[JackSpratts]

Quotes Of The Week

"We now live in a world where people can and will exchange information, globally and instantaneously. There's no turning back the clock on that." – Eric Garland.

"I'll put this online, with your permission, of course." – Justin Frankel



Early Edition



The A’s Don’t Stand For Algebra

When does 4 equal 532? When the RIAA does the math. We all know the record company trade group plays fast with figures, so it’s no surprise they’re doing the same with their latest lawsuits. Since the courts made it clear Americans are protected against unreasonable subpoenas, the RIAA can no longer count on special privileges when it comes to persecuting children and other hapless citizens. Now they have to sue them the same way everybody else sues people in America and that can get mighty expensive, mighty fast. So to get more bang for the buck the RIAA announced this week it was suing a staggering 532 Americans in one giant orgy of judicial overkill, instantly injecting their tired campaign with new drama, and putting it back on home pages and newspapers across the globe. It was a brilliant piece of public relations, getting them more coverage than they could’ve possibly hoped for. 532 suits! All at once! These guys mean business! Except, well, no. They don’t. Not really. You see it’s mostly vapor. Turns out the trade group isn’t suing anywhere near that many. Not five hundred, not three hundred, not even a hundred. The RIAA isn’t even suing a dozen file sharers this time around. In what can only be described charitably as the new math, the RIAA is actually suing just four individuals today or 99% less than the screaming headlines wail. Enough of a difference that the real figure would instill a great yawn in the collective throats of editors, guaranteeing near zero coverage. Those crafty record execs. Gotta hand it to them. That they will attempt to sue more swappers is a given but there is no guarantee the courts will oblige. For the time being they’ve been reduced to IP harvesting. Forget the blaring banners, the whole thing’s a non-issue, for a while anyway.

The RIAA says publicly the lawsuit campaign is effective, although it’s probably more of a “when that’s all you have - you stick with it” thing. From an objective point of view it’s obviously not working, not when file sharing continues to rise, but that file sharing is up during this hyper publicized campaign apparently makes no difference to them or their members, the world’s largest media companies. Still, if people running industries making billions from copyrighted materials truly wanted respect from the Americans who pay them and their artists, they might think about backing off from the hard stuff and coming to the table with workable solutions to the problems threatening their businesses. Instead they make more movie theater spots (to hector paying ticket holders) and invent more DRM laden “solutions” to further penalize anyone attempting to engage them in pay-per-download Internet purchasing. A marketing campaign centered around “Less Choice, Less Options, More Money!” is instantly DOA. Playing with the math won’t fix it. When free is better – even if it isn’t free – is when the record companies really need to work on product benefits if they expect their customers to pay for the so-called privilege of acquiring them.












Enjoy,

Jack.











Free at last.

Supreme Court Unscrambles DVD Decision
Samantha Chang

There's a war raging in cyberspace, and this time it is the movie industry that's feeling the heat.

The U.S. Supreme Court reversed an emergency stay on a case involving DVD descrambling Jan. 3.

In so doing, the high court affirmed a decision of the California Supreme Court, which had ruled that the entertainment industry could not force a Texas resident who had published DVD descrambling software on the Internet to stand trial in California.

This means that the defendant, Matthew Pavlovich, who posted the software called DeCSS, is able to distribute the program online.

DeCSS, which is distributed for free, enables people to play DVDs without technological restrictions, such as forced watching of commercials imposed by movie studios. The program became popular shortly after its dubious debut, being distributed online by thousands of individuals worldwide the first year it was posted.

To the high court, it is a question of geography: The court says Pavlovich cannot be sued in California because he is a Texas resident who does not have "substantial ties" to the Golden State.

Pavlovich's legal woes began in 1999, when a group of film studios and consumer electronics makers sued hundreds of people, including Pavlovich, for distributing DeCSS online, citing a violation of California trade secret laws. A state judge ruled for the plaintiffs and granted an injunction.

Three years later, the California Supreme Court ruled that Pavlovich could not be sued for violating state trade secrets simply because he knew that his actions could hurt the state's film industry.

In the latest ruling, U.S. Supreme Court Justice Sandra Day O'Connor lifted the injunction, saying there was no need to keep DeCSS a secret.

Internet groups wholeheartedly support the decision.

"The entertainment companies should stop pretending that DeCSS is a secret," says Cindy Cohn, legal director of the Electronic Frontier Foundation.

"The Supreme Court wisely recognized that there is no need for an emergency stay to prevent Mr. Pavlovich from publishing DeCSS," Cohn adds.

The decision affects numerous defendants, but the sole California resident is Andrew Bunner.

Bunner isn't fighting the jurisdictional issue but is arguing that he has a First Amendment right to distribute the software.

A California appeals court in 2001 agreed, saying that barring Bunner from future disclosures of DeCSS was "a restraint on First Amendment right."

Bunner's case is awaiting an argument date before the California Supreme Court.

A similar case in Europe already has been resolved.

Norwegian teenager Jon Johansen was acquitted Jan. 7 of criminal charges for writing and publishing DeCSS.

In 1999, 15-year-old Johansen published DeCSS on the Internet. He used the program to watch his own DVDs on his Linux computer.

Under tremendous pressure from the Motion Picture Assn. of America, the Norwegian Economic Crime Unit charged Johansen with violating a Norwegian criminal code that outlaws breaking into another person's locked property to gain access to privileged data.

The case was the first time the Norwegian government had attempted to punish an individual for accessing his own property.
http://www.reuters.com/newsArticle.j...toryID=4152687


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Betamax Legacy Plays On

A court decision 20 years ago on the videorecorder's legality is a point of dispute in the era of online piracy
Jon Healey

Sony Corp.'s Betamax videorecorder long ago vanished from store shelves, but its spirit lives on in Apple Computer Inc.'s iPod.

And TiVo Inc.'s personal videorecorder.

And Archos' portable video player.

And Hewlett-Packard Co.'s Media Center PC, not to mention umpteen other digital devices.

Simply put, virtually any equipment that can record, store or transmit music or movies owes its existence at least in part to Sony and the Betamax.

The Betamax triggered a bitter battle with Hollywood over products that can promote piracy, leading to a landmark Supreme Court ruling that technology and entertainment companies are arguing over to this day.

In the 5-4 ruling, issued 20 years ago today, products that could be used for piracy were deemed legal if they were "capable of substantial noninfringing uses." The opinion gave manufacturers the freedom to produce a range of audiovisual devices without the approval of Hollywood.

Now, lawyers for the entertainment and technology industries are fighting to define what the ruling means in the Internet era. The key question is whether companies can be held liable for products primarily used for piracy — even if people can use those products for legitimate purposes.

The Betamax decision is at the heart of a case pitting Hollywood studios and major record labels against the companies behind the Grokster and Morpheus file-sharing networks. A federal judge in Los Angeles ruled last year that Grokster and Morpheus were legal under the Betamax doctrine, but the studios have challenged the ruling in the U.S. 9th Circuit Court of Appeals.

Software company 321 Studios, whose software can be used to copy DVD movies, is also relying on Betamax to defend against a copyright infringement lawsuit by the studios. That case is awaiting a decision from a federal judge in San Francisco.

At stake is how far technology companies will have to go to protect copyrights before releasing new products or features — and the degree of control Hollywood and other copyright holders will have over those innovations.

The Betamax decision has been a shield for the manufacturers of many products that have both legitimate and illegitimate uses, including VHS machines, CD burners and DVD recorders. But the more narrowly the Betamax decision is applied by the courts and Congress, the smaller the shield will be, enabling copyright holders to force more products to include anti-piracy features.

To lawyers for the entertainment industry, it's too great a stretch to extend Betamax's protection to companies like Grokster and 321 Studios.

Russell Frackman, an attorney who has represented the major record companies in the file-sharing lawsuits, said the main thing people did with Betamax machines — recording shows for later viewing — was legitimate and "done for a very limited purpose in one's home."

By contrast, the main thing people do with file-sharing networks is make and share unauthorized free copies of copyrighted songs and movies.

It's not the technology that's the problem, he said; it's what most people do with it.

"You can rhetorically turn Betamax into a fight over technology. But that's not our position, and if you look at it, that's not what Betamax was talking about."

David Kendall, a lawyer for the major Hollywood studios, contends that the Betamax case doesn't give carte blanche to technologies that can violate copyrights. Although the original Napster file-sharing network relied on the Betamax defense, Kendall noted that the 9th Circuit ruled that the company wasn't taking the steps it could to deter piracy.

Attorneys for consumer electronics and technology companies said the entertainment companies were trying to replay the Betamax dispute, only with a different ending. The same arguments used against the file-sharing networks — that copying entire songs or movies isn't legal and that it damages the market for entertainment — were used against Sony's videorecorder, and the Supreme Court rejected them.

"The Sony Betamax decision was definitely the high-water mark for the growth of technology, all of which has benefited the content community," said Gary Shapiro, chief executive of the Consumer Electronics Assn.

That's quite a distinction for a ruling that very nearly went the other way.

The 9th Circuit ruled against Sony in October 1981, and a majority of the Supreme Court originally wanted to uphold the appellate ruling, said Jonathan Band, a copyright attorney who examined late Justice Thurgood Marshall's papers in the case. But Justice Sandra Day O'Connor switched sides, backing Justice John Paul Stevens' view that Betamax was legal.

Before the recent spate of lawsuits against file-sharing companies, the Betamax case was rarely used to defend a new technology. Although entertainment industry lawyers disagree, attorney Fred von Lohmann of the Electronic Frontier Foundation said this showed how clearly Betamax drew the line between technologies that were legal and those that weren't.

Rep. Rick Boucher, a Virginia Democrat active on technology issues, agreed. Noting the digital revolution sweeping through consumer electronics, Boucher said, "All of that is because of the legal certainty that Betamax provided."

In 1998, Congress muddied the waters for technology companies with the Digital Millennium Copyright Act. The law banned the manufacture or sale of products whose primary intent was to unscramble or pick the electronic locks on copyrighted works.

"A big goal of the DMCA was to create a quid pro quo: If the copyright owners lock their stuff up, the Betamax doctrine goes away," Von Lohmann said. Unless copyright owners approve, he added, the DMCA prevents manufacturers from unscrambling material even for the kinds of legitimate uses that the high court ratified in Betamax.

As a consequence, manufacturers are increasingly looking to strike deals with Hollywood to govern how people can use the next generation of digital products, such as high-definition videorecorders. The risk is that their agreements will be good enough for some consumers, and "we'll never know how much better it could have been," Von Lohmann said.

Steve Kroft, the Los Angeles-based attorney who represented the studios that sued Sony in the Betamax case, said it was nonsense to suggest that copyright owners could limit innovation.

"There's always going to be technological innovation because we're technological innovators," Kroft said. "You just have to operate within the rules…. Don't trample somebody else's rights because you've got the next 'next thing.' "
http://www.latimes.com/business/la-f...-home-business


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Military Officials Find Illegal File Sharers At Fort Myers, McNair
Chris Walz, Pentagram staff writer

Peer-to-peer file sharing programs, such as KaZaA and LimeWire, continue to plague computer systems inside the Fort Myer Military Community and Arlington National Cemetery. The National Capital Region Directorate of Information Management recently evaluated the computer network and discovered approximately 424 computers contained peer-to-peer programs banned by Army regulations.

"That's a lot of computers over a small area," said National Capital Region Information Assurance Manager Rick Coombe. "That's basically 424 computers over Forts Myer and McNair and Arlington National Cemetery."

File sharing programs invite a host of problems, especially on the Army's network.

Basically, these programs give users worldwide access to your computer. They may want to download a favorite song, or they may have more sinister intentions. With the click of a mouse, anyone can potentially download sensitive materials, like troop movements, contracting data and even social security numbers. They can also make a computer vulnerable to viruses.

"If someone gets a virus, we'll have to put a lot of man-hours into rebuilding the infected servers," Coombe said. "That means nobody will be able to use the network and customers will not be able to perform their missions. And, the [financial] expense will be enormous."

For that reason, file-sharing programs such as Tripnosis, iMesh, Wrapster, Napigator, Morpheus, Gnucleus and others are banned from Army computers.

Another problem with file sharing programs is the Millennium Digital Copyright Act, which gives "owners of intellectual material a big hammer," Coombe said. Programs like KaZaA allow people to download copyrighted music and software for free.

"You can go buy a brand new CD and rip it to your computer's hard drive within minutes," Coombe said. "Then, if you have a peer-to-peer program, hundreds of people can download that whole CD without purchasing it."

The music industry successfully won a Supreme Court decision to alter file-sharing practices of Napster and recently began suing individual downloaders. A bigger problem, Coombe said, is the music industry could sue the Army. He said file sharing programs are a major liability because "Army employees are using Army equipment" to steal copyrighted material.

Information Management is trying to solve the problem as quickly as possible. The directorate is preparing to install an Intrusion Prevention System, which will recognize and forbid such network traffic. The system will isolate the computer downloading or uploading copyrighted material and then administrators will report the offender to commanders for disciplinary action.

Officials are still trying to curb commercial instant messenger programs, which are also unauthorized for Army computers. Companies like Yahoo! and Microsoft offer free instant messengers, but they subject computers to similar vulnerabilities as file sharing programs.

Army Knowledge Online and a few other Defense Department sponsored programs offer acceptable instant messenger programs.

New employees should contact their Information Management Officer to verify their computer programs are legal.
http://www.dcmilitary.com/army/penta...s/27067-1.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

More on Real's Store, and Free Use v. Fair Use
Derek Slater

DRM Watch is more suspicious of Real Player 10's interoperability with iTunes songs, asserting that it might violate the DMCA. I still don't understand the mechanics of it precisely (see previous post and News.com article) - I'll try to find more out later.

Brad Hill now has his review up. Not quite a ringing endorsement: "RealPlayer10 Music Store is a heinous experiment in proprietary formatting that, even if it worked as advertised, would harshly constrain consumer value. Once again, RealNetworks is taking money for (or through) a broken beta program."

Only slightly related: Here's a line from the DRM Watch article that exemplifies how twisted the concept of fair use has become: "No one would argue that this [playing an iTunes Store song in Real Player] is unacceptable behavior or not 'fair use.'" For fair use to enter the picture, you have to implicate a right of the copyright holder. What right does playing a song implicate? Yes, you're copying the song into RAM, but that's true whether you use Real Player or iTunes. Playing a song in a player of your choice hasn't been - and, I'd say, shouldn't be - a copyright issue.

This is a point I've talked about before, and one that Professor Lessig stressed during his iLaw talk last year. To put it in his terms: forget fair use; what happened to "free use", use that copyright doesn't touch in the least? Today copyright holders have a right of access, a right to use, because of the DMCA. Not only does that set aside the fair uses we have, but it also eliminates many of the free uses.

In most discussions, though, fair use takes center stage. Fair use is now the umbrella term for all uses that are not infringement. And thus all uses are seemingly treated as conditional, riding on a case-by-case balancing test or copyright holder authorization. But there used to be this other zone of copyright too.

To some extent, this is all just semantics - people who say "we need to protect fair use" often mean that we should move more fair uses into the category of free uses, perhaps by legislating clear, affirmative consumer rights. That's all well and good, but it's worth remembering that having this grey area of fair use is also good. We need a balancing test, too, to deal with evolving uses. So, I think, both conceptually and legally, it's worth retaining this separation of fair use and free use.
http://blogs.law.harvard.edu/cmusings/2004/01/16#a565


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Microsoft Forced to Change Music Buying Browser Software
AP

Microsoft Corp. has agreed under pressure to change its Windows software to resolve complaints by the Justice Department that it unfairly influenced how customers buy their music online, the government said.

Microsoft will offer updated software for its Windows XP operating system in February or March to stop its disputed practice of compelling consumers who buy music on the Web to use only Microsoft's Internet browser.

The company continues to say its design is legal.

Government antitrust lawyers concluded that the design violated a landmark antitrust settlement approved by a federal court in October 2002.

Microsoft shares fell 16 cents to $27.54 on Nasdaq.
http://www.latimes.com/technology/la...nes-technology


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Microsoft Takes on Teen Over Web Site
AP

Mike Rowe thinks it's funny that his catchy name for a Web site design company sounds a lot like Microsoft.

The software giant, however, is not amused.

"Since my name is Mike Rowe, I thought it would be funny to add 'soft' to the end of it," said Rowe, a 17-year-old computer geek and Grade 12 student in Victoria, British Columbia.

Microsoft Corp. and its attorneys have demanded that he give up his domain name, the Vancouver Province newspaper reported Sunday.

Rowe registered the name in August. In November, he received a letter from Microsoft's Canadian lawyers, Smart & Biggar, informing him he was committing copyright infringement. He was advised to transfer the name to the Redmond, Wash.-based corporation.

"I didn't think they would get all their high-priced lawyers to come after me," Rowe said. He wrote back asking to be compensated for giving up his name. Microsoft's lawyers offered him $10 in U.S. funds. Then he asked for $10,000. On Thursday, he received a 25-page letter accusing him of trying to force Microsoft into giving him a large settlement.

"I never even thought of getting anything out of them," he said, adding that he only asked for the $10,000 because he was "sort of mad at them for only offering 10 bucks."

He said family and friends are backing him and a lawyer has offered to advise him for free. He's also keeping his sense of humor.

"It's not their name. It's my name. I just think it's kind of funny that they'd go after a 17-year-old," Rowe said.

Company spokesman Jim Desler said Sunday, "Microsoft has been in communication with Mr. Rowe in a good faith effort to reach a mutually agreeable resolution. And we remain hopeful we can resolve this issue to everyone's satisfaction."
http://story.news.yahoo.com/news?tmp...rosoft_unhappy


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

CinemaNow Debuts Download-To-Own Movies
Stefanie Olsen

CinemaNow, an online movie rental company, is testing new waters by launching a service that lets people buy permanent downloads of Hollywood films for a PC.

As part of a Web site overhaul, the company added on Thursday several features to its digital movie service for PCs. It introduced a download-to-own feature, or what's called "digital sell-through," which lets people buy and download a permanent copy of a film for unlimited playback.

"Allowing users to download and own DVD-quality versions of video content is the next great frontier in digital distribution," CinemaNow CEO Curt Marvis said in a statement.

Customers can also choose to subscribe to a monthly service or watch movies on a pay-per-view basis.

CinemaNow and rival Movielink, a Hollywood-backed venture, face hurdles when it comes to drawing customers. One is that people are accustomed to watching feature films on a big screen--not on a PC display. Broadband adoption and advances in technology have improved prospects for the online movie business, but it is still at a disadvantage.

By exploring a range of service models, CinemaNow should be able to gauge consumer demand for new distribution methods and potentially change viewers' habits. The company provides a legal alternative to downloading pirated DVDs--a source of mounting concern for CinemaNow's Hollywood studio partners.

"Will this change the economics of Hollywood? Absolutely not," said Steve Vonder Haar, an analyst at Interactive Media Strategies, an Arlington, Texas-based market research firm. "But it helps the technology and entertainment sector begin to learn a little bit more about what content models are doable and appealing to consumers over the long haul," he said.

As part of its site changes, CinemaNow introduced progressive download capabilities for broadband customers. These are designed to let people begin watching a newly rented movie within 30 seconds of the start of the download. The technology also lets people view films when they're not connected to the Internet.

CinemaNow's store of download-to-own films--which includes the surf documentary "Endless Summer"--is protected by Microsoft's Windows Media digital rights management software, according to the Marina Del Rey, Calif.-based company. People with Windows XP Media Center can watch CinemaNow downloaded movies on a television set; and in the second half of 2004, they will be able to view them on a compatible portable device with Microsoft's upcoming Portable Media Centers, via USB 2.0.
http://news.com.com/2100-1026-5141683.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Congressional Leaders Promise Action On Tech
David Becker

Federal lawmakers are ready to help the technology industry solve its problems--at least some of the issues.

That was the consensus from eight U.S. senators and representatives gathered Friday for a panel at the Consumer Electronics Show. Congressional leaders vowed concerted action on some hot-button tech issues, but warned attendees not to expect too much.

Some of the most vigorous debate focused on trade policy, with speakers describing a balancing act between encouraging free international trade and preventing an exodous of U.S. jobs to overseas locations.

Rep. Tom Davis, R-Va., said misguided concerns about jobs are setting the agenda now. "What we're seeing is a continuing assault on free trade," he said, adding that some lawmakers "want to punish companies that do business offshore."

"We've been in defense all year," Davis said. "The AFL-CIO is out there--they're taking book on this."

But Rep. Steve Buyer, R-Ind., warned that fellow free-trade Republicans shouldn't make the mistake of thinking the jobs issue isn't real. "There's some realities out there that hurt Americans," he said. "There's a beginning of the erosion of the middle class in this country."

Debate was more unified on intellectual property issues, with lawmakers saying that while Congress will continue to support strong copyright protection, media industries need to come up with their own solutions to file-swapping and other issues.

Sen. John Sununu, R-N.H., joined others in criticizing the Recording Industry Association of America (RIAA) for suing alleged music swappers, calling the RIAA's legal tactics heavy-handed and against the intent of U.S. copyright laws, including the controversial Digital Millennium Copyright Act (DMCA).

"The fundamental problem with the approach of the RIAA took is that it was based on legislation that created special property rights," Sununu said. "Suddenly, you had a private entity that's able to issue subpoenas, which is unprecedented."

"That's not what the DMCA was intended to do," he said. "We can't be writing legislation that gives holders of certain types of intellectual property special rights...We can't carve out special legislation to give special powers to certain types of content."

Rep. Joe Barton, R-Texas, said it's up to content creators to come up with business models that accommodate modern technology and attitudes. "I don't agree you're going to get teenagers and young people to believe they're doing something immoral" in file swapping, he said. "The industry has to decide on a different model."

Lawmakers also spoke in support of moratoriums on taxing the Internet, with Sen. George Allen, R-Va., saying lawmakers need to be vigilant against efforts by state and local authorities to grab a chunk of broadband service fees.

Sununu said those same force are hungry to take a bite out of the emerging market for Internet-based telephone service. "I think the most important policy issue we'll be dealing with over the next few months is voice over IP," he said. Sununu said Congress' job is "to try to protect it from taxation, to define it as an information service, so the technology can grow."
http://news.com.com/2100-1028-5138908.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Don't Sue Me, I'm Only The Piano Player
BBC

Suing for file-sharing is only the start and soon we could be paying to sing Happy Birthday in a restaurant, argues technology analyst Bill Thompson.

The British Phonographic Industry has said it is thinking about following the example of the Recording Industry Association of America and may soon sue its customers if they dare to share music over the net.

The threat is all part of the ongoing attempt to perpetuate the belief that declining sales of CDs are due to the widespread copying of unlicensed MP3 files.

Nevermind the lower number of new releases, the lack of any interesting music, or the fact that all of us over 40 have now finished buying CD versions of our vinyl albums.

Despite the lack of real evidence that file-sharing is the problem, and ignoring data from Jupiter Media Metrix that file sharers actually buy more CDs than other people, the record industry is taking legal action against those who swap files.

It seems to have had some success in the US.

Employers, colleges and even parents are so worried about the prospect of being sued, they are clamping down hard on any use of file-sharing peer-to-peer networks, even perfectly legal ones.

And now it could happen here.

Controlling technologies

A big part of the problem is that the few people see the connection between consumption and creativity.

We are still stuck with a view of the world in which most of us are passive consumers of other people's creative output.

So, controlling distribution and re-use makes good commercial sense, and we seem to be losing little other than free copies of music that we should be paying for.

Who knows what creativity could be unleashed by the growth of digital distribution and the widespread availability of programs to create, sample and manipulate content

Yet one of the most significant differences between analogue and digital media is the ability to take digital content and manipulate it ourselves.

It can be as simple as editing the adverts out of a programme, re-arranging the order of the tracks on a CD, or creating new versions of movies.

The Phantom Edit, a re-cut version of Star Wars: The Phantom Menace - but without Jar-Jar Binks - was an online hit in 2001.

Even though it was technically an infringement of copyright, George Lucas did not pursue its makers or distributors.

One way medium

The lack of interest in the creative use of digital media was brought home to me earlier this week at the Oxford Media Convention, hosted by the
think-tank, the Institute for Public Policy Research.

Despite the presence of the BBC's own director of new media Ashley Highfield, and a few other net luminaries, the "media" everyone was concerned with was really one medium, television.

Even the discussions on digital TV concerned ways to get everyone to switch over, and how to make sure that people with second sets would be all-digital.

There were exceptions. In one session about copyright, Stanford law professor Lawrence Lessig compared the current situation to the early days of photography.

When Edwin Land invented paper based film in 1884, it was a technical revolution that made photography widely available.

It took it out of the hands of the professional elite who had been able to afford the large plate cameras of the time.

But the revolution was almost derailed in the US by a lawsuit which argued that photographs of people should only be taken if prior permission was granted.

Fortunately, the courts decided that photography should not be restricted in this way, and the result was the massive growth in the sales of cameras and film, as well as the growth of photos.

Birthday troubles

When it comes to music, things seem to be going the other way.

If you want a wedding video then your video-maker will have to pay out about £80 to license the background music, even though it is for personal use.

If I make a home video of my daughter's birthday party in a local restaurant and put it online for the family, I could be in trouble for using the restaurant's logo.

I could also be in trouble for recording an unlicensed performance of that well-known - but still copyrighted - song, "Happy Birthday".

Who knows what creativity could be unleashed by the growth of digital distribution and the widespread availability of programs to create, sample and manipulate content.

But if we treat copyright as an absolute property right, and allow the limitations on re-use forced on us by digital rights management technologies, we will never find out.

Governments today are giving the music industry everything they want.

That is understandable over in the US, where campaign financing means that lobbying and corporate interests have massive influence over policy-making and legislation.

But over here things are not that bad, and it should be possible to campaign effectively against these dangerous and damaging laws.

Otherwise I can see the day when I will have to sign a license and pay a fee before I let my daughter's friends stand up and sing to her on her birthday, unless I want to face the possibility of a lawsuit.
http://news.bbc.co.uk/1/hi/technology/3403157.stm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~



York Community News

COMPUTER COURSE

Aurora library presents Peer to Peer Sharing, the fourth of a 10-part monthly series of free computer workshops held the third Wednesday of each month (Jan. 21), 7-8:30 p.m., between September and June. Register online at the adult info desk or call.

http://www.yorkregion.com/yr/newscen...-1916094c.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Did Big Music Really Sink The Pirates?
Brian Hindo

The Recording Industry Association of America's lawsuits against online song swappers are aggressive, but do they work? Two widely cited surveys seemed to show that legal action, which began in September, was chilling file-sharing activity. In December, a phone survey by the Pew Internet Project of 1,358 U.S. Net users found music downloading had dropped by half since May. And in November, comScore Media Metrix, monitoring 120,000 U.S. users, saw big yearly declines at four popular file- sharing services -- KaZaA, Grokster, BearShare, and WinMX.

Trouble is, those surveys provide a relatively narrow view of the file-swapping universe. BayTSP, a Silicon Valley watchdog that works for three of the major record labels, tracks the number of songs available for download worldwide. It sees just a 10 percent drop since July and also notes steady migration from older, virus-ridden programs like KaZaA to hipper peer-to-peer networks such as eDonkey and Bit Torrent -- which were absent from comScore's tally.

And Los Angeles-based researcher BigChampagne, which monitors millions of global file swappers, actually sees a 35% increase in illegal traffic from 2002 to 2003. Given BayTSP's and BigChampagne's broader sample sizes, says John Palfrey, of Harvard Law School's Berkman Center for Internet & Society, "They're going to have more accurate empirical data."

FLEXIBLE ARCHITECTURE. What explains the apparent discrepancies? Many analysts point to Pew's methodology -- phoning U.S. adults, who may be reluctant to self- report an illegal activity. Concedes Pew analyst Mary Madden: "It's quite possible that some people simply didn't want to admit to downloading now."

And comScore analyst Graham Mudd says he would expect different results had the study included overseas users and more services, whose constantly evolving network architecture make detection more difficult. Still, BigChampagne CEO Eric Garland says, "The Pew study underscores the dramatic and definitive effect" of the RIAA campaign. Indeed, the RIAA declined to comment on the surveys but says its own studies show increased public awareness of the lawsuits "and the consequences."

If the perceptions have changed, the reality is that the RIAA's suits have targeted only uploaders of music -- that is, people who make files available for others to copy. No one has yet been sued for simply downloading an MP3 file to his or her PC.

"TALMUDIC QUESTION." And amid the continued resilience of the file-sharing set, the decline in record sales is abating. According to Nielsen SoundScan, in 2003 CD album sales slipped 2 percent -- a less dramatic drop than the 9 percent slide the previous year. Also, fourth-quarter 2003 sales picked up 5.6 percent over 2002. So what does that do to the record industry's long-held argument that online piracy is killing music sales? "That's almost a Talmudic question," muses Michael McGuire, a Gartner G2 analyst.

Some observers, such as BigChampagne's Garland, believe it punctures the myth that downloading a song and buying a CD are mutually exclusive events. "This really is forceful evidence that those are independent variables," he says. In fact, Garland points out that BigChampagne's list of the most-downloaded songs tracks closely to the Billboard charts, which in part rely on sales totals.

Others, such as McGuire, maintain that file-trading is but one of many factors that conspired to dampen music sales. Others include pricing issues, the ubiquity of CD- recording drives on PCs, and fewer new CD releases.

NOT FADE AWAY. What's clear, though, is that until the music industry gets fully behind online music sales, file-swappers will flock to next-generation sites like eDonkey -- which has seen 150 percent growth in the past year, according to independent tallies by both BayTSP and BigChampagne.

"This stuff is not going to go away," Gartner's McGuire says. "The industry needs to provide a compelling legal alternative." Until that happens, pirates will continue to rule the online music seas.
http://www.hispanicbusiness.com/news...d.asp?id=14417


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Music Exec Says 'Hey Ya!' to Music Downloads
Bernhard Warner

A top music executive on Thursday said strong music download sales over Christmas from artists like chart-topping hip-hop Outkast with their hit "Hey Ya!" have set the beleaguered industry up for a promising year.

"The market is exploding, and as more significant retailers join the fray, we expect this market to continue to grow," said Larry Kenswil, president of eLabs, the new business and technology division of the world's largest music label, Universal Music Group .

"And Europe is next. Just about all the players roaring in the U.S. are preparing to come here. There is no reason to think they won't be just as successful here," he said, addressing a gathering of media and technology executives at a conference hosted by the Royal Society for the Encouragement of Arts.

Industry observers say it is far too soon to call a recovery. The $30 billion industry is bracing for a fourth consecutive year of declining sales as they struggle to find a solution for online piracy and win over a consumer base that spends more on DVDs and video games.

Still, the small, but growing demand for music downloads on such online music stores as Apple Computer's iTunes and Roxio's Napster and RealNetworks Liquid Audio offers a rare glimmer of hope for the battered industry.

THE FIRST MEANINGFUL YEAR

Outkast's "Hey Ya!" was the most downloaded song for 2003, with over 110,000 downloads, Kenswil said. The artists, signed to the BMG label Arista, hold the new distinction of topping the virtual and real-world charts.

In the Christmas week, 2.5 million songs were downloaded by U.S. consumers and 30 million songs were downloaded for the full year, said Kenswil, citing data from Nielsen Soundscan, which tracks U.S. music sales.

Last year, Kenswil said, was the first significant year for music downloads. Major industry-backed download services began in previous years, but were largely ignored by consumers as they carried a meager song library and a confusing array of tariffs.

The European market is small, too, as the likes of Britain's OD2 struggle to win over paying consumers from file-sharing networks such as Kazaa and eDonkey. Industry executives believe the likes of iTunes and Napster will arrive in Europe by summer. With an average price of 99 cents per song, the U.S. download market, far and away the world's largest, represents a minute fraction of total sales. But record executives are optimistic the recent success of online music stores in America will catch on in other territories.

"Record companies cannot compete with free, unless we have compelling consumer services," Kenswil said.

Kenswil said the best-selling bands in stores are also topping the charts online. But, he added, obscure artists who rarely sell a CD in stores are selling online.

"Apple has sold almost every track they have. Even the most obscure thing -- someone has bought it," he said. "All of this data, we're just starting to dig into it."
http://reuters.com/newsArticle.jhtml...toryID=4134582


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Full Circle: Morpheus Back On Fasttrack

Building bridges between P2P networks
John Borland

New file-swapping applications are bridging formerly separate networks, promising to improve the efficiency of peer-to-peer searches and sharpen competition among rival software developers.

On Thursday, StreamCast Networks released a new test version of its Morpheus software. The application, for the first time, taps into all the major file-trading networks, including Kazaa, the world's largest, from which StreamCast was unceremoniously ejected several years ago. Other, smaller software programs such as Shareaza and the Macintosh-based Poisoned have had similar multinetwork search capabilities for some time, but StreamCast is the first major commercial company to go this route.

Peer-to-peer interoperability could provide a boon for end users, because it could give them access to a wider variety of content and swapping partners. But it also could be a setback for companies, such as Kazaa distributor Sharman Networks, that include advertising and other commercial features. If Morpheus and other companies successfully offer universal peer-to-peer searching, they could immediately match, or even exceed, the available library of files on rival networks, regardless of how many people use their software.

The drive toward building bridges between networks appears well under way, driven by independent, noncommercial programmers as well as companies seeking to capture the benefits of Kazaa's huge user base for themselves.

"I think everyone is going to have to start moving in that direction," said Jed McCaleb, chief developer of the eDonkey and Overnet applications, which Net measurement companies say are overtaking Kazaa overseas. "There are benefits of supporting other networks, because there are so many people in them."

StreamCast's move, in particular, spotlights the ongoing tension between pure technological progress and an often-bitter sparring between the top commercial peer-to-peer developers.

The company's Morpheus software was once the most popular of the post-Napster file-swapping services, but it used the same technology--called FastTrack--as Kazaa. After a dispute over software licensing, Morpheus users were overnight ejected from the network. The company's popularity plummeted as it shifted to open-source technology, and Sharman Networks' Kazaa became file swapping's unrivalled leader.

Kazaa has been downloaded more than 315 million times, while Morpheus has reached 119 million, according to Download.com, a software aggregation site owned by News.com publisher CNET Networks.

By offering searches of all the major networks, including its most bitter rival, StreamCast hopes to recapture the top spot in the business by making comprehensive search results its hallmark.

"Google does a great job for search results on the Web," StreamCast CEO Michael Weiss said. "We hope to do as good a job on the edge of the Net."

However, some critics warn that bridging networks this way can have risks, too. Bringing many new people onto a network can bog down or even destroy that network, if newcomers are using flawed technology--and some open-source developers looking at Morpheus' new software are already sayint it could have devastating effects on the popular Kazaa network.

Sharman Networks executives say they're not happy about StreamCast's actions and are evaluating the software.

"On the surface, we're never comfortable when someone uses unauthorized, illegal code to tap into FastTrack," said Sharman Chief Technology Officer Phil Morle. "But we're not in panic mode."

The company has previously tried to stop distribution of versions of the Kazaa software, such as Kazaa Lite, in which independent programmers stripped out its advertising components. It has allowed the open-source Poisoned Project, for which open-source developers found a way to let Macintosh computers tap into the FastTrack network, to proceed.

P2P rising?
The bridging of the networks comes as entertainment companies are closely scrutinizing file swappers' behavior to see if a combination of lawsuits, education campaigns and the availability of legal content through services like Apple Computer's iTunes is finally putting a crimp in online piracy.

New data released Thursday by The NPD Group research firm have helped cloud a picture that has shown considerable drops in file swapping since the Recording Industry Association of America (RIAA) began suing individuals last fall.

According to NPD, both the number of households observed using peer-to-peer software and the number of individual consumers who report that they have used file- swapping software, have started climbing, after months of declines.

The number of households that have file-swapping services on their computers jumped 14 percent between September and November, the group said. Separate survey information, gained from interviews with consumers over the same time period, estimated that the number of individuals who had downloaded music from file-swapping services rose from 11 percent to 12 percent of the population of computer users over 13 years old.

That's still substantially lower than the 20 percent mark reached last May, but it may indicate that the effect of the RIAA's lawsuits is wearing off, NPD said.

Another recent survey, conducted by the Pew Internet & American Life Project, found that only 14 percent of Americans said they had downloaded music from a file- swapping network in December 2003, compared with 29 percent in a sample taken in March, April and May of 2003.

Building bridges, building trust
The drive toward interoperability has been under way for some time, but it is only now beginning to filter to the most popular file-sharing programs.

Peer-to-peer programmers say one of the most valuable resources a network has is people; more users mean more content--and a greater likelihood that any given search will get results. Adding bridges between networks is a natural way to increase the efficiency of file swapping at large, they say.

Indeed, some developers, including Microsoft itself, have foreseen using peer-to-peer technology as a complement or even a rival to traditional Web search technologies such as Google. Letting different networks talk to each other is one step toward this vision.

However, these bridges pose dangers as well. Allowing large numbers of people into what has been a fairly small network community can be disruptive from both a technological and social perspective--a little like bussing large groups of noisy tourists into an ordinarily placid town.

"These things are like communities of people," eDonkey's McCaleb said. "There is a lot of possibility and opportunity to cheat the network and mess up how things work or exploit it."

Even if social mores are followed, large numbers of new outside users hold the potential of destroying an older network, if they are using technology that is flawed in any way. For example, bugs in a file-swapping client could swamp a network with redundant search requests, slowing down everybody's connection, as happened in early versions of the Gnutella network.

One independent developer who has worked on open-source FastTrack technology said he has looked at the Morpheus version, and it is configured in a way that could be deeply destructive to Kazaa, iMesh and the other FastTrack-based networks.

"What they don't understand is the fact that they could actually damage the FastTrack network," said Julian Ashton, the former lead developer on the Poisoned project. "It's really bad."

Weiss said StreamCast has tested its new software to make sure that it doesn't have a negative impact on the new networks it is tapping into. It has deliberately turned off access to the Gnutella2 network while it continues testing, however. Consumers will be able to reach eDonkey, Overnet, Gnutella, Kazaa and other FastTrack-based networks.

Like many other free programs, the new Morpheus also is bundled with several third-party applications, including a search-focused toolbar that plugs into Internet Explorer.

Not quite detente
StreamCast's return to FastTrack access carries more than a hint of irony.

Morpheus' new access to FastTrack is done without permission, using an open-source project called MLdonkey, one of several independent projects that has tapped into the proprietary network after reverse engineering the Kazaa software. It also allows Morpheus users access to content from Altnet, an application that sells licensed content through Kazaa and--as of Thursday--Grokster.

Weiss said he's not worried about being shut out of the network again, since Kazaa parent Sharman Networks has spent considerable time in court proving that it does not control what happens on its network.

"It will be interesting to see if they attempt to" block us, Weiss said. "I think if they do, they are going to have some explaining to do."

Altnet Vice President Derek Broes said his company is examining the new Morpheus software but that he can't yet comment on the unauthorized access to his company's content.

"We are looking at this from a number of angles--technical, legal--and also with regards to Altnet's patents," Broes said.
http://news.com.com/2100-1032-5142626.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

FBI Logo to Grace Music CDs
Jeff Leeds

The FBI is coming to the local record store.

The music industry has won permission to include the agency's logo in CD packaging as a warning against unauthorized copying, sources said. Record labels want to use the logo the way it is used by movie studios, which include an on-screen warning on home videos and DVDs.

The deal, hammered out by the Recording Industry Assn. of America and FBI Director Robert S. Mueller III, comes as record labels try to dissuade Internet users from sharing copyrighted music online. The labels have filed hundreds of lawsuits against people who allegedly shared music illegally.

How the logo will be displayed is up to individual labels, sources said. Many discussed placement of the logo — and a warning about possible criminal prosecution for illegal copying — on the back of the disc packaging. Label executives also have discussed including software that displays the warning when a CD is put into a computer.

The RIAA declined to comment. An FBI representative couldn't be reached.
http://www.latimes.com/technology/la...,4433462.story


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Prominent pornsters shocked, shocked!- by p2p.

Ron Jeremy Cuts E-Music Store TV Spot
Charles Farrar

Adult entertainment legend and AVN Hall of Famer Ron Jeremy has cut a television commercial for Canadian Internet music store Puretracks which warns against the alleged hazards - porn, viruses - of free peer-to-peer file- swapping networks.

Jeremy appears in the spot in a red velour jogging suit, directing an adult scene, in the background of a teenager's room where the kid is downloading music on his computer, oblivious to Jeremy and his activity, with the action freezing when Mom knocks on the bedroom door.

This spot and a companion spot air after 9 p.m. on parent-oriented programming, according to the National Post.

"The music sites that are out there right now and which are being used by teenagers, especially younger teens, are just riddled with pornography and viruses and spyware," Toronto agency Cyclops Partners president John Farquhar told the Post. "When we presented that information to parents, they were completely unaware of it. We had to find a way to put together a commercial that could simply and impactfully put that forward."

"It's a very clever scene," Jeremy told AVNOnline.com, adding he got a "nice plug" on Regis and Kelly Live. "A kid is downloading, and they advertise there'll be no porn and no viruses. Very friendly for children, parents will love it, and they show what will not happen.

"In one scene there's these guys dressed in black kidnapping the kid, they're the viruses, and it says this will not happen," he continued. "And right behind, I'm directing a scene with a bunch of porn stars, a couple on the bed dressed but sexy dressed, and when the mom comes in we freeze, I go 'Hold it!' And she walks out, and it's 'Action!' and we continue."

Jeremy said he didn't know what it was going to be used for, when he was first booked for the commercial spot, which has been played widely on Canadian television in the hours after 9 p.m. "I got called from the Canadian union which made a deal with (the Screen Actors' Guild) which I'm a member of," he said. "But a commercial's a commercial. And I don't want kids to look for music and get porn by accident. I'm a big fan of porn, but I think it's really wrong to try to get kids to see it in a very sneaky way. If you have to rely on that to get traffic, you should just go out of business."

Jeremy - whose friends include Lars Ulrich, drummer for Metallica, outspoken opponents of free P2P file networks - said he understands "both sides" of the peer- to-peer file swapping controversy, but believes it's unfair to recording artists and filmmakers whose work ends up in files swapped by the millions for free.

"I've followed the situation fairly well, I have good friends on both sides," he said. "It's a very tricky, tough call, because people get free music on radio, too. But I think one of the arguments says that it doesn't hurt record sales and actually inspires sales, but the recording industry isn't doing all that well right now. This is not a big cause for me, and I'm not 100 percent against it, I'm 70 percent against it, but I think it is unfair for recording artists."

Jeremy himself has had past work turn up on the original Napster - a film file and a rap recording he had done. "I rapped on this record, I owned some of the publishing on it, I joined BMI, I made some money on it, and it was on an album, Booty Base, and there it was on Napster. Actually, I was flattered. Hey, I was good enough to be pirated! But I probably lost a couple of checks because of it."

Critics of P2P, like the music and film industries and some lawmakers, have often accused the P2P networks of either consciously allowing adult material to pass through their networks or turning a blind eye to those materials.

Earlier this month, adult video production company Titan Media accused KaZaA of refusing their request to help keep kids from being exposed to adult materials that pass through that network. "(W)hen given the specific knowledge and tools to do so," said Titan parent IO Group's vice president Keith Ruoff in a letter to the Senate Judiciary Committee, "they refused to respond or take action."

Sharman Networks, KaZaA's parent, has testified on Capitol Hill that the P2P service "will take all other feasible steps to best assure that minors are not inadvertently exposed to adult content when using (KaZaA)."
http://www.avn.com/index.php?Primary...ntent_ID=69962


If it’s really so important that kids don’t see your porn – you could always stop making it.

"Help Us Keep Kids From Porn On P2P": Titan to Senators
Charles Farrar

SAN FRANCISCO - A week after first asking the Senate Judiciary Committee to turn up the heat on peer-to-peer networks through which adult materials pass, Titan Media is bracing for a potential defamation suit from KaZaA's parent company, over Titan accusations that the P2P giant doesn't try hard enough to stop kids from getting adult materials through its network.

In a new letter to the Judiciary Committee, Titan vice president Keith Ruoff says Sharman Networks threatened the suit "simply because we had the courage to ask for your help in solving this important issue." Ruoff also says in the new letter that a lawsuit threat won't stop Titan from trying to find ways to keep kids from accessing adult materials online.

Ruoff told AVN.com he'd heard almost nothing back from the Judiciary Committee from the current round. "We heard from Senator (Dianne) Feinstein (D-California), she sent a 'Dear Constituent' thank you letter and said they would look at it," Ruoff said. "It seems like every time we release something to the Senate, two or three days later some Senator releases something based on what we send them."

Ruoff was referring to statements from senators just days after Titan's first letter to the Judiciary Committee, in which these senators – whom he didn't name – called for peer-to-peer networks taking stronger filtering measures.

Sharman has not yet made a formal move on suing Titan, Ruoff said. "We got the threat," he said. "We're sitting here waiting for the bomb to explode."

Sharman executive vice president Alan Morris testified to Congress last fall that his company welcomes suggestions for ways to keep kids from unwanted porn exposure. "We will take all other feasible steps," he said, "to best assure that minors are not inadvertently exposed to adult content when using (KaZaA)."

Titan has all but invited Sharman to put its money where its mouth is – they have also sent the Senate committee a point paper suggesting ways KaZaA and other P2P networks could keep kids – and anyone else who doesn't want it – from seeing adult materials through its networks. Titan calls it a "Shun Filter," based on a file's unique hash identification, which remains the same even if the filename is changed.

"Every file that is traded, downloaded, shared, and distributed using KaZaA goes in and out through 'shared folders'," the Titan paper says. "All file-sharing traffic either originates or is destined for these key areas of storage on a user's home computer…Instead of looking for viruses, the 'shun filter' would look for the hash ID of files on the 'shun list.' The KaZaA software would then simply ignore these positively identified files, preventing them from being traded within the network or displayed in content searches performed by users."

Ruoff said P2P defenders who compare the file-swapping scenario to the Sony Betamax videocassette recorder case of 20 years ago miss a big distinction between the VCR and the P2P online swap network.

"Sony sold a Betamax to a user, and that was the end of their association with that user," he said. "The difference is, here, KaZaA gives out a free piece of software, but they don't make money until people use it. They have an ongoing relationship with a user, and that's how they make money. They don't profit until someone uses it for infringing purposes.

"And if we put in a filtering mechanism that was effective and filtered out the content – and we believe adult material should be available legally – but if we found our content, positively identified it, and notified them about it, they need to do something about it," he continued. "And if they continue profiting and we're going to do something about it."

The music industry, of course, continues "doing something about it" – the Recording Industry Association of America has sued 532 computer users it claims were distributing songs online illegally, in the first such suits since a federal appeals court blocked the use of copyright subpoenas to identify the targeted users. And it's the largest number of suits since the RIAA launched its litigation campaign last summer.

The suits were filed in New York and Washington, though the individual defendants are likelier to be living across the U.S., the RIAA said.

The defendants in question are said to have distributed an average of 800 or more songs each online, and face potential civil penalties or settlements that could cost in the thousands. The RIAA said the latest round was aimed at discouraging music fans who thought that appeals court ruling would make it harder to be stopped because of higher cost and effort by the music business.

"Our campaign against illegal file sharers is not missing a beat," said RIAA president Cary Sherman in a statement. "The message to illegal file sharers should be as clear as ever."
http://www.avn.com/index.php?Primary...ntent_ID=70798


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Apple's iTunes Might Not Be Only Answer To Ending Piracy

Steve Jobs is pretty smug about iTunes, but maybe he's got it wrong.
Kevin Maney

It's at least worth exploring, because so far the tech industry has treated Apple Computer CEO Jobs and his creation of iTunes much the way the Hebrews treated Charlton Heston after he parted the sea of Jell-O in The Ten Commandments. Praise be Steve! He has saved us!

Except now there's a daring young Web site called Magnatune that's asking some interesting questions about ways to finally create harmony between the Internet, music artists and consumers.

It suggests that iTunes and all the similar 99-cents-a-song sites from the likes of Dell and Musicmatch are just a waylay on a longer path. Eventually, that path has to lead to a business model that stops the ongoing insane war between the music industry and its customers - a war in which both sides continue to give each other plenty of reason to act stupid.

Magnatune was launched in May by John Buckman, who is otherwise CEO of e-mail software company Lyris. At its core, Magnatune is an effort to create the first real Internet-era record label. It's intriguing enough that Hank Barry, former CEO of Napster (news - web sites), took Buckman to lunch a couple of weeks ago to learn about the company.

Magnatune doesn't have all the answers. But its model reveals how the Internet, CD burners and inexpensive digital recording technology are undermining the music industry's economics to a greater degree than most people realize.

The questions about current models start with pricing. Why, in this era of eBay, is all music priced the same? A new track from White Stripes can't be worth the same 99 cents online as an old Bread recording of Baby I'm-A Want You. (No quips from the peanut gallery about which is worth more.)

The Internet makes dynamic pricing possible - prices that change depending on demand. EBay's auctions are one way to do it. Magnatune is trying something a little different, and it includes playing on a buyer's conscience.

When you go to Magnatune, you find a list of a few dozen artists the company has signed. They are not famous. (About one in 300 artists that send music to Magnatune get signed - the idea is to maintain a level of quality.)

Click on an artist such as Falik - who plays electro-Indian music and may or may not intend his name to be a homonym - and you can listen to his album for free by streaming it over the Internet. It works like an on-demand radio station: You're not downloading the music onto your computer's hard drive, and you don't own it.

To download an album so you can play the songs any time or burn them to a CD, you have to buy it. When you click to buy, you see a "suggested" price of maybe $8, but you can choose to pay as little as $5, or as much as you want. Here's what's fascinating: "Everyone assumes we're just getting $5," Buckman says. "The average is $8.93."

Buckman is convinced his customers are willing to pay for - not steal - his artists' music, and even pay more than is necessary, because Magnatune pays artists half its revenue from selling music.

Which brings into play another layer of the Magnatune model. In decades past, it cost a lot to get recorded music to the public. Studios and equipment were expensive, so recording an album took a lot of upfront money. Then, manufacturing thousands of LPs or CDs and shipping them around the country cost a ton.

It all meant artists had to sign with a record label that would advance the money to launch an act. The price to artists has often been restrictive contracts that pay little royalties.

But every part of that model is changing. PCs, digital gizmos and software can be assembled into a high-quality basement studio for a few thousand dollars. Former Byrds legend Roger McGuinn is recording his next album on his laptop while on the road. And with high-speed Internet, CD burners in most every PC, and blank CDs that cost 30 cents, it makes little sense to manufacture and ship pieces of plastic. It's like, in the 1940s, when the first refrigerator/freezers made home ice delivery irrelevant.

Bottom line for Magnatune: It can sign artists who have already recorded their albums, advance them nothing, then split all purchases 50-50. If you pay $8, the artist gets $4.

The 50-50 deal is spelled out on the Magnatune site. Consumers, Buckman says, want to support artists.

But they don't want to support the Recording Industry Association of America (news - web sites) (RIAA) and the music industry, which they see as the enemy. People are willing to steal music from music companies but not from artists, Buckman says. Considering the outrage in 2003 over the RIAA suing a 12-year-old girl for downloading music, he's probably right.

Magnatune is taking advantage of this zeitgeist with a certain glee. Its slogan: "We are not evil."

Buckman is even embracing some of the more radical aspects of Internet culture. One is open source. Because music now is digital code, why not allow people to take it apart, improve on it, use it to make something new? Magnatune's contracts with artists allow for certain kinds of sharing. "We want to be the Linux (news - web sites) of the music world," Buckman says.

Now, nobody suggests Magnatune is going to overtake iTunes or the major record labels. "It probably won't get past a certain point because the music is obscure," says Mark Coleman, author of Playback: From the Victrola to MP3, 100 Years of Music, Machines and Money. But the model should make the music industry take notice.

Yes, compared with the lame attempts to sell music online before, iTunes is a breakthrough, and it is popular.

Still, it sells music from major labels that operate much the way they have since Elvis recorded Blue Suede Shoes. Jobs admits iTunes loses money. Consumers still steal: BigChampagne, a service that the music industry itself uses to monitor file swappers, reports a 35% increase in illegal traffic in 2003. And the RIAA threatens another round of lawsuits against consumers.

It's still broke. Jobs hasn't fixed it.
http://story.news.yahoo.com/news?tmp...toendingpiracy


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Untraceable File Sharing Inspired by Ants
Paul Eng

Like ants foraging for food, the requests continue on their way across the network. When the file is finally located on the network, the computer that has the file sends the message back to the nearby computer that sent the request, which then passes it to the computer that it received the request from and so on.

An invasion of ants has become the unlikely inspiration for what may be an untraceable way to trade files online.

Since last September, the Recording Industry Association of America (RIAA) has filed over 380 copyright infringement lawsuits against suspected online music pirates in the United States. And the effect has been chilling. A recent Pew survey of online users found just 14 percent still downloading music files from so-called peer-to-peer, or P2P, networks such as KaZaA, compared to 29 percent a year ago. Many cited fears of being nabbed as online "pirates."

Still, the legal clampdown hasn't stopped others, according to a recent survey by market researcher The NPD Group. As many as 12 million individuals claimed to have downloaded music illegally in November -- a 9 percent increase in the number of pirates reported in a September survey. Now Jason Rohrer, a 26-year-old programmer in Potsdam, N.Y., thinks he has a way to really boost file-sharing back into popularity.

When Rohrer was living in Santa Cruz, Calif., and studying for a master's degree in computer science, he noticed a trail of ants had invaded his indoor Ficus tree from the front door. No matter how he tried to destroy the trail -- sweeping daily, or blocking the path with chalk or hot pepper -- the ants always figured a way around the obstacle to the tree.

"I read about how they use pheromones -- chemical scents -- to create the trails and how it's used by the colony," says Rohrer. And it inspired him to see if the same "swarm intelligence" could be applied to how programs work over the Internet.

The result: MUTE, freely-available software for a P2P system that Rohrer maintains is almost as hard to trace and stop as, well, ants at a picnic.

Like Foraging Ants

In current P2P networks such as KaZaA and Grokster, software identifies each computer on the network using Internet Protocol (IP) addresses -- a string of numbers similar to a telephone number.
When a member searches a P2P network, the request -- say for music by Britney Spears -- goes out across the network. Computers that have the requested files send a response back directly to the computer that made the request using the IP address.

Files are traded directly between computers in small packets using the IP addresses -- making it extremely easy to track.
But MUTE's system has several different ways to thwart tracking efforts.

First of all, each computer on the MUTE network is "addressed" by a random string of characters and numbers. And each time a computer connects to the MUTE network, a new random address is generated. When a MUTE member searches a file, Rohrer says the request goes out from the originating computer only to nearby computers the program knows about. If the files aren't found there, the MUTE software on those nearby computers then sends out requests to the next set of computers they know about.

Like ants foraging for food, the requests continue on their way across the network. When the file is finally located on the network, the computer that has the file sends the message back to the nearby computer that sent the request, which then passes it to the computer that it received the request from and so on.

Rohrer says MUTE's setup offers several advantages over current P2P networks. For one, chances of finding and retrieving a particular file across the network might be increased since each computer on the network is actively looking and sending data back to the originating computer.

Rohrer compares it to sending a message using the old "telephone" party game. "Let's say you're in a room crowded with people, one of whom is someone you know," says Rohrer. "To reach that person, you ask the seven people next to you to pass a written message to that person. They may not know the person or where he is in the room, but in turn, they'll copy and pass the note to the people closest to them and so on. Eventually, the person you want to reach gets the message because you've covered everyone in the room."

What's more, such a system offers another layer of anonymity to user. In order for parties such as the RIAA to track such requests, the organization would have to monitor every single computer on the MUTE network. Rohrer says he initially didn't design MUTE as a blatant challenge to the RIAA and its efforts to stop piracy. But he says he was troubled by the recent RIAA lawsuits, which he believes trampled on individuals rights to privacy .

"It's a scary environment to be living in when an organization like the RIAA can just snoop on what you're doing online," says Rohrer. "I've created a piece of software that helps people protect their privacy."

But even he admits that for the privacy and other possible advantages a MUTE network would offer, there are plenty of downsides as well. For now, MUTE has garnered only a very small group of users. Since its initial released last month, just about 32,000 have downloaded the program to establish the fledgling P2P net. That hardly a drop in the bucket compared to the millions of computers running KaZaA or Gnutella worldwide.

And there's no guarantee that if the network gets bigger, it will become as powerful as other file sharing networks. In fact, Rohrer admits that MUTE may become terribly inefficient if too many computers -- each generating its own messages as well as passing along search requests from all the other computers on the network -- join up. What's more, there are questions if such a network would survive any legal battles in the ongoing war between the RIAA and purported music pirates.

Last month a U.S. District Court had ruled that the lawsuit tactics used by the RIAA to obtain user information from ISPs was illegal, marking a small victory for advocates of privacy.
But in a reaction statement released by RIAA President Cary Sherman: "This decision in no way changes our right to sue, or the fact that those who upload or download copyrighted music without authorization are engaging in illegal activity. We can and will continue to file copyright infringement lawsuits against illegal file sharers."

So while Rhorer's tiny, experimental Mute network has escaped the attention of the RIAA so far, there's no guarantee that the music industry will challenge him and his creation much like they did Shaun Fanning and his Napster creation. And that leaves it unclear if MUTE will become the latest pest to the RIAA's attempts to thwart piracy, or squashed like the insect that inspired it.
http://www.technewsworld.com/perl/story/32632.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Intel Pursuing Much Faster Home Internet Access
John Markoff

Intel, the world's largest computer chip maker, is pushing forward with a new wireless technology that it says it believes can bring extremely high-speed Internet access to American homes, a promise once offered by fiber optic networks.

Sean Maloney, general manager of Intel's wireless division, said on Wednesday that Intel saw enormous promise in a new technology known as WiMax and would produce chips that use that technology. At a speech on the opening day of an annual technical symposium sponsored by the Wireless Communications Association, a trade organization of equipment makers, Mr. Maloney said that growth in wireless communications would be as fast as the Internet expansion of the mid-1990's.

"It looks like the Internet in 1994," he said. "The next 10 years will be defined by broadband wireless."

Intel is hoping that broad deployment of the WiMax standard will allow it to repeat the success it has had selling its Centrino microprocessor chip, which uses Wi-Fi, or 802.11 technology. Intel has spent $300 million in the last year advertising its Centrino wireless technology for portable computers, and its venture capital arm, Intel Capital, has invested more than $4 billion in a range of wireless data ventures.

While Wi-Fi is now the international standard for home and office wireless networking, Intel executives say they believe that WiMax, or 802.16 technology, can have an equal or greater impact on the future of data transmission.

Indeed, the recent Consumer Electronics Show, held this month in Las Vegas, was a showcase for wireless technologies that are being used in everything from hand-held video players to televisions. And last week at the Sundance Film Festival in Utah, Intel showed a digital movie that was broadcast wirelessly to large flat-panel displays, demonstrating wireless video transmission.

"Most people don't think of them this way, but we believe that Intel is one of the most important companies," said Craig J. Mathias, a principal analyst with the Farpoint Group, a wireless industry consulting firm based in Ashland, Mass. "They will do to the wireless industry what they have done in computing."

Intel's strategy has long been to nurture computer applications to drive up consumer demand for more powerful computer chips. But the relatively slow adoption of broadband Internet access to the home, Mr. Maloney said, has delayed the widespread use of advanced applications like video-on-demand via the Internet that require high-speed connections.

He said that 65 percent of American households with Internet access still do not have broadband connections, and that hopes for broader deployment of high-speed fiber optic lines were fading. "There is no great fiber build-out going on," he said. "Some kind of wireless capacity is necessary to reach the last mile."

The time for laying fiber optic lines to the home has passed, he argued, because deployment costs have skyrocketed in recent years. It can now cost as much as $300 a foot to lay fiber optic lines.

During his speech and afterward in an interview, Mr. Maloney acknowledged that WiMax technology was not yet proven and that the radio spectrum needed to deploy the new technology at reasonable costs was not yet available.

He also conceded that efforts during the last decade to provide wireless data transmission using other technologies had largely ended in commercial failure.

"This stuff is obviously difficult," he said. "You have every right to ask how are we going to do this. You have the right to be skeptical."

Mr. Maloney also noted that the cost of deploying wireless connections was sharply higher when the service was offered at higher radio frequencies, because more antennas were needed to cover the same area. The frequencies available for new technologies are generally higher ones, which offer less than optimal performance over longer distances; most of the more desirable parts of the spectrum have been licensed for other uses.

Still, Mr. Maloney said he was confident that WiMax would catch on, because it could offer competition to cable and telephone companies selling high-speed Internet access. Intel has announced several American equipment partners for its WiMax technology and is working with eight foreign telecommunications service providers. But it has not announced any partners in the United States to offer service.

The company said it had run a small test of an early version of WiMax in Plano, Tex., last fall and would conduct larger-scale urban trials in 2005. Intel recently placed a WiMax antenna on top of its corporate headquarters in Santa Clara, Calif., and Mr. Maloney said he was able to receive a 7-megabit data signal - enough to view high- definition television- from the hills above Silicon Valley, more than 12 miles away.
http://www.nytimes.com/2004/01/22/te...pagewanted=all


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

TrustyFiles Delivers Public AND Personal File Sharing

Software provides easy-to-use file sharing with friends, while giving access to millions of files on the P2P network.
Press Release

RazorPop, Inc. today announced the release of TrustyFiles 2.0 Personal File Sharing software at http://www.TrustyFiles.com. TrustyFiles is free and has no spyware.

Traditional P2P software limits users to connecting to a large anonymous file sharing network. There's no way to share files directly with friends. TrustyFiles solves this problem and puts the user in control with Personal, Private, and Public File Sharing settings.

"File sharing is not just cool technology", said Marc Freedman, CEO of RazorPop, developer of TrustyFiles. "It's about the experience, exploring new music, video, and other media, trying new files your friends recommend, and sharing it back. This is the process that creates the fans who buy CDs and DVDs, go to performances, and support their favorite artists. P2P software should enhance and not restrict this experience."

"Only TrustyFiles offers users the power and flexibility to share and download files on their terms - when, where, and how they want it. Whether they want to search millions of files or download one file from a friend, find files at home or at work or share files with the entire network or just friends."
http://www.digitalvideoediting.com/2...w_razorpop.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Compulsory Licensing vs. the Three

"Golden Oldies"

Property Rights, Contracts, and Markets
Robert P. Merges

Executive Summary

From its inception in the U.S. in the early 20th century, compulsory licensing has been seen as a means of making intellectual works available by reducing some of the transaction costs associated with obtaining permission to use copyrighted material. There are now increasing calls for compulsory licensing for digitized works on the Internet, particularly music.

Conceptually, a compulsory license falls midway between granting full copyright, which gives owners broad control, and denying copyright protection altogether.

Rather than allowing musicians, artists, and other copyright owners to negotiate licensing terms for use of their works, a compulsory license forces copyright owners to allow use of their works under legislatively set prices and restrictions on use.

When warring groups sound the alarm over excessive control via copyright on the one hand and insufficient incentives to create on the other, compulsory licensing seems a reasonable compromise. Compulsory licensing seems to pay off big in the short term by reducing the need for individual buyers to locate, negotiate with, and pay individual sellers. Compulsory licensing supposedly addresses the "market failure" of high transaction costs.

But markets for digitized works do not suffer from market failures. Furthermore, the Internet has reduced the transaction costs that once served as a key rationale for compulsory licensing. Recent developments suggest that fears of excessive control of digital content are overblown. Without enhancing compulsory licensing, the digital landscape is diverse, as the case of music demonstrates. There is free music, temporarily free music, and low-cost music online. Offline, music companies are lowering the prices of CDs.

The influence costs associated with compulsory licensing schemes make them a more expensive mechanism for setting prices. Private negotiations are much cheaper and more flexible over the long term.

In the digital realm, we have not yet abandoned the basic building blocks of all creative endeavors—property rights, contracts, and voluntary markets—and we therefore retain the preconditions for future growth and diversification.
http://www.cato.org/pubs/pas/pa-508es.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Europeans Buy Millions Of Music Downloads
Reuters

Europeans purchased more than three million song downloads in 2003 from the continent's primary online music store, On Demand Distribution, or OD2, raising faint hopes that the lackluster music industry is on the road to recovery.

A few million downloads is not going to immediately turn around an industry bracing for its fourth straight year of declining CD sales. But the emerging download market offers a glimmer of hope for record label executives, who have struggled for years to thwart free file-sharing services like Kazaa.

"I have to believe electronic distribution of music will be an increasingly important part of the business for record labels, but unfortunately, I don't think this is an instant cure," Charles Grimsdale, chief executive of Britain's OD2, told Reuters Tuesday.

"The market is growing fast for sure, but new markets take time," said Grimsdale, who co-founded the company with rocker Peter Gabriel.

Still, the volume of downloads is growing 25 percent month on month, Grimsdale said, which would mean that download sales should grow more than threefold in 2004.

The more mature U.S. market is growing even faster. American music fans purchased 30 million download tracks in 2003, as online stores such as Apple Computer's iTunes proved a big hit with consumers.

The success of iTunes, combined with some encouraging reports that online piracy may be tailing off in the United States, has helped propel shares of the EMI Group, the largest stand-alone music company, more than 40 percent higher since the beginning of the year.

For OD2, which licenses its download service to 30 European retail and Internet partners, including HMV and Microsoft's MSN, the volume of downloads picked up in August, when it introduced through MSN a tariff scheme that enables users to buy downloads without a subscription.

"Our sales increased in some cases as much as 900 percent at that point," Grimsdale said.

Grimsdale acknowledged that competition will be much more fierce in 2004. Industry officials expect the big U.S. online stores such as iTunes and Roxio's Napster to make their European debut by summer.

OD2 is the most established player in Europe, having arranged licensing deals with all five major music labels, giving it a catalog of 260,000 songs.

Grimsdale said it is in the process of adding to its library several hundred thousand songs it has under license, giving it a catalog of a million songs. "We are furiously trying to fill the gap," he said.
http://news.com.com/2100-1027-5143384.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Exchange Rates Muddy Music Download Prices
Geoff Gasior

One of the reasons that online music services have become popular is the fact that consumers don't have to purchase an entire CD to get their hands on a one-hit wonder's three and a half minutes of fame. However, the price a music shopper will pay for the latest Outkast, Britney, or White Stripes single very much depends on where that shopper lives. In the US, the major players seem to have settled on a $0.99 price for single-track downloads, though Wal Mart is undercutting everyone and selling songs for only $0.88.

Outside the US, the 0.99 price point has been embraced by music services offered in Canada and the UK. However, due to the wonders of exchange rates, the actual cost of music downloads varies quite a bit from country to country. In Canada, Puretracks is selling songs for $0.99CDN, which works out to about $0.76US. In the UK, mycokemusic will apparently carry songs for £0.99, which works out to a whopping $1.80US.

As new players emerge, the price of downloads may stabilize, but until then there's probably a buck or two to be made muleing music downloads across international borders.
http://techreport.com/onearticle.x/6132


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

2003 in Review: DRM Technology
Bill Rosenblatt

It's the end of 2003, and DRM technology is inching ever so slowly towards the mainstream. To use Geoffrey Moore's terminology, DRM has crossed the chasm -- made particularly deep and yawning by the overall post-9/11 technology slump -- and made it firmly into the bowling alley. DRM technology progressed through 2003 primarily by finding new niche markets and building solutions for those markets that expand on established DRM technology architectures with appropriate features. Efforts to launch DRM into the mainstream have started to appear, through a couple of vendor efforts and fledgling standards initiatives, but have yet to gain any significant momentum.

The head bowling pin -- the niche market that developed the strongest in 2003 -- was online music (see our year-end review of online content services), dominated by Microsoft. Other bowling pins that emerged were e-periodicals, led by the vendors NewsStand and Zinio, and downloadable movies, divided for the moment between Microsoft and RealNetworks, the latter being otherwise practically invisible in the DRM market this past year. The e-book market suffered from flat overall growth, but Adobe began to emerge as the prevailing platform in that niche, with MobiPocket appearing poised for momentum in the coming year as more reading-friendly mobile devices appear.

Corporate Enterprise Push

Apart from those media segments, the strongest push into a "niche" market was in the corporate enterprise market. As the concerns of corporate IT executives rapidly shifted from boundless ERP and CRM-fueled expansion plans to information security and accountability, entrepreneurs and existing vendors of DRM-related technologies saw their chance and started to move in.

Some established DRM vendors, such as SealedMedia and RightsMarket, attempted to retool their publishing-oriented offerings for the corporate market and found some success, while others that bypassed the media and publishing market from the start, like Authentica, found their lives extended.

Meanwhile, regulatory compliance concerns in markets such as healthcare and financial services began to take on more importance. The relevant laws (including HIPAA in healthcare and Graham-Leach-Bliley (GLB) in financial services), combined with a post-Enron heightened awareness in keeping corporate information noses clean, created a new type of DRM-friendly environment. Toward the end of 2003, a handful of vendors created remarkably similar elevator pitches for VCs: sell allegedly out-of-the-box information security policy solutions to the new breed of empowered, budget-laden corporate info security czars. Vendors like PSS Systems, Trusted Edge, and Liquid Machines emerged with so-called "document policy compliance" solutions, about which it wouldn't surprise us to learn that they are mostly custom development at this stage.

We expect that there will be at least a half-dozen more vendors attempting to enter this space before the inevitable contraction to 2 to 4 by the end of 2004. We have yet to be convinced, for example, that DRM technology applies to regulatory compliance scenarios like HIPAA and GLB at more than a superficial level, or that there is really any such thing as an out-of-the-box "HIPAA solution." We suspect that such solutions require lots of custom integration and process reengineering, although we invite any of this cavalcade of VC-funded startups to prove us wrong.

The development in the corporate DRM space that threatens to overshadow all of the above is Microsoft's release of Windows Rights Management Services (RMS) for Windows Server 2003. This product is the culmination of the "Unified DRM" strategy that Microsoft has pursued since at least 2001, and it's telling that the product release is targeted at the corporate market rather than integrating Microsoft's DRM offerings for the media/publishing market. As is typical for other types of Microsoft platform technologies, the launch of RMS included an already-populated partner program designed to give third parties opportunities to develop more complex and more niche-specific solutions -- such as for HIPAA and GLB? -- on top of RMS.

New Media Applications

A handful of new DRM application areas emerged in the media market. The most fruitful of these was in pre-release processes -- production and distribution of content. After the major media industry segments began to publicly admit that much of the piracy of major releases takes place before any consumers lay eyes or ears on the products, vendors began to offer solutions for automation of production and distribution workflows that included a DRM component. These solutions, from vendors like DMOD, WiredEntertainment, and Activated Content, pay for themselves immediately through efficiency gained by distributing content over the Internet instead of through physical media; DRM features are almost icing on the cake. Expect the film industry to follow suit next year, especially in light of the MPAA's debacle over the distribution of "screener" copies of movies prior to Oscar time.

A few new media applications for DRM that appeared in 2003 didn't move beyond the "promising" stage. One was watermarking. Watermarking re-emerged from a slump that was brought about by two failures: the failure of the watermarking-based SDMI as a standard for the music industry, and the failure of Digimarc, the heavyweight IP owner in the watermarking space, to develop markets beyond its cash-cow business of licensing the basic tools with which it saturated the graphic arts and imaging markets. A few intriguing glimpses of advanced watermarking applications appeared -- including Sony's Signet Screener technology for video and the Fraunhofer institute of Germany's Light Weight DRM -- but none of these have gotten past the research stage yet.

Meanwhile, fingerprinting, a technology related to watermarking, came into its own this past year. Fingerprinting technology derives identities of content items from the content itself, not from a special mark inserted into it, as watermarking does. Fingerprinting vendors have used the technology to build "name that tune" services for consumers, but the more interesting (and more DRM-related) application of fingerprinting is in broadcast monitoring, i.e., identifying broadcast content for purposes of tracking and rightsholder compensation. Licensing collectives such as ASCAP have begun experimentation with fingerprinting-based broadcast monitoring solutions from vendors such as MediaGuide. Expect this technology to explode into mainstream use, but not for another couple of years as the underlying data issues are slowly and painfully worked out.

Another interesting technology area that emerged in 2003 but did not exit the year with any practical impact was DRM for the home network. Consumer electronics giants like Sony and Matsushita asserted that the home network was the next frontier, and many large content owners seemed to go along with the idea that users could do what they wished with content within their home networks. IBM demoed xCP, lab technology for authentication of device identities on home networks, and Sony began to make some noises about the application of its proprietary Open MagicGate (OMG) DRM technology to home networks, but nothing much has happened.

However, don't look for this area to take off in 2004. Larger problems have to be solved first: consumers can't install the basic plumbing of home networks without arcane technical knowledge, and even if they could, few people understand what a "home media network" is or why they might want one.

A similar lack of progress occurred during the past year in the broadband/set-top box market. That segment of the industry is in a holding pattern waiting for infrastructure as well as for the FCC's broadcast flag regulation (see our year-end review of DRM-related legal actions) to play out in the market.

Do, however, look for DRM to take off in peer-to-peer networks in 2004. The current dichotomy between peer-to-peer networks and established media interests is more a matter of polemics than of technology. Media companies can and eventually will find ways to embrace P-to-P and turn it to their advantage, and DRM technology will need to be incorporated in whatever schemes emerge.

The first experimental glimmers of integrating DRM into P-to-P networks occurred this past year through firms like File-Cash Networks and DigitalContainers, and Grokster made an arrangement with the UK-based DRM vendor SoftWrap. The Content Reference Forum (CRF; see the year-end review of standards initiatives), which originated in the music industry, suggested ways of incorporating DRM into P-to-P networks through formalized, "e-contract" based Superdistribution arrangements. Expect more of this experimentation to occur next year, along with the first glimmers of involvement by media industry product executives, to legitimize the market.

Negative Developments

2003 was a terrible year for copy protection for physical media. DVD piracy abounded, thanks to the selection of the weak CSS copy protection scheme, whose primary advantage seems to be low unit cost for the DVD player makers who designed it. Attempts to foment copy protection schemes for audio CDs were mostly laughable. Schemes that patently (pun intended) did not work, such as SunnComm's for BMG Music, were fobbed off on the public in an apparent attempt either to placate record company executives eager to "just do something," place audio CDs under the protectionist shield of DMCA 1201, or both.

Vendors of proprietary DRM solutions continued to cease operations or sell off their assets, but at a slower pace than in 2001-2, thereby confirming the idea that DRM is moving beyond the chasm phase of its market development. We counted four such developments in 2003: InfraWorks declared bankruptcy, Liquid Audio sold its assets to Wal-Mart's physical media fulfiller, Elisar ceased operations, and at the beginning of the year, Alchemedia sold its assets to a corporate info security vendor.

Finally, the entire DRM industry is holding its collective breath waiting for results from Sony and Philips's $450 Million acquisition of InterTrust in late 2002. The entire year has gone by with hardly a peep. InterTrust continues as a going concern, and there are stirrings of news that Philips will soon be deploying technology that InterTrust is currently developing, but all we are hearing from Sony (and not much, at that) is about its proprietary Open MagicGate technology, which predates the InterTrust acquisition.

Sony and Philips could do something truly radical with InterTrust's massive DRM-related IP and implemented technology -- dare we suggest a broadly applicable DRM toolkit, a la IBM's EMMS, released under open-source licensing? -- or the assets could disappear deeply into the maws of those two gigantic corporations, as those of similar-sized acquisitions have done so many times in the past. The re-emergence of InterTrust could well be the DRM story of the year in 2004.
http://www.drmwatch.com/drmtech/article.php/3294391


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Report Finds Risks in Internet Voting by Americans Overseas
John Schwartz

A $22 million system to allow soldiers and other Americans overseas to vote via the Internet is inherently insecure and should be abandoned, according to a report by computer security experts asked to review the new program.

The system, the Secure Electronic Registration and Voting Experiment, or Serve, was developed with financing from the Defense Department and will first be used in the primaries this year.

The review, requested by the government, noted that experts had voiced increasingly strong warnings about the reliability of electronic voting systems. It said the new program, restricted to voters overseas using personal computers to vote using the Internet, raised the ante on the risks of such systems.

Serve, the panel members wrote, "has numerous other fundamental security problems that leave it vulnerable to a variety of well-known cyberattacks, any one of which could be catastrophic."

Any system for voting over the Internet with common personal computers, the report noted, would run the same risks.

The Trojan horses, viruses and other attacks that complicate modern life and allow crimes like online snooping and identity theft could allow hackers to disrupt or even alter the course of elections, the report concluded. A major American election would be an irresistible target for hackers, and the ability of computers to automate tasks means that many attacks could be carried out on a large scale, the report added.

Such attacks "could have a devastating effect on public confidence in elections," the authors wrote, adding, "The best course to take is not to field the Serve system at all."
http://www.nytimes.com/2004/01/22/te...pagewanted=all


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Napster Takes Executive Action In Europe
Graeme Wearden

Napster, the now-legal music service, has hired its first Europe-based executive as part of a drive to expand into the lucrative European market.

The appointment of Leanne Sharman, a former vice president of sales and marketing at MP3.com, was announced Friday.

Precise details of Sharman's role weren't available, but as Napster's first European executive she will be spearheading the company's expansion into Europe. The European market is being eyed by several big U.S. online music retailers.

"We can't say a great deal at this stage," said a Napster representative. "Leanne's appointment is in response to the tremendous demand for Napster's services that we have seen from Europe."

The representative explained that Napster wants to have a senior player located in Europe to create partnerships with European-based companies. Napster won't name any likely partners at this stage, but says that it's keen to look at a wide range of possible brand tie-ins.

Napster was relaunched as a legal online music service last autumn. Its high-profile battles with the traditional music industry ended with Napster filing for bankruptcy protection in June 2002, and some of its assets were then snapped up by CD-burning software company Roxio.

Despite competition from services such as Apple Computer's iTunes and RealNetworks' Rhapsody, the new Napster is understood to be doing well. It sells individual music tracks for 99 cents, and albums for $9.99, on top of a free service that lets people view music videos and download short audio clips, and a premium service for $9.99 per month.
http://news.com.com/2100-1027-5142250.html


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

UPDATED: FBI raids hacker home in search of stolen Half-Life 2 code
"Hungry Programmers" pirate group likely involved
J. Eric Smith

Those wily grunts in the black helicopters are at it again. No, not Microsoft's Secret Service Legion, the somewhat-less-fear-inducing Federal Bureau of Investagation (FBI). According to a weblog posted by a San Francisco resident, the Effa Bee Eye raided his domicile looking for a treasure beyond comprehension: the stolen source code to Valve Software's upcoming blockbuster gaming sequel, Half-Life 2.

The raidee, one Chris Toshok, was rudely awakened by the men in black, who proceeded to search his apartment for anything relating to Valve Software and Half-Life 2. When the federal agents left, they took with them practically every piece of electronic gear owned by Toshok, including 9 computers, his Xbox, and a Tivo.

Toshok proclaims his innocence, but also admits to being associated with a group calling itself the "Hungry Programmers." The group is on the FBI's list as a piracy organization, and has apparently been linked to other hacking activities in the past.

You can read Toshok's blog on the event if you're so inclined.

UPDATE 4:30 P.M. ET: Forgot to include the following attribution in the original posting. Sorry, K.! --ChiefEditor

Thanks to K. Adams for the heads-up, and the link to The Inquirer's coverage.
http://www.geek.com/news/geeknews/20...120023508.htm#


USPTO Grants Calif. Lawyer Patent Over Entire WWW Naming Scheme

Do you know about United States Patent No. 6,671,714? You should. The patent, recently granted to one Frank Weyer of Beverly Hills, California, grants the patent holder full rights to:A method for assigning URL's and e-mail addresses to members of a group comprising the steps of: assigning each member of said group a URL of the form "name.subdomain.domain"; and assigning each member of said group an e-mail address of the form "name@subdomain.domain;"Sound familiar? Well, it should, because the patent describes what is essentially one of the most basic, most crucial underlying structures of the World Wide Web, namely the domain naming system.

The concept of domains and subdomains, as well as the e-mail addresses associated with them, has been around for a long time but apparently has escaped being patented prior to now. Meyer, a lawyer by trade, has capitalized on that oversight, and as of December 30, 2003, Meyer owns it. And now he's using it where it'll do the most good--in court.

On January 17, 2004, Meyer brought suit against Internet heavyweights Network Solutions, Inc. and Register.com, claiming the two services are infringing upon Meyer's newly-granted patent. In the suit Meyer claims damages of an unnamed amount and requests an immediate injunction against the two companies. Meyer states that he hopes to "work with" NSI and Register.com to license his patent. NSI and Register.com don't seem to be cooperating thus far, however.

You can read the text of the patent at the USPTO.
http://www.geek.com/news/geeknews/20...0120023507.htm


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Audio Formats Stumble In Quest to Replace CDs
Mike Musgrove

The appeal to consumers was supposed to be better and more lifelike sound quality. The appeal to music companies was supposed to be a new digital format that consumers couldn't Napster-ize or cheaply copy so it could be sent across the Internet to all their friends.

But instead, two newish audio media formats, DVD-Audio and SACD (short for "super audio compact disc"), seem to be stuck at the starting gate. Rather than replacing the enormously successful CD, these two formats are starting to look like two Next Big Things that may never find a place in tomorrow's all- digital, relentlessly networked living room.

The lack of enthusiasm adds yet another chapter to the hit-or-miss nature of digital innovation, and, experts said, a cautionary lesson in what happens when companies try to impose new restrictions on a product where once there were few or none at all.

Both of these shiny, palm-sized discs look just like standard audio compact discs but contain about six times as much digital information, delivering a sonic picture so detailed their backers brag you could practically hear Mick Jagger strut his stuff across the stage.

Both have been available since 2000 and cost about the same as a CD -- while the machines needed to play each disc cost only about $200, slightly more than traditional CD gear. Yet for both, sales have been negligible.

During the six-month period ending in June 2003, only 100,000 DVD-Audio discs were sold, compared with 245 million CDs, the Recording Industry Association of America reports. Even traditional vinyl records outsold DVD-Audio -- by a factor of six to one.

Rather than growing, sales of DVD-Audio discs are actually down from the same period a year ago. The RIAA does not track SACD sales.

Three years might not seem like a long time for a new format, but by this point in the CD's life cycle, sales had begun to triple and quadruple as consumers lined up to buy into the format.

The CD had a smoother road to introduction. The recording industry and the consumer electronics industry presented a united front when they sold the world on the benefits of the CD 20 years ago, but with the newer formats, there is no unanimity. Each is backed by different industry players (for instance, Warner Music Group likes DVD-Audio, while Sony Music Entertainment Inc. supports SACD). Even many audiophiles with golden ears can't tell the difference between the two.

It's "shades of Beta versus VHS," said Tom Edwards, analyst at NPD Group Inc., a market research firm. "It's a format war all over again, but the differences aren't as obvious this time around . . . and right now it's more a question of whether either of them will win."

"It's fair to say neither format has set the world alight to date," said analyst Jim Bottoms, president of Understanding & Solutions, an English firm that specializes in entertainment media research.

To keep users from easily copying songs featured on DVD-Audio discs and SACDs into MP3 files, both formats use encryption technology, which is supposed to keep the digital information in those song files locked away and unreadable except by authorized DVD-Audio or SACD players.

Since consumers have proved reluctant to buy a format they can't play in their car, SACD backers are offering "hybrid" discs which also feature unprotected (or copy-able) CD layers. A hybrid DVD-Audio is also in the works. Since the CD format was not designed with such security in mind, users can still copy song files off of discs that have this CD layer.

Still, there are no portable, Walkman-style devices to play either format, nor can either type of disc be played in any car except the 2004 Acura TL, which includes a Panasonic DVD-Audio unit.

Some low-cost "home-theater-in-a-box" systems from Sony or Philips include SACD compatibility. And music buyers may have to look through the liner notes to discover they've bought an SACD. Sometimes it is more difficult.

When Sony re-released the Rolling Stones catalog as hybrid SACDs, it left out the word "SACD" on the packaging material -- folks at the label feared the albums would be relegated to some "high definition" bin in the far corner of record stores. The reissues sold about 2 million copies.

David Kawakami, director of Sony's SACD efforts, said that hybrid discs have allowed the company to "get around the whole chicken-and-egg conundrum" that is common to new technological formats.

Though he admits that many owners of the hybrids don't have SACD players yet, he thinks they're still good marketing. "If you're a die-hard fan you're probably going to want to check out the SACD player at some time," he said.

David Dorn, vice president of strategic marketing at DVD-Audio backer Warner Music Group, pointed out recent DVD-Audio releases by R.E.M. and Outkast as a sign that big-name recording stars are beginning to take to the format.

"If we're able to get more artists to work in the format, I think it's really going to work," Dorn said. "It is always the artists who drive the adoption of a format."

While record companies have been choosing sides over which type of disc to support, consumer habits have been drifting away from discs entirely.

Apple's online music store iTunes, just one of a number of new online shops that sells copies of individual tracks for consumers to download to their computers, recently sold its 30 millionth song since it opened up this spring.

The research firm Ipsos-Insight estimates that roughly 10 million Americans paid to download music or MP3 files off the Internet in the first half of the year.

Sony's Kawakami has seen this behavior firsthand. "My 17-year-old daughter lives on her Mac, it's her portal to the world -- she does everything on it, including listening to music. For the time being, she's tied to her Mac and her iPod."

Kawakami hopes she'll be won over by SACD when she gets older.

"I have a feeling that, when she grows up, she's going to desire quality, and she's going to end up buying the albums of several bands she was introduced to on the Internet," he said.
http://www.washingtonpost.com/wp-dyn...2004Jan19.html