Bertelsmann's Profit Jumps Almost Sixfold
Mark Landler
BERLIN The German media conglomerate Bertelsmann reported sharply higher profit in 2004, propelled by bestsellers like Bill Clinton's memoir "My Life," and deep cost cuts at its music division, BMG, which is now part of a joint venture with Sony Music.
Net income jumped nearly sixfold to €1.2 billion, or $900 million, mainly because of a change in accounting rules. Operating income rose 39 percent to €1.4 billion. Revenue, hampered by the strength of the euro, rose only 1.3 percent to €17 billion.
While four of Bertelsmann's five divisions reported improved results over 2003, the most profit by far came from RTL, the European television group. With €668 million in operating income, RTL earned twice the combined profits of BMG and Random House, the book- publishing unit.
The results underline how Bertelsmann, despite its glamorous assets in the United States, is increasingly becoming a Europe-centered, TV-driven company. Bertelsmann, which is based in Gutersloh, Germany, sold its trophy office tower in Times Square last year, booking a €174 million gain.
Now, Bertelsmann is virtually debt free, and it has more than €2 billion in cash on its balance sheet. Its chief executive, Gunter Thielen, said that the company would use some of that to acquire more television assets. It also is scouting for acquisitions in Eastern Europe and Asia.
"We've shifted into higher gear this year," he said during a news conference. "In addition to the three acquisitions we've completed, there will be two or three additional acquisitions we'll be able to complete." Bertelsmann's recent deals have tended to be small-scale, like the purchase of a German automotive publisher by Gruner + Jahr, its magazine division. It is also building a sophisticated printing plant in Britain, drawing on its roots as a publisher of Protestant hymnals in the 1800s.
Thielen, who will retire in August 2007, said that Bertelsmann was not planning any deviation from the back-to-the-basics strategy that he put into place after the company's controlling shareholders, the Mohn family, ousted his predecessor, Thomas Middelhoff.
He brushed aside suggestions that Bertelsmann might follow Viacom in studying a breakup of the company. "We're always pleased if someone wants to split their business, because they will decrease in size, and we might be able to buy something," Thielen said.
A lingering wild card in the company's future is the status of a 25 percent stake owned by a Belgian investment firm, Groupe Bruxelles Lambert. The firm has the right to sell the stake in 2006, and analysts speculate that it may try to sell the shares through an initial public offering.
Disagreements over whether to go public contributed to Middelhoff's exit. Thielen said that Bertelsmann had no indication that Groupe Bruxelles Lambert was pushing for a sale, although he noted that Bertelsmann was prepared to conduct an offering if that was demanded.
Bertelsmann seemed relieved by the integration of BMG and Sony Music, which Rolf Schmidt- Holz, the venture's chairman, said had gone better than expected, and was 70 percent completed.
After a round of layoffs, Bertelsmann's operating profit from music tripled to €162 million. In the early days of the integration, Bertelsmann officials expressed alarm at Sony's bloated cost structure.
Management upheaval and an advertising downturn plagued another American outpost: Gruner + Jahr USA. Ad revenue declined significantly at the business magazine Fast Company and the teen publication YM, which Bertelsmann sold to Condé Nast in October.
But overall, the tone was upbeat. Thielen said that he expected every division to improve its profit in 2005.
http://www.iht.com/articles/2005/03/...ness/bert.html
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DreamWorks Animation Posts Profit on 'Shrek 2' DVD Sales
DreamWorks Animation SKG, the film studio run by Jeffrey Katzenberg, posted a fourth-quarter profit of $192 million yesterday on sales of "Shrek 2," last year's best- selling DVD.
Net income was $1.99 a share, in contrast to a loss of $36.6 million, or 48 cents a share, a year earlier, said the company, which is based in Glendale, Calif. Revenue more than tripled, to $495.7 million, in DreamWorks Animation's first full quarter as a public company.
"Shrek 2," which ended its theater run in November, generated more than $360 million in the quarter after its debut on home video. "Shark Tale," which opened in theaters in October, brought in $62 million in the quarter.
"There were unbelievable sales of 'Shrek 2' on home video," a Lehman Brothers analyst, Anthony DiClemente, said before the company announced earnings. He has an overweight rating on the company's shares.
"Shrek 2" accounted for about 80 percent of the company's quarterly revenue, Mr. DiClemente said. DreamWorks Animation said last year that the film might sell as many as 55 million video copies.
"Shark Tale," which opened Oct. 1 and closed at theaters in January, generated worldwide box office sales of $316 million through the end of the 2004, the company said.
DreamWorks Animation beat expectations that it would earn $1.56 a share, the average estimate of analysts polled by Thomson Financial. The company, which reported results for the second time since an Oct. 27 initial stock offering that raised $812 million, was expected to have sales of $381 million.
Mr. Katzenberg has promised investors two computer-animated films a year, more than Pixar and other animation studios.
DreamWorks SKG and Universal Pictures, a unit of General Electric, market and distribute DreamWorks Animation's films for a fee.
http://www.nytimes.com/2005/03/18/bu...reamworks.html
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UMass Amherst
Researcher Assesses Keys to Success in Open-Source Software
Press Release
What leads to the success of Internet-based open-source software projects and emerging “open-content” collaborations?
Those questions, which hold the key to a new era of sharing scientific knowledge, are being explored by Charles Schweik, a researcher at the University of Massachusetts Amherst.
Schweik recently received a five-year, $500,000 grant from the National Science Foundation's Faculty Early Career Development (CAREER) program to support his research. “Open source software, and the collaboration that helps develop it, has great promise beyond its use in computer science,” Schweik observes.
Schweik says he will use his research to develop a sequence of courses for students interested in solving environmental or public policy problems. Currently, many individuals and organizations worldwide are unable to pay for special proprietary software needed to conduct such analyses, he says. This curriculum will show students how to use such software and also encourage them to contribute to such collaborations in some form, such as the writing of new documentation or testing.
To develop and teach his courses, Schweik will use the open source computer teaching laboratory created last year on the UMass campus thanks to another grant he received last year from IBM Corp. for equipment and staffing. He says the lab will be critical for teaching of this curriculum and will allow other faculty to teach the use of open source software in their classes as well. This laboratory is designed to serve the non-science major students on campus, he says.
Schweik is an assistant professor of natural resources conservation and the Center for Public Policy and Administration. The NSF's CAREER grants support early career-development activities of those teacher-scholars who are most likely to become the academic leaders of the 21st century.
http://www.newswise.com/p/articles/view/510493/
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Patents For Profit: Dystopian Visions Of The New Economy
The struggle over intellectual property is the concern of more than knowledge economy specialists, says Becky Hogge: it is a contest over freedom as well as technology.
Fights for freedom are not always played out centre-stage. Since 2003, a piece of European Union legislation with the misleadingly arcane title of the “EU Directive on Computer Implemented Innovation” has been slipping unobtrusively through the bureaucratic thickets of Brussels. It has attracted little attention beyond intellectual property (IP) specialists and activists. It is time the interest widened, for the scope of the directive goes to the heart of how knowledge will be produced, consumed, and disseminated in the 21st-century global economy.
The proposed legislation has the potential to lock away information – code – by extending the remit of patent law to cover any piece of code that makes a “significant technical contribution” to the field. The law would bring Europe closer to the United States’s highly promiscuous attitude towards software patents, although how close remains a subject of fierce debate.
Patents are state-granted monopolies designed to nurture technical, scientific and social progress by protecting the inventor’s incentive to invent. Those opposed to software patents in Europe argue that there is no evidence to show that patenting code would ensure such progress in this still young field. As the directive has crawled across the legislative undergrowth, pioneers of technological discovery and commentary – Tim Berners-Lee, Richard Stallman , Lawrence Lessig and Linus Torvalds, among others – have urged the EU to come down against pure software patents. Many of these voices come from the patent-friendly United States: they hope that if Europe agrees with them, the US will be forced to reconsider its position.
Will their hopes for Europe prove to be misplaced? A striking feature of the directive’s two-year journey – from consultation to committee room, lobbying to redraft – is that the two main European Union institutions involved have moved gradually further apart on the issue. The elected European Parliament has been revealed as a space where open debate on intellectual property (IP) issues can occur. There, high-profile lobbyists seek to influence legislators; cross-Europe small and medium enterprise (SME) groups bring their concerns; and representatives from accession countries such as Poland share their experience of how the software industry has bootstrapped their growing economies. The cumulative result of the debate has been significant checks and balances on the legislation and the legislative process.
By contrast, the unelected European Commission has emerged vulnerable to accusations of a culture of closed-door negotiations – favouring secretive, fast-tracked voting that reverses the parliament’s careful work by executive fiat.
The commission’s confirmation on 25 February that it would not reconsider the legislation, despite the recommendations of a three-tiered parliamentary vote, is only the most recent evidence that “Europe” too is a site of contest over the key question of our time: who owns knowledge?
The evidence
The question has been a live one long before it entered the deep entrails of the European Union’s legislative process. Since the commercial software industry emerged around 1990, technologists have argued that code is different from other inventions: it does not need protection by patents. In software creation, open standards – code as common knowledge – are the key to fermenting progress. To patent code is to add disabling and unnecessary burdens on software enterprise that can kill its potential in this crucial, formative stage.
These fifteen years (a shorter timespan than the average patent) have seen the birth and maturing of the World Wide Web, all thanks to a protocol known as Hypertext Transfer (http). Tim Berners-Lee, the man who conceived the code that embodies this protocol, did not patent it. Thus it became an open standard: anybody could use it to contribute new programmes designed to run on the web. And use it they did. To the extent that the multiplying, democratising life-forms of the web now challenge the dominance of corporate media and orthodox models of economic activity.
Software programming has a relatively low financial barrier to entry. It relies on the manipulation of mathematical algorithms between one man and his machine. Progress in the sector takes place in swift but discrete steps. Each step contributes something to the art of programming: each software programme builds on the last. It is this environment – accretive, open-ended and egalitarian – that has allowed rapid progress in the software industry to enhance the utility and connectivity of the computers people use in their daily lives.
In the patent-free environment, contributions to the common pool of programming knowledge come from all corners of the world, from the amateur hacker working until 4am in his bedroom to corporations leasing the most expensive real estate in Silicon Valley. Richard Stallman, founder of the Free Software Foundation, likens reading a piece of software code to walking around a city – the expert eye will recognise “architectural periods”, little stylistic ticks that identify a piece of recycled code with a particular time, even place.
Software patents take chunks of code out of this vast pool of shared knowledge and lock them down using IP law. United States case law already shows how companies can use such patents to claim ownership of code that had previously been regarded as an open standard. The effect is not simply to appropriate and centralise a shared knowledge resource, but to make it impossible to create a new programme without infringing the patent. Where software is concerned, patents obliterate progress.
Software and strong IP
Some leading architects of the software sector are quite explicit about this. Bill Gates set his stall out as early as 1991:
“The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose... Established companies have an interest in excluding future competitors.”
Companies who have followed Gates’s advice and established a forceful patent portfolio gain another benefit: by subjecting software code to strong-IP protection, they can get around the problem of infringing rival patents by licensing patents to competitors – often generating significant revenues in the process. Already, IBM earns considerable royalties from its patent portfolio in the US. Other major IT companies there have started cross-licensing patented code with rivals.
The logic is as clear as it is chilling. In effect, corporations use software patenting to secure a monopoly and discourage the entrepreneurial activity of start-ups. The result is to freeze, not foster, innovation – the very opposite of patent law’s original intention.
Moreover, as intellectual property law combines with the global shift towards a “knowledge economy”, the regressive effect of such lockdowns acquires a more explicitly political dimension. The application of strong IP law is a game only the big boys, with their dedicated legal teams, can play. Knowledge, once viewed as a commons, becomes a commodity – just like land or labour in an agricultural or industrial economy – whose owners ordain themselves the new economy’s ruling class.
This process is taking place in all areas of the economy. At the moment we still baulk at the idea of knowledge as someone’s out-and-out possession: witness the public disgust when patents prevent life-saving drugs from reaching the dying in Africa. With a little imagination, this reaction can be understood as a contemporary example of resistance to changes in economic reality.
If the shift towards knowledge as commodity is as inevitable as many – including, it would appear, the European Commission – believe, then the future looks bleak. We can look forward to an age of monopolies, where innovation is choked by vested interest and the dynamic economies that software and other innovators have helped create fall to rot.
An alternative vision: knowledge as infinite resource
The patent-free history of the software industry speaks volumes for its own situation: software programming can get along fine without patents, if only it is allowed to. But what about the rest of the knowledge industries? Are they to be condemned to the dystopian, even Stalinist vision outlined above? Perhaps not. A new, much more radical model of the knowledge economy is emerging. And by coincidence, it too has been seeded in the software programming tradition.
Over the same period that the Hypertext Transfer protocol was giving birth to the World Wide Web, a new school of programming was born: Open Source. Within Open Source even traditional copyright protection is reversed: programmers are compelled by a mechanism called “copyleft” to distribute their code freely, allowing others to copy it, modify it and integrate it into their programmes. Within the programming community code is shared without levy. Money comes in from outside the community, through the manufacture of hardware and through companies contracting for expertise, custom- design and support.
The theory behind Open Source is that the “more eyeballs” that are fixed on a problem or “bug” in a particular programme – ie the more people with access to edit the code – the quicker that bug gets fixed. The model has proved a success. Open Source has come to dominate the backend of internet technology (the humming Apache-run servers that currently power 68% of the web) and has been creeping onto the consumer market in the form of the Linux operating system and Mozilla Firefox web browser.
The success of Open Source underlines the fact that knowledge is a different sort of resource to labour or land. While these are finite resources, knowledge can be infinitely replicated, and never more easily than in the age of the internet. The only tragedy of this commons, it seems, would be to censor it using strong-IP law. Because, as Open Source has shown, a solid commons of knowledge fosters a solid knowledge economy around its edges.
Open Source software is providing an attractive metaphor for others in the knowledge industries faced with increasingly obtrusive patent and copyright law, although technologists themselves, wary of being labelled romantic, often shy away from this. The economic success of Open Source programming relies in part on the nature of the programming task itself, but it can provide a model of understanding the world, as more and more of everyday life is becoming reducible to data.
Following the success of the Sanger Institute’s open funding model in the race to annotate the human genome, question marks are beginning to appear over the direct linking of medical r&d to the balance sheets of Big-Pharma. Arguments are also rippling through the creative industries over the use and misuse of copyright law on the internet. And libraries, academies and archives are finally finding their voice over open access to knowledge.
The future of knowledge
The contest between a strong-IP and a commons model will define the character of the knowledge economy worldwide for a generation. In the current transition period, it is being played out in institutions at every level of governance – local, national, regional, global. Thus, the tension between parliament and commission of the European Union is just one example of a wider trend. In 2004, the World Intellectual Property Organisation (Wipo), a specialised agency of the United Nations, agreed to revisit its terms of reference and move away from exclusively promoting strong IP where technical cooperation might be more appropriate to the interests of the developing world. But more recently, Wipo’s announcement that it would invite only “permanent observers” to forthcoming talks will have the effect of excluding “ad hoc observers”, who mainly represented IP reformist associations in previous talks, in favour of observers dominated by rightsholder interests.
The knowledge economy increasingly touches every area of life – work and pleasure, professional and personal life – in every part of the world. It is vital that decisions over its future are made in a fair, accountable and democratic way. As agencies of governance recognise the value of knowledge as any kind of commons, muscular lobbyists for a strong-IP regime, keen to commodify knowledge for the new economy, will be drawn into the fray. These agencies must arm themselves with well-researched models of how knowledge performs in a commons environment. Software is a crucial part of this new landscape. The story of the EU Directive on Computer Implemented Innovation is closer to centre-stage than it appears.
http://www.opendemocracy.net/debates...-8-40-2370.jsp
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Dangling Broadband From the Phone Stick
Matt Richtel
To gauge the potential consumer impact of the consolidation sweeping the telephone industry, look no further than the silver- toned plastic phone gathering dust on the desk in Justin Martikovic's studio apartment.
Mr. Martikovic, 30, a junior architect who relies on a cellphone for his normal calling, says he never uses the desk phone - but he pays $360 a year to keep it hooked up.
"I have to pay for a service I'm never using," he said.
He has no choice. His telephone company, SBC Communications, will not sell him high-speed Internet access unless he buys the phone service, too. That puts him in the same bind as many people around the country who want high-speed, or broadband, Internet access but no longer need a conventional telephone. Right now, their phone companies tend to have a "take it or leave it" attitude.
Consumers "are not forced to go with SBC," said Michael Coe, a company spokesman. "If they just want a broadband connection, I'd recommend they look around for people who can provide just a broadband connection."
The nation's other two largest phone companies, Verizon Communications and BellSouth, have similar policies: broadband service is available only as a bundle with phone service.
That means, even as high-speed Internet service has become one of the most quickly adopted technologies of the computer era, there are few options for the tens of millions of Americans trying to upgrade their dial-up connections.
Some lawmakers and consumer advocates say the issue should be on the agenda as the government considers the market impact of two proposed big telecommunications deals: SBC's planned $16 billion acquisition of AT&T, and Verizon's $6.75 billion offer for MCI, which is being challenged by a rival offer from Qwest Communications.
For many consumers, the main alternative to broadband from the phone company is the local cable company. But cable broadband prices tend to be higher - as much as $60 a month for access, compared typically with $40 or less for phone company broadband. And the cable companies prefer to sell the service as a package with television that can easily exceed $100 a month.
That is assuming cable is even available, which it is not in Mr. Martikovic's apartment in the Nob Hill section of San Francisco - or in 10 percent of the nation's households, for that matter.
Mr. Martikovic says that he has resigned himself to paying SBC $30 a month for a phone bill and $30 for Internet, in addition to $100 for a mobile phone from Sprint. "I bet half of my friends are in this exact same situation," he said.
The question of broadband's availability is almost certain to become part of the policy debate as the Justice Department and the Federal Communications Commission rule on an eventual acquisition of MCI and whether SBC can buy AT&T. And two weeks ago, the House Energy and Commerce Committee held a hearing to discuss the consolidating market power of the phone companies.
Consumer advocacy groups, including Consumers Union, say they plan to ask the F.C.C. to address the lack of "à la carte" broadband when the agency reviews the proposed takeovers.
Despite the market bottlenecks, broadband is increasingly in demand for its ability to let users zip e-mail back and forth with big photo or music files attached; or to play online games; or to quickly open Web pages loaded with video and audio extras. Of the nation's 74.5 million Internet households, an estimated 39 percent now have broadband - up from 36 percent of Internet households at the end of 2003.
So popular is the service, and so few the alternatives for most consumers, that the three biggest regional Bell companies - SBC, Verizon and BellSouth - have been able to expand their share of the Internet broadband market even while declining to sell the service separately.
The cable companies are still in the lead, having moved more nimbly than the phone companies in the early days of broadband back in 2000. But the phone industry's broadband share is now 37 percent, up from 32.7 percent at the end of 2003, and it continues to grow.
While critics say the phone companies are simply squeezing millions of extra dollars from consumers and making it harder for people to move to cheaper Internet telephony in place of conventional phone service, the three big Bells argue that selling stand-alone broadband is not a simple proposition.
In the case of Verizon, the nation's largest phone provider and the dominant one in the Northeast and Middle Atlantic states, the company says that it has based its technology and billing systems on delivering service to individual phone numbers.
Verizon has said it is working to develop a stand-alone broadband offering that could be available as soon as the end of the year.
"It's just very complex," said Michael D. Poling, Verizon's vice president for broadband operations and processes for Verizon. "It's changing the guts of the systems and processes we've built for five years."
But the smallest of the Bells, Qwest, which operates primarily in the Rocky Mountain states and is struggling to grow, has been willing to offer à la carte broadband for more than a year.
One satisfied Qwest customer is Chad Jorgenson, 25, a part-time student in Boise, Idaho, and an intern at a computer chip maker. By cutting off his traditional phone service, he said, he had been able to reduce his monthly bill to $47.92, from $71.40. (That bill could be lower still, but he opted for a particularly high speed of service.)
Richard C. Notebaert, the company's chief executive, said Qwest spent just three days and $134,000 to get regulatory approval to offer the service, now a year old. The company now has around 25,000 stand-alone broadband customers.
"We've had no technical problems; we've had no billing problems," he said. "If the consumer wants it, why are you stiffing them?"
In defending their marketing practices, the other Bell companies argue that they are sinking billions of dollars into building Internet-based networks that will eventually replace their conventional telephone technology even as they are struggling to cope with the erosion of their local telephone business. Last year, the phone companies lost 5.4 million residential phone lines as more subscribers chose to rely mainly on wireless service and abandoned second lines that had been used for dial-up computer modems.
Another threat to the phone company revenues will be Internet-based phone service in which calls are transmitted over high-speed Internet lines, as digital packets, much the way e-mail is transmitted. Once customers have broadband Internet access, they are not limited to their local Bell company to be the provider of Internet phone service.
A relatively new Internet phone company, Vonage, now has 550,000 customers who use its services over phone or cable broadband access lines.
And so while Internet telephony is a business the Bells have all said they plan to embrace, some critics say the biggest Bells are using their current market power to slow its development.
The issue might soon come before regulators and Congress. Representative Edward J. Markey, Democrat from Massachusetts, said he would like to see the Bells' reconsolidated power discussed as part of a pending rewriting of the increasingly outdated Telecommunications Act of 1996.
The F.C.C. is already considering a related issue as it seeks to settle a dispute between BellSouth and four states it serves - Florida, Kentucky, Louisiana and Georgia. Those states have told BellSouth that it must continue to sell broadband to an existing customer even if that customer leaves BellSouth to get local phone service from one of the few competitors that have survived the telecommunications shakeout.
BellSouth is fighting the requirements, in part on the ground that one of its competitive advantages is that it enables consumers to buy phone and broadband in one place.
"Our marketing strategy is that we offer a complete package of our services," said Joe Chandler, a spokesman for BellSouth. Because the company has made the investments in broadband network technology, he said, it should reap the rewards.
"If our competitors want to offer broadband," he added, "they should make the same investments."
http://www.nytimes.com/2005/03/19/te...y/19phone.html
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Bad Wi-Fi. Bad, Bad.
Growth of Wireless Internet Opens New Path for Thieves
Seth Schiesel
The spread of the wireless data technology known as Wi-Fi has reshaped the way millions of Americans go online, letting them tap into high-speed Internet connections effortlessly at home and in many public places.
But every convenience has its cost. Federal and state law enforcement officials say sophisticated criminals have begun to use the unsecured Wi-Fi networks of unsuspecting consumers and businesses to help cover their tracks in cyberspace.
In the wired world, it was often difficult for lawbreakers to make themselves untraceable on the Internet. In the wireless world, with scores of open Wi-Fi networks in some neighborhoods, it could hardly be easier.
Law enforcement officials warn that such connections are being commandeered for child pornography, fraud, death threats and identity and credit card theft.
"We have known for a long time that the criminal use of the Internet was progressing at a greater rate than law enforcement had the knowledge or ability to catch up," said Jan H. Gilhooly, who retired last month as special agent in charge of the Secret Service field office in Newark and now helps coordinate New Jersey operations for the Department of Homeland Security. "Now it's the same with the wireless technologies."
In 2003, the Secret Service office in Newark began an investigation that infiltrated the Web sites and computer networks of suspected professional data thieves. Since October, more than 30 people around the world have been arrested in connection with the operation and accused of trafficking in hundreds of thousands of stolen credit card numbers online.
Of those suspects, half regularly used the open Wi-Fi connections of unsuspecting neighbors. Four suspects, in Canada, California and Florida, were logged in to neighbors' Wi-Fi networks at the moment law enforcement agents, having tracked them by other means, entered their homes and arrested them, Secret Service agents involved in the case said.
More than 10 million homes in the United States now have a Wi-Fi base station providing a wireless Internet connection, according to ABI, a technology research firm in Oyster Bay, N.Y. There were essentially none as recently as 2000, the firm said. Those base stations, or routers, allow several computers to share a high-speed Internet connection and let users maintain that connection as they move about with laptops or other mobile devices. The routers are also used to connect computers with printers and other devices.
Experts say most of those households never turn on any of the features, available in almost all Wi-Fi routers, that change the system's default settings, conceal the connection from others and encrypt the data sent over it. Failure to secure the network in those ways can allow anyone with a Wi-Fi-enabled computer within about 200 feet to tap into the base station's Internet connection, typically a digital subscriber line or a cable modem.
Wi-Fi connections are also popping up in retail locations across the country. But while national chains like Starbucks take steps to protect their networks, independent coffee shops that offer Wi-Fi often leave their connections wide open, law enforcement officials say.
In addition, many universities are now blanketing campuses with open Wi-Fi networks, and dozens of cities and towns are creating wireless grids. While some locations charge a fee or otherwise force users to register, others leave the network open. All that is needed to tap in is a Wi-Fi card, typically costing $30 or less, for the user's PC or laptop. (Wi-Fi cards contain an identification code that is potentially traceable, but that information is not retained by most consumer routers, and the cards can in any case be readily removed and thrown away.)
When criminals operate online through a Wi-Fi network, law enforcement agents can track their activity to the numeric Internet Protocol address corresponding to that connection. But from there the trail may go cold, in the case of a public network, or lead to an innocent owner of a wireless home network.
"We had this whole network set up to identify these guys, but the one thing we had to take into consideration was Wi-Fi," Mr. Gilhooly said. "If I get to an Internet address and I send a subpoena to the Internet provider and it gets me a name and physical address, how do I know that that person isn't actually bouncing in from next door?"
Mr. Gilhooly said the possibility of crashing into an innocent person's home forced his team to spend additional time conducting in-person surveillance before making arrests. He said the suspects tracked in his investigation would regularly advise one another on the best ways to gain access to unsecured Wi-Fi systems.
"We intercepted their private conversations, and they would talk and brag about, 'Oh yeah, I just got a new amplifier and a new antenna and I can reach a quarter of a mile,' " he said. "Hotels are wide open. Universities, wide open."
Sometimes, suspected criminals using Wi-Fi do not get out of their car. At 5 a.m. one day in November 2003, the Toronto police spotted a wrong-way driver "with a laptop on the passenger seat showing a child pornography movie that he had downloaded using the wireless connection in a nearby house," said Detective Sgt. Paul Gillespie, an officer in the police sex crimes unit.
The suspect was charged with child pornography violations in addition to theft of telecommunications services; the case is pending. "The No. 1 challenge is that people are committing all sorts of criminal activity over the Internet using wireless, and it could trace back to somebody else," Sergeant Gillespie said.
Holly L. Hubert, the supervisory special agent in charge of the Cyber Task Force at the F.B.I. field office in Buffalo, said the use of Wi-Fi was making it much more difficult to track down online criminals.
"This happens all the time, and it's definitely a challenge for us," she said. "We'll track something to a particular Internet Protocol address and it could be an unsuspecting business or home network that's been invaded. Oftentimes these are a dead end for us."
Ms. Hubert says one group of hackers she has been tracking has regularly frequented a local chain of Wi-Fi-equipped tea and coffee shops to help cover its tracks.
Many times the suspects can find a choice of unsecured wireless networks right from home. Special Agent Bob Breeden, supervisor of the computer crime division for the Florida Department of Law Enforcement, said a fraud investigation led in December to the arrest of a Tallahassee man who had used two Wi-Fi networks set up by residents in his apartment complex.
Over those Internet connections, the suspect used the electronic routing information for a local college's bank account to pay for online pornography and to order sex- related products, Mr. Breeden said. The man was caught because he had the products delivered to his actual address, Mr. Breeden said. When officers went to arrest him, they found his computer set up to connect to a neighbor's wireless network. Mr. Breeden said the suspect, Abdul G. Wattley, pleaded guilty to charges of theft and unauthorized use of a communications network and was sentenced to two years' probation.
In another recent case, the principal of a Tallahassee high school had received death threats by e-mail, Mr. Breeden said. When authorities traced the messages to a certain Internet Protocol address and went to the household it corresponded to, Mr. Breeden said, "Dad has his laptop sitting on a table and Mom has another laptop, and of course they have Wi-Fi, and they clearly didn't know anything about the threats."
Cybercrime has been known to flourish even without Wi-Fi's cloak of anonymity; no such link has been found, for example, in recent data thefts from ChoicePoint, Lexis/Nexis and other database companies.
But unsecured wireless networks are nonetheless being looked at by the authorities as a potential tool for furtive activities of many sorts, including terrorism. Two federal law enforcement officials said on condition of anonymity that while they were not aware of specific cases, they believed that sophisticated terrorists might also be starting to exploit unsecured Wi-Fi connections.
In the end, prevention is largely in the hands of the buyers and sellers of Wi-Fi equipment. Michael Coe, a spokesman for SBC, the nation's No. 1 provider of digital subscriber line connections, said the company had provided about one million Wi-Fi routers to its customers with encryption turned on by default. But experts say most consumers who spend the $60 to $80 for a Wi-Fi router are just happy to make it work at all, and never turn on encryption.
"To some degree, most consumers are intimidated by the technology," said Roberta Wiggins, a wireless analyst at the Yankee Group, a technology research firm in Boston. "There is a behavior that they don't want to further complicate their options."
That attitude makes life easier for tech-savvy criminals and tougher for those who pursue them. "The public needs to realize that all they're doing is making it harder on me to go find the bad guys," said Mr. Gilhooly, the former Secret Service agent. "How would you feel if you're sitting at home and meanwhile someone is using your Wi- Fi to hack a bank or hack a company and downloads a million credit card numbers, which happens all the time? I come to you and knock on your door, and all you can say is, 'Oops.' "
http://www.nytimes.com/2005/03/19/te... tner=homepage
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Censorship
A New Screen Test for Imax: It's the Bible vs. the Volcano
Cornelia Dean
The fight over evolution has reached the big, big screen.
Several Imax theaters, including some in science museums, are refusing to show movies that mention the subject - or the Big Bang or the geology of the earth - fearing protests from people who object to films that contradict biblical descriptions of the origin of Earth and its creatures.
The number of theaters rejecting such films is small, people in the industry say - perhaps a dozen or fewer, most in the South. But because only a few dozen Imax theaters routinely show science documentaries, the decisions of a few can have a big impact on a film's bottom line - or a producer's decision to make a documentary in the first place.
People who follow trends at commercial and institutional Imax theaters say that in recent years, religious controversy has adversely affected the distribution of a number of films, including "Cosmic Voyage," which depicts the universe in dimensions running from the scale of subatomic particles to clusters of galaxies; "Galápagos," about the islands where Darwin theorized about evolution; and "Volcanoes of the Deep Sea," an underwater epic about the bizarre creatures that flourish in the hot, sulfurous emanations from vents in the ocean floor.
"Volcanoes," released in 2003 and sponsored in part by the National Science Foundation and Rutgers University, has been turned down at about a dozen science centers, mostly in the South, said Dr. Richard Lutz, the Rutgers oceanographer who was chief scientist for the film. He said theater officials rejected the film because of its brief references to evolution, in particular to the possibility that life on Earth originated at the undersea vents.
Carol Murray, director of marketing for the Fort Worth Museum of Science and History, said the museum decided not to offer the movie after showing it to a sample audience, a practice often followed by managers of Imax theaters. Ms. Murray said 137 people participated in the survey, and while some thought it was well done, "some people said it was blasphemous."
In their written comments, she explained, they made statements like "I really hate it when the theory of evolution is presented as fact," or "I don't agree with their presentation of human existence."
On other criteria, like narration and music, the film did not score as well as other films, Ms. Murray said, and over all, it did not receive high marks, so she recommended that the museum pass.
"If it's not going to draw a crowd and it is going to create controversy," she said, "from a marketing standpoint I cannot make a recommendation" to show it.
In interviews, officials at other Imax theaters said they had similarly decided against the film for fear of offending some audiences.
"We have definitely a lot more creation public than evolution public," said Lisa Buzzelli, who directs the Charleston Imax Theater in South Carolina, a commercial theater next to the Charleston Aquarium. Her theater had not ruled out ever showing "Volcanoes," Ms. Buzzelli said, "but being in the Bible Belt, the movie does have a lot to do with evolution, and we weigh that carefully."
Pietro Serapiglia, who handles distribution for the producer Stephen Low of Montreal, whose company made the film, said officials at other theaters told him they could not book the movie "for religious reasons," because it had "evolutionary overtones" or "would not go well with the Christian community" or because "the evolution stuff is a problem."
Hyman Field, who as a science foundation official had a role in the financing of "Volcanoes," said he understood that theaters must be responsive to their audiences. But Dr. Field he said he was "furious" that a science museum would decide not to show a scientifically accurate documentary like "Volcanoes" because it mentioned evolution.
"It's very alarming," he said, "all of this pressure being put on a lot of the public institutions by the fundamentalists."
People who follow the issue say it is more likely to arise at science centers and other public institutions than at commercial theaters. The filmmaker James Cameron, who was a producer on "Volcanoes," said the commercial film he made on the same topic, "Aliens of the Deep," had not encountered opposition, except during post- production, when "it was requested from some theaters that we change a line of dialogue" relating to sun worship by ancient Egyptians. The line remained, he said.
Mr. Cameron said he was "surprised and somewhat offended" that people were sensitive to the references to evolution in "Volcanoes."
"It seems to be a new phenomenon," he said, "obviously symptomatic of our shift away from empiricism in science to faith-based science."
Some in the industry say they fear that documentary filmmakers will steer clear of science topics likely to offend religious fundamentalists.
Large-format science documentaries "are generally not big moneymakers," said Joe DeAmicis, vice president for marketing at the California Science Center in Los Angeles and formerly the director of its Imax theater. "It's going to be hard for our filmmakers to continue to make unfettered documentaries when they know going in that 10 percent of the market" will reject them.
Others who follow the issue say many institutions are not able to resist such pressure.
"They have to be extremely careful as to how they present anything relating to evolution," said Bayley Silleck, who wrote and directed "Cosmic Voyage." Mr. Silleck said he confronted religious objections to that film and predicted he would face them again with a project he is working on now, about dinosaurs.
Of course, a number of factors affect a theater manager's decision about a movie. Mr. Silleck said an Imax documentary about oil fires in Kuwait "never reached its distribution potential" because it had shots of the first Persian Gulf war. "The theaters decided their patrons would be upset at seeing the bodies," he said.
"We all have to make films for an audience that is a family audience," he went on, "when you are talking about Imax, because they are in science centers and museums."
He added, however, "there are a number of us who are concerned that there is a kind of tacit overcaution, overprotectedness of the audience on the part of theater operators."
In any event, censoring films like "Volcanoes" is not an option, said Dr. Field, who said Mr. Low, the film's producer, got in touch with him when the evolution issue arose to ask whether the film should be altered.
"I said absolutely not," recalled Dr. Field, who retired from the National Science Foundation last year.
Mr. Low said that arguments over religion and science disturbed him because of his own religious faith. In his view, he said, science is "a celebration of what nature or God has done. So for me, there's no conflict."
Dr. Lutz, the Rutgers oceanographer, recalled a showing of "Volcanoes" he and Mr. Low attended at the New England Aquarium. When the movie ended, a little girl stood in the audience to challenge Mr. Low on the film's suggestion that Earth might have formed billions of years ago in the explosion of a star. "I thought God created the Earth," she said.
He replied, "Maybe that's how God did it."
http://www.nytimes.com/2005/03/19/na... tner=homepage
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Music Industry Financier Buys 'American Idol'
Ben Sisario
Robert F. X. Sillerman, the music industry baron who recently bought Elvis Presley Enterprises, added another big prize to his vault of media holdings yesterday, acquiring the British company that owns "American Idol" and its many lucrative franchises around the world.
His company, which is in the process of changing its name to CKX, said it would pay up to $161 million and 1.87 million CKX shares to purchase 19 Entertainment Ltd., a private company based in London.
The announcement, coming amid rising viewer interest as "American Idol" moves into its final rounds, drove shares of Mr. Sillerman's company, Sports Entertainment Enterprises, up more than 58 percent, to a close of $26.73 on Nasdaq.
In a telephone interview, Mr. Sillerman did not reveal specific plans for the "American Idol" franchise but said his aim at CKX was to assemble an arsenal of entertainment content with an eye to emerging distribution technologies like on-demand television and hand-held devices.
"I can imagine years from now something being distributed through cellphones, BlackBerries, computers, whatever," he said. The notion that video entertainment should "only go through a TV set is as archaic as the thought that music can only be distributed on a CD."
Besides the "American Idol" television show, which grew out of the British "Pop Idol," the acquisition of 19 Entertainment includes all of that company's management contracts with current and former "American Idol" and "Pop Idol" contestants as well as the Spice Girls, Annie Lennox, and the British soccer star David Beckham and his wife (and former Spice Girl) Victoria Beckham.
Now in its fourth season on Fox, "American Idol" remains one of the most popular shows on television, and its ratings continue to increase. On Wednesday nights, for example, the show this season has been seen by an average of more than 26 million viewers each week, an increase of 8 percent over last season and 20 percent above the season before, according to Nielson Media Research.
It also continues to churn out money-making acts. While no "American Idol" winner has sold in the league of Britney Spears or Usher, most of the albums by "American Idol" winners have been significant hits.
Clay Aiken, the runner-up in the show's second season, has sold three million copies of his debut album, "Measure of a Man," and one million of his holiday album from last year, "Merry Christmas With Love." "Free Yourself," by Fantasia Barrino, last year's winner, has sold 1.2 million copies since its release in November. But Diana DeGarmo, last season's runner-up, has sold only 141,000 of her "Blue Skies." All "Idol" winners' albums have been released by RCA Records.
As part of yesterday's deal, Simon Fuller, who created the "Idol" franchise, will remain president of the company for six years. Bear Stearns, the New York investment bank, lent Sports Entertainment $109 million to finance the acquisition.
"No TV show goes on forever," Mr. Sillerman said. "But somebody could say the Super Bowl is not going to go on forever and the Final Four is not going to go on forever, yet they continue to get bigger and bigger. 'American Idol' has become part of the fabric of America."
Mr. Sillerman has had plenty of experience in bundling entertainment companies and content. He built SFX Entertainment into the biggest concert promoter in the country in the late 90's, buying regional promoters as well as theaters, ticketing companies and artist-management firms.
He sold SFX in March 2000 to Clear Channel Communications for about $3 billion. Later, he set out to take over another artist-management giant, the Firm, based in Los Angeles. After that deal fell apart, Mr. Sillerman was largely out of the public eye until he announced in December that he was buying an 85 percent stake in Elvis Presley Enterprises, the business that controls Presley's name and likeness.
In naming his companies, Mr. Sillerman chooses enigmatic three-letter abbreviations that include his second middle initial, X.
"Management believes that a short name consisting of three letters is an easy way to create brand identification," the company explained in a Securities and Exchange Commission filing explaining its name change. "They have chosen 'C' and 'K' to stand for 'Content is King.'"
http://www.nytimes.com/2005/03/19/ar...on/19idol.html
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TV Station Puts Downloads Up For Sale
Jo Best
In a move that mimics iTunes, British terrestrial TV broadcaster Channel Five has announced that viewers will be able to download digital program snippets for less than three dollars each.
The channel, the most recently launched nondigital station in the United Kingdom, has begun selling online downloads of its motoring show "Fifth Gear," which it promises are DVD quality.
Five and its program makers are hoping that consumers' reaction to TV downloads will match their reaction to the raft of music store openings, with many pirates willing to buy from legitimate sites when offered a legal choice.
TV piracy is already rampant in the United Kingdom and now accounts for one-fifth of the world's TV piracy, according to a recent report.
Online auto fans won't be able to download whole editions of the car show for the price tag of 1.50 pounds ($2.85). The excerpts will be individual features from the series, including reviews of "supercars" such as the Porsche 911, as well as a televised race between a Lamborghini Gallardo and a Ducati 999 motorcycle.
Five is also hoping to entice wannabe Michael Schumachers with downloads available for purchase by cell phone.
The channel picked 7 Digital to supply the download store and will use Microsoft's digital rights management technology to keep the video clips locked down.
http://news.com.com/TV+station+puts+...3-5630243.html
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Three Top US Publishers Buy Stakes In Topix.net
Newspaper publishers Gannett Co. Inc., Knight Ridder Inc. and Tribune Co. on Wednesday said they bought a 75 percent stake in Topix.net, which collects and categorizes online news content from a broad range of sources.
The three publishers each bought 25 percent of Topix.net, while the company's founders retained the last quarter-stake.
Topix.net, which says it gives users links to news from more than 10,000 sources, will expand its services and technology using content and funds from the three new investors. The deal's value was not disclosed.
http://www.reuters.com/newsArticle.j...toryID=7984536
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Book Reviews
BLOCKBUSTER How Hollywood Learned to Stop Worrying and Love the Summer. By Tom Shone.
Illustrated. 339 pp. Free Press. $26. THE BIG PICTURE
The New Logic of Money and Power in Hollywood. By Edward Jay Epstein.
Illustrated. 396 pp. Random House. $25.95.
I Am Large, I Contain Multiplexes
Neil Genzlinger
TOM SHONE and Edward Jay Epstein probably love the movies. No one would immerse himself in the topic deeply enough to write a book about it, as each of these men has, without having an affection for or at least a fascination with Hollywood and its ways. So it's a bit odd that as you read their often absorbing accounts, you can feel whatever joy you still associate with going to the movies slowly draining away.
The ritual of moviegoing had, of course, become a somewhat pale pleasure already, thanks to $10 tickets, impersonal multiplexes and whatever impairment it is that allows Hollywood to combine A-list stars with a $54 million budget and get ''Gigli.'' But Shone, in ''Blockbuster: How Hollywood Learned to Stop Worrying and Love the Summer,'' shows us that the slicksters who market films have become so adept at manipulation that it doesn't even matter anymore whether the movies are any good. And Epstein, in ''The Big Picture: The New Logic of Money and Power in Hollywood,'' suggests that, like quality, the moviegoing audience itself is becoming irrelevant.
Shone's volume is the more entertaining, Epstein's the more illuminating. Shone, a former film critic for The Sunday Times of London, succumbs frequently to a gee-whiz tone and seems especially star-struck by Steven Spielberg. Yet the journey from ''Jaws,'' where his book begins, to ''The Lord of the Rings,'' where it ends, is still a descent into cynicism, for the reader if not the writer. Ah, for those blissful days when one primitive special effect and a two-note musical theme could set the county abuzz!
Shone traces the blockbuster mentality to ''Jaws,'' Spielberg's 1975 phenomenon, and to George Lucas's ''Star Wars'' two years later. His description of the way the success of those two films surprised everyone, including their relatively unknown makers, has the nostalgic glow of another Lucas film, ''American Graffiti.'' Spielberg tells of being floored when he pulled into a Baskin-Robbins and realized that everyone in line was talking about his little shark film, and then being floored again when he arrived home and the television news was showing a feature on ''Jaws'' mania. As for Lucas's space epic, so untried were its production methods that when Lucas showed a preliminary version to friends, they thought they were looking at a catastrophic flop. ''Part of the problem,'' Willard Huyck, a screenwriter who was there, recalls, ''was that almost none of the effects had been finished, and in their place George had inserted World War II dogfight footage, so one second you're with the wookie in the escape ship and the next you're in 'The Bridges at Toko-Ri.' It was like, George, what is going on?''
What was going on, it turned out, was a seismic change in the way movies are conceived, made and marketed. Having seen nine-figure box-office returns from ''Jaws'' and ''Star Wars,'' the big studios set out to duplicate those numbers, in the process discovering toy and burger tie-ins, sequels, prequels and, eventually, video (and now DVD) sales and rentals. The calculated pursuit of the blockbuster led to spectacular financial successes and dandy filmmaking (''Titanic,'' ''Jurassic Park,'' ''Men in Black''), but it also soon squashed the sense of excitement that had accompanied ''Jaws'' and ''Star Wars,'' films people stood in long lines and drove long distances to see. Studios began opening their big films on thousands of screens at once -- no chance for lines to form or word of mouth to be a factor. No chance, in other words, for genuine excitement, just the manufactured variety.
Shone takes a while getting through the chronology of all this, thanks in part to an annoying tendency to lapse into critic mode, dwelling on particular scenes from not- very-memorable movies like ''Speed'' (1994) as if most of us saw them just yesterday. It's also never quite clear how he's defining ''blockbuster.'' ''Alien,'' for instance, which made $40 million in the United States in 1979, receives extensive attention, while ''Star Trek,'' which made $56 million that same year, goes virtually unmentioned. In Shone's dictionary, it seems, ''blockbuster'' means ''whichever big names would give me interviews.''
His book compensates for those flaws with a rich collection of moviemaking anecdotes and effervescent phrasings like this one from a particularly fine chapter on Robert Zemeckis's time-traveling 1985 hit: ''If you are looking for a movie that perfectly symbolizes the state of arrested development that is American cinema, 'Back to the Future' is your movie: an episode of 'Leave It to Beaver' as scripted by Feydeau, a teen sex farce with no sex, a family comedy that contemplates incest, and as sturdy a disquisition on man's place in the webbings of fate as any movie with Huey Lewis on the soundtrack has ever quite managed to be.''
Shone makes an assortment of points in the course of his genial narrative, but the one that registers most starkly comes when he reaches the 1998 remake of ''Godzilla,'' a big-budget mess remembered primarily for a one-joke promotional campaign the marketers drew out forever. ''If you were a 7-year-old child when you first read the slogan 'size matters,' '' Shone writes of the big lizard's catchphrase, ''you were 8 by the time you saw the movie it advertised. If you were a potato crop, you would have been harvested and turned into French fries. If you were a joke, however, there was a high likelihood that you would have worn a little thin.''
YET ''size matters'' did its job, because that's how gullible we all are: the film, terrible by all accounts, still brought in $375 million worldwide. ''By 1998,'' Shone writes, ''what was in place was a system where it is perfectly possible for a studio to buy our curiosity for the space of a single weekend, which was all the time the studio needed to make back its money.'' The art of filmmaking begins to sound like nothing but the art of the carnival barker, with us as the suckers.
But wait: perhaps that equation, glum as it is, is too simplistic. Shone hints now and again that Hollywood's figures on production costs and box-office receipts don't reflect a meaningful reality, but he basically buys into them anyway; Epstein, in ''The Big Picture,'' dismantles them. In a succinct, startling opening chapter, he outlines the transformation of the movie business since the end of World War II, a time when studios didn't have to worry about getting people into theaters because weekly moviegoing was a national habit; now, they have to cultivate an audience for each movie individually. ''In 2003 they wound up paying more to alert potential moviegoers and supply theaters with prints for an opening than they were getting back from those who bought tickets,'' Epstein says, adding bluntly, ''Even if the studios had somehow managed to obtain all their movies for free, they would still have lost money on their American releases.''
Epstein, whose previous books have zeroed in on targets like the Warren Commission and television news, sets the scene by transporting us back to Oscar night, 1948, a moment in time when the old studio system, with its self-made titans and starry glamour, seemed invulnerable. In fact, it was about to topple, thanks to antitrust litigation and to an insidious little invention called television. The story of how the system rose again, in a profoundly different form, takes up the first part of Epstein's book.
He details the way, one after another, the old studios were acquired by multinational corporations, and he profiles some of the men who were at the heart of the transformation, like Akio Morita of Sony and Sumner Redstone of Viacom. Their stories leave you admiring their ability either to force innovation or to adapt to it -- Morita pushing CD technology; Redstone ironing the kinks out of the video rental system and making it mesh with the studios' interests. These changes were taking place amid a swirl of acquisition, so that today what used to be proud, self-contained studios are relatively small parts of giant conglomerates: Viacom, Time Warner, G.E., News Corporation, Sony and Disney.
Having sketched this framework, Epstein tries to shed light on how movies exist inside it: where their budgets and revenue fit in, how creative and corporate decision making mesh (a complex subject indeed, as demonstrated by the recent Oscars: none of the best-picture nominees even cracked the top 20 in earnings for 2004). Many of his insider details involve two movies, ''Gone in 60 Seconds'' (2000) and ''Terminator 3: Rise of the Machines'' (2003), but hey, in the closed world of Hollywood accounting, one takes the leaks one can get.
Epstein gets us closer than most to a comprehension of the movie world's numbers games, but he doesn't quite take the final step of putting it all together in terms that residents of the real world can grasp. He breaks down the $187.3 million budget for ''Terminator 3'' into its component categories, for example, but never tells us specifically why everything is so darned expensive. More than half a million dollars for makeup? That's a lot of lip gloss. And $691,000 for ''dubbing in dialogue''? Since when is there dialogue in a Schwarzenegger movie?
Still, by the time Epstein is through it's abundantly clear that what we think of as Hollywood is, in accounting terms, a high-stakes hall of mirrors. The same corporations that own the studios own the television and cable outlets where films are rebroadcast, the theme parks that promote film characters, the record companies that make soundtracks, and on and on. Studios, he notes, are not so much makers of movies as they are clearinghouses, collecting money from a hundred enterprises associated with any given film and then parceling it out to an army of participants and investors. Those Monday morning box-office figures we hear every week suddenly feel as phony and naïve as the Oscars.
One thing, though, seems beyond dispute: the studios don't care whether any of us go to the movies or not, or whether their movies stay in theaters for a day or a month; the real money is elsewhere -- for instance, in home video. ''The benefits of prolonging a film's run in the theaters are now negated by the loss that would be sustained by delaying its video opening past the point at which it can benefit from the movie's advertising campaign,'' Epstein writes. ''And box-office grosses, which may reflect no more than expensive advertising campaigns, are clearly no longer the principal concern of the studios.''
It's a disillusioning notion -- all that advertising, all those awards shows and low-cut gowns, sustaining a fiction. A suspicion arises when reading Epstein's somewhat dizzying book: these corporate giants don't actually need us at all, whether in the theaters or in the video stores or in line at Disney World. If our ten spot for a movie ticket is irrelevant to them, wouldn't our $15.99 for the DVD be as well? So much paper-shuffling and shell-gaming seems to be going on in the clearinghouses- formerly-known-as-studios that if you showed up there with a boxful of actual cash, no one would know what to do.
Hollywood, like the world of ''Terminator 3,'' seems on the verge of becoming a self-perpetuating machine, no human participation needed. The audience is obsolete. Large parts of many films are already computer-generated, so flesh-and-blood actors may become extinct too. Movies will be made on microchips and marketed to microchips, while still other microchips tally the profits. And out here in the real world we'll go back to doing what we did before there were movies. Er, what was that exactly, anyway?
http://www.nytimes.com/2005/03/20/bo...020GENZLI.html
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Study Criticizes Government on Cybersecurity Research
John Markoff
A report released Friday by a panel of computer experts criticizes the federal government, saying that its financing of research on computer network security is inadequate and that it is making a mistake by focusing on classified research that is inaccessible to the commercial sector.
The report, commissioned by the Bush administration, calls for the government to spend $148 million annually on Internet security research through the National Science Foundation, over the current $58 million. It also urges more research spending by the Pentagon's Defense Advanced Research Projects Agency, or Darpa, and by the Department of Homeland Security.
The report, "Cybersecurity: A Crisis of Prioritization," was prepared by a subcommittee of the President's Information Technology Advisory Committee, a group of industry and university experts.
Research in Internet security is needed to protect systems that run the government and military operations, as well as other areas, including the electric power grid, the air traffic control grid and financial systems, the report said.
"The federal government is largely failing in its responsibility to protect the nation from cyberthreats," said Edward D. Lazowska, chairman of the computer science and engineering department at the University of Washington and co-chairman of the panel. "The Department of Homeland Security simply doesn't 'get' cybersecurity. They are allocating less than 2 percent of their science and technology budget to cybersecurity, and only a small proportion of this is forward-looking."
Michelle Petrovich, a spokeswoman for the Department of Homeland Security, disputed the criticism. "We take cybersecurity seriously and have taken aggressive measures to address various needs," she said. "Our cybersecurity budget has gone up every year."
Peter Neumann, an independent computer scientist at SRI International, a research center in Menlo Park, Calif., said that both Congress and the Bush administration had been neglecting civilian Internet security research.
"The problem is that there is no sense of the importance of research in this Congress or in this administration," said Mr. Neumann, who consults for the government.
The panel also found that the Internet security research community was too small to meet a government goal of at least doubling the size of civilian Internet security researchers by the end of the decade. Fewer than 250 Internet security researchers are now at United States universities, largely because of unstable funding levels, the panel said.
The authors argue that because universities have provided many crucial ideas, technologies and talent, both the civilian and the military sectors are likely to be hurt by the recent trend.
The panel also criticized a recent shift, at both Darpa and the National Security Agency, toward short-term classified research over long-term academic research.
The report found that efforts to transfer federal research to Internet security businesses were inadequate and that there was a basic absence of leadership and coordination. The authors recommended that a federal interagency group take responsibility for coordinating Internet security research.
The report says the current commercial approach to security problems tends to consist of a series of patches. "Even if all the best practices were fully in place, in the absence of any fundamental new approaches we would still endlessly be patching and plugging holes in the dike," the report states.
The report also lists 10 Internet security research priorities, including authentication technologies, secure protocols, improved engineering techniques, monitoring and detection tools and cyberforensics.
http://www.nytimes.com/2005/03/19/te...9computer.html
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Home Sweet Studio
Jon Pareles
THERE'S a tambourine in Adam Pierce's bedroom, two upright pianos and some Balinese gamelan instruments in his living room, a Celtic harp near his television set. Piled up next to the basement stairs are four drum kits in their cases. Take a left at the laundry room and there's the recording studio, a low-ceiling den where drums, a guitar and a vibraphone are set up and battered amplifiers and reverb units are stacked against a wall. The control room, where Mr. Pierce records nearly everything on an old 16- track reel-to-reel tape recorder - 13 of the tracks still work - is a few steps away. It smells a little dank, since bathroom pipes run behind the mixing board.
Here, at the house he shares in Mount Vernon, N.Y., Mr. Pierce has recorded nearly all of the music on the five albums he has made as Mice Parade (an anagram of his name). "Try not to move that microphone," Mr. Pierce said, dodging a stand as he showed a visitor around the studio space. "It was getting a certain sound in that spot."
Mr. Pierce is part of a quiet revolution in music-making: the move from professional studios to home recording. Making an album used to mean booking a fixed amount of very expensive time in a well-equipped but unfamiliar room; now, it can be a matter of rolling out of bed and pressing a button. Whether it's Mice Parade's indie-rock, Aesop Rock's underground hip-hop, the twilit ballads of Keren Ann, the mercurial California rock of the Eels or sweeping Top 40 contenders from Moby, more and more music is emerging not from acoustically perfect state-of-the-art studios, but from setups tucked into bedrooms and basements or simply programmed onto a laptop.
The growth of home recording is a convergence of technology, thrift and shifting musical tastes that has been building for decades. In 1984 Bruce Springsteen released "Nebraska," with its songs recorded as demos on a four-track cassette recorder. It had a haunted sound that more professionally recorded versions of the same songs could not improve; he had tried. But "Nebraska" was an anomaly.
Then along came hip-hop, and hit songs made with two turntables and a microphone, convincing musicians and listeners that lo-fi sound has its uses. And along came digital recording: first in elaborate studio machines and then, as processor speed increased, in home computers. Now a virtual recording console, effects and instrumental sounds are all tucked into software like Pro Tools, the nearly ubiquitous program that was introduced by Digidesign in 1991. It simulates a multitrack studio capable of recording, overdubbing, mixing, editing, even tuning up missed notes or placing a sound on the beat. In the 21st century, homemade recordings can be indistinguishable from studio products.
"I avoided the computer generation for a very long time," said Aesop Rock, a rapper who produces most of his own tracks; he made his first albums with a turntable, a sampling keyboard and a few instruments. But after he invested some tour profits in a Pro Tools setup, he was hooked. "The ease of manipulating everything is amazing," he said. Studio costs vary widely, but can easily run hundreds of dollars an hour. A basic 32-track Pro Tools LE system, to interface with a computer, costs about $450.
Studios still excel at recording ensembles and making them sound lifelike (or better). Songs with the grandeur of Phil Spector productions or 1960's Motown hits, which had a full studio band chiming away, are unlikely to come out of home studios. And musicians working alone, or mostly alone, can't count on a group's creative friction - or an engineer's involuntary smirk - to sharpen their ideas. But for music that can be built by overdubbing - like the intricate patterns of guitars and drums that Mr. Pierce spins as Mice Parade, or the sampled and looped riffs of hip-hop, or the layers of synthesizers within Moby's songs - a home studio is just the thing.
As home studios gain, actual studios suffer. "They're dropping like flies," Mark Oliver Everett of Eels said mournfully. This year such well-known studios as the Hit Factory in New York, Cello Studios in Hollywood (formerly Western Recorders, where the Beach Boys made "Pet Sounds") and a renowned rock and soul crucible, Muscle Shoals Sound Studios in Sheffield, Ala., have all closed.
Under the same pressures as any commercial real estate, studio rooms that can hold orchestras or big bands in prime acoustics are disappearing. When Jazz at Lincoln Center built its headquarters in the Time Warner Center, it defied that trend, and ensured itself a place to record, by earmarking some of its precious midtown space for a rehearsal room that can accommodate a symphony and a jazz band, effectively building the first large New York City studio in years. It also wired its acoustically isolated theater and its club spaces for recording.
Home studios can be shoehorned into tighter quarters. Years ago, Moby moved his bed into a closet and converted the bedroom of his downtown Manhattan loft into a neat, skylighted studio full of keyboards, patch cords and computer gear. Out of it have come million-selling albums like "Play." Aesop Rock's studio is an alcove littered with cigarette packs and running shoes, tucked between the living room and kitchen of his ground-floor apartment in the Carroll Gardens neighborhood of Brooklyn.
When a musician lives in the studio, family and neighbors have to adapt. "The neighbors prefer I don't do vocals at night," admitted Aesop Rock. "It gets a little iffy when I'm screaming."
Songwriters have always recorded tales of their romances. Now, they might be doing it with their subject nearby. Mr. Everett records while his wife, upstairs, tries to ignore what he calls "the constant thumping and banging from the basement." Speaking by telephone from his home in the Silver Lake section of Los Angeles, he deadpanned: "She's not even a fan of my music. If the song's not about her, she doesn't care. I've started telling her they're all about her so she'll like them."
Home recording is subject to interruptions not generally found in professional quarters. During one Eels session for "Blinking Lights and Other Revelations" (Vagrant), which is due in April, Mr. Everett's dog, Bobby Jr., was sprayed by a skunk. "And I'm the one that has to give him a tomato-juice bath in the recording-studio bathroom," Mr. Everett said. Bobby Jr. actually appears on the album, howling what Mr. Everett called a solo vocal.
Mr. Everett works with a recording engineer in his home studio because, he said, "It's too advanced for me - I don't know how to turn some of the stuff on now." But many other home recordists work entirely alone as performer, producer and engineer.
"It's so nice not having to wait for other people to show up," Moby said by telephone from Amsterdam. "It's a very lonely process, and you miss the gregarious interaction you'd have with musicians. But the flip side of that is your equipment doesn't argue with you, so it's easier being a megalomanical home studio despot."
Working in solitude can nurture more eccentric, more private songs. Keren Ann recorded the hushed ballads of her new album, "Nolita" (Metro Blue), in two private studios: her soundproofed apartment in Paris and one in the downtown Manhattan neighborhood that gave the album its title, often working in the predawn hours when the city was quietest. Guest musicians could drop by after the last set at a jazz club.
"Going back and forth, I often arrive here jet-lagged, so I'm awake at 5 a.m.," Keren Ann said in an interview at her loft, where tom-toms sit on a kitchen shelf above pots and pans. "It happens that I have this idea on an instrument or an arrangement, and I'll wake up and turn everything on and record. It's also different when you can record your own vocals and nobody hears you. You can confess more. If I had not done 'Nolita' this way, it would have been less intimate, less naked."
When it's easy to record at any time, musicians don't hold back. "Because I work a lot," Moby said, "I figure I've got four or five thousand unreleased songs. A lot of them are not very good. If you're trying out a new idea in front of your friends or your bandmates, if it's a terrible idea they're going to throw stuff at you. I have a lot of terrible ideas. But working at home, you can be as embarrassing as you want, and you'll be the only person who will ever hear it. And sometimes the really dumb idea that you had could be a good piece of music."
Home recordists still venture out when they need improved equipment and acoustics: a $10,000 vocal microphone, a specialized guitar setup. It's a relief, they say, to have someone else responsible for the technical details. They also take their songs to full-fledged studios for final mixes to try out the music on speakers and systems that are too big for a basement.
While working in a rented studio can mean pressure, working at home can mean procrastination and endless second-guessing, and some home recordists appreciate the sense of urgency that the clock brings. "When I record in a studio," said Aesop Rock, "I know that on Tuesday at 3 o'clock I've got to go be creative."
Mr. Pierce said: "At home I don't know what I'm going to record before I'm about to record it, or how the pieces of the song will be put together. But in a studio, the way a transition is going to be made has to be decided in the next 30 minutes."
Although computers can mimic the reverberations of anything from a cubicle to a stadium, there's still no substitute for physical space. Mr. Everett compared his basement studio to a vintage keyboard warehouse. "It's so annoyingly small that it's gotten to the point now where I can't even buy another guitar. Every time I want to play an instrument I have to move another five instruments to get to it." So when he needed a string section for an Eels song, he went to a professional studio. "I could fit 32 people in the basement," he said, "but I'd have to stack them all on top of each other, and it's hard to play the violin like that."
Moby's new album, "Hotel" (V2), simulates concert halls and pulsating clubs, although nearly all of it came from a space he describes as claustrophobic. "I'm a small person, and the studio is built to scale," he said. "Occasionally I'll invite friends over, but it's a place that I spend so much time in by myself that when anyone's over I feel like the moment they leave, homeostasis has returned."
For musicians who record at home, the studio becomes a sanctuary: part sandbox, part confessional. "One of the greatest luxuries is having a permanent small studio space that's always waiting for me," Moby said. "It's secure when I leave, and it sits there waiting patiently for me when I get home. It's the perfect companion."
And there's a certain symmetry in the fact that the music that emerges from home recording is increasingly heard by one person at a time, between the headphones of portable music players like the iPod. The sounds musicians have made alone at home end up in an equally private sphere. "It's not about being lonely," Keren Ann said about recording at home. "It's about being apart."
http://www.nytimes.com/2005/03/20/ar...ic/20pare.html
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Toshiba Brings Forward 4GB 0.85in HDD Debut
Tony Smith
Toshiba will put its 4GB 0.85in micro hard drive into volume production next month, rather sooner than it anticipated when it announced the product in January this year.
Back then, Toshiba said (http://
www.theregister.co.uk/2005/01/06/ toshiba_2gb_phone_hdd/) it would begin shipping the 2GB version of the drive at the end of the month. It said it would offer a two-platter version of the product, taking the capacity up to 4GB, mid-2005.
According to Japanese-language site PCWatch, Toshiba will now ship the 4GB part in April, punching out 20,000-30,000 units a month, though the company intends to raise that figure over successive months.
Toshiba announced (
http://www.theregister.co.uk/2004/09...hiba_tiny_hdd/) its 0.85in HDD in December 2003. In September 2004, it said it would put the unit into mass-production by the end of the year (
http://www.theregister.co.uk/2004/09/29/ toshiba_tiny_hdd/), though that ultimately slipped to early 2005. That may explain why it's being a little more conservative about the availability of the 4GB version.
Both versions spin at 3600rpm, weigh less than 10g and operate at 3.3V. They can stand 1000G of operating shock, Toshiba claims.
The manufacturer is pitching the parts at mobile phones, PDAs and compact MP3 players. Earlier this month, Samsung demoed a music-oriented smart phone, the i300, which incorporates (
http://www.theregister.co.uk/2005/03/11/ samsung_hdd_handset/) a 3GB hard drive.
http://www.theregister.co.uk/2005/03...gb_0-85in_hdd/
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Surveillance
Investigators Argue for Access to Private Data
Tom Zeller Jr.
Diany Castillo, a 54-year-old home health care aide who lives in Brooklyn, says she is grateful that the fragmented bits of her past - her moves from one state to another, her marriages and her name changes - can be found in the vast commercial databases that contain personal information on tens of millions of Americans.
Last October, a private investigator in Los Angeles used those digital bread crumbs to track down Ms. Castillo and send her a letter. Her estranged daughter, Diani Ramos, adrift for nearly a decade on the streets of southern California, was looking for her, the letter said.
The two were reunited in November.
In the heated debate over privacy rights and the sale of personal information by the data-mining industry, the story of Ms. Castillo and Ms. Ramos may represent a contrarian's view.
But Bernard Cane, the private detective who found Ms. Castillo, says this kind of happy ending could become much rarer if lawmakers begin to limit access to commercial databases, which can include, among other personal information, Social Security numbers. In many ways, the interests of Mr. Cane and his clients highlight the difficulties in finding a one-size-fits-all solution that both protects consumer privacy and makes some information available for tasks like this one.
"How does a doctor do surgery without a scalpel?" Mr. Cane asked. "You've got to have the right tools to do a job."
Until now, the Sam Spade lobby has had surprising success in arguing that civilian investigators, like insurance brokers, employment screeners and other businesses, have a legitimate need for some sensitive consumer information. But over the last month, as one company after another - first ChoicePoint, then Bank of America and two weeks ago, LexisNexis - revealed the loss or theft of millions of bits of sensitive consumer data, Americans have been forced to contemplate the vulnerability of their personal information.
Congressional hearings into that vulnerability - and into the loosely regulated data trade - have already begun. And as privacy advocates, federal and state lawmakers and ordinary consumers beat the drum for new regulations on the commercial handling of consumer data, private investigators - who are major buyers of personal information from data brokers - have been bracing for more scrutiny of their access.
The digital information available to Mr. Cane and others in his business was greatly enhanced in 1993, when the Federal Trade Commission made a formal distinction between full credit reports, which are governed by specific rules of access, and the identifying information at the top of a credit report. The latter, which is known as the "header," includes the person's name, most recent address, date of birth and Social Security number.
That distinction allowed credit reporting companies to sell the header information to the growing data-brokering industry, which was already amassing dossiers on millions of Americans using public information sources like court filings and criminal records.
The commercial data trove quickly got filled with millions of Social Security numbers, and the question of just who ought to be able to gain access to those databases has been fiercely debated and haphazardly regulated ever since.
The Federal Trade Commission permitted a working group formed by several database companies to come up with self-regulating guidelines in 1997. But privacy advocates argue that individual commercial data brokers still decide themselves who is eligible to buy personal information.
The Gramm-Leach-Bliley Act, which went into effect in July 2001, reversed the credit header rule and prohibited credit reporting agencies from selling that information outside the rules set out by the Fair Credit Reporting Act. But the law did not clearly address what data brokers and their subscribers could do with the information already in their systems.
The access now enjoyed by private investigators troubles privacy advocates.
"We're concerned generally about accountability in this profession," said Chris Jay Hoofnagle, an associate director for the Electronic Privacy Information Center, a digital rights group based in Washington. Mr. Hoofnagle pointed out that investigators were not licensed in all states, and that in some jurisdictions licensing was a mere formality.
Data brokers could conceivably limit access to investigators in states with robust licensing rules, like California, Georgia and New York, but there is little evidence that this is done in practice. And other critics have argued that inaccuracies in the databases make them dubious sources for conducting investigations.
Organizations like the Privacy Rights Clearinghouse, for instance, have gathered information on hundreds of cases in which consumers were wrongly denied credit or, worse, wrongly associated with a crime or a debt.
And still other critics suggest that investigators could get all the information they need the old-fashioned way - by hitting the streets, reviewing court records and asking questions - without ever having to look at anything like a credit header.
"Private investigators using information brokers are simply lazy," said Robert Ellis Smith, editor and publisher of a newsletter, Privacy Journal. "They don't want to do the legwork."
But Kirsti Ekeholm, a licensed private investigator based in Atlanta, says her profession is too frequently dismissed in just this way. Investigators with expertise in databases know how to handle information that can often be incomplete or incorrect, she said.
"These records were never designed to be exploited as a commodity to be sold," Ms. Ekeholm said. "And while it's not possible - you can't stop private information from being available - you can limit how it's sold and limit what industries will have access to it."
Indeed, Ms. Ekeholm is among the many private investigators who have tried to stop big brokers like ChoicePoint from making even their less-sensitive data widely available, particularly to the general public. Part of this, of course, is simple turf protection for their business. But Ms. Ekeholm also argues that her industry shares the public's concerns over privacy, and that licensed investigators are trained to know how to protect it.
"The P.I. industry gets a black eye in all this," Ms. Ekeholm said. "But we have just as much interest in protecting privacy as anyone else. I don't want my information readily available to just anyone."
Several past Congressional efforts have sought to limit that availability across the board - including to investigators. But so far none has emerged from committee.
In such cases - and in numerous negotiations with the Federal Trade Commission, privacy advocates and state and federal legislators - the National Council of Investigation and Security Services, a trade group representing civilian investigators, has mounted vigorous campaigns to stifle new regulations.
But major security gaffes at companies like ChoicePoint, which was fooled by thieves masquerading as legitimate subscribers, might make things considerably tougher for the industry this legislative session.
"One of our strongest arguments has been that we are vetted," said Bruce Hulme, a private investigator in New York City and chairman of the trade group's legislative committee. "And if ChoicePoint and others do not properly vet their customers, then we're all in trouble."
One bill introduced in January by Senator Dianne Feinstein, Democrat of California, would require companies to notify consumers when breaches of security occur. It has won support from the investigators' lobby. But another of Senator Feinstein's bills, the Privacy Act of 2005, is opposed by investigators because it would limit access to all kinds of information that they use every day - including the credit headers, Mr. Hulme said.
And if that happens, investigators insist, reunions like that between Ms. Ramos and her mother would become a much rarer thing.
In an interview, Ms. Ramos explained how, at the age of 18, suffering from an abusive past, clinical depression and a mental fog induced by an antipsychotic drug, she left her family, which was then living in Fort Myers, Fla., and headed to California, seeking what she called "a better life."
She did not find it. Instead, she says, she drifted for years between halfway houses, shelters and the streets in Compton, Hollywood, Bell Gardens and, finally, San Diego. During her time in California, Ms. Ramos said, she was raped, robbed and jailed, and by last fall, she wanted desperately to go home.
But after nine years, all ties to her family back in Florida had evaporated. Phone numbers were long forgotten and, in her troubled mind, even names and places had become sketchy.
In a strange twist, Ms. Ramos reached out to the Privacy Rights Clearinghouse in San Diego for help. She had become convinced - wrongly - that her identity had been appropriated by thieves. The group put Ms. Ramos in touch with Certified Investigative Professionals, a membership organization in Santa Monica, which then put her in touch with Mr. Cane.
Ms. Ramos recalled names and middle names that her mother used - Diany, Ziani, Janet. She had surnames, married and maiden, but the spellings varied, and were only guessed at phonetically - Pechouka, or Pacheco, she thought. Or Mourra. And there was the street in Fort Myers where they had once lived - Seminole Street.
The information turned up thousands of possible leads and duplicate names, Mr. Cane said. But as he narrowed the field, it was his ability to view Social Security numbers that allowed him to link various records associated with Ms. Castillo, even as her name and location changed.
The process took about two weeks, Mr. Cane said. He did not charge Ms. Ramos.
"Given the holes in the information, it might have taken six months to a year" without the header information, Mr. Cane said. "I'd have had to retain folks, do background records searches on the ground, flown back and forth to Florida."
If new legislation were to force such globe-trotting, Mr. Cane said, he could not afford to do it - and neither could the justice system, which, he says, relies more heavily on private investigators using the data bazaar than anyone wants to admit.
"I don't want to find a new vocation," Mr. Cane said. "But if they knock any more teeth out of my tiger, I'm going to have to retire my tiger."
http://www.nytimes.com/2005/03/21/te...gy/21data.html
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The Music Goes on Side A and the Flip Side Is a DVD
Robert Levine
When Matchbox 20's lead singer, Rob Thomas, was planning his first solo release late last year, he thought about ways to make the album a better value, in part to entice consumers who might be tempted to download his songs illegally.
"Obviously, I don't want people to download my album," he said. "But you can't just complain that people are downloading music and not do anything."
In the last couple of years, some artists have included a second disc with bonus songs or a short DVD in order to win over potential file-sharers. But Mr. Thomas's "Something to Be," due April 19 from Atlantic, part of the Warner Music Group, is among the first by a major artist to be released only on DualDisc, a new format being introduced by the major labels that includes a traditional CD on one side of a disc and DVD content on the other. The DVD side includes the same album mixed in surround sound so that it can be heard through home theater systems, as well as about 20 minutes of video - in Mr. Thomas' case, some documentary footage.
At a time when the music business is still suing illegal file-sharers whom, the industry claims, are causing them to lose sales, the major music labels are hoping the DualDisc format will give them a multimedia carrot that can be used along with the legal stick. Because DualDisc albums have additional content but sell in most stores for only a dollar or two more than traditional CD's, they are marketed as a better value.
"They're trying to find some way to add value to the physical product," said David Card, an analyst at Jupiter Research.
They would also like to add some convenience. When Andrew Lack started as the head of Sony Music, now Sony BMG Music Entertainment, in January 2003, he would bring home stacks of CD's and DVD's every night to become more familiar with the company's artists. New to the music business - he had come from NBC, where he had been president of the network - Mr. Lack was struck by how inconvenient it was to switch between the two formats.
"I was thinking, 'Wouldn't it be nice if we could flip this disc over and learn something about the artists?' " he said. The idea was already in the works, so Mr. Lack decided to make the product one of his priorities. Over the last year, all the major labels agreed on specifications for the DualDisc, and no one label will control it. The logo will probably be licensed by the Recording Industry Association of America.
Retailers, who have been squeezed in recent years by file-sharing and by cuts in promotional money from music labels, are enthusiastic about the prospects of the DualDisc. Since the beginning of the year, two major albums have been released in both CD and DualDisc formats, "O" from Omarion and "Rebirth" by Jennifer Lopez. About a third of consumers purchased the DualDisc in the first week, according to Sony BMG Music Entertainment, which produced both. On April 26, the company will release Bruce Springsteen's new album, "Devils & Dust," exclusively as a DualDisc.
"The feedback I'm getting from retail accounts makes me cautiously optimistic," Mr. Lack said. "I think the CD is coming to the end of its run, and I think this might - might - be a replacement."
When the format was introduced before Christmas, there were technical concerns. The discs, imperceptibly thicker than ordinary CD's because two sides are fused together, are incompatible with a fraction of older slot-loading CD players. So far, however, few consumers seem to be having problems. "We have had a below- average return rate," said Bryan Everitt, director of music operations at Hastings Entertainment, which operates 153 music stores under various names.
Artistic advances have been made as well. "The initial DualDisc releases, some of them might have only appealed to the fan club," said Robert J. Higgins, the chairman and chief executive of Trans World Entertainment, which owns F.Y.E., Coconuts and other music chain stores. "But the newer ones have solved that problem."
"When you see a great artist come out in DualDisc," Mr. Higgins said, "that will really write the rules for this."
So far, Sony BMG has been the most aggressive of the major labels in involving marquee artists and promoting the format, according to several retailers. Since the DualDisc incorporates formats that already exist, it will have an advantage over other recent products, such as Super Audio CD and DVD-Audio, and retailers believe DualDisc will capture more of a market. Of the four major labels, only EMI Music has not yet announced DualDisc releases but it is expected to do so this year.
Among the encouraging signs for DualDisc is the recent growth in sales of music DVD's, which nearly doubled in 2004 from the previous year. "We think that consumers have shown a great desire for video," said Paul Bishow, a vice president in marketing for Universal Music Group. "And one of the great engines for growth of DVD video is the additional features. Now you see the beginning of that with music."
Retailers hope consumers see the parallels with DVD. "We need something where, when the consumer picks up a CD, they'll think it's as good a value as a DVD," said Mr. Higgins of Trans World Entertainment.
Like many retailers, Trans World usually charges up to $1.50 more for a DualDisc version of a title. But music companies hope low prices will expand the size of the market, as they did for DVD's."By Labor Day, we'll know," said Mike Dreese, the co-owner of Newbury Comics, a chain of record and movie stores in New England. "This will either be a mildly interesting niche product, or by next year, half of the albums by major artists will be DualDisc," Mr. Dreese said. For now, given the problems the music business has suffered over the last several years, "it's exciting to see something that when you put it in a rack, it sells."
http://www.nytimes.com/2005/03/21/bu...ia/21dual.html
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Blank Discs Not Created Equal
Aaron Weiss
There was a time when burning a blank CD-ROM in your own home sparked feelings of wonder and joy as if you were performing a minor miracle. What once seemed like a technical marvel has, like so many small wonders, become routine.
Now we can also burn our own DVDs. Sprinting down to the local mega-mart for a stack of blank CDs seems like a no-brainer, and it's quickly becoming so for DVDs. But the story doesn't actually end there.
Blank media still possess an air of mystery, at least to some people. When you buy a stack of shiny new platters packaged by Fujifilm, TDK Electronics, Ritek, Verbatim, Imation, Hewlett-Packard or another recognizable brand, you cannot count on the name that appears on the label to reveal the whole story. In fact, most of this blank media is manufactured by a short list of companies: India's Moser Baer, Japan's Ricoh and Taiyo Yuden, and Taiwan's CMC Magnetics, Prodisc Technology and Optodisc Technology.
Taiyo Yuden is the granddaddy of them all. Together with Sony and Philips, it invented recordable CD media in 1988. Today, these manufacturers produce a variety of product lines. Some are in-house formulations bought and resold under brand names, while other lines may be designed to the specifications of a particular vendor.
Just how much of each is out there "is an area where speculation takes hold more than fact," says Kevin Pieper, who maintains the resource site digitalFAQ.com. In Pieper's experience, the name brands "purchase the media being made by the manufacturers, and put their pretty little logo in it -- nothing more."
Verbatim spokesman Andy Marken describes the company's facilities in Singapore and Japan as using "our own processes and procedures" and says "our own production and quality engineers monitor the work flow."
It is not uncommon for brand names to draw on more than one manufacturer to fill their inventories, selling blank media with different ancestries. And so ... who cares?
People who take their burns seriously care a lot. They hang out in online forums such as Club CD Freaks, a community with more than 100,000 members and 5 million visitors a month. A smaller community of about 10,000 members frequents CDRLabs.com. Hot topics at these sites include reviews of the latest DVD recorders and hot tips on blank-media bargains.
"Good," by these standards, has several meanings. Most importantly, people don't want to wind up with coasters -- discs that fail to burn properly and are rendered useless. It used to be that producing coasters was a fact of life, back when recording technology was immature. These days, most coasters are the result of poorly made media. In fact, says Pieper, "there is actually more bad media now than there was just two years ago."
Even with a successful burn, the question of durability and longevity remains key. All burns produce a certain number of errors -- the CD and DVD data protocols are designed to handle this. But too many errors can result in a disc that does not stand the test of time -- readable in the short term, but possibly not years later.
Some media can burn reliably faster than its rated speed. A DVD+R might be rated at 4X burn speed, yet with certain recorders, it can be burned at 8X. The factors that contribute to high- or low-quality media are varied. Several choices of dye are on the market, and which one is used can affect a disc's reflectivity, and thus its readability. But beyond that, says Pieper, "if your dye is unevenly spread, or the other materials and workmanship are shoddy, it doesn't matter what dye is used." Also, Pieper says if the glue job on the platter is sloppy, "the media literally falls apart."
Taiyo Yuden media stands as the golden child for blank-media enthusiasts. Popular opinion swings the other way for manufacturers such as CMC Magnetics and Princo.
Individual community members, however, have their own personal favorites. Wesley Novack, a system administrator in Phoenix, is a review coordinator for Club CD Freaks. He prefers Maxell and Verbatim media along with the reigning favorite. But in these murky waters, he cautions that Verbatim media made in Singapore is generally preferable to Verbatim media manufactured elsewhere, because that plant is directly owned by the company.
Every blank platter is encoded with an MID, or manufacturer identifier, which indicates the real manufacturer of the media. The MID can only be read with software such as the popular recording suite Nero 6, and niche utilities such as DVD Identifier and KProbe, all for Windows.
A roar of excitement goes up on message boards when someone buys a discounted pack of, say, Fuji DVD+R and discovers the blanks have an MID of YUDEN000T02 -- in other words, a Taiyo Yuden batch.
But you can't read MID codes in a store aisle. Community members share clues that are almost mystical for identifying "the good stuff" on the shelves. One poster suggests that Verbatim-branded DataLife DVD-R discs on a gray spindle are made by Ritek (considered above-average) while those on a black spindle come from CMC.
Another secret shared by the connoisseurs: Fuji-branded package labels may read in small print either "made in Taiwan" or "made in Japan." Like children combing store shelves for that cereal box with the special decoder ring inside, media sleuths know Fuji discs made in Japan are the sought-after Taiyo Yudens. Another clue, according to Novack, is that with Taiyo Yuden-made media, "the cakebox bubbles out and is wider at the bottom of the spindle."
Despite all the back-room whispering and tip-of-the-day gossip, it's easy to buy Taiyo Yudens online -- just order them. Taiyo Yuden discs, like those from many of the other original manufacturers, can be bought straight up -- no brand-name middleman needed.
So, why all the fuss? What everyone wants is a great deal. Sure, you can visit online retailer Newegg.com and pick up a 50-pack of 8X DVD+R discs guaranteed to be Taiyo Yudens for just under $40.
But the bargain hunting keeps these communities buzzing. Unlike most online retailers, the big-box chains run heavy loss-leader discounts on recordable media. Nearly every week, recordable media go on sale for half-price or even less at a local mega-mart. And sometimes, just sometimes, these bargains reveal a gleaming stack of gems beneath the brand label.
"About a month or two ago," Novack says, Club CD Freak members hit upon a mother lode at Best Buy. "You could find a 25-spindle of Fujifilm 8X Taiyo Yuden DVD+R discs for $9. Now even though that was a sweet deal already, many stores had a shelf tag marked at $4 for a 25-spindle!"
http://www.wired.com/news/digiwood/0,1412,66911,00.html
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Euro Software Patents Pending
Wendy M. Grossman
The European Parliament appears set to introduce U.S.-style software patents, which critics have denounced as too broad and business-friendly.
Software patents continue to be one of the most hotly contested legislative initiatives in Europe. On Feb. 28, the European Commission declined the European Parliament's request to restart the legislative process from scratch.
A week later, the EC sent the Patentability of Computer- Implemented Inventions Directive, or CIID, to the European Parliament for a second read, a stage heavily weighted toward passage. The directive would allow software to be patented provided that it makes a "technical contribution ... to the 'state of the art' in the technical field concerned."
If the CIID passes, all EU member states will be required to pass supportive national legislation.
The United States has been granting software patents since the early 1990s, but in Europe they remain controversial. Opponents like the NoSoftwarePatents campaign and the Foundation for a Free Information Infrastructure, or FFII, argue that software patents make it impossible to write free and open-source software. They also believe patents favor large companies at the expense of small ones.
Critics point to the U.S. experience, in which a massive number of patent applications have been made and many patents have been criticized as overbroad, obvious or invalid because of prior art.
The CIID is widely described as bringing software patents to Europe, though this is only partially correct.
Jeremy Philpott, a marketing executive and former senior examiner for the U.K. Patent Office, noted that although the EU Patent Convention of 1973 specifically prohibits patenting software, in practice many such patents are granted.
"The intended purpose of the directive is to clarify the law while maintaining the status quo," Philpott said. "Anything unpatentable now, such as business methods, should remain so when the directive comes in, whereas software which has a technical contribution and is patentable now would still be patentable."
Philpott is correct that the United Kingdom already patents software. But, says Florian Müller, the Munich, Germany, manager of the NoSoftwarePatents campaign, the same is not true in other European countries.
Germany and Poland, for example, have specifically rejected patenting software. In Germany, only devices that involve natural forces may be patented. So, software can be patented only as part of a physical device, such as a recent Adidas patent on a new shoe with a computer chip in it that enables the shoe to respond to different surfaces.
"Of the various national patent offices in Europe," Müller said, "the U.K. Patent Office has the most liberal practice, surpassed only by the European Patent Office. The directive in its present form would standardize on that. It's like harmonizing taxes by taking the highest rate and saying that gives clarity for all."
A lot of the patents granted by the U.K. and European patent offices, he said, are not enforceable in Germany even though all European Patent Office decisions to grant patents are binding upon all EU member states, who must issue national patents.
Harmonizing patent law across the European Union is seen as an important step toward lowering the barriers to internal trade. In addition, the so-called trilateral offices -- the patent offices of the United States, Japan and the European Union -- have met regularly since 1983, attempting to establish common standards in patent search and examination practices. Japan allows software patents, but they must be "a creation of technical ideas utilizing a law of nature."
The next step under the European Union's codecision procedure (.pdf) is the European Parliament's second reading, which must begin within three months of formal delivery of the commission's text, translated into all 20 official languages, to the Parliament.
The second reading is expected to take place this spring or early summer. At that time, the European Parliament may accept, amend or reject the directive. Normally, no new amendments could be introduced at this stage, but the election of a new Parliament since the first reading voids this prohibition.
Still, there's a twist: To pass an amendment or reject the directive outright requires an absolute majority -- half plus one of all 732 elected members of the European Parliament, not just those present for the vote. The default is therefore weighted heavily toward passage of the directive.
It was for this reason that the FFII and the NoSoftwarePatents campaign both lobbied the council to restart the legislative process from scratch. The directive text agreed upon last May was voted upon by the commission only 17 days after 10 new member countries joined the EU.
Having failed in that effort, they now hope either to have the directive text amended substantially or to get it rejected completely with a view toward drafting better legislation later.
At the very least, said James Heald, a spokesman for the FFII, the phrase "technical contribution" must be clearly defined. "If the directive is to have meaning we have to be able to see what its intent is. The worst case is what's just come out of the council -- green-lighting software patents with no protective provisions."
http://www.wired.com/news/politics/0,1283,66938,00.html
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Court Ruling May Force EBay to Scrap 'Buy-It-Now' Feature
Chris Gaither
EBay Inc.'s U.S. site could be forced to abandon its popular "buy-it-now" feature — which accounts for nearly a third of the value of goods sold by the online auctioneer — as a result of a court ruling this week, analysts said Thursday.
The U.S. Court of Appeals for the Federal Circuit in Virginia on Wednesday upheld a key element of a patent infringement case against EBay by MercExchange and said a lower court was wrong to deny a permanent injunction against the online auction giant.
EBay shares Thursday fell 36 cents to $36.12 on Nasdaq. Scott Kessler, Internet equity analyst with Standard & Poor's, said investors underestimated the potential threat the ruling posed to the company's business.
"There are potentially far-ranging implications," he said.
After throwing out a $4.5-million judgment against EBay regarding comparison-shopping technology Wednesday, the court upheld an earlier ruling that ordered EBay to pay $25 million for infringing the no-haggle pricing feature from September 2001 to April 2003.
An attorney for plaintiff Thomas Woolston, president of Great Falls, Va.-based MercExchange, said he would ask the lower court as soon as next month to tack on more than $100 million to cover the nearly two years since then.
Unlike the auctions EBay is known for, the "buy-it-now" feature lets people snap up items immediately for a fixed price. Last year, EBay sold $3 billion in merchandise that way, or 31% of the global total.
The court ruling applies only to the U.S. sales, which EBay does not break out in financial statements.
EBay said in a news release that any injunction would have no effect because it changed its fixed-price system after the court's original verdict in 2003.
But in a filing with the Securities and Exchange Commission, EBay said that if it failed to persuade the lower court that those changes weren't infringing, the company "would likely be forced to pay significant damages and licensing fees or modify our business practices in an adverse manner."
http://www.latimes.com/business/la-fi-ebay18mar18.story
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iPod Therefore iAm
Douglas Kern
Ordinary people narrowcast; always have, always will. It's human nature to want to surround ourselves with like-minded people, familiar music, comfortable art, and unchallenging surroundings. Who can be surprised that our technology reflects this basic impulse?
Andrew Sullivan, that's who. In his recent essay, "iPod World: The End of Society?" Sullivan broods over the popularity of America's new favorite gizmo, the iPod:
"Americans are beginning to narrowcast their own lives. […] Technology has given us finally a universe entirely for ourselves -- where the serendipity of meeting a new stranger, or hearing a piece of music we would never choose for ourselves, or an opinion that might actually force us to change our mind about something are all effectively banished. Atomization by little white boxes and cell-phones. Society without the social. Others who are chosen -- not met at random.
"Human beings have never lived like this before."
On the contrary: human beings have always lived this way. Until very recently, most people lived their lives -- culturally and otherwise -- within the confines of small homes, small towns, and small places. Geography dictated your language, religion, political beliefs, cultural preferences, and artistic tastes. You didn't need a cell phone or an iPod or an Internet connection to link up with your tiny little subculture -- you just needed to get out of bed in the morning. To be sure, there was room for variety within geographical areas -- but for most of human history, location was destiny. Cultural jostling was largely restricted to merchants, soldiers, peripatetic clergymen, and perhaps the very rich. And while the constriction of cultural experience was hardly ennobling or intellectually fulfilling, it doesn't appear to have made most people miserable.
The history of the modern world is the history of culture transforming from a geographical phenomenon into an ideological phenomenon. As information technology has blossomed, ideas no longer rely upon locations for transmission. But while the unit of atomization in the bad old days was the small community, the unit of atomization in the present is the individual. Either way, the constant is atomization.
Human beings are parochial animals; in the modern age, we dwell in parishes of the mind. Sooner or later, one form of homogeneity replaces another. The old differences -- North vs. South, city vs. country, black vs. white -- give way to the new: Red America vs. Blue America, investor vs. consumer, new wave vs. old school. We select our style of narrowness, but the narrowness never changes.
And what's wrong with a little narrowcasting, anyway? Social life is a difficult thing -- fraught with awkwardness, quirky taboos, the fear of rejection, and the discomfort of confrontation. The unfamiliar and the unexpected can stimulate but they can also exasperate -- and exacerbate ill will. We surround ourselves with the familiar and unthreatening precisely because ordinary life is threatening enough, even within the confines of the familiar. To be sure, a select few will always strive to broaden their cultural horizons -- but then, a belief in the value of broadened cultural horizons is itself a cultural position, and a surprisingly comfortable one at that.
The question is not whether we will narrowcast our lives. The question is how to create a broadcast society out of narrowcast people.
Our true concern is not cocooning, but rather the intellectual indolence that it permits. It's fine to surround ourselves with the familiar and unobtrusive, provided that we use that comfort to create a mental space for reasoned, virtuous reflection. If every New York iPod zombie engaged his or her chosen style of music in a focused, intelligent way, we wouldn't mind the rise of the iPod a bit. But it seems likely that the familiarity of our favorite iPod tunes isn't making civilized thought easier -- it's allowing civilized thought to be avoided altogether. How many iPod-heads poison their brains with soulless pop drivel because it's the same crap to which they've always listened? As Christine Rosen warns in her New Atlantis article, "The Age of Egocasting:"
"TiVo is God's machine, the iPod plays our own personal symphonies, and each device brings with it its own series of individualized rituals. What we don't seem to realize is that ritual thoroughly personalized is no longer religion or art. It is fetish. And unlike religion and art, which encourage us to transcend our own experience, fetish urges us to return obsessively to the sounds and images of an arrested stage of development."
But fetish is an old enemy. Since time out of mind, most people stayed in the village because it was easier than venturing out into the city. Most people thoughtlessly accepted whatever music the cultural elites presented at the orchestral performances, or whatever art the smart-set displayed at the museums. Even today, most people accept the religion, culture, and mores of their upbringing without question. Do iPods encourage fetishes, or simply transform them?
Perhaps the new and the unfamiliar are just as likely to close the indifferent mind as to open it. Perhaps iPods are merely symbols of the insularity that characterizes the average intellect.
Sullivan identifies the real problem later in his essay:
"But what are we missing? That hilarious shard of an over-heard conversation that stays with you all day; the child whose chatter on the sidewalk takes you back to your own early memories; birdsong; weather; accents; the laughter of others; and those thoughts that come not by filling your head with selected diversion, but by allowing your mind to wander aimlessly through the regular background noise of human and mechanical life."
The iPod is a tool of choice. With it, we can download exactly the music that we choose, and play it when we choose, and where we choose. And ours is a nation swooning over the joys of choice. We learn the lesson over and over, in movies and TV shows and commercials: be yourself. Do what you want. Don't live by the rules and expectations of others. Pursue your own destiny. What we forget -- but what Sullivan remembers -- are the joys of not choosing. To accept what life offers, not numbly but deliberately, placing our beloved autonomy into abeyance, is to open the door to unforeseen surprises, happy coincidences, and profound affirmations. Good as it is to choose who we love, it is even more intoxicating to be chosen. Good as it is to seek out what we like, it is just as pleasant for what we like to seek us. And given our society's endless fascination with questions of identity, it seems that we are desperate to find those qualities of ourselves that are unchosen, unchanging, and fundamental. As our tools for choosing grow ever more powerful, our hunger for the unchosen can only increase.
I am not afraid of iPod nation. I am not so naïve as to think that good music will triumph over awful music. I am not so optimistic as to forget that we lose something vital when choice barricades the walls of our minds against the adventure of the unknown and unselected. And I accept that every iPod- like innovation tips the scales a little further in the direction of the chosen over the unchosen -- a dangerous trend in an era when choice always seems to win. But like everything else in modernity, iPods have increased our capacity to take pleasure in our unique pursuits, even as they have increased our responsibility to choose our pursuits wisely. Will we live up to that responsibility? Maybe so, maybe not; either way, the fault, dear Andrew, dear Christine, lies not within our iPods, but within ourselves.
http://techcentralstation.com/031805B.html