May 1, 2006
Volume 13, Issue 3
Online Advertising at Record High
Excerpted from eMarketer Report
According to the latest figures from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC), total online advertising revenues in the US came to $12.5 billion for 2005, a new annual record exceeding the 2004 total by 30%. In the fourth quarter alone, online advertising revenues totaled a record $3.6 billion, representing a 34% increase over the same period in 2004.
"Interactive advertising continues to experience tremendous growth as marketers witness its overall effectiveness in building brands and delivering online and offline sales," said Greg Stuart, IAB CEO. "We are confident that this growth trend will continue as more marketers find interactive to be an imperative and additional platforms including broadband video, gaming, IPTV, and others continue to emerge as real opportunities."
"Continued strong growth in online advertising documents that an increasing number of advertisers and marketers see the Internet is an essential brand-building component in their media planning," added Peter Petrusky of PwC. "The Internet delivers the right audience at the right time – a winning combination for all types of marketers. We expect to see continued growth in Internet advertising spend."
Mochila Unveils P2P Ad Network
Excerpted from Adotas.com Report
Mochila, the pioneer global media marketplace for high quality print, photo, audio, and video content, unveiled a new online advertising service at this week’s Ad:Tech Conference in San Francisco. The new network will run on a peer-to-peer (P2P) basis, in which advertisers have greater control over the type of content on which their campaigns appear.
Now advertisers in Mochila’s syndicated marketplace can self-select their exposure: choosing a subject category, a particular brand, or category of brands. They also have the ability to opt-out of content at any one of these levels.
The company hopes this plan will generate more revenue for publishers, more quality feature content for consumers, and more relevant delivery of online ads.
The Mochila marketplace allows publishers to syndicate their own content to a variety of other venues, as well as buy a great range of high quality content for use in their own publications. Its charter media members include: Metro International, MediaNews Group, Freedom Communications, Liberty Group, Fast Company, Reports, and The Greenspun Media Group.
Internet2 Announces Faster Network
Excerpted from The Baltimore Sun Report by Anick Jesdanun
By sending data using different colors of light, operators of the ultrahigh-speed Internet2 network are hoping to boost capacity by as much as 80-fold to enable researchers to connect telescopes around the world and perform other bandwidth-intensive tasks.
The new network should be in place by Fall 2007, said Douglas Van Houweling, Internet2’s Chief Executive.
He announced the plans this week as researchers set a new networking speed record – 8.8 gigabits per second (Gbps), nearing the Internet2’s current theoretical limit of 10 Gbps, which is thousands of times faster than standard home broadband connections.
"We have applications now that need more than 10 gigabits of capacity," Van Houweling said Wednesday at the nonprofit Internet2 consortium’s twice-annual meeting in Arlington, VA, where DCIA headquarters are located.
The Internet2 network parallels the regular Internet to let universities, corporations, and researchers share large amounts of information in real time. It currently uses shared fiber optic cables run by Qwest Communications International.
Report from CEO Marty Lafferty
 Online registration will be activated this week for the June 22nd–23rd P2P MEDIA SUMMIT, and the DCIA is continuing to add exciting speakers and valuable special sessions.
We previously announced keynotes from P2P program distribution executives representing the world’s largest file-sharing networks, the best-connected P2P service offerings, and the most advanced file-sharing software applications available today, plus stimulating panels featuring diverse leaders from this emerging high-growth industry.
The DCIA is proud to announce the following new participants.
First, as one our special sessions, Friend Media Technology Systems (FMTS) will introduce its new P2P information system at the June 22nd DCIA Conference. FMTS will offer unprecedented depth in the acquisition and analysis of empirical data regarding activity in the P2P file-sharing environment. This will include granular information about the global P2P universe, such as precise usage statistics with respect to content being redistributed via P2P, comparisons to published entertainment industry charts, and more.
Second, StreamCast Networks’ CEO Mike Weiss, developer and distributor of Morpheus, will speak at the Conference. StreamCast has been in the news most recently based on its decision to return to court in the US to resolve a now five-year dispute with the entertainment industry.
According to the AP report, "This move by StreamCast represents a turnaround from only a few weeks ago, when StreamCast and representatives of the film studios and music companies began talks to settle the case. The company has spent some $4 million over the past five years defending itself from entertainment industry litigation."
And third, EMI Music’s SVP of Digital Distribution & Development, Ted Cohen, will also speak at the Conference. At a multimedia workshop in Hong Kong this week, the peripatetic executive said, "The music industry is now at a critical point where the traditional method of creating and distributing music is blurred. The consumer is now the center of the industry and it is the music companies that have to adapt to consumer needs.
Some of the changes in the music scene include creating new revenue models for the labels, new royalty schemes, direct online distribution of music by original artists, and implementation of new legal protection rights, one of which includes the use of digital rights management (DRM) technologies."
Live showcase entertainers for the post-conference networking cocktail reception now also include Kirsten DeHaan. Tracks from Kirsten’s new album "Under the Richter Scale" have just been chosen by MTV to air on this season’s "My Sweet Sixteen."
The June 23rd DCIA Exposition is being held in conjunction with the Digital Media Conference, and your registration for the full DCIA Conference & Exposition includes that event as well.
Now in its third year, the Digital Media Conference is a "must-attend" event for media, entertainment, and technology businesses, educational institutions, and government agencies involved in the digital distribution of media.
Exhibits and demonstrations will feature industry-leading products and services.
Additional exciting speakers and special sessions will be announced in coming weeks.
Don’t miss the opportunity to participate in this 2006 inaugural event. You may register online or call 888-864-3242 to register. For sponsor packages and speaker information, please contact Karen Kaplowitz, DCIA Member Services, at 888-890-4240 or karen@dcia.info. Share wisely, and take care.
Content Filtering Grows
Excerpted from PhysOrg.com Report
As organizations choose to deploy network content control solutions, they have a number of architectural choices. "For some enterprises, it’s preferable to avoid any potential network disruption by deploying a content filtering tool out-of-band. They don’t necessarily want to give up remediation capabilities, though: so a flexible solution is a key consideration," said Trent Henry of IT research firm The Burton Group.
One such solution is the latest version of Fidelis Security Systems content filtering software. Known as extrusion-prevention software, the software is designed to fit into existing IT infrastructure, and prevent the unauthorized transfer of sensitive or critical information over a network. This includes e-mail, Web mail, FTP, instant messaging, and even P2P communications.
Pre-built policies use information profiles to prevent any sensitive information from "leaking," or being sent outside the company. The software can be programmed to include state regulations protecting personally identifiable information, or the Pentagon’s data classification standards, or health regulations, or computer source code.
"The incidents of data leakage continue to grow and the market, brand, legal, operational, and financial consequences can be significant," said Timothy Sullivan, CEO of Fidelis. External threats are still valid – viruses, malware and the like – though there is an increasing recognition that insiders can cause all manner of problems for corporate IT security too.
Smaller companies, in particular, are looking for tools that can combine both scanning of outbound and inbound messages, so as to reduce their IT costs. A firm called eSoft has developed an "intelligence" sharing program that allows small companies, throughout its customer base, to share information on the latest threats.
New Models for TV on the Web
Excerpted from Knowledge@Wharton Report
Disney, the media giant, announced earlier this month that the company would provide several major shows – "Desperate Housewives," "Lost," "Commander-in-Chief," and "Alias" – as free streaming video through the ABC network’s website.
Also this month, the Wall Street Journal reported that the FOX network has signed agreements with 187 of its affiliated stations to share revenues from reruns of its programs on the web.
What is behind these moves? Wharton Marketing Professor Peter Fader spoke with Mukul Pandya, Editor-in-Chief of Knowledge@Wharton, and Kendall Whitehouse, Knowledge@Wharton’s Contributing Editor in Technology, about these developments and what they mean for the media industry. Please click here for their full report.
Peerflix DVD Trading Technology
Peerflix, the leading P2P network that allows members to trade DVDs online, launched new, proprietary technology designed to optimize and further accelerate the DVD trading process among its members. These technology improvements are the culmination of nearly six months of extensive analysis of online DVD trading behaviors at Peerflix, which has given the company unique insight into the habits of online traders.
The new technology is based on advanced mathematical algorithms that predict future behavior and optimize the matching of DVDs and members in a manner that is transparent to the end user. Moreover, the company believes that the data collected reaches beyond DVD trading and provides an understanding of the general habits of P2P network users.
The new DVD-trader matching engine has been designed to optimize DVD trading transactions between senders and receivers, taking into account factors such as available DVD inventory, geographic location between DVD traders, and customers’ relative desire for a certain DVD. On the front-end, availability indicators have been refined to better reflect the expected wait-time for the DVDs they request. On the back-end, Peerflix employs its proprietary technology to match up those DVD trades.
Laplink Offers ShareDirect for Free
Excerpted from IT News Online Report
Laplink Software, a provider of remote access, file-transfer, and synchronization technologies, announced that the basic version of its P2P file-sharing software ShareDirect, is now available as a free download from www.laplink.com. The software was previously available online for $39.95.
ShareDirect allows PC users to share files with other people from their desktops. Instead of e-mailing files back and forth, setting up a limited network, or placing files on a third-party server, users can retain control and ownership of their files and simply invite trusted contacts to view and download them from the designated folders.
Laplink said the files never leave the safety of a user’s hard drive until someone is invited to download them directly. All files are protected by 128-bit encryption and can securely travel through existing firewall settings.
"We are pleased to make ShareDirect Basic available to consumers and businesses at no cost," said Emir Aboulhosn, Laplink’s VP of Marketing Communications. "Now anyone can share files on their PC with any number of contacts, instantly, easily, and securely."
Phones Share Songs with PCs
Excerpted from Extreme DRM Report by Mark Hachman
A deal struck between Microsoft and DRM provider CoreMedia will allow content first downloaded by a mobile phone to be securely shared with a PC.
The deal would allow OMA DRM 2.0 protected content to be exported from mobile handsets to the PC and played using Windows Media Player. CoreMedia said it had integrated the Windows Media DRM SDK into its own content protection technology and rights management technology, enabling the secure handoff of content.
OMA 2.0 was developed by the OpenMobile Alliance in 2004 through a consortium of technology companies and content providers including Intel, mmO2, Nokia, Panasonic, RealNetworks, Samsung, and Warner Bros.
"Our work with CoreMedia further advances the flow of premium digital content to mobile handsets and Windows-based PCs," said Chad Hodge, Group Program Manager of the Windows Digital Media Division at Microsoft. "By working together we are delivering an end-to-end solution to power backend services to mobile handsets with PC interoperability delivered via the industry leading Windows Media Player."
To date, carriers like Verizon’s V-Cast music store sidestep the DRM issues by allowing users to download two copies of a song: a lower-bitrate version to the phone, to minimize the file size and download bandwidth, and a higher-quality version for the PC. Sprint’s music store uses a similar model.
Skype Calls on EMI, Sony, Warner
Excerpted from TechNewsWorld Report by Jennifer LeClaire
DCIA Member Skype announced license agreements for worldwide distribution rights to potentially hundreds of thousands of musical works as ring-tones for its Internet telephony service.
The eBay subsidiary inked deals with three major music publishing companies – EMI Music Publishing, Sony/ATV Music Publishing and Warner/Chappell Music – as well as with the UK's collecting society for author/publisher rights, the MCPS-PRS Alliance, which is a partnership between the Mechanical-Copyright Protection Society and The Performing Right Society.
"Skype's collaboration with publishing powerhouses EMI, Sony/ATV and Warner/Chappell, and with the collecting society the MCPS-PRS Alliance, gives us the foundation we need to offer great content from today's hottest artists to Skype's fast-growing global user base," said Saul Klein, Vice President of Global Marketing for Skype. "The Personalize Skype store is one more way that we are making Internet calling fun."
The recording industry has seen promising results from initial ring-tone sales, according to wireless research firm M:Metrics. In the fourth quarter of 2005, wireless carriers were selling 17.7 million ring-tones a month. Slightly less than 10 percent of US wireless customers have purchased additional ring-tones.
IDC forecasts that the total volume of ring-tone sales will approach the 100 million mark by 2009. By then, 4 in 10 wireless subscribers and customers will be ring-tone purchasers, the firm expects.
Telcordia & Unipier’s Dual Network Roaming
Unipier, a provider of intelligent policy management products, and DCIA Member Telcordia Technologies, a global provider of telecommunications software and services, will develop a joint product for policy-based roaming in a dual network environment.
The joint solution will provide mobile users with a quality connection over dual-mode mobile devices, which allow users to connect and roam between a cellular service and a Wi-Fi network. In-Stat predicts that there will be over 89 million dual-mode devices by 2009, while a new study from ABI concludes that dual-mode device sales are likely to exceed 100 million in the same period.
"This is truly a case of one plus one equaling three," said Telcordia CTO, Adam Drobot. "The market continues to confirm Telcordia’s mobility OSS as world class. Likewise, Unipier’s policy management expertise is second to none. Combining these capabilities will allow service providers significant cost and reliability advantages across their dual-mode phone offerings."
Viacom Acquires Xfire for $102M
Viacom, a leading global entertainment content company, will acquire Xfire, the fastest growing online gaming communication and community platform, for $102 million in cash. Xfire will become part of the MTV networks.
Since its launch in 2004, Xfire has registered 4 million users of its software. Its 2 million active users average 91 hours per month with an average session length of over 3 hours. The ad-supported Xfire application supports hundreds of the latest PC games and provides social networking, instant-messaging, and information for online gamers.
Xfire allows gamers to find and join their friends in online games. P2P file sharing is also possible with Xfire’s download system.
Tom Freston, President & CEO of Viacom, said, "On both a strategic and an economic level, this is a terrific deal for Viacom." Mike Cassidy, CEO of Xfire, said, "We can think of no better home for Xfire than MTV Networks, a company that’s as user-obsessed as we are."
Keeping Net Neutrality Alive
Excerpted from MediaPost Reports
In a vote of 34 to 22, the US House Commerce Committee rejected an amendment that would bar the practice of network operators favoring one content provider’s web traffic over another. This is a defeat for any web firm that isn’t a network operator, including Google, Yahoo, Intel, eBay, and Microsoft.
The larger bill, which passed 42-12, means nothing changes on the consumer end. Operators still have to let consumers access the content, applications, and services of their choice, but some of their favorites could be delivering slower traffic than others.
Under the law, companies who feel wronged may appeal to the Federal Communications Commission (FCC) on a case-by-case basis, but generally, network operators will be able to limit publicly available bandwidth as they see fit.
The loss, Business Week says, is attributable to how unfamiliar Washington is with net companies, versus the polished lobbying expertise of cable and telco operators.
Activists won’t let the issue go without a fight. According to CNET News, dozens of organizations ranging from the conservative Gun Owners of America to uber-liberal Moveon.org have launched a website under the moniker "Save the Internet."
The campaign’s director declared: "On one side you have the public; on the other side you have the nation’s largest telephone and cable companies aligned with some in Congress to strip the Internet of the First Amendment."
The providers swear they’re not going to abuse their power, arguing that it would be in their best interest not to, since network operators have many competitors. The worry is that the biggest operators, like Comcast and AT&T, will continue to buy their way through the ISP market until there are only a few providers out there so they can effectively set their own rules.
New IPPA Considered by Congress
A new Intellectual Property Protection Act of 2006 (IPPA) is now being circulated among Members of the US Congress.
The bill would make willful attempts at copyright infringement a crime punishable by ten years in prison – even if no infringement actually occurs – and expand restrictions on technologies that can circumvent digital media copyright protections. This measure would have outlawed research that disclosed consumer security risks associated with SonyBMG’s rootkit CD copy-protection technology, and condone wiretapping for copyright infringement investigations.
According to IPac, "This is a concerted effort to escalate Hollywood’s war on America by creating a generation of criminals and sending them off to jail. That’s right: IPPA would double the authorized prison terms for existing copyright infringement, create a host of new offenses, and establish a division within the FBI to hunt down infringers. The Members of Congress in the pockets of the Hollywood cartels want to divert $20 million a year and FBI agents from fighting real criminals."
Please click here for more information and e-mail ippa@dcia.info to join the growing effort to oppose this misguided legislation.
Artists Revolt Against CRIA
Excerpted from the Globe and Mail Report
The music recording industry will no longer be able to present the united front it claimed to have on copyright issues, after a group of prominent musicians and singers announced an association whose philosophy is at odds with the Canadian Recording Industry Association (CRIA).
The group, called the Canadian Music Creators Coalition (CMCC), says they got together because the recording industry seldom speaks for recording artists.
The new group’s membership includes the Barenaked Ladies, Avril Lavigne, Sarah McLachlan, Chantal Kreviazuk, Sum 41, Stars, Raine Maida (Our Lady Peace), Dave Bidini (Rheostatics), Billy Talent, John K. Samson (Weakerthans), Broken Social Scene, Sloan, Andrew Cash, and Bob Wiseman (co-founder of Blue Rodeo).
The group opposes demands of the recording industry for major changes in the Canadian Copyright Act. The former Liberal government had tabled an amendment to the act that was heavily influenced by demands from the recording industry. The coalition parts company with the recording industry in three major areas.
It calls the lawsuits the industry wants to launch against those who download music free from the Internet "destructive and hypocritical," and opposes any copyright reform that that would make it easier for the recording industry to sue the fans.
It condemns digital copyright protection measures as "risky and counterproductive," and opposes the criminalization of any attempt to circumvent them, a provision that exists in the US Digital Millennium Copyright Act (DMCA), one of the world’s most draconian pieces of intellectual-property law.
The CMCC also demands that any copyright reform should support the musicians and artists, not the record labels themselves.
The creation of the CMCC is not the first setback suffered by the CRIA recently. The independent label and DCIA Member Nettwerk, which records Sarah McLachlan and the Barenaked Ladies, spoke out against CRIA’s policy of suing people who share music files.
Six of Canada’s leading independent record labels — Anthem Records, Aquarius Records, The Children’s Group, Linus Entertainment, Nettwerk Records, and True North Records — pulled out of the CRIA this month.
In another setback, the CRIA recently commissioned a study, conducted by the Pollara market-research group, on the downloading habits of Canadian music consumers. The study failed to prove that P2P file-sharing technology is devastating the music industry.
The Pollara study concluded that Internet downloading constitutes less than a third of the music on downloaders’ computers, that downloaders use the downloaded versions as a sample before they decide to buy the music, and that the largest downloader demographic is also the largest music-buying demographic.
The CMCC was blunt in its criticism of the recording industry: "Suing our fans against our will, and laws enabling these suits cannot be justified in our names. The government should repeal provisions of the Copyright Act that allow labels to unfairly punish fans who share music for non-commercial purposes."
It also says that consumers should be able to transfer the music they buy to other formats under a right of fair use, without having to pay twice.
French Legislation Tackles Copyright
The French Minister of Culture, Renaud Donnedieu de Vabres, has a growing controversy on his hands: the DADVSI law on copyright in the digital age. The most contentious aspect of this proposed legislation is the attempt to curb illegal downloading of music and movies via P2P programs through the use of DRM. This has caused an uproar among the Internet-using public and divided the governing political party representatives in the National Assembly.
In late December 2005, when the DADVSI law was put to vote for the first time, representatives went so far as to pass an article to be added to the law that did away with the controversial DRM proposal and opted for an equally controversial global license concept. Instead of attempting to halt P2P use, global licensing would have increased monthly Internet access fees from two to six euros a month. In exchange, Internet users would have been granted the right to unlimited P2P downloading.
The disagreement over the inclusion of DRM use in the DADVSI law is understandable for a number of reasons. First, the French hold dear their right to private use. At the moment in France, no legislation restricts users from making copies of video and audio works for private use. Currently, there is a tax on all blank CDs, DVDs, and video and audio cassettes, which is then distributed to French performers, as is the case in the United States.
Given this precedent, downloading a song or a movie for private use should be allowed for most French Internet users. The fear is that if DADVSI becomes law, private copying will no longer be legal. The other main sticking point with DRMs is their general lack of interoperability. And, perhaps more importantly, Linux machines cannot read any media protected by DRMs. Since the DADVSI law makes it a criminal offense to crack a DRM program, as well as share the crack code, it basically ignores open source users.
CEO of Company That Owns Kazaa Testifies
Excerpted from AP Report by Mike Corder
The CEO of the company that owns the Kazaa file-sharing application appeared in a Sydney court Friday. The appearance of Nikki Hemming in the New South Wales Federal Court marked the first time a senior executive linked to Kazaa has taken the stand in a long-running legal battle between Australian record labels and Kazaa.
Hemming is Chief Executive of DCIA Member Sharman Networks, the company that owns the Kazaa software used by millions of people around the world to swap music and video files. Hemming said Sharman bought the Kazaa file-sharing software in early 2002 for $750,000.
She said she envisaged Sharman joining forces with a company called Altnet, also a DCIA Member, "to present a solution for the distribution and sale of rights-managed content."
Record company lawyers say that the network was exploited by computer users to breach copyright by swapping music files without paying the artists. Kazaa’s owners said they were unable to control how people used Kazaa and could not stop such copyright infringement.
UMG & EMI Face Fresh Collusion Charges
Excerpted from Digital Music News Report
Major labels Universal Music Group (UMG) and EMI have recently been targeted for possible collusion and misrepresentation, part of an ongoing dispute involving original file-sharing application Napster.
Late last week, Ninth Circuit CourtJudge Marilyn Patel ordered the labels to disclose previously confidential documents involving 2001-era ventures Pressplay and MusicNet. Pressplay was a joint venture involving Sony Music and UMG, while the original version of MusicNet involved EMI, BMG, Warner Music, and RealNetworks (the company is now wholly-owned by Baker Capital, a New York-based private equity firm).
The Patel order emanated from a countersuit involving Hummer Winblad Venture Partners, which was a backer of Napster. Hummer had been sued by UMG and EMI, which accused the venture capital firm of contributory and vicarious infringement. As part of the countersuit, Hummer argued that Napster was deprived of reasonable licensing consideration, while Pressplay and MusicNet were given exclusive and preferential treatment.
Those allegations further allege that both UMG and EMI colluded on licensing details for both services, and misled and concealed the nature of those negotiations. "Hummer contends that the labels used the joint ventures to obtain information about their competitors’ content licensing and to coordinate the terms of their licenses," court documents explain. Patel agreed with the assertions, and has now ordered the labels to release documents that were previously protected by attorney-client privilege.
The Department of Justice, which originally sought documents related to the matter, dropped its investigation in 2003, citing a lack of evidence of collusion. That decision could change, depending on what new information surfaces.
Coming Events of Interest
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Connections 2006 – May 2nd in Santa Clara, CA. This conference combines Parks Associates’ primary and industry research with insights from key strategists providing a comprehensive analysis of current and future "digital living" technologies. Attend this event to network with executives, establish partnerships, learn about emerging products and services, and become educated on this growing segment.
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We Media Global Forum – May 3rd–4th in London, England. The forum brings together the trailblazers of the connected society - the thinkers, innovators, investors, executives, and activists seeking to tap the potential of digital networks connecting people everywhere.
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Workshop RFID & The Internet of Things – May 9th in Amsterdam, Holland. Participants will develop scenarios for an Internet of things ranging from scripts for small rituals to outlines of societal changes of epic scale. Sessions will also be dedicated to lectures on current technology, theory, and implementations of RFID. Experienced staff will be present for technical assistance on workshop projects.
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Internet Dating Conference – May 18th in Beijing, China. A business conference covering the online dating industry and the social networking industry in Asia and the Far East. Topics include management, marketing, and technology. It will be attended by the owners and top executives of the major Asian online dating firms.
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First Annual DCIA Conference & Expo – June 22nd-23rd at the Intercontinental Holiday Inn, Tysons Corner, McLean, VA. The first-ever global P2P MEDIA SUMMIT will cover policy, marketing, and technology issues affecting commercial development of this emerging high-growth industry. Exhibits and demonstrations will feature industry-leading products and services. For sponsor packages and speaker information, please contact Karen Kaplowitz at 888-890-4240 or karen@dcia.info. DCIA Members Music Dish Network and Javien are our media and e-commerce partners respectively. Plan now to attend.
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Washington Digital Media Conference – June 23rd at the Ritz-Carlton, Tysons Corner, McLean, VA. DCIA Conference & Expo attendees can attend this executive briefing on emerging business, policy, and technology issues & opportunities at half-price. This is a must-attend event for media, entertainment and technology businesses, educational institutions, and government agencies involved in the digital distribution of media. The Washington Post calls the event: "a confab of powerful communicators and content providers in the region."
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