[JackSpratts]

State Of The Art



Music Buffet: Loading Up for Takeout
Wilson Rothman

A NAPSTER commercial on TV offers the following comparison. On top, there is a single iPod. The cost to fill it, Napster says, is $10,000. Beneath it are three MP3 players: the Dell Pocket DJ, the Creative Zen Micro and iRiver's new H10. With Napster to Go, the commercial says, you can fill all three with almost any song you can think of and you're out only $15.

Next to that, in tiny print, are the words "per month."

Ordinarily such a lopsided comparison would make me cringe and conclude that it was aimed at the gullible. But this one made me re-examine my life.

Napster to Go is the latest edition of Napster's legal download service. (Although it was previewed to the public last fall, the software allowing small portable music players to work with it has become available only in the last few weeks.) A vast majority of the available tracks - Napster says 1.3 million - can be downloaded by subscribers without paying additional fees.

What makes Napster to Go different from other subscription services, like Rhapsody ($10 a month) from Real Networks, is that you can load these tracks onto a compatible player and hit the road. As long as the player reconnects to the PC every month to verify your subscription, it feels just like the more common alternative, the one-time à la carte cost of $1 per track or $10 per album.

Of course, the commercial doesn't say you will lose access to music if you stop paying. And Napster's $10,000 reckoning also assumes that everything on an iPod is purchased at the iTunes Music Store. In reality, you could have plenty of MP3's already, from ripping CD's and dredging the Internet.

But the commercial raises a good question: Will you rent albums the way you rent TV programming? If it makes financial sense - and if, armed with that knowledge, you can avoid the competing allure of iPod style and the Apple brand - you just might.

Since Apple opened its iTunes store at the end of 2003, I've purchased 504 songs - that's 21 albums and 224 loose tracks. That means my music diet, excluding a dwindling number of old-timey CD purchases, comes to roughly $30 a month.

Most of my spending has been satisfying: new releases from U2 and Jack Johnson are simply essential, and impulse buys like the Postal Service's "Give Up" and Better Than Ezra's "How Does Your Garden Grow?" have become staples of my week. But many hunches and recommendations got old fast.

More frustrating still, there are hundreds of tracks I've just been too cheap to check out. Even though I have a permanent collection of about 7,000 MP3's - compatible with any service and player - $15 a month is still less than what I spend discovering new music.

Parents with children ages 10 to 20 know how costly the digital music revolution can be. If you look the other way as they download music using ... let's call them gray-market techniques, your PC becomes irreversibly crippled by spyware. But when you try to encourage them to pay for music instead of stealing it, you quickly discover that even a two-album-a-month allowance adds up.

When used to its fullest extent, Napster to Go lays iTunes flat, financially speaking. For the $15 monthly fee, you're allowed unlimited downloads. You can put them on up to three compatible portable players, and log in and listen on up to three PC's. (Napster to Go does charge by the song, however, to burn music to a CD.) Sure, there's an initial investment, and in homes with more than three listeners they'll have to share, but for a low fixed price they can all download as many songs as they want, most of which they will soon forget about anyway.

The value proposition is in place. I know I can get tons of music, but can I get tons of good music? There are bands not yet online at all, like the Beatles, Led Zeppelin and AC/ DC. But with Napster to Go there is a new discrepancy: songs you must purchase outright, ones that aren't part of the all-you-can-have subscription deal.

I hit Napster thinking that maybe half of the tracks I'd want would be "buy only." To my amazement, it was less than a tenth. Heavies like Paul Simon, Pink Floyd, Prince, Bruce Springsteen and even, yes, Metallica have made their entire catalogs available for subscription download. The subscription service makes sense for Pearl Jam, which has posted over 80 separate live recordings. Sure, some people bought them before, but now even those without Eddie Vedder tattoos will have a chance to check them out.

I'm not saying that you won't stub your toe against tracks that don't budge until paid for individually. But between your own music collection and what is available, it's easy to see how to build up your core library.

The magic of the subscription plan is that music you don't know is also covered. I got to see if I liked new cuts from the Killers (yep) and Gwen Stefani (nope). Sitting in judgment didn't mean sitting in front of a computer screen, either; I could do it in the driver's seat of my car.

The trouble is, that thing next to me wasn't my trusty iPod. A switch to Napster means kissing your iPod, or any prospect of getting one, goodbye. The Napster-compatible players, at the moment, are the ones from Creative, iRiver and Dell that I tested, as well as others from Samsung, Gateway and Audiovox, ranging in price from $180 to $500. What they have in common is a piece of hardware allowing this sort of subscription content to be used under a Microsoft-powered secure-content system.

I could easily dismiss the players friendly with Napster to Go, but most of my gripes merely translate into this boilerplate: They're not iPods.

More substantial are my complaints with Napster's PC software, which tends to jerk the user around in a very unstable fashion. It takes its sweet time reacting to mouse clicks, and mundane maneuvers make it freeze for minutes. Players often ominously "stop responding" in the middle of something important. It's possible to load the same tracks onto a player twice (an act iTunes most sensibly prohibits). Once you get the hang of the Napster service, a smart move is to use the more stable Windows Media Player 10 as your music manager instead.

For the most part, however, the software and the players do their jobs. So let me ask a question that some may consider heresy: How necessary is the iPod?

I recently discovered (with some horror) that I could live without TiVo. Time Warner Cable offered a box with better picture quality at a better price - about $9 a month with nothing up front. Compared with TiVo, the new box's interface is medieval dentist painful to use, but I use it and I don't look back.

If I could jump from TiVo to Time Warner, a switch from the iPod to the Creative Zen Micro ought to be easy by comparison. Yes, the iPod is a beautiful symbol of how cool I am, but an iPodectomy is scientifically possible.

Thankfully, an iPodectomy may not be necessary. Buzz on the Internet and in the industry suggests that Apple may be planning a retaliatory move, an iTunes to go. There are also good odds that Yahoo and Real Networks will soon join the melee.

Though it seems like a lopsided deal - paying less than what Target charges for a CD and getting almost any musical wish granted instantly - the record industry is lobbying hard to make subscription services the next phase in the digital revolution. The labels are using them to get the attention of 15- to 25-year-olds, the group most responsible for the sharp decline in CD sales over the last few years (not to mention the rise of illegal file sharing).

"We are very pleased to welcome this group into paying for music again," says Adam Klein, executive vice president for strategy and business development at EMI. Mr. Klein also tipped me off to another source of industry optimism: early research has shown that people who pay monthly to sample all music are still likely to pay extra to own some of it outright.

At the moment, that makes sense. Pay a nominal fee to taste everything, then spring for the stuff you can't live without. But in a future in which renting music is standard practice, this concept of ownership may become silly.

And though you may not be able to switch cable operators, you will be able to switch subscription music plans when a better price or a cooler program comes along. Switching may require a new player, and an afternoon to redownload the content you still want. The remaining question is, who will get your $15 a month? Let the real contest begin.
http://www.nytimes.com/2005/03/17/te...ts/17stat.html


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Japanese Giants Launch Web Over Powerline System

Three Japanese consumer electronics giants have created a new technology to transport Internet and media signals around the home via the electricity network, Panasonic said on Thursday., Mitsubishi and Matsushita-owned Panasonic have set up the SECA powerline alliance.

They have developed a system to transfer 170 Megabits per second of data through the power lines of a home, Panasonic researcher Ingo Chmielewski told journalists at the electronics trade fair CeBIT.

He said the technology is already available and introduction depended on government authorization.

The speed is three times faster than wireless technology Wi-Fi and is fast enough for high definition television signals. Unlike wireless alternatives, the powerline technology performance is stable throughout the home. SECA will compete with existing technology from the HomePlug alliance of 50 companies, including Japanese group Sharp (6753.T: Quote, Profile, Research) . The two systems are not compatible.

HomePlug's current standard is only 14 Mbps but it is thought to be working on a faster version.

Sony is also a member of HomePlug, according to the consortium's Web Site and it was unclear if it would be part of both. Sony was not available to comment.

Asked why the three companies came up with their own technology and risked yet another format war in the consumer electronics world, Chmielewski said: "We think our technology is better."
http://www.reuters.com/newsArticle.j...toryID=7866928


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Utility, Commodity: IT To Follow Electricity?
Jonathan Schwartz

As Silicon Valley emerges from the dot-com bubble, it has become fashionable for high-tech leaders to describe ours as a maturing industry whose slower growth rate is doomed to mirror the increase in gross domestic product.

But that's taking the narrow view. If you look beyond raw silicon and software, you'll see a much bigger industry poised to deliver services based on technology that already exists. What stands between the broad industry and continued growth is not technology, but rather a cultural divide in the deployment and consumption of technology--one slowly being bridged.

This cultural divide is not unique to IT; we've seen this movie before. If you examine the history of many key technologies, you'll find three distinct stages of evolution: customization, standardization and utilization.

Some companies even employed a "chief electricity officer."

In her engaging 2003 book, "Empires of Light," historian Jill Jonnes examines the nascent electric-power industry. At first, she found, electricity was customized and costly. Thomas Edison envisioned building an electric dynamo every few blocks in a major city powering his light bulb. (His first plant served one square mile of New York, and 800 light bulbs, and cost the equivalent of $5 million today.)

Many showplace homes in the mid-1880s, including the Manhattan mansions of John Pierpont Morgan and William Henry Vanderbilt, had their own electric generators (along with a highly trained engineer on the premises to operate them). Some companies even employed a "chief electricity officer" to manage the role of electricity within the business. (Kodak, one of the first companies to build its own power plants, surprisingly still burns about 700,000 tons of costly coal a year to fire two power plants at its Rochester, N.Y., headquarters.)

If that sounds familiar, it's because that's the reality of many data centers in corporate America: They're big, costly, custom-built and run by experts.

It took many years to reach the next stage in the electricity market--standardization--where George Westinghouse's establishment of AC power and long-distance transmission helped set standards we still use today. Those standards (voltages, cycles and the like) enabled electricity to be mass-marketed. But it was still a rarity; in 1902, Niagara Falls generated a fifth of all the electricity used in the United States. In 1907, a mere 8 percent of American homes had electricity.

That's where we are today in information technology. We've created standards--chips, operating systems, network protocols and such--that have enabled computing to be mass-marketed. But IT currently requires significant expenses and expertise on the part of the user, especially in large corporate data centers.

As with electricity, though, we'll need to create mechanisms for defining a unit of computing power and pricing it.

It was the third stage--utilization, in which electricity was viewed as a commodity with a transparent price and reliable service quality--that really brought the benefits of electricity to the world. As electricity moved from customized to standardized to utilized, two things happened: Its ubiquity rose, and its cost plummeted. All manner of things driven by electricity, in addition to lights and industrial motors, were created, bringing real value to everyday people.

By 1930, even midsize American cities had nearly universal electrification; between 1910 and 1940, commodity electricity helped increase U.S. productivity by 300 percent. Industries never before dreamed of were now driving enormous wealth creation.

Ours is a young industry; we're just beginning to look at the utilization stage of technology, where network bandwidth and computing power will be available as a utility, where and when needed.

As with electricity, though, we'll need to create mechanisms for defining a unit of computing power and pricing it. We'll need to create reliable and secure delivery mechanisms. We'll have to create the things that turn this commodity into real value for consumers, the way electric irons, washing machines and water heaters did. And as consumers of computing, we'll need to take a fresh look at the role of "technology" in business and our daily lives.

What this will enable is the rapid deployment and expansion of valuable services that can be delivered over the network. Take, for instance, Google, which is delivering a wide range of search capabilities that are becoming more valuable as they become more personalized and can be used on any device.

Or look at Salesforce.com, which can use commodity bandwidth to deliver the same customer relationship management services much more cheaply than its competitors.

And this is just the beginning. For companies that provide the innovative content, network services, products and inherent intelligence to take advantage of ubiquitous and affordable bandwidth, the future is bright. As bright as for those who recognized that the light bulb was not the culmination of an idea, but rather the beginning of a revolution.
http://news.com.com/Utility%2C+commo...3-5609406.html


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Addressing The Risks Of Removable Media

Magnus Ahlberg explores the data protection threats posed by technological developments in the field of removable media.

The rise of the mobile data market has been rapid, lucrative and dangerous. Long gone are the days when you needed identical tape drives and software on both computers. The traditional floppy disk market and local tape markets were superseded by the super-floppy and zip drive. Now even they are disappearing as the mobile data storage market evolves.

Thanks to their large capacities, portability, and simplicity, removable media have become one of the most popular types of storage devices around today. You’ve only to go down to one of the big computer shows to be offered a free memory stick as a stand give-away. If you take part in an IT training course, you might be given one with all your computer course notes stored on it. They are so cheap it’s the obvious way to store information, business proposals, accounts, client’s details, marketing plans etc

The arrival of the MP3 music player has had a significant impact on the market. While Apple sees music as the only reason for owning an iPod, their competitors have simply created large USB stores with some built in music software. An increasingly number of people now view the MP3 player as both a data and entertainment tool. The danger here is that as an entertainment device it falls below the radar and with storage capacities set to exceed 80GB by the end of 2005, it is a serious threat to data protection.

Here are 10 things you might not know about this market:

1. The first Compact Flash Drives began to appear in quantity five years ago and started at 8MB. By 2004, Lexar had released an 8GB device aimed predominately at the professional photo-market.

2. USB Pen Drives are now often hidden inside pens making them very difficult to detect by security teams.

3. Seagate now ships a proper, very small form factor 5GB USB disk drive. It is less than half the size of a Yo-Yo and features a real disk drive spinning at 3600rpm.

4. 4GB USB pen drives are expected to reach capacities of over 8GB by mid 2005.

5. New mobile phones can use memory cards holding in excess of 1GB

6. Research in 2004 suggested that a modern office worker carrying an MP3 device and a mobile phone would be capable of storing over 20GB of data.

7. MP3 and mobile video player company Archos will soon launch a 100GB device.

8. The new 1-inch hard disks are expected to reach 100GB within 12 months.

9. Blocking the USB port would prevent all devices from working and with operating systems like Windows XP, is easy to circumvent.

10. IDC predicts that the sale of very small hard disks will explode from less than 18m in 2004 to over 100m in 2008. Most of those will be in portable devices that could be carried into offices.

If this doesn’t scare you then you clearly are not responsible for looking after corporate security.

Some facts about corporate data:

1. The average word processing file is 3 pages in length and between 25k and 30k. That means that a 20GB MP3 player could hold over 750,000 documents.

2. The majority of corporate networks do not audit what data a user copies to a local machine or attached device.

3. New compliance legislation means that you must develop a policy for the use of devices or risk being fined by regulators.

4. 99 percent of users who use mobile devices to transfer data use no encryption to protect their contents.

Think about how easy it would be to remove your corporate data. During the 1980’s the fear was that people would be able to save the customer or company price lists onto a floppy disk and take it to their next employer. Today, they can not only take that information but also your entire customer database showing purchasing prices and history on a single device.

The advent of fast Internet access in the office meant that employees started used the company network to download files. Increasingly, that has meant people pulling down illegal content as well as installing peer-to-peer (P2P) networks on their desktop computer. With P2P installed, they can move files between the office and home on CD, DVD or other removable media. The danger to the corporate network is that file sharing through P2P exposes the organisation’s internal structure.

Preventing people bringing devices and media into the office is an extremely difficult task. Look at the physical size of much of this media - it’s easily missed in a pocket, briefcase or handbag. Short of instituting an invasive and very workforce unfriendly search policy, keeping devices out of the company is virtually impossible.

The solution then, appears to be one of management. The first step here is to decide on what you can and cannot enforce. Remarkably, few companies actually realise how limited their powers actually are, especially with respect to current privacy and human rights legislation.

For example, preventing employees from bringing their MP3 player to work and then using it during lunchtime would require draconian terms of employment that are almost certainly illegal. Companies that have tried similar experiments with regard to camera phones have found it hard to police and enforce.

What you can do, however, is ensure that all members of staff are aware that their employment does not allow the connection of non-company devices to their computers or other peripherals. This means banning people from downloading their photos to that nice colour printer. No swapping music with the person who sits next to you if that means connecting to the computer and using it as a transfer point.

Administrators need to create security solutions that log the amount of data that a user downloads. It is already acceptable to search an employee’s hard disk for illegal files but few companies do this. Nightly sweeps of hardware to find MP3, WMA, JPG and other file extensions would seem a simple thing. Unfortunately, all of these formats have legitimate work uses and are often used by software packages for saving business files.

If you are to allow data to be transferred over removable media then you should consider how to secure it. There are several vendors with encryption solutions in the market. All of them have different advantages but whatever you choose should have a minimum set of features:

1. Works with policy files to allow data to be locked after a given number of password attempts.

2. Has a mechanism that allows data to be encrypted once and then accessed where required without having to install software on the receiving computer.

3. Be backed by an administration program that would allow for the recovery of lost passwords.

4. Will work on a range of devices and removable media.

5. Be simple to use, implement and manage.

The latter is all too often overlooked when deploying security solutions. There is a belief that security means complex; it doesn’t. To ensure that people use a solution it must be simple, effective and deal with all situations. If you have to give encrypted files to someone who needs a copy of the software, then it becomes a case of either give them a licence for the software or don’t encrypt. Many people will opt for the latter.

Files need to be self contained as an executable where the level of encryption is still high enough to thwart all but the most extensive brute force attack. There are products that fall into this category and they are worth finding and deploying in order to minimise the risks. One possible solution it to ensure that you encrypt everything that is downloaded from a computer onto any removable media.

Your corporate data has never been so insecure. The ease with which is can now be removed from the office surpasses anything in history. There are approaches that you can use but they must encompass protection of content and system management simply banning devices will not work.

Remember, we are now in a world where almost every month a new piece of regulation over data protection and access appears. If you don’t sort this out now, they regulator will simply fine you extensive amounts of money and you’ll still have the problem.
http://www.continuitycentral.com/feature0184.htm


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A More Business-Friendly BitTorrent
Steven J. Vaughan-Nichols

Open-source programmer Bram Cohen on Monday released version 4.0 of his popular BitTorrent client for Windows and Linux.

BitTorrent is an ad hoc, P2P (peer-to-peer) protocol.

Cohen created it to address the problem of transferring popular, large files over the Internet.

Instead of using the client-server model of traditional Internet file distribution systems, such as FTP or the Web's HTTP or older P2P systems such as Kazaa, wherein files are shared directly among individual users, BitTorrent took a new approach.

BitTorrent works by using a central server, or tracker, to coordinate all the peers sharing a particular file.

The tracker, however, may or may not have a master copy of the file.

Its job is to simply coordinate the connections—nothing more, nothing less.

Instead, systems with a complete copy of the file, also known as seeders, start sharing it with systems that request it.

Then, unlike other P2P systems, those systems that have only part of the file begin sharing it with other users requesting the file.

The end result is that with multiple users both sending and receiving the file, download speeds tend to be fast without requiring high-bandwidth connections or multiple servers by the file's owner.

Technically, BitTorrent works by connecting over TCP ports 6881-6999.

A smaller subset of ports can be used. Ten, one per each transfer session, such as 6881-6891, is a typical configuration.

However, a BitTorrent client must have outbound access to port 6969 to connect with most trackers.

It all sounds more complicated then it really is, as far as end-users are concerned.

For a user, all that's required is that the system's firewall or NAT (Network Address Translation) be set to allow BitTorrent access to its TCP ports.

Some anti-worm programs, like the one in Norton SystemWorks 2005, must also be set to allow BitTorrent inbound connections.

With those factors taken care of, all you need to do is to click on a BitTorrent link, and the download will begin.

With BitTorrent, data transfer rates can be achieved that make the downloading of hundreds of megabytes of data, or even gigabytes of data, practical over even slow broadband connections.

So, for the end user, BitTorrent is easy. It's another story for network administrators.

British P2P analysis firm CacheLogic claims that BitTorrent protocol traffic accounts for an amazing 35 percent of all Internet traffic.

According to CacheLogic's studies, BitTorrent traffic accounts for more Internet traffic than any other single protocol, such as http, or e-mail's POP (Post Office Protocol) and SMTP.

That same popularity makes BitTorrent a major problem for network administrators.

Even though an individual BitTorrent client doesn't use much bandwidth, dozens, hundreds, or even thousands of them are enough to bring strong LANs to their knees.

Another problem with BitTorrent is, like other P2P services before it, it's often used to copy and share copyrighted materials.

Unlike Napster of old, though, which only transferred songs of a few megabytes, BitTorrent is often used to move the hundreds of megabytes of movies.

Read more here about Linux distributor Lindows.com taking commercial advantage of BitTorrent.

Together, these problems are bad enough that many institutions, like the University of Florida, ban the use of BitTorrent and other P2P clients.

Next Page: Expanding to business use.

BitTorrent is much more, though, than just the latest craze for hijacking movies and TV shows. It is also proving useful for delivering the large ISO images of operating systems, applications and major patches.

For example, the Linux Mirror Project makes it possible to use BitTorrent to download most popular Linux distributions, including Mandrake, Red Hat's Fedora and Novell/SUSE, at rates that are usually speedier than those provided by FTP or HTTP.

This new edition makes it much more attractive for business use. While it now boasts an improved interface and more granular control for the client, by far the most important new feature for administrators is that BitTorrent packets are marked as bulk data.

This last feature makes managing BitTorrent traffic a snap.

In the past, service providers would need special appliances, like Sandvine Inc.'s Peer to Peer Element 8200 or Allot Communications' enterprise line for network administrators, to manage it.

General-purpose traffic management tools, such as Lightspeed Systems Inc.'s Total Traffic Control, can be used to manage BitTorrent traffic.

No matter what was used for traffic management, short of stopping BitTorrent entirely by blocking its TCP ports with a firewall, management was necessary.

Otherwise, its sheer volume of traffic was likely to slow down networks and make such latency- sensitive applications as VOIP (voice over IP) unusable.

Click here to read more about BitTorrent and RSS straining the boundaries of their infrastructure.

By marking its traffic as bulk, as does newer versions of FTP, almost any network traffic tool can easily be used to manage BitTorrent's traffic.

It's possible to successfully control BitTorrent traffic with the common iproute2 tools, which are available on almost all modern versions of Linux.

The new version also performs better on local networks.

With earlier versions, network congestion was possible even when BitTorrent traffic was only moving at single-digit Kbps rates. With 4.0, that problem has gone away.

Other programs, such as Azureus, a Java-based P2P client, and BitTornado also use the BitTorrent protocol.

These tend to have more features than Cohen's original BitTorrent, but this new version's ease of traffic manageability both for the end-user and the network administrator make it the P2P client of choice for professional environments.
http://www.eweek.com/article2/0,1759,1775055,00.asp


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How-to

Make Your Webcam Into An Infraredcam
Jack

Turns a cheesy round plastic cam into a cheesy round plastic cam – that sees IR. Instructions and everything.

Plus cool (or warm) pics.

Scarfed from/dot. http://homepage.ntlworld.com/geoff.johnson2/IR/


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iTunes Prices Too High
Richard Menta

Do you know what I think? I think the prices for paid digital music downloads are too high. I have thought this for quite awhile, in fact I said it way back in August of 2001 - long before iTunes appeared and when Napster was a free file sharing service - in an article titled 6 CDs a Year.

The driving statistic of that article was that the average music lover only buys six CDs a year. That's a fairly low number, but one that reflects the high cost of music that existed before and after Napster made its appearence. High prices enabled by the record cartel force us to be very choosy over which albums we finally commit to buy.

Richard Menta

Unfortunately, we as consumers have been complaining about the spotty consistancy of many of the albums we buy. You know, the "two good singles the rest is filler" complaint we have heard for years. The record industry pushes albums over singles because they make them more money. There also has been this "Albums are Art" concept floating around since Sgt. Pepper's first appeared, as if singles were incapable of producing the same. Napster and file trading brought back the single as a preferred medium because we as consumers have more control so quality (and therefore value) is overall much higher.

The record industry's fear is that reasonably priced digital downloads will canibalize profitable CD sales. There is no evidence that this would be true, especially since singles have always been used to promote albums, but we're not talking about proof here, we are talking about fear. There is precedent to say there is nothing to fear if the record industry would just look for it.

My solution in that article was for the record industry to sell digital downloads at compelling prices that developed a tiered pricing system similar to what the movie industry employs. As I wrote in that article:

Put six CDs in a customer's hand and they'll pay $90 and be done for the year. Put 100 high quality MP3 singles in their hand and they might pay an additional $10 a year to expand on - not replace - the six CDs they bought. That's $700 million in additional revenue if we just talk about Napster's 70 million former users. $1.4 Billion if those users decide to download 200 songs, etc.

How many people do you know see only a few movies a year in the theater, yet rent regularly at the local video store. At $9 per person to see a movie, the cost forces us to be very selective over which movies we see just like it forces us to be selective on the CDs we buy. On video, $3.00 covers the entire family and so we supplement our movie going experience this way. We haven't stopped going to the theaters. That's because the wide screen experience is superior to the TV experience just as a CD on a stereo is superior to an MP3 playing on the tinny speakers of our computer systems (that is how most of us listen to our MP3s).

The end result is this has brought hundreds of millions of additional revenue to the movie industry.

Today, the movie industry makes more revenue from video/DVD sales and rentals that from the box office, a box office that has set sales records the last 9 out of 10 years.

I quoted $0.10 as a good price for paid downloads. Frankly, a quarter or even $0.35 would work well. Somewhere where a 13-track albums worth of music will cost under $5.00. This price mark is compelling.

What does the record industry charge? $0.99 a single of which their cut is anywhere from $0.65 - $0.85 (different sources give different numbers). The problem is, these prices are too high.

Thanks to iTunes, digital sales are modestly successful. They certainly are profitable - as in pure profit - for the record labels.

I say pure profit because the record industry's costs of supplying digital music online is negligible. In fact, all they are supplying is permission. It is Apple and Napster and all the other services who are converting decades of CD material into digital files to be downloaded so the labels supply no hard product. As for music production costs, 98% of each label's catalog was produced before online services appeared. All of their costs for production and marketing were committed to sell CDs, not downloads.

Lower prices will drive more people to these services and further deflect the competition from the free P2P services. It will create this tiered system I envisioned.

But the record industry is getting greedy again. They don't want to lower prices. In fact, they are now sending feelers out through the press that they want to raise prices. They are claiming that they introduced prices low to stimulate this market in the first place. In fantasyland this may be true.

In the real world it is the consumer's perception of value that drives sales.

My personal perception is that prices are too high and need to come down to satisfy my notion of value. I'm sure there are many who feel the same way.

But, I say if they want to raise prices let them., but if they do they increase their risk and the paid download industry will probably stagnate with maybe modest gains rather than grow. iTunes will survive, because it makes up two-thirds of the market, but Napster may not. The same may go for other iTunes competitors, competiton that keeps iTunes from becoming a monopoly.

They say Steve Jobs was upset at this announcement by record executives. If there is a shake up and iTunes becomes the only major survivor guess who will hold more influence on paid download pricing. Yep, angry Steve himself.

That's when he demands both lower prices and a bigger cut for Apple, because he knows lower prices will make him more money.

In other words, the market will bring equilibrium to all this. The record industry is an oligopoly in traditional retail, but not online. If Grokster wins its case in the Supreme Court it will bring this equilibrium faster.

One more note, Napster has shifted from selling music to renting music. You pay every month infinitum or the music you acquired disappears. This is a business model that the record industry has tried to foist on online commerce since Sony introduced its first Net music service in 2000. Higher download prices may not be applied to rental prices, giving Napster more of an edge against iTunes.

Could there be collusion to force the rent-a-song business model at the expense of iTune's buy-a-song-and-own-it forever model?

Stay tuned.
http://www.mp3newswire.net/stories/5...nesprices.html


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Viacom May Split Into Two Companies
AP

Frustrated with a languishing stock price, media conglomerate Viacom Inc. announced late Wednesday that it is considering a plan to split into two companies to allow investors to value its businesses separately.

A breakup of the New York-based media company, whose properties include CBS, MTV, VH1 and the Paramount movie studio, would also solve the question of who would succeed Sumner Redstone as CEO. The company said it would provide more details on its plans in the second quarter.

Confirming a report on The Wall Street Journal's Web site, Viacom said late Wednesday it was exploring a plan that would split the company into two separate entities: One anchored by its fast-growing cable networks such as MTV, led by longtime MTV chief Tom Freston; and another built around the broadcast television businesses that would be run by CBS head Les Moonves.

Freston and Moonves have been contending for the top job at Viacom since last June, when chief operating officer Mel Karmazin left in a power struggle and triggered the two-way race.

Under the breakup plan being considered, the broadcast television company would also include Viacom's radio businesses, which remain profitable but have fallen out of favor with investors due to poor growth prospects and increasing competition from portable music players like Apple Computer Inc.'s iPods.

Viacom's stock has been languishing below $40 since April 2004 as investors remained frustrated that the high-growth businesses like MTV remained tied to slower- growth properties like radio, outdoor advertising and theme parks.

Viacom's shares jumped after news of the possible breakup hit the market, ending up $2.71 or 7.9 percent at $37 on the New York Stock Exchange. In after-hours trading the shares gained another $1.70, or 4.6 percent.

Last fall Viacom also separated itself from Blockbuster Inc., its video rental unit that had also fallen out of favor with investors due to heavy competition from cheap DVD sales from Wal-Mart Stores and DVD rent-by-mail services.

Redstone said in a statement that despite the company's efforts to drive its various businesses for the best possible returns, those businesses ``have inherently different growth characteristics and investment attributes that appeal to different types of investors.''

What's more, ``it has also become clear that this important distinction is likely to continue to limit Viacom's ability to receive full value for its assets and its prospects in the investment community,'' Redstone said.

Earlier Wednesday, media analyst Jessica Reif Cohen of Merrill Lynch sent a report on Viacom to investors suggesting essentially what the company announced later in the day -- that the company consider breaking itself up in order to allow the market to value its pieces separately.

``If the stock continues to languish below what we consider to be fair value, we believe Viacom should consider breaking up the company to unlock the underlying value of the company's assets,'' Reif Cohen wrote. Reif Cohen said in an interview later that she was surprised at the company's announcement. ``I did not expect this,'' she said.

If the breakup goes through, it would mark the latest move by a media conglomerate to restructure itself and streamline under pressure from investors. Media investor John Malone has been paring down the complex holdings of his company Liberty Media Corp., splitting off its overseas businesses last year and announcing Tuesday that it would spin off its 50 percent stake in Discovery Communications Inc. to shareholders.

Rupert Murdoch's News Corp. recently moved its legal base to the United States and is absorbing Fox Entertainment Group Inc., its separately traded U.S. subsidiary. Time Warner Inc. has also trimmed down, selling off numerous businesses including Warner Music Group, which recently announced plans of its own to sell shares to the public.
http://www.businessweek.com/ap/finan...=apn_home_down


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Republican Skilled in Art of the Deal Is Elevated to F.C.C. Chairman
Stephen LaBaton

Kevin J. Martin, a telecommunications lawyer who became known for his pragmatic and independent streak as a Republican member of the Federal Communications Commission, was chosen by President Bush today to become the 26th chairman of the agency.

At a time when Michael K. Powell, who is retiring as chairman, came under considerable criticism for his less than adroit handling of difficult policy issues, Mr. Martin's political skills and deal making over the last four years as a practical promoter of deregulation have earned him support from varied and, at times, warring constituencies.

Social conservatives like his aggressively hard-line approach to indecency in broadcasting. The Bell companies, once embittered by some adverse rulings, have patched things up. Smaller rivals to the Bells have found Mr. Martin an important ally on some issues. State regulators find him to be a rare Washington friend at a time when their authority is being pre-empted by other federal regulators. And consumer organizations say he will be more accommodating to their concerns than Mr. Powell was.

"His strength is that he's appeared sympathetic to people of differing interests," said Gene Kimmelman, a senior official in the Washington office of Consumers Union. "Now we're going to find out who the real Kevin Martin is."

Scott Cleland, a regulatory analyst with Precursor Group, said the major change between Mr. Powell and Mr. Martin would be one of style and political skills.

"Chairman Martin will be a coalition builder and deal maker," Mr. Cleland said. "He has a nose for votes and a nose for a deal. As a result, those issues that have languished for a long time now have a better chance of getting done."

Mr. Martin was also an attractive candidate to the White House because he does not need to be confirmed by the Senate to lead the agency. (Confirmation is required only for appointment as a commissioner, which Mr. Martin already is.)

That made him particularly appealing because of the growing prospect that the Senate could soon shut down the nominations process as a result of a growing dispute between Republicans and Democrats over a group of nominations to the Federal judiciary. As a result, other contenders for the job, notably Michael Gallagher, a senior official at the Commerce Department, and Becky Klein, a former Texas utilities regulator, could have faced months of delay in getting through the Senate at a time when the commission is expected to face a thicket of thorny issues.

Foremost will be the rewriting of the rules governing the billions of dollars in compensation paid between telephone companies for connecting calls and the reorganization of the programs that provide universal telephone service to millions of customers in rural and underserved areas. The agency is also facing important decisions over how to regulate the new telephone services offered over the Internet. And the commission has yet to respond to a federal appeals court that struck down the effort to relax the rules restricting the size of the nation's largest media companies.

The elevation of Mr. Martin, along with the expected departure of a Republican commissioner, Kathleen Q. Abernathy, gives the White House the opportunity to make two appointments to the agency and reshape the composition of the five-member commission.

Mr. Martin, a 38-year-old former White House official and North Carolina native who looks half his age, drew Mr. Bush's attention as the deputy counsel to his 2000 presidential campaign. He was part of the team of young lawyers who traveled to Florida in the legal contest following the election that ultimately decided the presidency. He then briefly worked in the White House on telecom and economic policy issues before rejoining the commission in the spring of 2001. (During the Clinton administration, Mr. Martin was an aide to Harold Furchtgott-Roth, the most conservative and deregulatory-minded member of the agency.)

Mr. Martin has taken some of the more aggressive approaches in indecency cases, dissenting from a series of opinions in which the agency either found no violation or did not issue what he believed was a significant enough punishment. For those votes, he was strongly endorsed for the job by some conservative organizations that have pushed the agency to come down harder on radio and television broadcasters.

"Chairman Martin's leadership record on the indecency issue shows his commitment to serving the public interest," said L. Brent Bozell, president of the Parents Television Council, which has filed more indecency complaints than any other group.

Mr. Martin also differed with Mr. Powell on rules governing the size of the nation's largest media conglomerates, forcing Mr. Powell to compromise on some elements of that package - most notably the number of stations that the networks could own - in order for the chairman to find the three votes he needed to attempt to deregulate those rules. (Ultimately, however, Mr. Powell was foiled when a court blocked the agency from imposing the new rules, which are now once again before the commission.)

In the politics of the commission, Mr. Martin has distinguished himself for being the Republican foil of Mr. Powell, and the two men have had a chilly relationship.

The relationship broke down two years ago, when Mr. Martin voted with the Democrats to largely leave in place rules that are meant to foster local telephone competition by requiring the four regional Bell companies to lease their local networks to their rivals at low prices set by state regulators.

But in recent months, Mr. Martin had the political savvy to patch relations with the Bell companies, and Bell executives have said in recent weeks that he was their top choice.
http://www.nytimes.com/2005/03/16/po...16cnd-fcc.html


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From Toyota, a Different Sound System
Ben Sisario

For the car and music businesses, marketing with music has been a mutually beneficial relationship: automakers stir potential customers' emotions with old classics and next-big-thing songs, and musicians get commercial exposure.

Toyota's new Scion line has taken this relationship to the logical next level by founding its own record label.

The label, called Scion A/V, has released two recordings so far, one by Dakah, a 60-plus-piece hip-hop orchestra from Los Angeles, and one by Junk Science, a crew from Brooklyn that won a contest on the carmaker's Web site. Both releases have been small runs of CD's and 12-inch vinyl records, paid for by Scion and sold through independent distributors.

The company is careful to play down its role as a record label. Scion A/V has no dedicated staff; the project is handled through the carmaker's marketing division and by outside contractors. Scion does not take any profit from the releases, and it allows the artists to own their own master recordings, said Jeri Yoshizu, Scion's manager of sales promotions. The goal, she said, is simply brand extension by association with underground music.

"If we did make money, it would not have such a positive effect," she said. "We don't want to cross that line."

The risk for Scion, as music companies know all too well, is that it is extremely difficult to predict what new songs people will like.

"If they can ensure that the records are credible with their audience, then it really does build their brand," said Garrett Te Slaa, the head of marketing at New Line Records, a Time Warner company. "If not, then it would hurt the brand in the long run."

But in a competitive advertising field, a novel, low-cost gimmick has distinct advantages. "It's a little more unique than a keychain," Ms. Yoshizu said. BEN SISARI
http://www.nytimes.com/2005/03/14/bu...a/14scion.html


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Can Papers End the Free Ride Online?
Katharine Q. Seelye

Consumers are willing to spend millions of dollars on the Web when it comes to music services like iTunes and gaming sites like Xbox Live. But when it comes to online news, they are happy to read it but loath to pay for it.

Newspaper Web sites have been so popular that at some newspapers, including The New York Times, the number of people who read the paper online now surpasses the number who buy the print edition.

This migration of readers is beginning to transform the newspaper industry. Advertising revenue from online sites is booming and, while it accounts for only 2 percent or 3 percent of most newspapers' overall revenues, it is the fastest-growing source of revenue. And newspaper executives are watching anxiously as the number of online readers grows while the number of print readers declines.

"For some publishers, it really sticks in the craw that they are giving away their content for free," said Colby Atwood, vice president of Borrell Associates Inc., a media research firm. The giveaway means less support for expensive news-gathering operations and the potential erosion of advertising revenue from the print side, which is much more profitable.

"Newspapers are cannibalizing themselves," said Frederick W. Searby, an advertising and publishing analyst at J. P. Morgan.

As a result, nearly a decade after newspapers began building and showcasing their Web sites, one of the most vexing questions in newspaper economics endures: should publishers charge for Web news, knowing that they may drive readers away and into the arms of the competition?

Of the nation's 1,456 daily newspapers, only one national paper, The Wall Street Journal, which is published by Dow Jones & Company, and about 40 small dailies charge readers to use their Web sites. Other papers charge for either online access to portions of their content or offer online subscribers additional features.

The New York Times on the Web, which is owned by The New York Times Company, has been considering charging for years and is expected to make an announcement soon about its plans. In January, The Times's Web site had 1.4 million unique daily visitors. Its daily print circulation averaged 1,124,000 in 2004, down from its peak daily circulation of 1,176,000 in 1993.

Executives at The Times have suggested that the paper, which already charges for its crossword puzzle, news alerts and archives online, may start charging for other portions of its content, but would not follow the Journal model, which charges online readers $79 a year for everything.

(The Journal charges $39 a year to online readers who also subscribe to the printed newspaper.)

"A big part of the motivation for newspapers to charge for their online content is not the revenue it will generate, but the revenue it will save, by slowing the erosion of their print subscriptions," Mr. Atwood said. "We're in the midst of a long and painful transition."

Most big papers are watching and waiting as they study the patterns of online readers. Analysts said that the growth in readers was slowing but that readers appeared to be spending more time on the Web sites.

"We're always looking at the issue," said Caroline Little, publisher of Washingtonpost.Newsweek Interactive, the online media subsidiary of The Washington Post Company. She said that the online registration process that most papers now require for use of their Web sites, while free, lays the groundwork for charging if papers decide to go that route.

"You're getting information from your users and you can target ads to your users, which is more efficient for advertisers," she said. "This has been a dipping of the toe in the water."

The Post has no plans to charge now because it would mean too big of a drop-off in readers. "It's just not a strong financial proposition at this point," she said.

Executives at other newspaper groups, including the Gannett Company, which publishes USA Today, said they had no plans to start charging either.

A report last week from the Online Publishers Association underscored the challenges facing newspapers in selling news. Internet users spent $88 million for general news in 2004, or just 0.4 percent more than they paid in 2003, the report said; by comparison, they spent $414 million on entertainment, up 90 percent.

Rob Runett, director of electronic media communications at the Newspaper Association of America, eyed the report ruefully. News, he said, may become an acronym for "Not Ever Willing to Spend."

The Tribune Company, which owns The Los Angeles Times, The Chicago Tribune and other papers, has conducted limited experiments in charging for access, some more successful than others.

The Los Angeles Times charges $4.95 a month for its Calendar Live section, which covers entertainment and provides listings and restaurant reviews, but traffic to the site has declined and a spokeswoman said the paper was reviewing the decision to charge for it.

The Chicago Tribune offers a "subscriber advantage" program, which gives print subscribers free access to archives and bonuses online. "It's an interesting first step to see how people react in trying to differentiate between the two products," said Alison Scholly, general manager of Chicago Tribune Interactive.

The difficulty comes in determining what readers will pay for on the Web. Most executives agree that national news can be found in so many places that it would be self-defeating to try to charge for it. But they are finding that readers will pay for sports, if the Web offers more than the printed page. The Milwaukee Journal Sentinel provides in-depth coverage of the Green Bay Packers, along with blogs, fan photos and audio reports, in "Packer Insider" for $34.95 a year.

But for the most part, publishers make money on Web sites by selling space to advertisers, and that is a booming business. Mr. Atwood at Borrell said a preliminary analysis of online revenues for about 700 daily newspaper Web sites showed an average increase of 45 percent from 2003 to 2004.

But some newspapers want to develop a cadre of paying readers as a second stream of revenue beyond the advertising.

Bill Keller, executive editor of The New York Times, said of relying on advertising as the sole revenue stream: "My main concern is that, however we distribute our work, we have to generate the money to pay for it. The advertising model looks appealing now, but do we want our future to depend on that single source of revenue? What happens if advertising goes flat? What happens when somebody develops software to filter out advertising - TiVo for the Web?"

At the same time, he said, charging for the Web site could alienate both current readers and potential new readers, particularly in growing markets like China and India, and The Times would be limiting its global reach.

Perhaps the biggest obstacle for newspapers is that online readers have been conditioned to expect free news. "Most newspapers believe that if they charged for the Web, the number of users would decline to such an extent that their advertising revenues would decline more than they get from charging users," said Gary B. Pruitt, chairman and chief executive of the McClatchy Company, which publishes The Sacramento Bee, The Star Tribune in Minneapolis and other papers, which do not charge for their Web sites.

The Wall Street Journal experiment suggests the contrary. About 700,000 people subscribe to its online edition, with 300,000 of them subscribing to the Web edition only and 400,000 subscribing to both the online and print editions. The print edition has 1.8 million subscribers.

"If you have strong value, people will pay for it," said Todd H. Larsen, president of consumer electronic publishing for Dow Jones, which owns The Journal. "There is nothing so magical about the Internet that everything has to be free."

The Journal's experience may not translate to other papers. It is primarily a financial paper, and analysts said that it is a business expense for many readers buying it. Moreover, charging online brings its own problems. By limiting readership to subscribers, papers also limit the amount of advertising space they can sell. Earlier this year, Dow Jones spent more than $519 million for MarketWatch, the financial news Web site, largely as a way to attract advertising that it was not getting online.

When the paper first charged for its Web site in 1996, daily traffic fell by about two-thirds, said Rich Jaroslovsky, who was the managing editor of The Wall Street Journal Online at the time and is now a managing editor at Bloomberg News.

"You have to take the hit some time if you do this," he said of charging for a Web site. "We took the pain because we felt over the longer term, we'd see the gain."

Since 1997, The Journal's Web site has grown, although growth has slowed dramatically. Subscriptions jumped 35 percent from the third quarter of 1999 to the third quarter of 2000, for example, but grew by just 2 percent from 2003 to 2004, according to the company. This reflects an industrywide slowdown, said Merrill Brown, the founding editor of MSNBC.com and a media consultant. "There is no question that growth has slowed as the medium has matured," he said.

"It's a pretty stagnant business for a variety of reasons," he added. "At a moment when big papers are so financially stressed and their prospects uncertain, they aren't investing at the level they need to grow their alternative distribution platforms."

On a smaller scale, another newspaper that charges for its Web site is The Spokesman-Review in Spokane, Wash., which has a print circulation of around 100,000. About 20,000 of those print subscribers also get the paper online for no additional fee; just 545 people pay for the Web edition only, at $7 per month.

Ken Sands, the online publisher, who until a month ago was the managing editor of the print edition, said the paper decided to charge for the Web in an effort to save the print edition.

"We had the sense that a lot of people had canceled their print subscriptions because they could read the paper for free online," he said. He said that as soon as the paper started charging for the Web, in September, new daily traffic, which had been growing by more than 40 percent a year, stopped cold. He said that traffic was 5 percent lower this January than it was in January a year ago. He added that the print circulation had been steadily declining somewhat anyway, and so he could not blame the Web for that.

"Print is going the way it's going, which is down, which is unfortunate because it's the revenue engine that keeps this whole thing going," he said. "The online business model won't ever be able to support the whole news infrastructure."

Mr. Jaroslovsky, the former editor of The Wall Street Journal Online, said that some publishers were regretting not having charged for the Web back in the 1990's when it was developing, because doing so now will be a bigger shock to their readers. Also, he said, the stakes are higher.

"When we did this, we were at the beginning of an investment curve and the amount of money at stake was not as great," he said. "Today, if you make a wrong decision, there's a chance it will be not only embarrassing, but very costly."
http://www.nytimes.com/2005/03/14/bu...a/14paper.html


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Ante Up at Dear Old Princeton: Online Poker Is a Campus Draw
Jonathan Cheng

For Michael Sandberg, it started a few years ago with nickel-and-dime games among friends. But last fall, he says, it became the source of a six-figure income and an alternative to law school.

Mr. Sandberg, 22, of Alexandria, Va., mostly splits his time between Princeton University, where he is a senior and a politics major, and Atlantic City, where he plays high-stakes poker in his black hooded sweatshirt and dark aviator shades.

Since September, he says, he has won $120,000, including $30,000 in Atlantic City and $90,000 playing at PartyPoker.com, a popular online casino that says it is "licensed and regulated by the government of Gibraltar." Those claims are backed up by his financial records.

Mr. Sandberg's is an extreme example of a gambling revolution on the nation's college campuses. Mr. Sandberg calls it an explosion, one spurred by televised poker championships and a proliferation of Web sites that offer online poker games.

Experts say the evidence of gambling's popularity on campus is hard to miss. In December, for example, a sorority at Columbia held its first, 80-player poker tournament with a $10 buy-in, a minimum amount required to play, while the University of North Carolina held its first tournament, a 175-player competition, in October. Both games filled up and had waiting lists. At the University of Pennsylvania, private games are advertised every night in a campus e-mail list.

"It's the TV programs that are driving it," said Elizabeth George, chief executive of the North American Training Institute, a nonprofit organization in Duluth, Minn., that specializes in the problems of pathological and underage gambling. "Young people particularly are drawn to it. There are superstars, then there's advertising, plus the Internet. So with all of those elements, put that into a bag and shake it up and what you have is a remarkably dangerous situation."

Last year, Elliott Dorsch of Tampa, Fla., another Princeton senior, made $11,000 in two hours playing online blackjack, only to lose most of it in 15 minutes, he said.

"I was playing very recklessly," he said. "I was definitely very drunk."

Vik Bellapravalu, a Princeton junior from Phoenix, who plays poker with friends on campus, said, "Whatever amount you can think of, it's probably been lost or won."

Drastic gains and losses have always been a part of gambling, but access to poker games has never been as easy as the Internet makes it, and undergraduates and students of youth gambling say that interest has never been so high.

Members of both groups point to ESPN's frequent broadcasts of the World Series of Poker as a catalyst. The series has made heroes out of everyman champions like Chris Moneymaker, who started playing poker four years ago and won the $2.5 million grand prize in the 2003 series after entering for $40 through an online poker Web site.

Mr. Sandberg, from his narrow, atticlike room on the top floor of a Princeton dormitory, can spend up to 10 hours a day playing the game he loves most - Texas Hold'em, a popular version of poker that is simple to learn but hard to master.

With his well-worn baseball cap and bristly, blond goatee, Mr. Sandberg doesn't look like a high roller, and his slapdash dorm room, bedecked with poker posters, bears no marks of a conspicuous consumer.

Sitting on a folding chair in front of his laptop computer and looking almost bored, he plays three online games at once, each for many hundreds of dollars, while distractedly listening to classic rock and instant-messaging his friends. He speaks in poker parlance as if everyone understands it and can innately calculate the odds of drawing pocket aces (two, face down), while casually sizing up his online opponents and divining what cards they may hold.

Thanks to a boom in tournaments and prize money, poker has become a career option for Mr. Sandberg, he says. Though he is graduating in May, he has not applied to graduate school or for any jobs.

"I'm playing this game, treating it like a job," he said. He predicts that he could make up to half a million dollars a year, just playing on his computer every day. "Even with the bad runs," he said, "I haven't had a losing month or even too long of a losing session. I think I'm a pretty smart guy, and I'm only going to get better at cards."

Last summer, instead of getting a job, Mr. Sandberg set a goal of winning $10,000 at PartyPoker, where, he said, he clicked and bluffed his way to his goal by the time he returned to school in September.

"My parents said I should do something useful, and I made $10,000," he said. "I thought that was pretty useful."

His bank statement seems to support his claims, with a six-figure balance, large withdrawals for what he says were casino trips and even larger deposits from online winnings. His personal account on PartyPoker.com echoes his bank statement, with matching payments and deposits that are specifically for poker.

Mr. Sandberg credits his success to two simple principles: know the odds, and don't play more than you can lose. "It seems simple, but it's one of the biggest flaws of many poker players," he said.

His goal is to enter the high-stakes poker tours and compete with his heroes.

"I want to get to the point where I'm the best in the world and play against those guys on TV," he said. "I don't want to tell stories about playing with so-and-so once; I want to be doing it all the time."

While Mr. Sandberg insists that he is not a compulsive gambler, and he seems to bet large amounts only when the odds are heavily in his favor, some experts fear that college-age gamblers are swallowing the hype of big-stakes poker without coming to grips with the dangers of addiction.

"With gambling on TV, there's been lots of glamorization, but not much responsibility," said Keith S. Whyte, executive director of the National Council on Problem Gambling. He called the gambling opportunities "almost ubiquitous" for the college-age crowd. "The administrations don't do a good job of telling students how to get help," he said, "the same way they're sending the 'prevention and responsibility' messages for alcohol, substance abuse and date rape."

At the University of Pennsylvania, Dan Kline, the president of the poker society, says that everyone is playing poker.

"When we started this thing in 2002, about 10 people joined," said Mr. Kline, a junior. "Now when we have a tournament, we'll get 500 people responding in a half-hour to our e-mail."

A free tournament organized by the group last year attracted twice as many people as space would permit. This year's tournament, however, which offered $2,000 in donated prize money, was canceled by uneasy administrators, who had also canceled a fraternity-organized charity poker tournament in November, fearing the legal implications of offering prizes for gambling.

Princeton has no explicit rules about gambling on campus, and has not taken steps to address it. "This is something we, the administration, need to sit down and decide if there should be a uniform policy about it," said Hilary Herbold, the associate dean in charge of disciplinary action at the university. She noted the formal policies devised amid concerns about file-sharing of copyrighted music in recent years.

Mrs. Herbold said problem gamblers were being dealt with case by case. The administration has broken up regular group games held in Princeton's eating clubs.

"What we're really primarily concerned about is the well-being of the students," she said. "Were I to discover that a student was gambling online, I would probably tell them to stop and give them a warning."

Mr. Whyte of the National Council on Problem Gambling says he is concerned that college-age gamblers, often susceptible to overwhelming stress and lacking a mature sense of money, are particularly susceptible.

"They're not going to lose their house if they don't win," he said. "Mom and Dad can still bail them out. It's just not as realistic a view of money as adults, and it's very hard to reach that age group. By the time they've gotten to college, they've already started gambling."

Mr. Sandberg says his parents in Alexandria are aware that he loves playing poker, but don't know that he spends almost every weekend in Atlantic City, or how much he has earned. His mother, he said, "thinks I just don't tell her about the times I lose."

He added, "She thinks I'm up and down, but I really do win almost every time I go."

Like video games and instant messaging, online poker has had its impact on academics. Mr. Sandberg said that he failed a midterm exam this fall because of his commitment to poker, and that he ranked in the bottom fifth of his class.

But, he says, "I'm not too concerned with what my G.P.A. is. You don't have to hand your résumé to the casino when you walk in or anything."

And even during final exams in January, Mr. Sandberg's poker hours did not diminish.

"It's tough to battle the mind-set of, 'I'm going to graduate, and this poker is pretty regular money,' " he said. "I don't think I can make $120,000 doing anything but poker. I was half-studying for my politics exam today, but I got bored and started playing poker on my computer instead."

If the experts are correct, though, Mr. Sandberg might want to focus on that exam.

"Gambling is a game of chance," Mr. Whyte said. "Some people can make a living doing it, but even in the long run, most people regress to the mean and wind up with zero or close to it."
http://www.nytimes.com/2005/03/14/ed...rtner=homepage


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Internet Radio Contest



Win The Coolest Network Music Player Ever!

This month all RP supporters will be automatically entered in our March Listener Support Drawing. We'll be giving away five Roku SoundBridge M500 Network Music Players.

We've investigated just about every network player out there, and the Roku Soundbridge is far and away the best one we've tested. It's amazingly easy to set up (via either WiFi or wired Ethernet) and works flawlessly. It'll interface with iTunes, Windows Media Player, and several other programs to access your MP3 library - or it'll play Internet radio stations like RP without involving a computer at all. The sound quality is outstanding - and it looks way cool, too.

All March RP supporters (including those of you who send support automatically via recurring payments) will be automatically entered in the drawing. You can also enter by emailing rebecca@radioparadise.com. Deadline for entries is 3/31/05 at midnight PST. The drawing will be held at noon on 4/1/05 (no fooling).
http://www.radioparadise.com/


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'Blair Witch' Creator Takes New Project To Web

"Blair Witch Project" director and co- creator Daniel Myrick has come a long way from the spooky woods of Maryland to the sunny bike paths of Venice Beach.

On Tuesday Myrick launches "The Strand," a live-action experimental series set on Venice's famous beachfront sidewalk, once again harnessing the Internet to connect him with his audience.

A lot has changed since unexpected blockbuster "Blair Witch" introduced the mainstream entertainment industry to the term "viral marketing." "The Strand" is designed for independent online distribution, an approach that wasn't possible in 1999.

"There are a handful of executives out there who are the gatekeepers of what gets made and seen -- or not," Myrick said. "I've pitched so many ideas and come away frustrated. So we just decided to do it ourselves."

Each webisode uses method-film techniques to capture real people and actors like Katherine Helmond interacting in a world where spontaneous and scripted dialogue seamlessly co-exist.

"The webisodic format allows me to do so much exploration of characters and story without constraints on language or topic," Myrick said.

The world premiere will be available for free at www.strandvenice.com. Gearhead Pictures, Myrick's production company, is using digital payments technology from BitPass to charge 99 cents for each webisode after that. He also is considering whether to seek sponsors.

Myrick said this project demonstrates the future of filmmaking, in which filmmakers can use the Internet for distribution while protecting their content with technology that manages licenses, payments and promotions of the digital content.

"Unlike a Fox show that needs 3 million viewers a week or it's canceled, I only need a fraction of that and I can be filming forever," he said. "At Sundance, we were the only ones out there not looking for distribution. You've already got the largest distribution network in the world already on your desktop, and the end-user experience is getting better every day."

The official Web site will document the production process and encourage audience interaction, which will be used to shape the series as it progresses, Myrick said. He also intends to post audition videos, chat rooms and character point-of-view cameras.

"I know how powerful the Internet can be. I've seen it firsthand," Myrick said. "I think this is the perfect home for 'The Strand,' and I'm excited about its potential."

He believes that the entertainment industry is averse to taking risks, a condition that limits innovation and creativity, but that the Internet can provide a viable alternative for filmmakers. Adding a micropayment system rather than rely on advertising gives online ventures an interesting business model as well.

"BitPass enables independent production companies like us to make a show 'for the people, by the people,' where production is sponsored by people who watch it, leaving its destiny in the hands of those who care most about its future," Myrick said.

BitPass has nearly 2,000 digital content merchants. The company has received venture funding from Worldview Technology Partners, Steamboat Ventures (the venture capital arm of the Walt Disney Co.), RRE Ventures and others.
http://edition.cnn.com/2005/TECH/int...eut/index.html


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End Of The Peer Show?
Charles Arthur

Is file-sharing really on the wane? And if it is, what's the true cause? If you believe the UK's biggest record labels, in the form of the British Phonographic Industry (BPI), we are already on the road to the Elysian fields where everyone buys their music either legally online or legally in shops, and never duplicates a CD or wanders on to a file-sharing network.

Well, they can hope, but it's wise to have something helping things along. On Friday, they won a High Court order that will see six internet service providers forced to hand over the names of 31 people the BPI alleges have been making "large numbers" of songs available through such networks. The previous week, the BPI got 23 out of 26 people it had brought cases against on the same grounds to make out-of-court settlements, paying up to £4,000 (average £2,000) each.

So what's the trend in file-sharing use? Interestingly, it does seem to be vaguely downwards, although it's very hard to pin that down to a particular country. And it might be more correct to say that the trend in online music file- sharing is not growing, but stabilising. "File sharing has become firmly established among UK internet users, massively outperforming the legitimate services, as shown by some recent Jupiter consumer survey data," says Mark Mulligan, an analyst at Jupiter Research. "Legal action has to be seen as part of a slow integrated strategy that will, bit by bit, reduce the impact of file sharing. But it's not going to wipe it out. The utopian ideal of a world without illegal file-sharing simply won't happen, in the same way as shoplifting will never wholly disappear from the music retail equation."

On the plus side for the BPI, the trend in online music-buying is relentlessly up, to the extent that in the last week of 2004 it outstripped sales of physical CD singles. With the shops open again, online songs sell only about one-tenth of the physical ones. But it's catching up.

So is the BPI right to claim, as it has, that this is because its legal threats are taking effect, while online stores such as iTunes and Napster become more prominent in peoples' thinking? I think there are less obvious reasons for the apparent fall in such sharing, and most come bundled with the file-sharing programs themselves. They're the insidious adware programs added to the free programs such as Bearshare, KaZaA, Grokster, iMesh and eDonkey.

The reason they're bundled? First, while everyone seems to be getting a free lunch by downloading music without payment, the writers of the adware reckon they can at least rent out the space on the table. Developers of "peer-to-peer" (P2P) software are thus regularly approached by makers of adware who offer money to get their programs included in the finished product, because tens of millions of people use file-sharing programs, no matter what efforts the BPI and its US cousin, the Recording Industry Association of America (RIAA), make to sue the users and program writers into retreat.

The spyware and adware fighter Ben Edelman did an interesting comparison on what the P2P programs really add to your hard drive, which he wrote up on his blog last week (www.benedelman.org/news/030705-1.html). Although the study was itself sponsored by one of the P2P programs, LimeWire, with the fairly clear agenda of dissing its rivals, the evidence is still stunning.

The licence agreements these programs expect you to click "Agree" to run to tens of thousands of words. The reality is that reading these agreements is a superheroic effort that most people won't bother with, as they don't with almost all click-through agreements. And the programs come with some truly frustrating add-ons that will do all the classic adware things - add dozens (even hundreds) of entries to the Windows Registry, add pop-ups to Internet Explorer, and generally slow your computer down while making your online life a misery.

I think people have come to recognise this: that it's the adware that comes along for the ride and then takes control when you install a P2P program that really causes havoc, not the program itself. However, generally you can't get the one without the other, although Edelman found that LimeWire limits itself only to nagging the user to upgrade to the paid-for version if they use the free one.

I think any downward trend in the use of file-sharing programs is down to that rather than the BPI having struck fear into the hearts of teenagers or parents. For one thing, the lawsuits have progressed in a remarkably low-key fashion. Although three of the first tranche of cases may attract extra publicity by reaching court, it was pretty quiet between October and the announcement.

The weakness for the BPI and RIAA is that their argument that every song downloaded (or indeed uploaded) is a lost sale is palpably false, because not everyone is prepared to pay for every song they'll download for free.

An interesting discussion has taken place in the past few days on what the best price would be for online music downloads. At the Canadian Music Conference in Toronto, Sandy Pearlman of McGill University (and former producer of The Clash) suggested 5 US cents (plus a 1 per cent tax on new computers). The music business is having none of it. In fact, what the record labels really want is to raise the price of online songs; they're unhappy at the 79p that Apple charges in the UK. They think it's too low.

Pearlman argues that dropping the price would lead to exponential growth in downloads, thus recouping any apparent "lost" revenues. And, as online music sells much more "back catalogue" (stuff you can't find in most record shops), all its costs have already been paid. But no; the record labels want to hike the price, and kill the goose that is laying these new golden eggs. From suing its customers to soaking them, you have to agree that it is at least consistent.
http://news.independent.co.uk/world/...p?story=620455


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File-Sharing Is A Lot More Than Stolen Music
Andrew Kantor

On March 29, the Supreme Court will begin hearing arguments in what's been tagged the "Grokster" case. A full 28 entertainment companies filed suit against several makers of peer-to-peer (P2P) file-sharing software, including one called Grokster, claiming that, because that software can be used for illegal purposes — spreading pirated copies of songs, movies, and software — it should be banned.

By that logic, knives, baseball bats, and guns should also be outlawed.

Grokster and friends won this suit when it was heard before the Ninth Circuit Court of Appeals (in MGM v. Grokster). The court held that the software — like knives, bats, and guns — has substantial noninfringing uses.

That's the key phrase, and it ties back to the 1984 "Betamax" decision by the Supreme Court (Sony Corp. v. Universal City Studios). It said that if a tool was "capable of commercially significant noninfringing uses" it was A-OK. (I'm paraphrasing. Justice Stevens was somewhat more detailed.)

But now we're back to the Supreme Court, this time with file-sharing instead of VCRs.

Central files

For a lot of people, the whole concept of file sharing is a vague notion: "People can trade files over the Internet." But there's more to it than that, and besides, the whole concept of P2P is interesting and new.

For a long time the only way you got a file on the Internet was to download it from a server, usually run by a company. Someone has the file and "serves" it from their computer so you (and lots of other people) can get a copy — you got the latest copy of Adobe's Acrobat Reader from adobe.com, for example.

There are two problems with this. First, it means that the company offering something has to be ready for potentially thousands of people downloading it; the server has to handle requests from all of them. Just like at a big restaurant with a single waiter, that server is going to be overwhelmed; service will suck.

The other problem is that by having a centralized system you can become a target of someone who doesn't want you to distribute whatever your distributing for political or legal reasons. Call it the Pearl Harbor model — having all your eggs in one basket invites trouble.

That's what killed Napster, one of the original and best-known file-sharing networks. More in a second.

Peer-to-peer file sharing is different. It doesn't use central servers to hold files. Instead, every computer on the network can be a server and send or receive files. You can offer anything you want to other people on the Net, and you can download anything of theirs they make available.

With P2P you don't have to find an "official" server of some sort. All you need is someone else, somewhere on the Net, who has what you want.

Generation gap

The rise of P2P came with the rise of the MP3 music format. Before MP3, individual songs were so large that even with high-speed connections it took a long time to send them to one another. It was impractical to share songs. But the MP3 format shrinks files down to a fraction of their original size, and suddenly music sharing was doable.

This did not make the Recording Industry Association of America happy, because it meant that people were sharing music, not (they claim) buying it.

The first P2P program to hit the public consciousness was Napster. But Napster had a fatal flaw: It required a central server (run by Napster) to keep track of who had what to share. And yes, most of it was music.

This meant the RIAA had a clear target, and it made a convincing case — here was the company running a service that was being used to illegally share music. It eventually drove Napster out of business.

Peer-to-peer users and programmers were smart, so they created the next generation of P2P software with Napster in their minds. This software that didn't require a central server. Without napster.com, Napster couldn't work. But as long as this new P2P software exists, the networks will exist.

So today we have nebulous networks of users who can share their files without being tied to a particular site.

And today, file sharing is huge. Despite claims that its is on the way out, it's getting bigger and bigger. Not too long ago I found almost 600 million files — more than 4.5 million gigabytes (that's 4.5 petabytes) — on a single P2P. Holy wow.

Working knowledge

Most P2P software uses one of three major "networks." Each network has several of clients you can use to access it (kind of the same way both Firefox, Internet Explorer, and Netscape are all clients for viewing the Web). Some clients free, some are supported with ads, and some are commercial software.

big guns are the FastTrack network (with clients that include Kazaa and Grokster); the Gnutella network (with clients that include BearShare, Gnucleus, LimeWire, and Morpheus); and the BitTorrent network, which is a somewhat different model (clients include the original BitTorrent, BitTornado, and my favorite, Yet Another BitTorrent Client).

FastTrack and Gnutella work in similar ways. When you start your client, it uses various methods to find other users on the network — they’re called nodes. Each of those other nodes, because they’re already connected, has a list of other nodes, which it passes on to your software.

In a few seconds you’re connected to dozens of other machines. (It could be hundreds or thousands, but the software sets limits so the network isn’t overwhelmed.)

Let’s say you want to search for the Marc Lindsay’s 1970 song “Arizona.” You enter “Arizona” into the software’s search field and choose “Music” or “Audio,” lest you find things like maps of the state.

Your client then sends your request to the nodes nearest you. If they don’t have the song, they pass your request on to other nodes, until you’ve searched thousands of machines. Hopefully one or more has the song, which will then show up in your search results list. Tell your software to download it, and one or more of those other nodes will start sending it.

(In fact, if more than one computer has it, P2P software can do a “swarm” download, in which it gets different pieces of the same file from different nodes. That means no one node has to supply the whole thing — think of it as spreading the labor.)

At the same time that you’re searching and downloading, the files on your machine are available to others. Not, obviously, all your files — your P2P client has a list of which ones you’re willing to share.

When you set up the software, you would have told it what you want to make available. So while you’re downloading “Arizona,” you might notice someone else downloading something from your machine.

BitTorrent is a little different. Someone who wants to share something first creates another file — a .torrent file — that describes what he’s sharing. (There is special software for this.) He can post that .torrent to his Web site, for example. People who click on that .torrent link will download that file.

The big difference is that BitTorrent clients don’t have a search function. You don’t search the network for a file; you have to find a .torrent for it, using sites such as isoHunt, TorrentReactor, and TorrentSpy which are databases of .torrent files out there on the Net.

BitTorrent clients connect with your Web browser so clicking on a .torrent link starts the download process.

The beauty of BitTorrent is that the people who are downloading something become sources of that file as well. So what starts off as one person sharing (which can eat a lot of his bandwidth) can quickly become a lot of people sharing the same thing. An ad hoc distribution network emerges as long as the .torrent file is out there.

Note, too, that I said “the people who are downloading it become sources of that file…” in the present tense. With BitTorrent, you start sharing a file soon after you begin downloading. It works on a tit for tat basis — “Those that provide the most to others get the best treatment in return,” as the site puts it. It encourages you not to “leech” by forcing you to upload to others as you download.

Forward, march

Whether FastTrack, Gnutella, or BitTorrent, that’s how P2P works: Everybody shares. The RIAA’s nightmare is that one person buys a CD (shelling out $15 for two good songs), then “rips” those songs into MP3 files and makes them available via a P2P network.

In theory, 10 people who download 50 Cent’s “Candy Shop” are 10 people who don’t buy his album “The Massacre.” Eventually the guy’s gonna have to sell one of his Escalades to pay one of his mortgages, and the RIAA doesn’t want to see that happen.

But without a central server like Napster’s, there’s no convenient target for lawsuits. That’s why the RIAA is going after individual file sharers one at a time.

And it’s not just the RIAA. You can download movies via P2P networks as well (a 4 GB DVD of “The Incredibles” can make its way to you via BitTorrent overnight), not to mention software valued in the thousands of dollars.

But pirated music, movies, and software is only one reality of file sharing, and yes, it’s out there. But a lot of people use P2P networks for legal reasons — to share large files without taking a big hit on their servers. In fact, the Internet was built on a similar idea — that decentralization means robustness.

In fact, a fairly large chunk of what’s out there is completely above board. Folks put their photos on P2P networks. Ad agencies release videos that quickly spread over the Net. Smaller software companies that can’t afford huge bandwidth charges put their products out on P2P networks so users can help distribute them just by leaving their computers connected.

Substantial noninfringing uses? You bet.

But even though it may seem that there’s a ton of illegal content out there, getting it, as I discovered, is not quite so simple. That story next week.
http://www.usatoday.com/tech/columni...-kantor_x.htm#