[JackSpratts]

Is Piracy Really Killing the Music Industry?

Various music industry trade groups claim that piracy is killing their industry, and are suing file traders and the sites they use. Are music sales, revenue, and profits down? Are MP3 downloads preventing music sales or do they instead help advertise new music? Are paid music downloads profitable or are they still insignificant?

Let's Ask the RIAA
Unsurprisingly, the music industry's own research and opinions on the subject support the idea that unauthorized distribution of music is killing both sales growth and profits. The result: music costs more to produce, there's greater risk in signing smaller acts with uncertain audiences, and the lower sales volumes have forced the labels to raise the retail price of CDs.

From the label's perspectives, the only solutions are to:

1.
•lock down music so users can't share the copies they buy
2.
•prosecute file traders and win settlements against them to discourage the practice
3.
•institute market pricing for music, so buyers pay more for popular music and less for back catalog music


Isn’t The Customer Always Right?
The RIAA has its critics, many of whom are music customers. Among them are:

1.
•the free and open source software crowd, who like the idea of freely shared content
2.
•people who don't want to pay for things that can be found for free, and don't like being sued
3.
•people who don't want to be restricted in their use of purchased music
4.
•companies who don't benefit from the market pricing of music

Before looking at the merits of the RIAA’s complaints and examining their own data on sales, take a look at the rationale presented by its various circles of critics, and see whose perspective best fits the facts.

Free as in Beer, Speech
Among the most effusive and articulate of critics are the minds who make up the volunteer collective of free and open source software. These people have spent a lot of time thinking about the nature of shared ideas and intellectual property, and some try to apply the principles proven to work in delivering shared, open code into the world of entertainment.

The difference, of course, is that free and open source software is written by volunteers. GNU/Linux, BSD, and other projects' code can be shared as desired by their creators.

The GPL and BSD style licenses seek to enforce different schools of thought on how content should be shared. However, neither can be applied to the commercial music represented by the labels, because none of that music is free or open.

Britney Spears' music is just as closed and proprietary as Microsoft Windows, and nobody has rights to distribute it under a free license, just as Microsoft has no rights to distribute Linux code without following the license provisions of the GPL.

Reasonable proponents of free and open content don't confuse unauthorized use of commercial music with "free content," and have instead sought to create their own music, movies and other entertainment, and share them under agreements like the Creative Commons licenses.

In their ideal world, there would be no DRM, no or at least few middleman labels selling their representation and marketing, and musicians and other performers would be supported by user donations, sponsoring companies, or perhaps sunshine and love.

Think of the Children
While many free and open source software proponents are intelligent, experienced, and affluent, there is an epidemic of poor and stupid people around the world. Many of them have been quarantined into higher education campuses in a social engineering experiment to educate them and make them valuable to society.

All that exposure to education and liberal thinking--considering facts and being willing to change their outlook based upon that new information--frequently results in more free and open source software proponents, with less attraction to music from Britney Spears and a greater interest in the work of smaller indie artists.

Along the way however, the problems of being poor and stupid commonly result in run-ins with authority. The RIAA is increasingly becoming a prime example of this; it has been targeting the poor and stupid to create fear, uncertainty, and doubt about the safety of trading files.

The RIAA mounted its legal attack just as sales of music to younger demographics appeared to collapsed in tandem with Internet file trading. However, things are not always as they appear, as the numbers indicate later.

The Scarcity Behind Supply and Demand
In trying to emulate their smarter and more experienced role models, the poor and stupid have tried to create economic arguments against the commercial existence of music.

A recent popular meme is to describe music as a "non-scarce good" and DRM as an artificial construct designed to convert music into a scarce good, one that can command a high price. This argument is absurd.

Music itself--as well as movies and other forms of entertaining, intellectual, and artistic performances--is most certainly a scarce good. It costs many thousands of dollars to produce an album, and millions to create movies.

That expense, related to not only the "above the line" performers, but also the "below the line" technicians involved in production, and expenses in advertising, promoting, and the various administrative costs, all make music and other productions very expensive projects. Expensive things are scarce.

If the resources to produce music were not scarce, there would be no American Idol or Star Search, and the planet would have 6 billion rock stars. Music is a scarce good. The fact that it can be mass duplicated after production finishes does not make it a non-scarce good. There are lots of ideas with clear and obvious value that are not tangible nor consumed:

1.
•Currency is artificially scarce. Anti-counterfeiting measures are essentially a “DRM,” protecting the value of currency and propping up the economy.

2.
•Apartment rentals invent artificial scarcity to exchange privacy for money. A landlord could shove a dozen other people in your apartment. By not sharing your space, value is created and rent rises.

3.
•Consulting work is similarly based on the scarcity of an expert's time. If time and space knew no boundaries, we could all be experts in every field and solve each other’s problems for free.

Time and space are constrained however, as are raw materials, talent, and good ideas. All those constraints result in scarcity, which demands effort and expense to collect, expend, or consume. We vote on how to distribute scarce things with our money.

Counterfeiting vs Piracy
Arguments that “ideas” like music have no value because they can be duplicated are as fallacious as suggesting that a copy machine creates value when it counterfeits money. No, it doesn't.

Fraud might temporarily enrich the counterfeiter, but it steals from everyone else who has worked for their money, because a fraudulent supply of money devalues real money.

Counterfeiting is such a threat to the worlds' economies that governments enact harsh punishments for counterfeiters, invest in developing anti-counterfeiting methods, and carefully police their money supplies.

It is therefore no surprise that unauthorized copying of music is similarly viewed as a serious threat by those who benefit from a tight hold on its supply, or that they are interested in DRM as a mechanism of preventing copying, or that they are work to create strong copyright laws, penalties for evading the law, and are suing those who do.

The main difference between money counterfeiting and music piracy is that nobody benefits from counterfeiting apart from the counterfeiter, while more people benefit from freely duplicated music: pirated music doesn't only eat into music sales, it can also act as an advertisement and promotional tool.

Record companies have long played their music on the radio for free, something that has no analog in the comparison to counterfeit money. The real question is: to what extent does file sharing hurt or help the industry?

The Real Customers
Neither the free and open source software people--who aren't interested in commercial music--nor the poor and stupid--who don't want to pay for music at all--are ideal customers. The real customers are people who buy music. They buy millions of CDs every year, and an increasing number are buying song downloads online.

This pool of people make up the sweet spot. Record labels take them for granted, and focus most of their efforts on trying to herd people from the first two groups into this population, using threats of lawsuits and other forms of intimidation, including the use of often excessive DRM aimed to force paying users from ever leaving the pool and joining those who don't pay for what they want.

Carrots vs Sticks
People respond better to positive, welcoming carrots than the stick of a police crackdown. Give an employee a critical summary of their screw-ups, and they will immediately stop listening to everything you say and consider you a bad manager. Highlight what they do well, and they will turn themselves inside out to please you.

The same principle applies everywhere else humans exist. Send police into a poor, crime ridden neighborhood to "control crime" and the crime will continue, and probably increase. Provide education and create opportunities, and those same people will clean up their own neighborhood.

America's wars on Terror, Drugs, and Science have not resulted in victories, only in huge prison populations that cross-train fiercer criminals and in publicity campaigns than only appeal to those who designed them. If the US would dial back into its recent history, it could discover that investing in education and creating opportunities for advancement would solve its problems with much less spending and far better results.

Similarly, if the record labels really want to expand their pool of paying customers, they need to focus on creating sales instead of attacking the poor and stupid who are unlikely to pay for their product anyway.

The labels are so afraid of change that they failed to recognize the potential for digital music sales a decade ago, and have more recently dragged their feet in getting behind sales of music downloads.

Companies Against the Market Pricing of Music
The forth group critical of the music label's policies also represents a huge part of the solution to the music industry’s problems.

That group includes Apple, which makes very little money in selling music in its online iTunes Store. Increasing the price of music is not in Apple's interests at all, because the company is primarily hoping to ensure a supply of music for its players.

Of course, Apple is also interested in expanding the supply of music sold through its online store. This both brings attention to its hardware sales, as well as enabling the company to expand its sales into TV and movie programming. Obviously, the more music that Apple sells, the more revenues the labels will earn.

Apple is the carrot that music labels can use to reward customers for buying their music: offering a wider selection of artists and a deeper catalog to encourage more sales. As people discover more music they like, they will in turn buy more music.

Alternatives to iTunes have failed primarily because instead of handing out an attractive carrot, they threatened users with a fearsome DRM-armored stick. MiniDisc and DAT were so encumbered by restrictions that they negated their own benefits.

Microsoft's PlaysForSure and Sony's ATRAC similarly applied layers of DRM to suit the needs of producers so egregiously that consumers were left with little reason to buy their products.

What Do the Facts Support?
Do the facts indicate that the labels' lawsuits, DRM, and market pricing strategies are effective? Are the assumptions that music sales, revenue, and profits are down accurate? Does file trading preventing music sales or does it instead help sell new music? Are paid music downloads profitable or are they still insignificant?

Take a look at figures reported by the RIAA itself. One warning sign: The RIAA contrasts "physical sales," the vast majority of which are CDs, with "digital sales," by which it intends to mean “music downloads.” It is somewhat scary that the RIAA in 2007 is not aware that CDs are digital music.

According to these figures, CD sales units and revenue increased from 1995-2000, then fell between 2000-2005. The labels blame piracy. There are additional reasons for the tapering off of CDs however. Among them:

Increased competition for entertainment dollars. When DVDs arrived, one could suddenly buy a 2 hour movie for around the same price as an hour of music on CD. Theatrical movies, video games, and other forms of entertainment have also given consumers other things to spend their money on.

Alternative music formats. While SACD and DVD-Audio were huge duds, an increasing amount of music is being sold as mobile phone ringtones or in paid downloads.

As the RIAA’s own number show, simply adding these sales with CDs makes up for the downturn in CD sales since 2000.

Does the RIAA expect every dollar of new music sold in other formats to only expand upon CD sales? Has it never occurred to anyone that some would cannibalize existing sales, just as CDs ate up cassettes?

Economic downturn. The economy tanked in 2000, just when CD sales flattened. However, as CD unit sales fell as noted in the blue line of this chart, the yellow line representing unit list prices failed to drop in the same ratio.

The higher overall, relative price of CDs actually helped to retard sales, making alternative music formats and other entertainment options more attractive.

Further, by antagonizing with the sticks of lawsuits, excessive DRM and higher prices, rather than incentivizing music sales by quickly moving to embrace online markets and offering fair prices to boost sales volumes, the labels have turned their industry into an authority figure that is fashionable to hate by the very demographic they hope to sell their new music.

Sell Where the Customers Are
The percentage of music sold as downloads skyrocketed in 2005, from less than 1% the year before to nearly 6% of the market. Labels that embraced digital music did the best.

In overall music market share, Variety reports that in 2006, Universal ranked first among the labels at 31.6%, Sony BMG came next with 27.4%, Warner Music took 18.1%, and EMI had 10.2%.

While CD sales slipped, download sales doubled. Warner, the first label to partner with Apple, did the best. In downloads, Warner Music claimed first jumped from a distant third to a tie for second place, with a 23.29% share. Universal had 27.4%, Sony BMG 24%, and EMI 10%.

Killing Me Softly
Despite the advantage iTunes sales gave Warner in online sales, CEO Edgar Bronfman Jr. complained the loudest about Steve Jobs’ position against market pricing.

Bronfman attempted to goad Apple into supporting the idea with a populist appeal, describing market pricing as an attempt to offer music for less than 99 cents. Of course, the real point of market pricing is to jack up the price of popular music that is actually being bought.

This strategy has been disastrous for the music industry in markets outside of the iTunes Store, where labels have the freedom to set higher list prices. In fact, higher list prices are the phenomenon charted above in yellow and blue lines above.

The “dollar value” statistics the RIAA reports for CDs is not the actual revenues earned by stores, but the list price of CDs! As popular new releases are given list prices of $18.99 or more, the record stores are left trying to sell a product priced beyond what the market will bear.

The music labels helped kill the record store by making popular music unaffordable--and unprofitable, since big box retailers are happy to undercut list pricing to offer CDs as a loss leader to create store traffic. That leaves the record stores to sell lower volume catalog CDs, something many smaller stores can’t afford to do.

Consistent Prices Saved Online Sales
Apple has prevented the labels from shooting themselves in the face in the online market by playing hardball: sell songs at 99 cents, and albums at $10, or your music will go unsold in the only online store with customers.

In the online market, Apple has far more market power than all the record stores combined, and the discounting of Wal-Mart--which lists songs for 88 cents online--is constrained by the failure of Microsoft’s PlaysForSure DRM.

The result is that sales are moving online, incentivized by consistent and fair prices, a wider available catalog, and better service than big box retailers.

In addition to eating into physical sales, iTunes’ paid downloads are eating into casual file sharing. Those same principles make buying music more attractive than trying to search for free music online.

Supporting iTunes is a far more workable strategy for the labels than trying to investigate and litigate against people who are unlikely customers anyway.

The Real Pirates
If the music industry wants to survive, it needs to sell music rather than vilify itself as a hostile authority, price itself out of the market, and insist upon excessive DRM.

The most effective strategies the labels can take is to:

1.
•destroy the utility of online services by dumping poor quality downloads into them
2.
•focus its efforts on prosecuting physical piracy duplicators, not casual file traders
3.
•attack the download piracy of organized criminal organizations such as the Pirate Bay and the Russian mafia.

The Pirate Bay, a site that helps to distribute pirated copies of commercial music, was reported selling $120,000 in advertising space on its website in a month. None of that money went to the artists, nor the technicians, nor the labels that work to sell it. Are those pirates Robin Hoods or simply organized hoods?

Is File Sharing Piracy?
Beyond the thieves profiteering on sales of unauthorized music, there is a less clear boundary between casual file trading and outright piracy. The music industry sees no distinction, and views every song traded as potentially hundreds of unsold CDs.

In 2001, the International Federation of the Phonographic Industry, a worldwide body representing the music industry, blamed the 5% drop in worldwide music sales on file trading sites and CD burning.

"The industry's problems reflect no fall in the popularity of recorded music. Rather, they reflect the fact that the commercial value of music is being widely devalued by mass copying and piracy," IFPI Chief Executive Jay Berman said.

Regionally however, there were actual increases in music sales that year. France reported 10% growth and the UK saw an increase of 5%. The IFPI credited those increases on strong demand for local artists.

A year later, the IFPI reported a 7% drop worldwide, and a 10% drop in the US. However, the group began admitting that piracy wasn’t the only factor on its radar. Berman said the music industry is “also having to compete with increased sales of other entertainment formats such as DVD films and new video game consoles.”

Retail DVD sales jumped over 60 percent in 2002 to $8.7 billion, a $3.3 billion increase over 2001. US music sales in the same year fell by $1 billion to $12.6 billion. How much of that $1 billion drop in CD spending was converted directly into the $3 billion of new DVD sales?

Does File Sharing Help the Music Industry?
That same year, Jupiter Research announced the results of a survey of 3,319 people which found that file traders were reporting that they now bought more music than they had before getting online to trade files.

"It is safe to say that active usage of online music content is one of the best predictors of increased consumer purchasing," Aram Sinnreich wrote in the report.

"Music sellers should devote their limited resources to online marketing and distribution--rather than eradicating the phantom threat of file sharing--if they truly wish to stanch the blood flow and turn the music market around."

The following year, researchers at Harvard University and the University of North Carolina reported the results of a study of file sharing, based on a review of the log reports of 1.75 million traded songs over a 17 week period compared to actual album sales.

They determined that even massive file sharing appeared to have no negative effect on sales, and in some cases appeared to have a positive effect on purchases. Other studies have reported that file trading does have the negative affect on sales one would logically expect.

In any event, it is hard to argue against the fact that the recording industry can gain more ground by making CD and online purchases more appealing than it can through raising CD prices and suing children.

Rather than seeking to raise prices in iTunes with so called market pricing, and continue to destroy the retail market for music with unrealistically high list prices, music labels need to focus on putting their product in front of their customers and making it appealing to buy.

That’s their job.
http://www.roughlydrafted.com/RD/RDM...A6AC07C37.html





Accounting for the Big Plunge in "Music Sales": the Digital Singles Effect
Ken Fisher

The music industry quaked yesterday as reports surfaced indicating that CD sales have plummeted 20 percent compared to the same period last year. This is just the latest a string of bad news for music sales going back several years. The question is, what's to blame?

The Wall Street Journal, which brought news of the decline, correctly notes that the demise of the boutique music store has certainly played a role in this. 800 stores closed in 2006, according to the Journal. Of course, those stores closed for a reason: they weren't selling enough music to stay profitable. Still, the effect on total sales would be hard to dismiss.

All the while, legal downloads continued to grow, but so far the focus from analysts and the press has been on how legal downloads have failed to "fill the revenue gap" created by the shortfall in traditional CD sales. What deserves further examination, however, is whether legal downloads are causing that shortfall. We do believe that they play a significant role in the music industry's current situation.

This quarter, 81.5 million CDs will be sold. While that's down 20 percent from the same period last year, digital singles sold by the likes of Apple's iTunes store grew 54 percent, to account for 175 million songs sold. In other words, the quantity of downloaded songs far outweighs the quantity of CDs sold as a whole. How many of those purchases are "singles," as opposed to digital album sales conducted online or subscription downloads?

Last year the industry saw about $2 billion in revenues from online music sales, and nearly $800 million of that stemmed from single-track sales, according to the International Federation of the Phonographic Industry's report. That leads me to estimate that at least 40 percent of sales are singles, which means that this quarter we could see something in the range of 70 million "singles" sold digitally.

The question is: how often does a consumer opt to buy just one or two songs off an album rather than buy the whole thing? This phenomenon must affect the top of the music charts quite viciously. I know I'm reluctant to buy an album, especially anything approaching a "hit album," unless I know that there's more than 2 to 3 songs on it that I like. Otherwise, I don't want to take the "risk."

But to answer the question of how often, let's just estimate based on what limited information we have. Given the estimate of 70 million digital singles, we could say that the ratio between consumers buying digital songs and entire CDs is approximately 1:1.22. That's quite a leveling. If my estimates have been conservative, the balance may be tipped even more in favor of digital singles.

Whereas years ago most consumers would drop their hard-earned cash on a whole album just to get "Tom's Diner," that same song can now be had for a buck. In other words, the business is changing. Legal downloads are on the rise, physical CD sales are on the decline, and consumers appear eager to purchase digital singles. Even if they're not just buying one or two songs off an album, that prudence can be devastating to CD album sales. Generally speaking, it takes 10 songs to reach the cost of an "album" (if generalized to $10), so even someone buying a handful of songs off an album leaves a "revenue gap" compared to a whole album sale.

There are certainly more factors involved in this than just the sale of digital singles. Competition with other forms of entertainment, such as the Internet, is also eating into both music and television. Many of our readers also cite a declining quality in music from the major labels.

But it goes without saying that the industry will blame much of this decline on P2P file sharing. Studies have thrown considerable doubt on the actual effects of music piracy, though, with one recent study arguing that its effects are "not statistically distinguishable from zero." It's worth considering other causes for this decline.
http://arstechnica.com/news.ars/post...es-effect.html





Did iTunes Kill the Record Store?

Record stores across America are turning up dead, including more than few established, high profile chains. Who killed the record store? Was it the iPod, iTunes Store, or is the real killer still on the loose?

The Fall of Tower Records
One of the chains forced to shut down its stores was the iconic Tower Records. The company entered bankruptcy protection in 2004. Creditors subsequently bailed the chain out, hoping that it could be salvaged.

The National Association of Recording Merchants had repeatedly named Tower "Retailer of the Year" over the last three years, but that didn't stop the collapse of America's eighth largest music store.

Tower was quickly liquidated this winter by Great American Group, whose bankruptcy bid won the remains of Tower's retail music stores; it quickly closed them all down, although stores outside the US and an online store are still being run independently under the Tower name.

Tower isn't the only music chain facing financial troubles.

1.
•HMV closed all its US stores in 2004.
2.
•Virgin Megastores reported losses of $495 million over the last two years.

Trans World Success?
The largest record store chain in the US is FYE. It's owned by Trans World Entertainment, which has been buying up troubled music store chains since 2003: Camelot, Wherehouse Entertainment, CD World, and most recently Musicland and its Sam Goody and Suncoast branded stores.

Trans World had also hoped to buy up Tower Records and keep some of its stores open. Despite continuing to expand its music store business however, Trans World reported slipping revenues over the last half decade.

One of the few music store chains actually doing well is Hastings, which has managed to increase its revenues in four of the last five years. However, Hastings' growth has largely come from books and videos rather than music sales, which currently only make up a quarter of its revenues.

Who killed the record store? The death of chains since 2004 provides some circumstantial evidence that points to Apple’s iTunes Store. The Washington Post fingered online sales, specifically mentioning iTunes next to a chart showing CD sales down and online sales up dramatically.

Did iTunes and Apple's ubiquitous iPod conspire to kill the record store? Are the big record labels somehow to blame? Was it simply a mass suicide?

CD+DRM = Failure
Things change in the music industry. Over the last decade for example, music sales rapidly moved away from cassette tapes to CDs.

In 1996, the RIAA reported that tapes accounted for nearly 20% of sales. Today, tapes are hard to find, while CDs expanded from 68.4% in 1996 to 87% of all purchased music in 2005.

As the technology to rip CDs became commonplace, the labels hoped to move consumers from CDs to unrippable, DRM-encrypted discs, including DVD-Audio and SACD. Both formats offer higher definition sound quality than standard CDs, as well as support for 5.1 surround channel sound.

Consumers didn't buy them however; both formats combined only managed to make up 2% of the music market in 2005, after several years of rivaling each other in the bid to replace the CD. Their failure offers a lesson that Blu-Ray and HD-DVD backers might benefit from contemplating.

SACD was introduced by Sony and Phillips, the same companies that had earlier hamstrung the release of DAT with excessive DRM. DVD-Audio was pushed by the DVD Forum, a consortium that responded to the cracking of DVD’s CSS by introducing even tougher encryption for DVD-Audio. It has subsequently been cracked as well.

Online DRM Fails
The labels also hoped that Microsoft's Windows Media DRM would help to sell music online, but none of Microsoft's partner stores ever developed sales that amounted to anything. As CD sales began to grow stagnant and online piracy expanded, the labels finally agreed to sell music in Apple's iTunes Store.

In the years since, Apple has sold over two billion songs, and sales are rapidly increasing. Still, downloads only amount to 5-6% of the music sold over the last couple years, depending on who's counting.

That means Apple's iTunes Store--which sold the vast majority of those downloads--didn't have enough sales to kill the record stores, despite the graphic comparison of percentages of change printed by the Washington Post to suggest otherwise.

The huge percentages of growth really highlight that online music sales have rapidly expanded from nearly nothing just a year or two ago. Online sales were tiny in the 2003-2004 period when the record stores began their steady decline.

Today, web retailers--including Amazon--are together selling more music on CDs than Apple is selling in FairPlay downloads. Internet sales amounted to 8.2% of all music in all formats outside of digital downloads.

Even adding Apple's digital downloads to physical CD sales over the Internet to fails to add up to a killer blow to the music stores; the shift to web based sales has largely only served to replace the direct mail sales by formerly sold through record clubs.

The Internet didn’t kill music stores.

Trail of the Real Killer
A look at the range of retail CD prices helps to establish what really killed the record stores. In an article about the demise of Tower Records, Elaine Misonzhnik observed:

"Wal-Mart, Target and Virgin Megastores (through the Amazon.com website) have been selling the recently released Christina Aguilera CD Back to Basics for $11.88. But Tower Records was selling the same CD for $17.99; F.Y.E. for $14.99; and Amarillo, Texas-based Hastings Entertainment, Inc. for $15.39."

Ah-ha! Record stores were trying to turn a profit, and simply starved to death. Dramatically cheaper albums, sold by big box retailers, killed the business model of stores hoping to stay in business selling CDs at list prices.

How can Wal-Mart and Target afford to sell CDs for a third less than CD stores? Easy: the big box retailers aren't planning to make money on CDs, but rather offer CDs as loss leaders to generate foot traffic. Music stores were trampled to death under the feet of shoppers running to Wal-Mart.

Retail Bandwagon
Other retailers have also found that selling CDs helps to attract customers and then keep them in the store longer. Misonzhnik noted that Radio Shack, 7-Eleven, and JC Penney have all added CD sales in attempts to bring in more customers.

Even Starbucks began selling CDs to encourage customers to linger, although it sells exclusive CDs which don't directly compete with albums from record stores.

By selling popular CD titles at a loss, Wal-Mart, Target, and other retailers have traded the easy profits on CDs--which formerly kept music stores in business--into store advertising and then wrote it off as a business expense.

The Long Tail
The remaining business of record stores has been catalog sales: the long tail of titles that are not available in the limited selection of CDs offered at a deep discount by general big box retail stores.

However, many of the record store chains that are closing simply couldn't afford to stock a huge selection of less popular acts, and were instead trying to compete directly against companies with no need to profit from CD sales.

That strategy has pushed customers interested in a broader selection to online sales: CDs from Amazon's catalog and downloads from Apple's increasingly large collection of music.

Wal-Mart Takes on Downloads
Having destroyed the music store, Wal-Mart has turned its market power to the Internet in hopes of dominating online sales as well. The company teamed up with Microsoft to sell online downloads, and underpriced Apples iTunes Store with 88 cent songs.

Efforts of the pair of monopolizing giants to take over online sales have been blocked by Apple's dominant position with the iPod. Microsoft's DRM doesn't work on the iPod, cutting Wal-Mart out of the market for the vast majority of potential buyers of online music.

By forcing third parties to sell their music without DRM in order to work on the iPod, Apple has pushed buyers toward CDs and MP3s stores, and choked sales from rival DRM outlets selling Microsoft PlaysForSure music.

Last year, download sales essentially doubled over the year prior across the board, from current albums in recent release to catalog sales and "deep catalog," the industry term for older and more obscure albums.

Sales growth in iTunes was actually stronger in catalog and deep catalog albums than in recent releases, underlining that the iTunes Store is picking up the broader, older album sales that dying record stores are leaving behind after being finished off in their attempts to compete in sales of recently released albums against the big box retail stores offering those same albums at cost.
http://www.roughlydrafted.com/RD/RDM...4E698E94A.html





Sales of Music, Long in Decline, Plunge Sharply
Ethan Smith

Rise in Downloading Fails to Boost Industry;
A Retailing Shakeout

In a dramatic acceleration of the seven-year sales decline that has battered the music industry, compact-disc sales for the first three months of this year plunged 20% from a year earlier, the latest sign of the seismic shift in the way consumers acquire music.

The sharp slide in sales of CDs, which still account for more than 85% of music sold, has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry's salvation.

The slide stems from the confluence of long-simmering factors that are now feeding off each other, including the demise of specialty music retailers like longtime music mecca Tower Records. About 800 music stores, including Tower's 89 locations, closed in 2006 alone.

Apple Inc.'s sale of around 100 million iPods shows that music remains a powerful force in the lives of consumers. But because of the Internet, those consumers have more ways to obtain music now than they did a decade ago, when walking into a store and buying it was the only option.

Today, popular songs and albums -- and countless lesser-known works -- can be easily found online, in either legal or pirated forms. While the music industry hopes that those songs will be purchased through legal services like Apple's iTunes Store, consumers can often listen to them on MySpace pages or download them free from other sources, such as so-called MP3 blogs.

Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. "Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream," says Mr. Rabhan. "It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."

The music industry has found itself almost powerless in the face of this shift. Its struggles are hardly unique in the media world. The film, TV and publishing industries are also finding it hard to adapt to the digital age. Though consumers are exposed to more media in more ways than ever before, the challenge for media companies is finding a way to make money from all that exposure. Newspaper publishers, for example, are finding that their Internet advertising isn't growing fast enough to replace the loss of traditional print ads.

In recent weeks, the music industry has posted some of the weakest sales it has ever recorded. This year has already seen the two lowest-selling No. 1 albums since Nielsen SoundScan, which tracks music sales, was launched in 1991.

One week, "American Idol" runner-up Chris Daughtry's rock band sold just 65,000 copies of its chart-topping album; another week, the "Dreamgirls" movie soundtrack sold a mere 60,000. As recently as 2005, there were many weeks when such tallies wouldn't have been enough to crack the top 30 sellers. In prior years, it wasn't uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week.

In general, even today's big titles are stalling out far earlier than they did a few years ago.

The music industry has been banking on the rise of digital music to compensate for inevitable drops in sales of CDs. Apple's 2003 launch of its iTunes Store was greeted as a new day in music retailing, one that would allow fans to conveniently and quickly snap up large amounts of music from limitless virtual shelves.

It hasn't worked out that way -- at least so far. Digital sales of individual songs this year have risen 54% from a year earlier to 173.4 million, according to Nielsen SoundScan. But that's nowhere near enough to offset the 20% decline from a year ago in CD sales to 81.5 million units. Overall, sales of all music -- digital and physical -- are down 10% this year. And even including sales of ringtones, subscription services and other "ancillary" goods, sales are still down 9%, according to one estimate; some recording executives have privately questioned that figure, which was included in a recent report by Pali Research.

Meanwhile, one billion songs a month are traded on illegal file-sharing networks, according to BigChampagne LLC.

Adding to the music industry's misery, CD prices have fallen amid pressure for cheaper prices from big-box retailers like Wal-Mart and others. That pressure is feeding through to record labels' bottom lines. As the market has deteriorated, Warner Music Group Corp., which reported a 74% drop in profits for the fourth quarter of 2006, is expected to report little relief in the first quarter of this year.

Looking at unit sales alone "flatters the situation," says Simon Wright, chief executive of Virgin Entertainment Group International, which runs 14 Virgin Megastores locations in North America and 250 world-wide. "In value terms, the market's down 25%, probably." Virgin's music sales have increased slightly this year, he says, thanks to the demise of chief competitor Tower, and to a mix of fashion and "lifestyle" products designed to attract customers.

Perhaps the biggest factor in the latest chapter of the music industry's struggle is the shakeout among music retailers. As recently as a decade ago, specialty stores like Tower Records were must-shop destinations for fans looking for both big hits and older catalog titles. But retailers like Wal-Mart Stores Inc. and Best Buy Co. took away the hits business by undercutting the chains on price. Today such megaretailers represent about 65% of the retail market, up from 20% a decade ago, music-distribution executives estimate. And digital-music piracy, which has been rife since the rise of the original Napster file-sharing service, has allowed many would-be music buyers to fill their CD racks or digital-music players without ever venturing into a store.

Late last year, Tower Records closed its doors, after filing for bankruptcy-court protection in August. Earlier in 2006, following a bankruptcy filing, Musicland Holding Corp., which owned the Sam Goody chain, closed 500 of its 900 locations. And recently, Trans World Entertainment Corp., which operates the FYE and Coconuts chains, among others, began closing 134 of its 1,087 locations.

But even at the outlets that are still open, business has suffered. Executives at Trans World, based in Albany, N.Y., told analysts earlier this month that sales of music at its stores declined 14% in the last quarter of 2006. For the year, music represented just 44% of the company's sales, down from 54% in 2005. For the final quarter of the year, music represented just 38% of its sales.

Joe Nardone Jr., who owns the independent 10-store Gallery of Sound chain in Pennsylvania, says he is trying to make up for declining sales of new music by emphasizing used CDs, which he calls "a more consistent business." For now, though, he says used discs represent less than 10% of his business -- not nearly enough to offset the declines.

Retailers and others say record labels have failed to deliver big sellers. And even the hits aren't what they used to be. Norah Jones's "Not Too Late" has sold just shy of 1.1 million copies since it was released six weeks ago. Her previous album, "Feels Like Home," sold more than 2.2. million copies in the same period after its 2004 release.

"Even when you have a good release like Norah Jones, maybe the environment is so bad you can't turn it around," says Richard Greenfield, an analyst at Pali Research.

Meanwhile, with music sales sliding for the first time even at some big-box chains, Best Buy has been quietly reducing the floor space it dedicates to music, according to music-distribution executives.

Whether Wal-Mart and others will follow suit isn't clear, but if they do it could spell more trouble for the record companies. The big-box chains already stocked far fewer titles than did the fading specialty retailers. As a result, it is harder for consumers to find and purchase older titles in stores.
http://online.wsj.com/public/article...l?mod=rss_free





From 2004

Wal-Mart Wants $10 CDs

Biggest U.S. record retailer battles record labels over prices
Warren Cohen

Wal-mart wants every CD you buy to cost less than ten bucks. And the nation's largest retailer -- which moved a quarter of a trillion dollars' worth of goods last year -- usually gets its way. Suppliers who don't accede to Wal-Mart's "everyday low price" mantra often find their products bounced from the chain's stores, excluded from being sold to the 138 million people who shop at a Wal-Mart store every week.

In the past decade, Wal-Mart has quietly emerged as the nation's biggest record store. Wal-Mart now sells an estimated one out of every five major-label albums. It has so much power, industry insiders say, that what it chooses to stock can basically determine what becomes a hit. "If you don't have a Wal-Mart account, you probably won't have a major pop artist," says one label executive.

Along with other giant retailers such as Best Buy and Target, Wal-Mart willingly loses money selling CDs for less than $10 (they buy most hit CDs from distributors for around $12). These companies use bargain CDs to lure consumers to the store, hoping they might also grab a boombox or a DVD player while checking out the music deals.

Less-expensive CDs are something consumers have been demanding for years. But here's the hitch: Wal-Mart is tired of losing money on cheap CDs. It wants to keep selling them for less than $10 -- $9.72, to be exact -- but it wants the record industry to lower the prices at which it purchases them. Last winter, Wal-Mart asked the industry to supply it with choice albums -- from new releases from alternative rockers the Killers to perennial classics such as Beatles 1 -- at favorable prices. According to music-industry sources, Wal-Mart executives hinted that they could reduce Wal-Mart's CD stock and replace it with more lucrative DVDs and video games.

"This wasn't framed as a gentle negotiation," says one label rep. "It's a line in the sand -- you don't do this, then the threat is this." (Wal-Mart denies these claims.) As a result, all of the major labels agreed to supply some popular albums to Wal-Mart's $9.72 program. "We're in such a competitive world, and you can't reach consumers if you're not in Wal-Mart," admits another label executive.

Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry's major priorities. That's because if Wal-Mart cut back on music, industry sales would suffer severely -- though Wal-Mart's shareholders would barely bat an eye. While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart's total sales. "If they got out of selling music, it would mean nothing to them," says another label executive. "This keeps me awake at night."

Wal-Mart would not directly comment on tensions with the labels, but Gary Severson, Wal-Mart's senior vice president and general merchandise manager in charge of the chain's entertainment section, did allude to the dispute about music prices. "The labels price things based on what they believe they can get -- a pricing philosophy a lot of industries have," he says. "But we like to price things as cheaply as we possibly can, rather than charge as much as we can get. It's a big difference in philosophy, and we try to help other people see that." Virtually no industry executives would publicly comment about their company's relationship with Wal-Mart. But off the record, many record-industry executives shared their concerns. "I don't think there is a music supplier in America who really enjoys doing business with Wal-Mart," says one major-label rep.

No one in the music business ever expected Wal-Mart to become the most powerful force in record retailing. In the past, the business was shared among smaller local and regional chains such as Musicland, which once had an estimated ten percent of the market. But as Wal-Mart and other national discount operations such as Target and Best Buy have grown -- approximately half of all major-label music is sold through these three -- an estimated 1,200 record stores have closed in the past two years, according to market-research firm Almighty Institute of Music Retail. Last February, Tower Records, with ninety-three stores, declared bankruptcy and is now up for sale; Musicland has already changed owners, with many local outposts shuttered.

Wal-Mart is like no traditional record seller. Unlike a typical Tower store, which stocks 60,000 titles, an average Wal-Mart carries about 5,000 CDs. That leaves little room on the shelf for developing artists or independent labels. There's also scant space for catalog albums, which now represent about forty percent of all sales. At a Wal-Mart Supercenter in Thorton, Colorado, for example, there were no copies of the Rolling Stones' Exile on Main Street or Nirvana's Nevermind. While most of the latest hits were priced at $13.88, some records -- from the O Brother, Where Art Thou? soundtrack to the latest by Yellowcard -- were displayed for $9.72. Says Severson, "Paying fifteen dollars for a piece of music is a difficult value equation for customers."

For the music industry, having such a dominant retailer is like being stuck in a bad marriage. Whereas traditional music retailers took advertising money from the labels to push new releases in Sunday newspaper circulars, Wal-Mart barely advertises locally. It relies on national campaigns, where it promotes its own low-price policy. "Wal-Mart has no long-term care for an individual artist or marketing plan, unlike the specialty stores, which were a real business partner," says one former distribution executive. "At Wal-Mart, we're a commodity and have to fight for shelf space like Colgate fights for shelf space."

In the same way that Wal-Mart made it difficult for local mom-and-pop retailers to compete with its low prices, it has hurt smaller music stores. "When you're buying CDs for twelve dollars and selling them for ten like Wal-Mart, it makes the rest of us look like we're gouging the customer, when we're not," says Don Van Cleave, head of the Coalition for Independent Music Stores, a retail consortium. "It's supertough to compete with that price point." Even online, Wal-Mart sells songs for eighty-eight cents, compared with ninety-nine cents at the market leader, Apple iTunes Music Store.

Getting Wal-Mart excited about carrying a record is at the top of every label's to-do list, but it's harder than it sounds. There is an immense cultural chasm between slick industry executives and Severson's team of three music buyers at Wal-Mart headquarters in Bentonville, Arkansas. Only one of the three had ever worked in music retailing -- until that person moved to a new division in August and was replaced by someone who previously bought Wal-Mart's salty snacks. (Wal-Mart also relies on buyers at its two distribution companies, Handleman and Anderson Merchandisers, who purchase records as well as stock the Wal-Mart stores.)

"Content-wise, Wal-Mart is limited about what they sell," says one label chieftain. "Wal-Mart is Middle America's shopping headquarters, with different buying habits and consumer tastes than those who live in Manhattan and L.A." When founder Sam Walton christened the first Wal-Mart in 1962, music was never a priority -- it wasn't an everyday, easy-to-stock product like light bulbs, since the Top Ten changed so much. The chain also had specific objections to music. Walton wanted all stores to remain family-friendly, and in the rural South, rock & roll had the potential to turn away many customers. In 1986, the Rev. Jimmy Swaggart led one such campaign to ban music from Wal-Mart, saying rock fostered "adultery, alcoholism, drug abuse, necrophilia, bestiality and you name it." Albums and magazines about rock (including Rolling Stone) were temporarily pulled from the Wal-Mart shelves.

Wal-Mart's wariness about music ended once the music industry adopted a voluntary advisory sticker on albums deemed to contain adult language or sexual content. Today, before any new album is released, someone at each label is charged with asking, "Do we have any Wal-Mart issues?" If an advisory sticker is placed on an album, the label will put out a clean version about ninety percent of the time. Since the edited version of a hit record usually averages only about ten percent of a record's total sales, they do it mostly to keep Wal-Mart happy.

Wal-Mart has loosened up a bit, too. Eminem's albums, stickered or not, are not carried by the chain, but it does sell the 8 Mile soundtrack. And it carries an edited version of 50 Cent's debut. Since the labels are so adept at self-policing, though, censorship controversies are now rare. "There have been examples in the past, but it's not a current issue," says Severson.

Wal-Mart has also urged the labels to create exclusive new products that would lower music prices. In a short-lived test, Universal excerpted seven songs from existing albums by acts such as Sum 41 and Ashanti and sold them at Wal-Mart for $7. Few other labels wanted to participate. "They proposed it to a bunch of artists and managers, but everyone was worried that we are sending a message that instead of the sixteen-track album we sold, those nine extra songs were filler," says a label executive.

Some record executives think they can survive Wal-Mart's push. They argue that the hottest acts will always command a premium price. "50 Cent sold 7 million copies," says one rep, "and I guarantee that many of those sold for fifteen, sixteen dollars." And they believe that Wal-Mart will want to carry those hits because they draw customers. "If they can't find a record at Wal-Mart, people will go elsewhere," says one executive. "We should play hardball." But each label is watching the others to see if any make major concessions to Wal-Mart's demands for lower prices. A label that gives in could gain shelf space at the expense of another. "If you lose an account, one of your rivals could get more product in the store and get one up on everyone else," says a major-label rep. "You have to tread cautiously."

The tug of war between the labels and Wal-Mart isn't going away soon. The chain is aggressively opening new stores -- fifty-seven in October -- including some in urban areas. So unless it makes good on its threat to cut back on its music section, it will continue to grow as the top record store and become even more powerful. Laments one industry rep, "There is some impending doom associated with us not helping them."

Price War: Does a CD have to cost $15.99?

Major labels insist that the low prices mass retailers such as Wal-Mart and Best Buy demand are impossible for them to achieve. But Best Buy senior vice president Gary Arnold counters, "The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn't properly priced." Labels point to roster cuts and layoffs as evidence that they can't sell CDs cheaper.

This breakdown of the cost of a typical major-label release by the independent market-research firm Almighty Institute of Music Retail shows where the money goes for a new album with a list price of $15.99.

$0.17 Musicians' unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead

http://www.rollingstone.com/news/sto...t_wants_10_cds





Sub Pop, New Line, Dangerbird Partner With SNOCAP
FMQB

Online music distributer SNOCAP today announced today that it will power SNOCAP MyStores for indie labels Sub Pop, New Line and Dangerbird in conjunction with their distributor, Alternative Distribution Alliance (ADA). Using SNOCAP MyStores, the labels will be able to sell content directly to fans from their artists' MySpace pages and other sites.

"We want our music to be easily available on the sites where our fans live," says Sub Pop VP/Business Affairs Eric Brown. "SNOCAP's MyStores are inherently viral on MySpace and beyond. The combination of our artists with the versatility of this new way to sell music is the innovation we've been seeking."

ADA President, Andy Allen, added, "ADA's group of distributed labels have been among the most aggressive in the digital music space and as their distributor, we have worked to offer them the best digital sales and marketing services available, in the formats and on the platforms they choose."

The SNOCAP MyStore service originally launched to distribute unsigned and independent artists on MySpace in December, along with SNOCAP's digital registry, which contains over three million tracks. The SNOCAP MyStore is a digital storefront that can be posted anywhere that accepts html code.

"These partnerships make it easier than ever for premier artists and labels to promote and sell their music instantly and directly to their fans over the Internet, while remaining completely in control of their content," says SNOCAP CEO Rusty Rueff. "More choices for music fans, more music for everyone."
http://fmqb.com/Article.asp?id=370436





Musicload: 75% of Customer Service Problems Caused by DRM
Ken Fisher

Deutsche Telekom's Musicload, one of the largest online music stores in Europe, has come out strongly against DRM on account of its effects on the marketplace and its customers, according to German-language Heise Online.

Musicload said in a letter distributed last week that customers are having consistent problems with DRM, so much so that 3 out of 4 customer service calls are ultimately the result of the frustrations that come with DRM. In a business where the major music labels expect to be paid well for their source material, the costs of supporting DRM are borne entirely by the music retailers. If the labels' love affair with DRM is hurting the companies trying to make a go at selling music online, something is horribly wrong.

According to Musicload, DRM "makes the use of music quite difficult and hinders the development of a mass-market for legal downloads." The lack of interoperability is unfair to customers and prevents true competition between music services, in other words.

Musicload itself is in heated competition in Germany with Apple's iTunes Store. Apple's Steve Jobs has come out against DRM as well, although his iTunes Store does not offer DRM-free music despite the fact that many artists have requested it. A new upstart in the online music sales business, Aime Street, has inked deals with a number of top artists to do what Apple thus far has been unwilling to do, while eMusic has seen moderate success selling DRM-free music from independent labels for quite some time now.

Musicload has also tried to differentiate itself by allowing independent music labels to sell their music on the service sans DRM, and the move has reportedly been a success. Championing the "Comeback of MP3," Musicload said that artists choosing to drop DRM saw a 40 percent increase in sales since December, and that more artists and labels are showing interest. The company hopes that DRM-free MP3s make a comeback, though there have been few signs that the major labels are interested. EMI has been toying with the idea, but the company expects resellers like Musicload, Apple and others to carry the supposed "risk" by paying increased fees upfront.
http://arstechnica.com/news.ars/post...ed-by-drm.html





From February

Steve Jobs and the iTunes DRM Threat to Microsoft

Steve Job's recent comments about DRM and the music industry have drawn cautious praise from foes of DRM and quick criticism from those who prefer to believe that his comments were only made to diffuse pressure from the European regulators complaining about Apple's proprietary FairPlay DRM on iTunes purchases.

Anyone who hasn't read the article, should. It provides some interesting insights into Job's efforts to sell music and why Apple has been able to make money in online downloads while other companies--that were both larger and ahead of Apple in the online music business--have been unable to make any progress at all.

DRM as a Business Model
Before Apple released its FairPlay DRM at the unveiling of the originally Mac-only iTunes Store, DRM systems developed by Sony, Microsoft, and others were already established.

The Danger of DRM recounted how Sony and Phillips had tried to introduce DRM-laden digital music formats throughout the 90s, but ended up destroying any market for new digital players.

Sony's MiniDisc, Phillip's DCC, and the two companies' collaboration on DAT all ended in failure as consumers largely ignored the new digital products rather than quickly leaving their recordable analog cassettes behind. When the technology to burn CDs was released, the game was over; MP3s and mix CDs--devoid of any DRM--became the new way to listen to music.

At the beginning of the next decade, Microsoft began releasing a new DRM effort referred to as Windows Media. Ignoring Sony's previous blunders, Microsoft developed a complex array of DRM security to allow providers to sell any kind of digital media under what ever set of DRM rules suited their fancy.

The result was the failure of the PlaysForSure partnership, followed by a bang-up solo effort in Microsoft's Zune, which used the same technology but introduced artificial restrictions that prevented the two versions of the same Janus DRM from playing each other's content.

If we could thaw out some Neanderthals, reanimate them, and teach them our language, they would no doubt quickly grasp why Microsoft failed back to back by repeating a strategy that had failed earlier for Sony.

Apple's Threat to DRM
It has been no secret that Jobs struggled to convince music executives to sign up with the iTunes store. Even after several years of rapidly escalating sales, Apple ran into the same difficulties in getting movie executives to add their content. So far, while iTunes has all the major music labels, it has only signed up Disney and Paramount for movies.

The reason for all the guarded hesitancy by content producers is the fear that Apple would be too liberal in use rights; once Apple were established as the only company able to successfully sell mass market content online, they worried it would have too much market power and could force content owners to lower prices, give up profits, and relax user restrictions.

That's a valid concern for producers, because Apple is not really interested in pushing DRM. It's not because Apple is holy and righteous, but because Apple makes little money from selling content; it makes its money selling hardware. For Apple, being able to sell its hardware requires available content; that content is a means to an end, not a business plan.

It's Not Blades and Razors
Analysts have long tried to describe Apple as selling blades and razors, an allusion to Gillette, the razor maker that got rich losing money on razors but made it all back in selling replacement blades. In the case of Apple, analysts imagine that the same thing is going on, except that Apple makes money on both the razor and the blade because it sells both the player and the music.

Of course, that's not really a good analogy at all. Apple makes a lot of money on the iPod, and only breaks even selling songs in the iTunes Store. That's not a guess, nor is it a secret. Apple's earning reports show quite obviously where the company makes its money.

"Blades and razors" is not just a flawed analogy, but really a completely unrelated business model. Apple's iPod business is far closer to how it sells Macs. In both cases, Apple makes the majority of its money selling hardware, and barely anything selling software. However, that mostly profitless software is essential to making sure that its hardware actually sells.

It's Cars and Roads
Apple's model is closer to the plight of car makers, who are dependent upon the availability of roads. Making roads is a huge waste of money to an enterprising capitalist. The only companies in the road making business are either being paid by governments or have some special bit of land that can support a toll road.

In general however, nobody could afford to build networks of roads and sell access to them. While there is a huge demand for roads, there are no profits, because nobody wants to pay for the roads they use.

So like the equally unprofitable businesses of healthcare, water, and defense, society hands it over to the public sector to maintain. Yes, there is money to be made in all those industries, but not by taking money directly from consumers to provide them.
In Apple's case, its cars will sell only if enough roads are available. Apple ran into difficulty with the Mac in the mid 90s because it wasn't paving its own software roads; it relied upon third party developers to build them. Once Windows became ubiquitous, many of the roads stopped supporting Macs. Without enough roads, Apple couldn't sell its car.

Apple bounced back by building its own set of roads, which offered a more pleasant drive. They also were only available to Mac drivers. Apple has also recently done more to encourage and support third party Mac road construction. The more software roads to drive upon, the more Macs sell.

Everyone is excited to buy a sexy car, but nobody wants to pay for the use of roads. Just like road construction, it's difficult to make money selling software, because while everyone is excited to buy a sexy computer, nobody wants to pay for software licensing.

Free software advocates have worked to build free, public roads available to anyone. Apple has worked to make sure its Macs support and leverage the variety of free software already available, and is encouraging its use. It has contributed back its own technology as well.

High Cost, Low Profit Content
The cars and roads analogy also applies the iPod. While iPods sell at an easy profit, there simply isn't a lot of money to be made in selling content for it. There are two main reasons:

1.
•high quality, desirable content--like software and roads--is difficult and expensive to produce.
2.
•owners of existing content want money for use of their content, because it cost them a lot of money to make.

Some of the highest regarded content worldwide is government supported: the BBC, and other nationally supported movies and TV offer many examples. Left to the private sector, content commonly boils down into whatever is cheapest to produce. American daytime TV turned to soaps, then the much cheaper talk shows, then the even cheaper reality shows in search of a profit. The BBC isn’t profit motivated to produce trash.

The high cost of content explains why Apple simply can't really churn out its own music and movies for the iPod, just so users can have somewhere interesting to drive. Apple has to license rights from existing content holders.

That's why the iTunes Store makes so little money, despite selling hundreds of millions of songs. The vast majority of that revenue is going to the labels and studios. Apple is investing the rest back into the iTunes Store so that potential iPod buyers have as many new places to go as possible.

That's why Apple got behind the entirely profitless podcasting business in iTunes as well. If there were huge amounts of cash to be made in reselling content online, Apple would be stupid to be pointing people toward free content. As it is, Apple is smart to be offering alternative content so users will have yet another reason to want to buy iPods.

The fact that the average iPod user only has around 25 tracks--many none, some a lot--indicates that online media sales are an accessory business, not a key moneymaker for Apple.

That also explains why Apple has little interest in making sure music and movies are managed by DRM. The only reason FairPlay is around is to make sure there is content for the iPod.

Had Apple left things to Sony and Microsoft, all the labels would still be struggling to sell their music in WMA and ATRAC formats, which only run on Windows PCs and devices licensed by Sony or Microsoft. The Mac and iPod would both be left out of the loop on downloadable commercial content.

Apple's Vendor Lock Is A Better Product
From that perspective, it's obvious why Jobs announced that Apple would drop its DRM efforts in a hot minute if only it were allowed to by content providers. As pointed out earlier, it's a myth that the small proportion of iTunes content on iPods is being used to lock users to the iPod. Apple is locking in sales by offering a better product.

The fact that Xbox games only work on the Xbox does not prevent Xbox users from also buying a Wii on the side to play Wii games. The half million additional Macs being sold every quarter to former PC users was not prevented by those PC users having PC software that couldn't make the transition. The DVD wasn't held back by the inability of customers to shove VHS tapes into them for playback.

Apple doesn't have to force users to buy Macs and iPods with exclusive OEM contracts; people go out of their way to buy them. That means Apple isn't afraid of losing its vendor lock, because the only way it can lose sales is by failing to innovate.

Imagine There's No DRM
So what would happen if labels allowed Apple to sell music and movies without DRM? Previous articles have stated that DRM makes viable markets.

If music from iTunes were unrestricted, there would be far more sharing of that music. However, given that CDs comprise the vast majority of music actually sold, and the triviality of ripping CDs from iTunes and distributing songs without authorization, it's hard to understand why labels are worried about DRM in iTunes.

If Apple were freed from having to devote its resources to managing and policing DRM, it could focus its efforts on offering a variety of formats, including high definition lossless downloads. That would expand the demand for online music. Currently, the only reason why some users don't buy from iTunes is the limited bitrate.

In an iTunes Store without DRM, would the increase in the amount of stolen music be offset by expanding the market for digital downloads to premium users who want higher quality recordings?

Given how easy it currently is to defeat FairPlay by simply burning a CD, it's not hard to imagine that sales might skyrocket if DRM went away, the selection expanded, and other device makers started bundling iTunes for access to an online store for their players.

How No-DRM Would Affect Apple
The main beneficiary to increased iTunes sales wouldn't be Apple--which only makes a few cents on every sale--but rather the record companies themselves, who rake in the majority of iTunes Store revenues.

Further, what would happen to iPod sales if any player could play music obtained from the iTunes Store? It could only help the struggling Creative to have access to a store that works. It might help the Zune, which is currently saddled with a byzantine store supported by an inconvenient points currency. It certainly wouldn't benefit sales of the iPod in the least.

So why is Apple describing itself as being behind the defusing of DRM? Analysts who accuse the company of vendor lock in, monopolistic behavior, and collapsing sales must all be very confused, because their theories don't support Apple's willingness to abandon DRM at all.

How No-DRM Would Affect Microsoft
The world's leading proponent of DRM, Bill Gates, was credited as the software architect behind Palladium, an ultra secure system for enforcing access controls and DRM in hardware.

A Palladium PC would tell users where they could go, rather than just asking them where they wanted to go.

After being harshly criticized by user rights advocates, Microsoft dialed back its plans for Palladium, but still incorporated strong DRM controls into Vista that seek to clamp down every potential vector for extracting high quality video or audio that is not expressly authorized. Windows Media similarly strives to maintain its lead as the tightest ship in the DRM armada.

If Apple were allowed by studios and labels to offer music and movies without DRM, Microsoft's DRM would completely run aground. Its huge investments in courting the favors of the content industry would be worthless, and its architectures for deploying ultra secure payloads of entertainment would be unsalable.

That suddenly makes it crystal clear why Jobs is disinterested in DRM. If studios and labels allowed Apple to dump DRM in the iTunes Store, Apple might lose a handful of diehard Creative fans and Zune lovers and face slightly more competition in the music player arena, but that would be a very cheap price to pay for ridding the online music and media industry of the looming 800 lb gorilla.

Microsoft has the billions to hand out free Zunes to everyone in America and cram Zune-branded DRM down everyone's throat. So far, the only thing that has held the company back is the hubris that it could beat Apple in the marketplace. Having failed miserably for two years with PlaysForSure, and then even more spectacularly with its own Zune, Microsoft is now a desperate and angry loose cannon.

The Last Angry Dash
When Microsoft fails in the market, it has a long and documented history of turning to anticompetitive, and even criminal behavior. The company has tight political ties to the far right and the Bush administration, and is rumored to be pushing the dismissal of state Attorneys General in order to engage Apple in a political imbroglio over its highly hyped options backdating.

Never mind that Microsoft itself danced through its own options backdating during the same era; Microsoft also skidded through a Federal Monopoly trial and several state cases that all have resulted in nothing more than a few inconsequential fines and done little to prevent further misconduct.

What would happen if Microsoft could marshal the political capital it has paid mightily to accumulate and fire it along with all its rage toward the only company that's really getting in its way and making it look foolish?

There are few other weapons for Microsoft to pull out: Vista is being compared to Tiger from two years ago; its star PC hardware maker Dell has fallen down and can't get up; and the media has become wise to its FUD and is increasingly difficult to charm with vaporware promises.
http://www.roughlydrafted.com/RD/RDM...E0084C9D5.html





P2P File-Sharing Ruins Physical Piracy Business
enigmax

If the likes of the MPAA, RIAA and IFPI are to be believed, file-sharing is causing worldwide havok, costing billions of dollars and creating unemployment. It’s true that some people are feeling the P2P effect; they’re called ‘physical pirates’ and one of them says that file-sharing has ruined his business.

Tony started his life of piracy sometime in the 1990’s working markets, car-boot sales and pubs in the UK, selling counterfeit PC applications/games and console discs for a fraction of the retail price. “The profit was amazing back then” he recalls “We were getting £25 ($48) for a couple of PSX games and £15 ($29) for a single CDR with the latest utilities on. We couldn’t make them fast enough.” Things were looking good for his little enterprise and before long he was clearing up to £1000 ($1,942) profit each week.

According to Tony, the first 2 hours of every Saturday and Sunday morning at the local flea market always proved the most exciting. “We’d take 60 cases of CDRs down in the van and as soon as we got there a crowd would swarm around us. We had no competition and it was obvious the punters had no other suppliers. Inside 30 minutes, 90% of the stock would be gone with some customers taking 2 or 3 cases each, presumably to sell on. After 3 hours we were cleared out and on our way home, always with huge amounts of money.”

By 2001, Tony was renting a factory unit and employing 3 people to operate duplicators 24 hours a day, 7 days a week but although business was lively right up to 2004, profits were being squeezed every year. Forced to increase the amount of media burnt each week to make up for the shortfall in profit, it became clear that the business was in trouble - demand was falling dramatically.

“In 2005 we shut down the factory unit” said Tony, “we just couldn’t keep going on that scale, nobody was buying anything in quantity anymore. So we closed up and moved back into a bedroom at home with my wife and her sister operating the burners, something they hadn’t done in years. They weren’t happy.”

Tony used to enjoy the finer things in life - a beautiful house, high performance cars, exotic foreign holidays, up-market restaurants and fine wine. I met him by chance, wearing overalls and sitting on a forklift truck, working in a factory manufacturing boxes. Sipping on a mug of tea he explained “We got to the point where we just couldn’t make ends meet anymore, I couldn’t even keep a couple of dozen burners going so that was that. I had to get a job and so did my wife. She’s gone back to hairdressing and i’ve come back to what I was doing before - warehouse work. We’ve moved to a smaller house and i’ve had to get a sensible car. Things have changed quite a lot.”

Tony is very clear about why his rags to riches story has gone back to rags again. “File-sharing, P2P - call it what you like. When you asked a customer why he wasn’t buying anything, 9 times out of 10 it was ‘BitTorrent this, LimeWire that’. Add that to the fact that huge numbers of PC users have burners and fast broadband and its obvious why I had to get out and earn a living another way. We had it good for a while but I don’t think those days are coming back.”

P2P is a very powerful machine and although Tony could see that his operation was feeling its effects, he admits that he sat back and did nothing about it and consequently, his business has paid the ultimate price. Other industries affected by P2P should take note: Don’t be a Tony. Overhaul your business model. Quickly.
http://torrentfreak.com/p2p-file-sha...racy-business/





Discord in Boston After Delp Suicide
AP

The band Boston spoke to people's souls during the 1970s with smash hits like ''More Than a Feeling'' and ''Peace of Mind.'' But two weeks after lead singer Brad Delp's suicide at his New Hampshire home, bad feelings abound.

Current members of the band, including the chief songwriter and founder, Tom Scholz, were not informed about or invited to Delp's funeral, which was attended by early band members who opposed Scholz in a 1980s legal battle.

Last week, Delp's ex-wife Micki was quoted on a radio station saying Delp was distressed about the conflicts in his professional life and became despondent after a longtime friend, Fran Cosmo, was cut from Boston's summer concert lineup. The story spread online, where fans trying to figure out the reason for Delp's suicide took up the cudgels.

Scholz, who called Delp his ''closest friend and collaborator in music for over 35 years,'' said he was crushed by Delp's suicide and his exclusion from the funeral. Now he feels he is being unfairly blamed for Delp's death.

''It went from devastating on the initial phone call to an absolute nightmare,'' Scholz told The Associated Press on Friday in a tearful telephone interview, his first since Delp's death on March 9. (An interview conducted by e-mail was published earlier in Rolling Stone.)

''We had been told it would only be his immediate family (at the funeral), and of course it wasn't,'' he said.

A lawyer for Scholz sent a letter to Micki Delp on Friday demanding a retraction. She did not immediately respond Friday to an e-mail message from The Associated Press via the publicist who has handled statements for the family.

Boston has canceled its summer engagements, and Scholz said he still hopes the rift can be mended and the band can be part of a public memorial service that Delp's children, their mother Micki, and Delp's fiancee, Pamela Sullivan, said last week was in the works.

Sullivan said no one intentionally excluded the current band members from the funeral.

''It was about getting the children through it as quickly and quietly as possible with the people they were up to facing at the time and the people who could be the most comfort to them,'' she told the AP in a telephone interview.

Tensions between Scholz and some of the early band members date from the early 1980s, when CBS Inc. sued the band over delays in recording new albums. The company's Epic Records label recorded the band's first two releases: ''Boston,'' in 1976, and ''Don't Look Back,'' in 1978.

Scholz countersued for the rights to the band's name and music. Three members of the original band -- Barry Goudreau, Sib Hashian and Fran Sheehan -- testified for the record company, which lost. Goudreau is Micki Delp's brother-in-law, and she reportedly remains close to the ousted band members.

Delp, the only band member besides Scholz whose name was on the CBS recording contract, remained friends with everyone, touring and recording with Scholz and the others over the decades. He also started a Beatles tribute band, Beatle Juice.

Scholz wrote, engineered, and laid down nearly all the instrumental tracks on the first album, but he said Delp helped him refine the songs and brought his music to life.

''It went from a guitar lick that didn't mean a thing to a real song as soon as he opened his mouth. That was always the case,'' Scholz said. ''We had a very, very close working relationship. I swear it was like we were hooked up by a cable. We didn't even have to talk most of the time.''

Scholz and Delp were both vegetarians and pacifists, both dedicated their money and talents to causes they believed in, and both proposed to their longtime girlfriends on Christmas Day 2006 by putting rings in their stockings -- only learning about the coincidence in a conversation afterward.

The band's first album was wildly successful, and remains one of the best-selling debut albums of all time, according to Billboard, selling more than 16 million copies. Boston's early music also remains a staple on classic rock stations, especially in New England.

96.5 FM (''The Mill'') in Manchester plans a two-hour tribute to Boston on Sunday featuring excerpts from the station's interviews with Delp over the years. Program Director J.C. Haze said he remembers hearing the first album.

''Tom and Brad, they made such a unique sound it just took the world by storm,'' Haze said. ''Nothing ever sounded like it, and nothing ever did since.''
http://www.nytimes.com/aponline/arts...p-Discord.html





CEBIT - Scientists Show Thought-Controlled Computer

An Austrian company is showing a brain-computer interface at Cebit that 'reads' thoughts to operate a computer.
James Niccolai

Forget speech-recognition software: How about typing a letter just by thinking it?

In a quiet corner of the Cebit trade show a small Austrian company is showing a "brain-computer interface," a technology that could one day transform how we use computers, play video games and even talk to each other.

It sounds like science fiction but is a clever application of science and technology. The system does not really read thoughts; rather, it measures fluctuations in electrical voltage in the brain and translates them into commands on a computer screen.

The system consists of a cap that fits over the user's head, with a few dozen holes through which electrodes are attached so they rest on the scalp. The electrodes are connected via thin cables to a "biosignal amplifier," which transmits the signals from the brain to a computer.

Different parts of the brain are used to process different types of thoughts. Vertical and horizontal hand movements are handled in an area called the sensory motor cortex, for example, said Christoph Guger, CEO of g.tec, which built the BCI system shown at Cebit.

To use a BCI to move a computer cursor, the electrodes are placed over the corresponding part of the brain, where they read tiny fluctuations in voltage and feed them into a software program that analyzes them to figure out what the person is thinking.

The software needs to be trained to read the signals, which takes several hours to do properly. The subject responds to commands on a computer screen, thinking "left" and "right" when they are instructed to do so, for example. Another test involves looking at a series of blinking letters, and thinking of a letter when it appears.

The software "learns" what the brain's voltage fluctuations look like when those directions or letters are thought of, Guger said.

The system today is also quite slow -- even a trained system can "read" only 18 characters per minute, or three or four words. Still, that may be helpful for a disabled person who cannot communicate through speech or movement. About 200 disabled people worldwide are using the software at home to communicate, according to Guger, although they need professional help to set it up.

Another issue is accuracy. In a test at a conference in Austria about two years ago, 300 attendees were trained on the system for 30 minutes. After that time the system could figure out simple binary responses from most of the people 60 percent of the time -- or "better than random," Guger said. For 7 percent of the people, the accuracy was more than 90 percent, he said.

The technology is advancing. Five years ago the system was too bulky to be transported easily, and now the various parts can fit in a shoebox. In 10 years it could be fast and accurate enough to commercialize in home PCs or games consoles, according to Guber.

"Ultimately you could have wireless contacts embedded in the brain, and communicate with others just by thinking," he said. "But then you really would have to worry about your wife finding out about your girlfriend."

At Cebit, a colleague of Guber's donned the BCI system and played the game "Pong" against a reporter. It has also been used to write letters, operate artificial limbs and steer a wheelchair. "It's not safe enough for wheelchairs today though; if it reads a command wrongly you could veer off into the road," Guger said.

The study of BCI took off in the 1990s, primarily at three laboratories, in Austria, Germany and the U.S. There are now 300 laboratories working on it, Guger said. He completed his Ph.D. in BCI at the Graz University of Technology, in Austria, in 1999, he said.

He sells his BCI systems mainly to scientists for research work. They are priced from Euro 20,000 (US$26,000) to Euro 100,000 depending on their sophistication. The company is showing a smaller, Pocket PC-based device at Cebit that starts at Euro 3,000. More information is at g.tec's Web site.

Measuring the brain's electrical activity like this is called electroencephalography, or EEG. It is noninvasive, meaning the electrodes are placed on the scalp without surgery, but it produces weaker signals and is subject to noise interference.

Invasive techniques produce better results but are tried only on patients who require brain surgery in any case, and on monkeys and other animals.

An engineer in the U.S. holds a patent on the general BCI concept, Guger said; other patents are held by universities for specific software algorithms used to decode the brain's signals.

G.tec's BCI is among the nominees for the European ICT Prize, the winners of which will be announced Friday. There are three grand prizes of Euro 200,000 each.
http://www.computerworld.com.au/inde...0;fp;16;fpid;1





Google Snaps up Karolinska Stats Tool

It began as a teaching aid in a lecture at Stockholm's Karolinska Institute . Now internet giant Google has bought the rights to the Swedish statistics tool Trendalyzer.

Seven years ago, professor Hans Rosling was lecturing his students when it struck him that statistics were an underexploited resource, often presented in an incomprehensible fashion. To solve the problem he developed - along with his son - a new kind of software.

The result was every software developer's dream: on Friday, Google bought Trendalyzer for an undisclosed sum.

But however much Google paid for the software, which presents data in an easily-accessible, graphic format, the deal has not made Rosling Sweden's latest IT billionaire.

Gapminder, the organisation set up to develop the product, is a non-profit foundation that has been largely funded by public grants.

According to its constitution, its objective is "to promote sustainable global development and achievement of the United Nations Millennium Development Goals by increased use and understanding of statistics and other information about social, economic and environmental development at local, national and global levels".

"It is a charity that has sold the programme so I haven't had any money," said Hans Rosling.

"It's not an operating business that was sold, just the software and a web site. Although I would gladly accept that kind of money," he added, perhaps thinking of fellow Swede Niklas Zennström , who sold Skype to eBay for 4.1 billion dollars.

But the potential of the Trendalyzer software is seen as being enormous. According to Rosling, public organisations around the world invest 20 billion dollars a year producing different kinds of statistics.

Until now, nobody has thought of collecting all the information in the same place. That should be possible with Trendalyzer, which will be able to present that quantity of data in a clear way as well as giving the user the ability to compare many different kinds of information.
http://www.thelocal.se/6725/20070318/





EFF Kills Bogus Clear Channel Patent
Press Release

Patent Busting Project Wins Victory for Artists and Innovators

San Francisco - The U.S. Patent and Trademark Office (PTO) has announced it will revoke an illegitimate patent held by Clear Channel Communications after a campaign by the Electronic Frontier Foundation (EFF).

The patent -- owned by Instant Live, a company formerly owned by Clear Channel, and now owned by Live Nation -- covered a system and method of creating digital recordings of live performances. Clear Channel claimed the bogus patent created a monopoly on all-in-one technologies that produce post-concert digital recordings and threatened to sue those who made such recordings. This locked musical acts into using Clear Channel technology and blocked innovations by others.

However, EFF's investigation found that a company named Telex had in fact developed similar technology more than a year before Clear Channel filed its patent request. EFF -- in conjunction with patent attorney Theodore C. McCullough and with the help of Lori President and Ashley Bollinger, students at the Glushko-Samuelson Intellectual Property Clinic at American University's Washington College of Law -- asked the PTO to revoke the patent based on this and other extensive evidence.

"Bogus patents like this one are good examples of what's wrong with the current patent system," said EFF Staff Attorney Jason Schultz. "We're glad that the Patent Office was willing to help artists and innovators out from under its shadow."

The Clear Channel patent challenge was part of EFF's Patent Busting Project, aimed at combating the chilling effects bad patents have on public and consumer interests. The Patent Busting Project seeks to document the threats and fight back by filing requests for reexamination against the worst offenders.

"The patent system plays a critical role in business and the economy," said McCullough. "Everyone loses if we allow overreaching patent claims to restrict the tremendous benefits of new software and technology development."

For the notice from the Patent Office: http://www.eff.org/patent/wanted/cle..._to_cancel.pdf
http://www.eff.org/news/archives/2007_03.php#005155





MIT Faculty and Libraries Refuse DRM; SAE Digital Library Canceled
Press Release

The MIT Libraries have canceled access to the Society of Automotive Engineers’ web-based database of technical papers, rejecting the SAE’s requirement that MIT accept the imposition of Digital Rights Management (DRM) technology.

SAE’s DRM technology severely limits use of SAE papers and imposes unnecessary burdens on readers. With this technology, users must download a DRM plugin, Adobe’s “FileOpen,” in order to read SAE papers. This plugin limits use to on-screen viewing and making a single printed copy, and does not work on Linux or Unix platforms.

MIT faculty respond

“It’s a step backwards,” says Professor Wai Cheng, SAE fellow and Professor of Mechanical Engineering at MIT, who feels strongly enough about the implications of DRM that he has asked to be added to the agenda of the upcoming SAE Publication Board meeting in April, when he will address this topic.

In addition to Professor Cheng, the MIT Libraries consulted with other faculty members who publish or use SAE content. The responses were uniformly against accepting DRM, even if it meant losing ready access to SAE papers. When informed that the SAE feels the need to impose DRM to protect their intellectual property, Professor John Heywood, the Director of MIT’s Sloan Automotive Lab, who publishes his own work with the SAE, responded with a question: “Their intellectual property?” He commented that increasingly strict and limiting restrictions on use of papers that are offered to publishers for free is causing faculty to become less willing to “give it all away” when they publish.

Echoing Professor Heywood, Alan Epstein, Professor of Aeronautics and Astronautics, believes that “If SAE limits exposure to their material and makes it difficult for people to get it, faculty will choose to publish elsewhere.” He noted that “SAE is a not-for-profit organization and should be in this for the long term,” rather than imposing high prices and heavy restrictions to maximize short-term profit.

Reducing access to research

At a time when technology makes it possible to share research more quickly and broadly than ever before, and when innovative automotive research is a matter of global concern, SAE is limiting access to the research that has been entrusted to the society. In addition to imposing DRM on access to the papers for paid subscribers, the SAE also prevents information about its papers from being found through any channel other than the ones they control.

What does this mean? In contrast to information about research published by other engineering societies, which can be found in databases such as Google, ISI’s Web of Science, or the Compendex engineering database, information about SAE papers is only made available through SAE’s proprietary database. Such policies severely limit access to information about SAE papers, and are out of step with market norms.

New arrangements for access to SAE content at MIT

While MIT faculty, the MIT Libraries, and MIT’s Office of Information Services & Technology all agree that SAE’s imposition of DRM is unacceptable in our environment, the Libraries nevertheless recognize that it is important to provide some level of ongoing access to SAE papers needed by the MIT community. The Libraries are therefore working on a new access arrangement.

Beginning in April, 2007, the Libraries will make available either a printed or web-based index of SAE papers; once a citation is identified in this index, the paper will be accessible through one of three channels, depending on its publication date:

• SAE papers published prior to 2004 will be available either in print or on microfiche in the Barker Engineering Library.
• SAE papers published in 2004, 2005, or 2006 will be available either in print or on CD-ROM in the Barker Engineering Library.
• SAE papers from the current year will be made available on request through a web form.

The Libraries are working to ensure that this system will be in place in time to avoid major disruption to MIT users when the SAE Digital Library access ends March 31. We regret that CD-ROM and on-demand access will not be as convenient for the MIT community as the full-text, web-based access has been.

Before taking this step, the Libraries spent several months weighing options, consulting with faculty and IS&T experts, and in conversation with the SAE. When the SAE informed the Libraries that they remain unwilling to accept any access to the Digital Library other than through the DRM plugin, the Libraries reluctantly chose this alternative path.

We welcome and encourage your feedback

We are interested in your views about this situation, particularly given its manifestation of some of the complex issues currently facing publishers, academic authors, users of digital content, and the libraries that serve them. Please address comments or questions to any of the following members of the MIT Libraries staff:

Anna Gold, Head, Engineering & Science Libraries: annagold@mit.edu / x3 7741
Tracy Gabridge, Associate Head, Barker Engineering Library: tag@mit.edu / x3 8971
Ellen Finnie Duranceau, Scholarly Publishing and Licensing Consultant, efinnie@mit.edu / x38483
http://news-libraries.mit.edu/blog/a...s/engineering/





Starr hits for Jesus

Free-Speech Case Divides Bush and Religious Right
Linda Greenhouse

A Supreme Court case about the free-speech rights of high school students, to be argued on Monday, has opened an unexpected fissure between the Bush administration and its usual allies on the religious right.

As a result, an appeal that asks the justices to decide whether school officials can squelch or punish student advocacy of illegal drugs has taken on an added dimension as a window on an active front in the culture wars, one that has escaped the notice of most people outside the fray. And as the stakes have grown higher, a case that once looked like an easy victory for the government side may prove to be a much closer call.

On the surface, Joseph Frederick’s dispute with his principal, Deborah Morse, at the Juneau-Douglas High School in Alaska five years ago appeared to have little if anything to do with religion — or perhaps with much of anything beyond a bored senior’s attitude and a harried administrator’s impatience.

As the Olympic torch was carried through the streets of Juneau on its way to the 2002 winter games in Salt Lake City, students were allowed to leave the school grounds to watch. The school band and cheerleaders performed. With television cameras focused on the scene, Mr. Frederick and some friends unfurled a 14-foot-long banner with the inscription: “Bong Hits 4 Jesus.”

Mr. Frederick later testified that he designed the banner, using a slogan he had seen on a snowboard, “to be meaningless and funny, in order to get on television.” Ms. Morse found no humor but plenty of meaning in the sign, recognizing “bong hits” as a slang reference to using marijuana. She demanded that he take the banner down. When he refused, she tore it down, ordered him to her office, and gave him a 10-day suspension.

Mr. Fredericks’s ensuing lawsuit and the free-speech court battle that resulted, in which he has prevailed so far, is one that, classically, pits official authority against student dissent. It is the first Supreme Court case to do so directly since the court upheld the right of students to wear black arm bands to school to protest the war in Vietnam, declaring in Tinker v. Des Moines School District that “it can hardly be argued that either students or teachers shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.”

The court followed that 1969 decision with two others during the 1980s that upheld the authority of school officials to ban vulgar or offensive student speech and to control the content of school newspapers. Clearly there is some tension in the court’s student-speech doctrine; what message to extract from the trio of decisions is the basic analytical question in the new case, Morse v. Frederick, No. 06-278. What is most striking is how the two sides line up.

The Bush administration entered the case on the side of the principal and the Juneau School Board, which are both represented by Kenneth W. Starr, the former solicitor general and independent counsel. His law firm, Kirkland & Ellis, is handling the appeal without a fee. Mr. Starr and Edwin S. Kneedler, a deputy solicitor general who will present the government’s view, will share argument time on Monday. The National School Board Association, two school principals’ groups, and several antidrug organizations also filed briefs on the school board’s side.

While it is hardly surprising to find the American Civil Liberties Union and the National Coalition Against Censorship on Mr. Frederick’s side, it is the array of briefs from organizations that litigate and speak on behalf of the religious right that has lifted Morse v. Frederick out of the realm of the ordinary.

The groups include the American Center for Law and Justice, founded by the Rev. Pat Robertson; the Christian Legal Society; the Alliance Defense Fund, an organization based in Arizona that describes its mission as “defending the right to hear and speak the Truth”; the Rutherford Institute, which has participated in many religion cases before the court; and Liberty Legal Institute, a nonprofit law firm “dedicated to the preservation of First Amendment rights and religious freedom.”

The institute, based in Plano, Tex., told the justices in its brief that it was “gravely concerned that the religious freedom of students in public schools will be damaged” if the court rules for the school board.

Lawyers on Mr. Frederick’s side offer a straightforward explanation for the strange-bedfellows aspect of the case. “The status of being a dissident unites dissidents on either side,” said Prof. Douglas Laycock of the University of Michigan Law School, an authority on constitutional issues involving religion who worked on Liberty Legal Institute’s brief.

In an interview, Professor Laycock said that religiously observant students often find the atmosphere in public school to be unwelcoming and “feel themselves a dissident and excluded minority.” As the Jehovah’s Witnesses did in the last century, these students are turning to the courts.

The briefs from the conservative religious organizations depict the school environment as an ideological battleground. The Christian Legal Society asserts that its law school chapters “have endured a relentless assault by law schools intolerant of their unpopular perspective on the morality of homosexual conduct or the relevance of religious belief.”

The American Center for Law and Justice brief, filed by its chief counsel, Jay Alan Sekulow, warns that public schools “face a constant temptation to impose a suffocating blanket of political correctness upon the educational atmosphere.”

What galvanized most of the groups on Mr. Frederick’s side was the breadth of the arguments made on the other side. The solicitor general’s brief asserts that under the Supreme Court’s precedents, student speech “may be banned if it is inconsistent with a school’s basic educational mission.”

The Juneau School Board’s mission includes opposing illegal drug use, the administration’s brief continues, citing as evidence a 1994 federal law, the Safe and Drug-Free Schools and Communities Act, which requires that schools, as a condition of receiving federal money, must “convey a clear and consistent message” that using illegal drugs is “wrong and harmful.”

Mr. Starr’s main brief asserts that the court’s trilogy of cases “stands for the proposition that students have limited free speech rights balanced against the school district’s right to carry out its educational mission and to maintain discipline.” The brief argues that even if Ms. Morse applied that precept incorrectly to the facts of this case, she is entitled to immunity from suit because she could have reasonably believed that the law was on her side.

The religious groups were particularly alarmed by what they saw as the implication that school boards could define their “educational mission” as they wished and could suppress countervailing speech accordingly.

“Holy moly, look at this! To get drugs we can eliminate free speech in schools?” is how Robert A. Destro, a law professor at Catholic University, described his reaction to the briefs for the school board when the Liberty Legal Institute asked him to consider participating on the Mr. Frederick’s behalf. He quickly signed on.

Having worked closely with Republican administrations for years, Mr. Destro said he was hard pressed to understand the administration’s position. “My guess is they just hadn’t thought it through,” he said in an interview. “To the people who put them in office, they are making an incoherent statement.”

The solicitor general’s office does not comment publicly on its cases. But Mr. Starr, by contrast, was happy to talk about the case and the alignment against him of many of his old allies. “It’s reassuring to have lots of friends of liberty running around,” he said in a cheerful tone, adding: “I welcome this outpouring because it will help the court see that it shouldn’t go too far either way.”
http://www.nytimes.com/2007/03/18/wa...2&ei=5087%0 A





Play About Iraq War Divides a Connecticut School
Alison Leigh Cowan

Student productions at Wilton High School range from splashy musicals like last year’s “West Side Story,” performed in the state-of-the-art, $10 million auditorium, to weightier works like Arthur Miller’s “Crucible,” on stage last fall in the school’s smaller theater.

For the spring semester, students in the advanced theater class took on a bigger challenge: creating an original play about the war in Iraq. They compiled reflections of soldiers and others involved, including a heartbreaking letter from a 2005 Wilton High graduate killed in Iraq last September at age 19, and quickly found their largely sheltered lives somewhat transformed.

“In Wilton, most kids only care about Britney Spears shaving her head or Tyra Banks gaining weight,” said Devon Fontaine, 16, a cast member. “What we wanted was to show kids what was going on overseas.”

But even as 15 student actors were polishing the script and perfecting their accents for a planned April performance, the school principal last week canceled the play, titled “Voices in Conflict,” citing questions of political balance and context.

The principal, Timothy H. Canty, who has tangled with students before over free speech, said in an interview he was worried the play might hurt Wilton families “who had lost loved ones or who had individuals serving as we speak,” and that there was not enough classroom and rehearsal time to ensure it would provide “a legitimate instructional experience for our students.”

“It would be easy to look at this case on first glance and decide this is a question of censorship or academic freedom,” said Mr. Canty, who attended Wilton High himself in the 1970s and has been its principal for three years. “In some minds, I can see how they would react this way. But quite frankly, it’s a false argument.”

At least 10 students involved in the production, however, said that the principal had told them the material was too inflammatory, and that only someone who had actually served in the war could understand the experience. They said that Gabby Alessi-Friedlander, a Wilton junior whose brother is serving in Iraq, had complained about the play, and that the principal barred the class from performing it even after they changed the script to respond to concerns about balance.

“He told us the student body is unprepared to hear about the war from students, and we aren’t prepared to answer questions from the audience and it wasn’t our place to tell them what soldiers were thinking,” said Sarah Anderson, a 17-year-old senior who planned to play the role of a military policewoman.

Bonnie Dickinson, who has been teaching theater at the school for 13 years, said, “If I had just done ‘Grease,’ this would not be happening.”

Frustration over the inelegant finale has quickly spread across campus and through Wilton, and has led to protest online through Facebook and other Web sites.

“To me, it was outrageous,’’ said Jim Anderson, Sarah’s father. “Here these kids are really trying to make a meaningful effort to educate, to illuminate their fellow students, and the administration, of all people, is shutting them down.”

First Amendment lawyers said Mr. Canty had some leeway to limit speech that might be disruptive and to consider the educational merit of what goes on during the school day, when the play was scheduled to be performed. But thornier legal questions arise over students’ contention that they were also thwarted from trying to stage the play at night before a limited audience, and discouraged from doing so even off-campus. Just this week, an Alaska public high school was defending itself before the United States Supreme Court for having suspended a student who unfurled a banner extolling drug use at an off-campus parade.

The scrap over “Voices in Conflict” is the latest in a series of free-speech squabbles at Wilton High, a school of 1,250 students that is consistently one of Connecticut’s top performers and was the alma mater of Elizabeth Neuffer, the Boston Globe correspondent killed in Iraq in 2003.

The current issue of the student newspaper, The Forum, includes an article criticizing the administration for requiring that yearbook quotations come from well-known sources for fear of coded messages. After the Gay Straight Alliance wallpapered stairwells with posters a few years ago, the administration, citing public safety hazards, began insisting that all student posters be approved in advance.

Around the same time, the administration tried to ban bandanas because they could be associated with gangs, prompting hundreds of students to turn up wearing them until officials relented.

“Our school is all about censorship,” said James Presson, 16, a member of the “Voices of Conflict” cast. “People don’t talk about the things that matter.”

After reading a book of first-person accounts of the war, Ms. Dickinson kicked off the spring semester — with the principal’s blessing — by asking her advanced students if they were open to creating a play about Iraq. In an interview, the teacher said the objective was to showcase people close to the same age as the students who were “experiencing very different things in their daily lives and to stand in the shoes of those people and then present them by speaking their words exactly in front of an audience.”

What emerged was a compilation of monologues taken from the book that impressed Ms. Dickinson, “In Conflict: Iraq War Veterans Speak Out on Duty, Loss and the Fight to Stay Alive”; a documentary, “The Ground Truth”; Web logs and other sources. The script consisted of the subjects’ own words, though some license was taken with identity: Lt. Charles Anderson became “Charlene” because, as Seth Koproski, a senior, put it, “we had a lot of women” in the cast.

In March, students said, Gabby, the junior whose brother is serving in the Army in Iraq, said she wanted to join the production, and soon circulated drafts of the script to parents and others in town. A school administrator who is a Vietnam veteran also raised questions about the wisdom of letting students explore such sensitive issues, Mr. Canty said.

In response to concerns that the script was too antiwar, Ms. Dickinson reworked it with the help of an English teacher. The revised version is more reflective and less angry, omitting graphic descriptions of killing, crude language and some things that reflect poorly on the Bush administration, like a comparison of how long it took various countries to get their troops bulletproof vests. A critical reference to Donald H. Rumsfeld, the former defense secretary, was cut, along with a line from Cpl. Sean Huze saying of soldiers: “Your purpose is to kill.”

Seven characters were added, including Maj. Tammy Duckworth of the National Guard, a helicopter pilot who lost both legs and returned from the war to run for Congress last fall. The second version gives First Lt. Melissa Stockwell, who lost her left leg from the knee down, a new closing line: “But I’d go back. I wouldn’t want to go back, but I would go.”

On March 13, Mr. Canty met with the class. He told us “no matter what we do, it’s not happening,” said one of the students, Erin Clancy. That night, on a Facebook chat group called “Support the Troops in Iraq,” a poster named GabriellaAF, who several students said was their classmate Gabby, posted a celebratory note saying, “We got the show canceled!!” (Reached by telephone, Gabby’s mother, Barbara Alessi, said she had no knowledge of the play or her daughter’s involvement in it.) In classrooms, teenage centers and at dinner tables around town, the drama students entertained the idea of staging the show at a local church, or perhaps al fresco just outside the school grounds. One possibility was Wilton Presbyterian Church.

“I would want to read the script before having it performed here, but from what I understand from the students who wrote it, they didn’t have a political agenda,” said the Rev. Jane Field, the church’s youth minister.

Mr. Canty said he had never discouraged the students from continuing to work on the play on their own. But Ms. Dickinson said he told her “we may not do the play outside of the four walls of the classroom,” adding, “I can’t have anything to do with it because we’re not allowed to perform the play and I have to stand behind my building principal.”

Parents, even those who are critical of the decision, say the episode is out of character for a school system that is among the attractions of Wilton, a well-off town of 18,000 about an hour’s drive from Manhattan.

“The sad thing was this thing was a missed opportunity for growth from a school that I really have tremendous regard for,” said Emmalisa Lesica, whose son was in the play. Given the age of the performers and their peers who might have seen the show, she noted, “if we ended up in a further state of war, wouldn’t they be the next ones drafted or who choose to go to war? Why wouldn’t you let them know what this is about?”

The latest draft of the script opens with the words of Pvt. Nicholas Madaras, the Wilton graduate who died last September and whose memory the town plans to soon honor by naming a soccer field for him. In a letter he wrote to the local paper last May, Private Madaras said Baqubah, north of Baghdad, sometimes “feels like you are on another planet,” and speaks wistfully about the life he left behind in Wilton.

“I never thought I’d ever say this, but I miss being in high school,” he wrote. “High school is really the foundation for the rest of your life, whether teenagers want to believe it or not.”

Private Madaras’s parents said they had not read the play, and had no desire to meddle in a school matter. But his mother, Shalini Madaras, added, “We always like to think about him being part of us, and people talking about him, I think it’s wonderful.”
http://www.nytimes.com/2007/03/24/ny...4drama.html?hp





Town ‘n’ gown

That Free Song May Lead to a Stiff Fine

Well, maybe. Either way, the recording industry is targeting college students.
Jay Cridlin

TAMPA - As she mounted her bicycle outside the University of South Florida library, Emily Adkins spun the dial on her iPod to pick a tune for the ride.

The 21-year-old senior gets most of her music online, either by trading with friends or through the file-sharing program BitTorrent, where she can download entire albums in a snap. If she buys CDs, she buys them used. Her most recent purchase: The Decemberists' Castaways and Cutouts, an album released in 2002.

Adkins isn't apologetic about downloading free music, and she doesn't seem worried about getting caught. "You read about it happening in the newspaper," she said. "I guess it's possible, but it just seems so weird."

Weird or not, it's not only possible, it's becoming more likely every month.

On Feb. 28, the Recording Industry Association of America - the trade group of the record business - accused 400 students at 13 universities, including 31 at the University of South Florida, of illegally sharing and downloading tens of thousands of songs.
According to the RIAA, those 31 USF students had shared 17,568 songs, most during January. One was caught sharing 1,957 songs.

The RIAA's letters note that each illegally shared song carries a minimum fine of $750. Should their cases go to court, those 31 students - whose names the school is withholding due to privacy laws - would face a combined fine of $13.1-million.

Another 400 letters will go out to more universities later this month, with 400 more to follow each month after that. The mass mailings represent a "significant escalation" in the ongoing war between the RIAA and college students, said RIAA spokeswoman Jenni Engebretsen, "because the problem is so acute in the university community."

But will this crackdown be enough to actually scare students from using file-sharing programs like Ares, LimeWire, KaZaa and BitTorrent to download music for free?

"Pretty much everybody I know has downloaded music," said sophomore music major Jesus Izquierdo, 19. "It's like drinking on campus. It's still going to happen."

Indeed, USF has received the 11th-most file-sharing complaints from the RIAA during the 2006-07 year, with 490 through mid February.

To those students who do find themselves in the RIAA's crosshairs, the threat of litigation is intimidating. They're told they have 20 days to pay a fine, or else they'll be sued in federal court for hundreds of thousands of dollars.

But if any of them are actually found guilty, they would be the first. Of the 18,000 individual copyright infringement lawsuits the RIAA has filed since September 2003 - including 1,000 against college students - exactly zero have come to trial. About 5,700 were settled out of court.

That means the scariest part of the letters - the bit about the $750-per-song fine - has never actually come into play. Instead, the accused students are asked to settle for a greatly reduced sum - reportedly around $4,000 - which goes not to artists or record labels, but back into the RIAA's anti-piracy coffers.

The RIAA's critics think the settlement letters are a form of bullying.

"That's exactly the intent of it: 'Pay early, pay quickly and make this campaign easy for us, rather than fighting back,' " said Corynne McSherry, a staff attorney with the Electronic Frontier Foundation, a critic of the RIAA's war on peer-to-peer networks.

Another problem, McSherry says, is that students aren't given enough time to weigh their legal rights. "It takes a while to realize the situation, figure out what's going on, what your options are and contact legal counsel," she said. "Even if you want to fight back, only having 20 days to make that decision is very difficult."

In many instances, those cases that do go to court end up going nowhere.

Adam and Marie Litvinchyk of Lutz received a warning letter from the RIAA four years ago, accusing their three teenage children of swapping music files on KaZaa. They were offered the chance to settle their case for $5,000. The Litvinchyks placed one phone call to the RIAA, then moved on with their lives.

"I got a letter a couple of years later, and I ignored that one, too," said Marie, 40, two of whose children now attend Remington College. "I'm not paying $5,000 because my kids downloaded a song. Whoever owns KaZaa should be paying for that. That's their fault."

On Feb. 27, record companies filed a copyright infringement complaint against the Litvinchyks in the Middle District of Florida. Informed of this latest complaint, Marie said it was news to her: She hadn't heard anything in months.

The RIAA says its campaign against students is as much about publicity as it is about catching actual downloaders. "Anyone engaged in music theft is a potential recipient of one of these letters," Engebretsen said.

Thirty-one students represents only about 0.07 percent of USF's undergraduate population. But the publicity these letters generate may help instill in students the fear that they could be next - even if it's 99.93 percent likely that they won't.

Sophomore Sean Alexander isn't a regular downloader, but he has used LimeWire. He's also a musician who makes his own songs available for download on his MySpace page.

"These artists are already rich enough. Why are they getting upset that people want to hear their music?" he said. "If somebody was getting fined thousands of dollars for just wanting to hear my music, I would be crushed."

Still, he believes most college students know downloading free music is against the law. And during this interview, he asked which details of his own downloading habits might make it into print.

"I'm just curious," he said. "I don't want the RIAA to see it."

USF itself doesn't face any legal action from the RIAA, but it complies with the RIAA's request to forward the letters to students so that they may settle the cases as swiftly and quietly as possible, said USF general counsel Colin Mailloux.

Unfortunately, that meant Mailloux and the USF academic computing staff had to launch their own mini-investigation into illegal downloads, poring through weeks' worth of data to verify the RIAA's claims. It took two days before the school could alert all 31 students; Mailloux then had to field calls from about a dozen panicked students asking what to do next. "It definitely is a drain of resources," he said.

In a March 8 hearing on the issue, Congress slammed universities across the nation for not doing enough to stop illegal downloads.

"Current law isn't giving universities enough incentives to stop piracy," said Rep. Howard L. Berman, (D-Calif.), chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property.

Added Rep. Ric Keller (R-Orlando): "I would say the hammer's coming. I want to see universities get serious about it."

USF is now debating whether to take a more proactive role in preventing illegal downloads. Administrators from across the university have met to brainstorm ways to make students more aware of the risks of illegal file-sharing - dorm announcements, mass mailings, maybe a section on copyright violations in the school's "University Experience" course for first-year students. The school could start monitoring all peer-to-peer traffic and high-bandwidth usage.

Other schools have gone even further. The University of Florida uses a program called Icarus that kicks students who use peer-to-peer software offline. Others have suggested instituting a nationwide fee, similar to a student activities fee, for college students to download music.

"Everything is on the table right now," said Alex Campoe, USF's information security manager.

However, cautioned Mailloux: "We can't protect the students against everything. At some point, they have to be responsible, too."

Angie Drobnic Holan Times research contributed to this story.
http://www.sptimes.com/2007/03/19/Hi...g_may_le.shtml





UNL Can't Identify Most of its 36 Alleged Illegal Downloaders
AP

The University of Nebraska-Lincoln can't figure out which 36 student names it should turn over to the Recording Industry Association of America for lawsuits alleging illegal file-sharing.

The university stores the computer records for only 31 days, so it's been able to identify only 13 of the 36 users.

The university ranks third nationally for the number of complaints it has received from the recording industry trade group for music illegally downloaded on campus computer networks.

Last month, the association said it intended to sue more students and others on campuses in the next three months than it has in the past three years.

It said it would send 400 letters a month to computer users suspected of copyright infringement, including 36 at UNL.

UNL and the other universities were asked to identify their guilty students based on association lists of computers known to have visited file-sharing sites.

But because UNL has been regularly purging its records, the names of the 23 alleged music pirates can't be determined, said UNL network security analyst Zac Reimer.

"There's nothing we can do," Reimer said.

An association spokeswoman, Jenni Engebretsen, said UNL should have saved the records longer, as do other universities.

"Reasonable data retention policies are essential," she said. "One would think universities would understand the need to retain these records."

She said the association is processing responses from the 13 students UNL did identify, but it's not yet known whether they'll settle with the association or go to court.

Under UNL policy, almost every time a campus computer user turns on his or her machine, it is given a new Internet protocol address, which allows the association to track a user's online activity.

The university saves those IP address records for 31 days, then deletes them.

"We can't re-create data that we don't have anymore," UNL spokeswoman Kelly Bartling said, so it's impossible to find the last 23.

The university isn't planning to change the records policy, Reimer said, in part because the association probably will begin asking for names in the same months the file-sharing occurred.

"We've never had any problems with the 31 days," he said.

Last fall, UNL began a public relations campaign in which students were advised the practice was illegal and could lead to university disciplinary action.

The school has a three strikes policy: First, a notice to music pirates they are violating university policy, then loss of Internet access, and finally, a visit to the school's disciplinary board.
http://www.beatricedailysun.com/arti.../d8o0isdo0.txt





U of Nebraska Can’t Track Down Downloading Students

The Recording Industry Association of America would love to give University of Nebraska students who are illegally downloading music a chance to pay up before taking them to court, but they can't find out who they are, the lobbying group says. The Omaha World-Herald reports that the RIAA has sent 36 letters to Nebraska students they have found to be illegally downloading music, but due to system programming, they can only find nine of the students.

"Probably not," said Walter Weir, the university's chief information officer, when asked if the recording industry could locate the remaining students in some other way. "If they can't give us any more information, I don't know how in the heck anyone can find 'em."

The university's system was unintentionally designed to automatically change a computer's Internet protocol address each time that computer is turned on. The university only saves a record of these "IP addresses" for about a month. It's the only tool the University of Nebraska at Lincoln and the recording industry have to find the students.

RIAA spokeswoman Jenni Engebretsen has been critical of UNL for failing to keep computer records that would have made it easy to track down the UNL offenders.

"One would think universities would understand the need to retain these records," she said.

The industry has sent more than 1,000 "cease and desist" complaints to UNL during the current school year, more than all but two other U.S. universities.

To make matters worse, the university wants to be reimbursed $11 for each warning letter it processes.

"We're spending taxpayer dollars tracking down RIAA problems," Weir said. "Are we an agent of the RIAA? Why aren't they paying us for this?"

That request was rebuked by the RIAA. "It is neither practical nor appropriate for us to entertain a reimbursement request," said Engebretsen.

The university is researching installing software that would hinder students' ability to illegally download music.
http://education.zdnet.com/?p=926





UW Warns Music Sharers
Nick Penzenstadler

The University of Wisconsin went against the national trends Friday by warning students about its policy regarding illegal file sharing but refusing to forward settlement letters to violators from the Recording Industry Association of America.

According to Brian Rust, communications manager for the UW Division of Information Technology, the university sent an e-mail reminding students of the “appropriate use guidelines” for downloading to protect them from what could amount to thousands of dollars in out-of-court settlements.

“These settlement letters are an attempt to short circuit the legal process to rely on universities to be their legal agent,” Rust said. “It basically says, you are illegally downloading and/or sharing information; and before we take legal action, you can remedy this situation and pay for the music or movies that you’ve downloaded.”

Rust said DoIT receives about 10 to 20 cease-and-desist notices per day, which they are obligated to forward to their users. The notices are only warnings, Rust added, but the settlement letters brought on by the Recording Industry Association of America are more of a threat.

The settlements are usually around $700 per instance, but could be as much as $3,500, according to Rust.

“So you can imagine some people have probably come to that website with their credit card and paid it,” Rust said. “We do not want to be a party to that; we are not the legal agent for the recording agency, nor do we aspire to (be).”

Liz Kennedy, RIAA director of communications, said the association does not disclose the dollar amounts of the settlements, which vary by case.

Once the RIAA files litigation through an attorney, individual users are notified via a subpoena, which Rust pointed out the university has not received as of yet.

However, Kennedy said pressure is mounting from the RIAA to cut down on the illegal file sharing with a recent campaign, which has increased its lawsuits threefold at universities as of Feb. 28.

Dean of Students Lori Berquam said she understands the interest of the recording industry but is concerned with the targeting.

“Housing is kind of like easy pickings — it’s like they are any easy target because there are 5,000 of them on our campus,” Berquam said. “My fear is that this is just the residence folks are being targeted, but … who knows about the rest of the country.”
When notified of the e-mail sent to students Friday, RIAA Communications Director Jenni Engebretsen issued a statement in opposition to UW’s action.

“It’s almost unimaginable that a university would be unwilling to help a student avoid a lawsuit,” Engebretsen said in an e-mail to The Badger Herald. “Our pre-litigation settlement letters are offered as a benefit to university students to allow them to settle claims early, at a substantially discounted sum and off the public record.”

If students do receive a subpoena notice of being sued after being warned by the cease-and-desist letter, Rust said they will have their Internet access suspended and their names forwarded to the dean of students for an official review.

Berquam said the office will have conversations with students who violate downloading agreements, but she added the main focus should be on education.

“The bottom line on our campus is how do we educate our students about this,” Berquam said. “We need to let them know it’s illegal and opens them up to a pretty big lawsuit.”

And Paul Evans, director of University Housing, said students needed to read the message on their computers and restart before they could continue using the Internet in any UW dormitory.

“I think there’s a lot of downloading of copyrighted materials,” Evans said. “I think if students are doing it, they should be careful. There are certainly people looking out for it.”
http://badgerherald.com/news/2007/03...usic_share.php





RIAA University Campaign Sputters: Group Asked To Pay Up For Wasting School's Time

Lately, the RIAA has been on a high-profile campaign to get college students that the RIAA believes have been involved in illegal file trading to settle lawsuits against them at a "discount". As part of this strategy, the company has tried to enlist universities to help them identify and turn over the names of offending students. But it's heartening to see that some universities aren't spinelessly acquiescing to the RIAA's demands. The University of Wisconsin has told the RIAA that it has no obligation to rat its students out unless it's compelled to do so by a subpoena.

Meanwhile, the University of Nebraska has told the RIAA that it can't help them identify many of the students accused of file trading. The school's system changes a computer's IP address each time its turned on, and it only keeps this information for month. After that month, the school has no way of associating an IP address with a computer or its user. The RIAA is angry about this, and a spokesman for the group criticized the university for not understanding "the need to retain these records". This is a ridiculous complaint. The university doesn't have a need to retain these records, and there's no reason it should do so out of some obligation to the RIAA.

If there were any doubt that the university is really irritated by the RIAA's requests, it has requested that the RIAA pay the university to reimburse its expenses from dealing with this (good luck with that).

If all of this back and forth sounds familiar, it's because it very closely resembles what happened a few years ago when the RIAA tried getting ISPs to share data on their users. Fortunately, the ISPs stood up for their users and told the RIAA to get lost. It's too bad the group didn't seem to learn its lesson.
http://www.techdirt.com/articles/20070320/171228.shtml





Points

Explaining the Crackdown on Student Downloading
Mitch Bainwol and Cary Sherman

As many in the higher education community are well aware from news coverage here and elsewhere, the Recording Industry Association of America (RIAA), on behalf of its member labels, recently initiated a new process for lawsuits against computer users who engage in illegal file-trafficking of copyrighted content on peer-to-peer (P2P) systems. In the new round of lawsuits, 400 of these legal actions were directed at college and university students around the country. The inclusion of so many students was unprecedented. Unfortunately, it was also necessary.

In the three and a half years since we first began suing individuals for illegal file-trafficking, we have witnessed an immense growth in national awareness of this problem. Today, virtually no one, particularly technology savvy students, can claim not to know that the online “sharing” of copyrighted music, movies, software and other works is illegal. By now, there is broad understanding of the impact from this activity, including billions of dollars in lost revenue, millions of dollars in lost taxes, thousands of lost jobs, and entire industries struggling to grow viable legitimate online market places that benefit consumers against a backdrop of massive theft.

We have made great progress — both in holding responsible the illicit businesses profiting from copyright infringement and in deterring many individuals from engaging in illegal downloading behavior. Nevertheless, illegal file-trafficking remains a significant and disproportionate problem on college campuses. A recent survey by Student Monitor from spring 2006 found that more than half of college students download music and movies illegally, and according to the market research firm NPD, college students alone accounted for more than 1.3 billion illegal music downloads in 2006.

We know some in the university community believe these figures overstate the contribution of college students to the illegal file-trafficking problem today. Yet new data confirms that students are more prone to engaging in this illegal activity than the population at large. While college students represented only 10 percent of the sample in the online NPD study, they accounted for 26 percent of all music downloading on P2P networks and 21 percent of all P2P users in 2006. Furthermore, college students surveyed by NPD reported that more than two-thirds of all the music they acquired was obtained illegally.

Moreover, our focus on university students is not detracting from our continuing enforcement efforts against individuals using commercial Internet Service Provider (ISP) accounts to engage in this same behavior. Indeed, we have asked ISPs to participate in the same new process that we have implemented for university network users.

Yet this is about far more than the size of a particular slice of the pie. This is about a generation of music fans. College students used to be the music industry’s best customers. Now, finding a record store still in business anywhere near a campus is a difficult assignment at best. It’s not just the loss of current sales that concerns us, but the habits formed in college that will stay with these students for a lifetime. This is a teachable moment — an opportunity to educate these particular students about the importance of music in their lives and the importance of respecting and valuing music as intellectual property.

The prevalence of this activity on our college campuses should be as unacceptable to universities as it is to us. These networks are intended for educational and research purposes. These are the environments where students receive the guidance necessary to become responsible citizens. Institutions of higher education, of all places, are where people should learn about the value of intellectual property and the importance of protecting it.

The fact that students continue to engage in this behavior is particularly egregious given the extraordinary lengths to which we have gone to address the problem. Our approach always has been and continues to be collaborative — partnering with and appealing to the higher motives of universities. We have met personally with university administrators. We have provided both instructional material and educational resources, including an orientation video to help deter illegal downloading. We have worked productively through organizations like the Joint Committee of the Higher Education and Entertainment Communities. We have participated in Congressional hearings.

We have informed schools of effective network technologies to inhibit illegal activity. We have licensed legitimate music services at steeply discounted rates for college students and helped to arrange partnership opportunities between universities and legitimate services. We have stepped up our notice program to alert schools and students of infringing activity. And, of course, we have as a last resort brought suit against individual file-traffickers.

With this latest round of lawsuits, we have initiated a new pre-lawsuit settlement program intended to allow students to voluntarily settle claims before a suit is actually filed. We have asked for school administrations’ assistance in passing our letters on to students in order to give them the opportunity to settle a claim at a discounted rate and before a public record is created. This is a program initiated in part as a response to defendants who told us they would like this opportunity, and we are encouraged by the swift response of so many schools. Lawsuits are by no means our desired course of action. But when the problem continues to persist, year after year, we are left with no choice.

An op-ed writer recently published in this forum described this approach as bullying. There is a big difference between using “bullying tactics” and using a “bully pulpit” to make an important point. Should we ignore this problem and stand silent as entire generations of students learn to steal? Should we not point out that administrators are brushing off responsibility, choosing not to exercise their moral leadership on this issue? This problem is anything but ours and ours alone. If music is stolen with such impunity, what makes term papers any different? Yet we know university administrators very aggressively pursue plagiarism. Why would universities — so prolific in the creation of intellectual capital themselves — not apply the same high standards to intellectual property of all kinds? This is, after all, a segment of our economy responsible for more than 6 percent of our nation’s GDP.

Furthermore, a Business Software Alliance study conducted last year found that 86 percent of managers say that the file-sharing attitudes and behaviors of applicants affect on their hiring decisions. Don’t administrators have an obligation to prepare students for the real world, where theft is simply not tolerated? Our strategy is not to bully but to point out that the self-interest of universities lies remarkably close to the interests of the entertainment industries whose products are being looted. And, most importantly, we have sought to do so in a collaborative way.

It doesn’t have to be like this. We take this opportunity to once again ask schools to be proactive, to step up and accept responsibility for the activity of their students on their network — not legal responsibility, but moral responsibility, as educators, as organizations transmitting values. Turning a blind eye will not make the problem go away; it will further ingrain in students the belief that a costly and illegal pastime is sanctioned, and even facilitated, by school administrations.

The necessary steps are simple. First, implement a network technical solution. Products like Red Lambda’s cGrid are promising as effective and comprehensive solutions that maintain the integrity, security, and legal use of school computing systems without threatening student privacy. Some schools have used these products to block the use of P2P entirely, realizing that the overwhelming, if not sole, use of these applications on campus is to illegally download and distribute copyrighted works. For schools that do not wish to prohibit entirely access to P2P applications, products such as Audible Magic’s CopySense can be used to filter illegal P2P traffic, again, without impinging on student privacy.

Second, offer a legal online service to give students an inexpensive alternative to stealing. One such service, Ruckus, is funded through advertising and is completely free to users. When schools increasingly provide their students with amenities like cable TV, there is simply no reason not to offer them cheap or free legal access to the music they crave.

Third, take appropriate and consistent disciplinary action when students are found to be engaging in infringing conduct online. This includes stopping and punishing such activity in dorms and on all Local Area Networks throughout a school’s computing system.

Some administrations have embraced these solutions, engaged in productive dialogue with us to address this problem, and begun to see positive results. We thank these schools and commend them for their responsible actions.

Yet the vast majority of institutions still have not come to grips with the need to take appropriate action. As we continue our necessary enforcement measures — including our notices and pre-lawsuit settlement initiative — and as Congress continues to monitor this issue with a watchful eye, we hope these schools will fully realize the harm their inaction causes them and their students. We call upon them to do their part to address this continuing, mutual problem.
http://insidehighered.com/views/2007/03/15/sherman


Counterpoints

Shame on Inside Higher Ed…

…to allow itself to be used as a mouthpiece for commercially driven industry propaganda. Who on your staff ‘invited” these paid provocateurs to write, and decided that Inside Higher Ed’s time and money should be spent to aid them in promoting their industry agenda? - MartinH


The Problem is not the Students.
Brian Boyko

Any college administrator or professor needs to educate students; not feed them this BS story.

If you want to educate people in social responsibility, tell them not to buy CDs from RIAA member labels, that way there will be less money in RIAA coffers to sue their friends.

I used to buy RIAA music; but I haven’t bought an album from them in 8 years — not because of piracy but because I don’t want one red cent to go to them.

I feel so strongly about it that if I was enrolled at an institution of higher learning and they entered into a deal with the RIAA to use student fees to pay for music I find morally repugnant (because of the RIAA, not because of the lyrics) that I would immediately drop out of that school and transfer to another one after making clear that that is the reason I’m leaving the school.


“Copyright Infringement” is Not “Theft.”
D. Moore

The RIAA’s bullying only exacerbates their already untenable situation. I hope that school administrators look past this ridiculous editorial to see the RIAA’s tactics for what they are: an attack on civil liberties.


Stifling Innovation with Copyright
Adrian Cachinero

I’ll make it brief. Technology and the internet have allowed for momentous growth and innovation. Clearly, there are limitless possibilities with the internet. P2P is one of these examples. P2P technology reduces bandwidth costs for data servers, to name but one benefit.

If this technology is used to share copyrighted material, then quite frankly it’s up to the RIAA to do something about rethinking their business model. The government and the legal framework are not in place to satisfy the cravings of decadent record labels.

I can only remind the readers that Hollywood was borne out of ‘copyright theft’. In order to avoid Edison’s ridiculous tariffs on camera technology, the movie industry moved to California. I cannot start to imagine how much money they owe the Edison estate if they were truly keen on preserving copyright ‘law’.

It’s also noteworthily hypocritical of the RIAA to talk of copyright theft, when the contracts they cajole their artists into signing appropriate all the intellectual property that should belong to the artist.

The Old Media industry is dying and this will not change unless they stop trying to stifle innovation and attempt to make a profit with the new tech. The consumer is certainly not responsible if Old Media is incapable of doing this. The consumer is certainly not a criminal.

So share all you like. Old Media is on it’s way out. I just wish it would hurry up already.
http://insidehighered.com/views/2007/03/15/sherman





Judge's Decision Leaves RIAA With Lose-Lose Situation in Elektra v. Santangelo
Eric Bangeman

The case of Elektra v. Santangelo has been one of the more closely followed cases in the RIAA's crusade against suspected file sharers, due in no small part to the aggressiveness of Patti Santangelo's defense. Ray Beckerman is reporting that Judge Colleen McMahon has denied the RIAA's motion to dismiss the case without prejudice, ruling that the case must either proceed to trial or be dismissed with prejudice.

It's a noteworthy ruling because if the case is dismissed with prejudice, Santangelo would be considered the prevailing party and would likely be entitled to an award of attorneys' fees, as in Capitol v. Foster. In her ruling, Judge McMahon concluded that "no conceivable interest of justice would be served by permitting this case to be dismissed without prejudice against defendant." Instead, the defendant should have a shot at vindication via a trial or have the case dismissed with prejudice.

"This case is two years old," wrote Judge McMahon. "There has been extensive fact discovery. After taking this discovery, either plaintiffs want to make their case that Mrs. Santangelo is guilty of contributory copyright infringement or they do not."

The choice is clear-cut for the RIAA: either proceed with a full-blown jury trial in which they will have to convince a jury that the defendant is guilty of secondary infringement—making the same argument that the judge in Capitol v. Foster didn't buy—or agree to an order dismissing the action with prejudice. (For a further discussion of secondary infringement, see earlier Capitol v. Foster coverage.)

Patti Santangelo, a divorced mother of five, was sued in 2005 after MediaSentry, the RIAA's investigative arm, found music in a shared folder under an IP that Santangelo's ISP said was assigned to her account at that time. Santangelo denied any knowledge of the alleged file-sharing, but the RIAA pressed ahead with the case.

After a barrage of legal filings, the RIAA then sued two of her children last November: Michelle, age 20, and Robert, age 16 (and 11 years old when the infringement allegedly took place). The new lawsuit claimed that Michelle had admitted to illicit downloading and that Robert's best friend had implicated him. At the same time, the RIAA continued to press its case that Patti Santangelo was guilty of secondary infringement. Robert has since filed an answer to the RIAA's lawsuit, denying any wrongdoing and demanding a trial by jury.

The ruling leaves the RIAA between a rock and a hard place, a position that it may find itself in more frequently as such cases move through the court system.
http://arstechnica.com/news.ars/post...antangelo.html





RIAA Wins Worst Company In America 2007

The RIAA won The Consumerist's "Worst Company In America 2007" reader poll.

We predicted an RIAA landlslide, but they only managed a 53.8% majority over Halliburton's 46.2%

The message is clear. The internet cares deeply about being able to download music illegally.

Congrats to you, oh RIAA! Your lucky golden shit trophy will be arriving at your headquarters shortly.

Check out the BIG BOARD to see how the 15 other companies fared.

Here's some RIAA phone numbers so you can call them up and offer your congratulations.
http://consumerist.com/consumer/wors...007-245235.php





RIAA Updates Mission Statement to Reflect Priorities
Brian Briggs

The RIAA has updated its mission statement from "Our mission is to foster a business and legal climate that supports and promotes our members' creative and financial vitality" to "Our mission is to maximize hatred for the music industry by using creative legal and innovative technological methods which will further destroy our member's creativity and financial vitality." The organization hopes the change will more accurately reflect their long-term goals.

Chairman and CEO of the RIAA Mitch Bainwol said, "This change allows us to focus on our goals of ridding ourselves of annoying artists and consumers completely. The Internet has made this possible. In the days before the Internet only a few artists and industry insiders hated the RIAA, now hatred for the RIAA is at an all-time high."

Bainwol explained that a committee formed three years ago has developed most of the ideas used to foment the growing hatred for the organization.

"We're proud of them. When more people hate you than the President you know you're doing something right," Bainwol said.

Innovative methods for producing more hatred from consumers and artists in the future include:

• Suing a family in a refugee camp in Darfur, who doesn't even know what a computer is, for sharing music illegally.
• Running a public service announcement campaign which will equate downloading music to molesting children.
• Make charitable donations to Hitler Youth and KKK.
• Seizing iPods from troops in Iraq and searching them for illegal music. Filing suit against violators.

"With strategies like this we're bound to reach our goals in five years. Maybe even sooner," said Bainwol.


Related News

RIAA Makes Big Donation to SETI Project; Hopes to Sue Aliens

RIAA Offers Lawsuit Family Packs

RIAA Wants Background Checks on CD-RW Buyers


The RIAA was recently voted the worst company in America in a recent online poll, narrowly beating out Halliburton. Upset by the news and the RIAAs plans, Halliburton announced plans of its own.

CEO Bob Johnson said that his company would begin infecting elephants and other endangered species with the AIDS virus then shooting them from giant catapults onto orphanages and children's wards of hospitals.

"If that doesn't build the hate, then I don't know what will," said Johnson.
http://www.bbspot.com/News/2007/03/r...statement.html





Microsoft Partner: Vista Less Secure Than XP
Tom Espiner

Security company Kaspersky claimed that Vista's User Account Control (UAC), the system of user privileges that can be used to restrict users' administrative rights, will be so annoying that users will disable it.

Natalya Kaspersky, the company's chief executive, said that without UAC, Vista will be less secure than Windows XP SP2. "There's a question mark if Vista security has improved, or has really dropped down," she said to our sister site ZDNet UK at the CeBIT show in Hanover last week.

Kaspersky provides one of the scanning engines in ForeFront, Microsoft's business security product.

Arno Edelmann, business security product manager for Microsoft, said that Kaspersky's claims were surprising. "We have a thriving community of partners, and Kasperky is one of our best partners," Edelmann told ZDNet UK. "I find their statements a little strange because they have one of the best insights into Microsoft security products."

After being roundly criticised over its security strategy in the past, Microsoft has done a lot of work to improve its approach and has been touting Vista as its most secure operating system. But Kaspersky confirmed that her analysts had found five ways to bypass Vista's UAC, and that malware writers will find more security holes.

Kaspersky also added her voice to Symantec and McAfee complaints that PatchGuard, designed to protect the Vista kernel, is hindering security companies' work.

"PatchGuard doesn't allow legitimate security vendors to do what we used to do," said Kaspersky.

Symantec has claimed that PatchGuard is hurting security vendors more than it was hurting malware writers. Bruce McCorkendale, a chief engineer at Symantec, said: "There are types of security policies and next-generation security products that can only work through some of the mechanisms that PatchGuard prohibits."

Eugene Kaspersky, the company founder, said last Thursday that while vendors had to interact with Vista legitimately, hackers were under no such constraints.

"Cybercriminals seem not to care about Vista licensing," said Eugene Kaspersky. "They don't need to follow regulations or be certified by Microsoft -- antivirus vendors do."
http://www.zdnet.com.au/news/softwar...9274261,00.htm





Bots Surge Ahead in March

The number of compromised computers that are part of a centrally controlled bot net has tripled in the past two weeks, according to data gathered by the Shadowserver Foundation, a bot-net takedown group.

The weekly tally of bot-infected PCs tracked by the group rose to nearly 1.2 million this week, up from less than 400,000 infected machines two weeks ago. The surge reversed a sudden drop in infected systems--from 500,000 to less than 400,000--last December.

The threat to Internet users from bot nets has steadily increased over the past few years. Increasingly, computer systems in China have become infected with bot software and used to attack or spam other targets, according to the latest Internet Security Threat Report published by Symantec, the owner of SecurityFocus. Spammers have taken a shine to bot nets as a way to reliably send stock-touting e-mail campaigns and other mass mailings of junk advertisements. Worms are rapidly being replaced by Trojan horse programs, such as the misnamed Storm Worm, that use a bot net to spam out more copies of the malicious code.

Between December 2006 and March 2007, the Shadowserver Foundation's tally of bot-infected computers has never risen above 600,000.
http://www.securityfocus.com/brief/466





Adopting Ubuntu

Linux Switch Can be Painless, Free
David Conabree

The author is a regular reviewer of new high-tech gear and longtime computer user.

In all the "switcher" TV ads that the folks in Apple's marketing department have come up with, the choice is always the same. Go with the clunky and complicated Microsoft Windows machine, or pick up the hip and sleek designer Apple computer running the Mac OS (hip and sleek short form for "operating system"). They're good ads — heck, I've even gone to Apple's website just to watch them.

But there is another choice out there that a lot of people simply aren't aware of because there's no slick marketing campaign behind it.

For many people, e-mail, web surfing, picture editing, listening to music, making spreadsheets and basic word processing are just about all they do with their computers. Today's Macs and Windows PCs are impressive machines indeed, but their power — and price — can be overkill for the average computer user. If you're looking for a new computer and you're not sure whether to go Windows or Mac, I'd suggest also paying some attention to the "L" word.

No, not that "L" word. I'm talking about Linux.

A brief history of Linux

For those of you not familiar with the world of Linux, let me give you the Coles Notes version. Some time ago, a rather creative software engineer in Finland decided he wanted to build a new computer operating system in his spare time. In what ended up earning him a near god-like status in the "geek" hierarchy, Linus Torvalds and a growing group of volunteers eventually did the highly improbable, putting together a new kind of operating system that could go head to head with the software that companies like Microsoft and Apple have spent millions developing.

Torvalds then went and gave his software, called Linux, away to anyone who wanted to use it or tinker with it, so long as they agreed to openly share any changes or improvements they made. Since that time, dozens of flavours of the Linux operating systems have come out, and the majority of them are utterly free. They're also stable, secure, easy to use, and generally not plagued by spyware and viruses the way commercial operating systems are.

Now, back to our story.

Ubuntu

Linux, and more specifically the free "Ubuntu" version, has come a long way in the past few years and is well worth considering for basic computing.

Best of all, it won't cost you a penny to try it out.

Like many Linux distributions, the entire Ubuntu operating system is available as a free "Live CD" you can download from the internet. Just burn the file [called an "ISO"] to a CD, and that's it ... you're ready to try Ubuntu on any home or business PC. Alternatively, you can pay a small shipping fee and have an Ubuntu disc delivered to you by mail.

Either way, reboot your Windows machine with the disc in the CD drive, and rather than starting up Windows, the computer will run Ubuntu directly from the CD. This means that your entire Windows installation, including all of your personal files, are left entirely untouched — nothing is "installed" over the existing content on your machine. Once you're finished trying Ubuntu, just take the CD out, reboot and your PC will start Windows exactly as it did before.

So what is it like?

Amazingly, Ubuntu feels much like Windows. I have converted several friends to Ubuntu over the years and every one of them has had the same opinion — everything is where you think it should be if you're familiar with a Windows computer.

Software

The Linux operating system comes with great open-source software, and the icons for them are right there on your desktop where you'd expect to find them. Want to write a memo? Ubuntu comes with Open Office, a full (and free) office software suite that works with Microsoft documents, such as spreadsheets, text files and presentations. For browsing the internet, you get Firefox, the same browser I use now for both my Windows and Mac machines. Play music in the Rhythmbox Media Player or play your videos in Totem — again, both included for free.

With the exception of gaming, which is limited, almost all of the average person's basic computing needs are well looked after with this package. I've used the last three versions of Ubuntu on my main portable web-surfing computer for years just to avoid viruses and spyware (as the vast majority of these nasty programs are written for Windows), and I have yet to be disappointed.

With the exception of gaming, which is very limited, almost all of the average person's basic computing needs are well looked after with this package.

If you like it, you can load Linux permanently onto a cheap "bare bones" PC from your local computer store, saving yourself a chunk of cash that you'd otherwise have to spend on an operating system, software and high-powered hardware. The Ubuntu software is free, although there is an option where you can buy several years' worth of support and troubleshooting if you feel you'll need some extra help.

I've also "resurrected" several old machines using Ubuntu and various other versions of Linux that are far more compact and less memory intensive than Windows or the Mac OS, so they don't need as much computing power to run them. It's amazing to see how quickly you can breathe new life into an old beige-box geezer and save it from the landfill, rather than junk it because it doesn't have the power to keep up with the latest commercial operating system.

The "Damn Small Linux" version actually comes in at a paltry 50MB for the entire operating system, complete with basic software to cover most daily computing needs — it's great for getting more use out of old desktops or notebooks.

Ubuntu, however, is far slicker and more powerful than these trimmed-down versions of Linux. If you're new to the Linux world and want to compare the experience to Windows or the Mac OS, I highly recommend Ubuntu as the best place to start. It will cost you nothing to try out, and you might just be surprised at how good "free" really is.
http://www.cbc.ca/news/background/tech/linux.html





MySpace Restrictions Upset Some Users
Brad Stone

Some users of MySpace feel as if their space is being invaded.

MySpace, the Web’s largest social network, has gradually been imposing limits on the software tools that users can embed in their pages, like music and video players that also deliver advertising or enable transactions.

At stake is the ability of MySpace, which is owned by the News Corporation, to ensure that it alone can commercially capitalize on its 90 million visitors each month.

But to some formerly enthusiastic MySpace users, the new restrictions hamper their abilities to design their pages and promote new projects.

“The reason why I am so bummed out about MySpace now is because recently they have been cutting down our freedom and taking away our rights slowly,” wrote Tila Tequila, a singer who is one of MySpace’s most popular and visible users, in a blog posting over the weekend. “MySpace will now only allow you to use ‘MySpace’ things.”

Ms. Tequila, born Tila Nguyen, has attracted attention by linking to more than 1.7 million friends on her MySpace page. To promote her first album, she recently added to her MySpace page a new music player and music store, called the Hoooka, created by Indie911, a Los Angeles-based start-up company.

Users listened to her music and played the accompanying videos 20,000 times over the weekend. But the Hoooka disappeared on Sunday after a MySpace founder, Tom Anderson, personally contacted Ms. Tequila to object, according to someone with direct knowledge of the dispute. She then vented her thoughts on her personal blog.

MySpace says that it will block these pieces of third-party software — also called widgets — when they lend themselves to violations of its terms of service, like the spread of pornography or copyrighted material. But it also objects to widgets that enable users to sell items or advertise without authorization, or without entering into a direct partnership with the company.

A MySpace spokeswoman said yesterday that the service did not remove anything from Ms. Tequila’s page. “A MySpace representative contacted her and told her that she had violated our terms of service in regards to commercial activity,” the spokeswoman said. “She removed the material herself, after realizing it was not appropriate for MySpace.”

Ms. Tequila and her representatives would not comment.

But Justin Goldberg, chief executive of Indie911, said MySpace’s actions undercut the notion that the social networks’ users have complete creative freedom. “We find it incredibly ironic and frustrating that a company that has built its assets on the back of its users is turning around and telling people they can’t do anything that violates terms of service,” he said.

“Why shouldn’t they call it FoxSpace? Or RupertSpace?” Mr. Goldberg said, referring to the News Corporation’s chief, Rupert Murdoch.

The tussle between MySpace and Indie911 underscores tensions between established Internet companies and the latest generation of Web start-ups. Without a critical mass of visitors to their sites, many of these smaller companies are devising strategies that involve clamping on to sites like MySpace and Facebook and trying to make money off their traffic.

MySpace, meanwhile, is trying to show that it can generate stable revenue. Google will pay it at least $900 million over the next three years to serve ads to the site’s users. And last fall, MySpace announced a partnership with Snocap, a San Francisco-based company, to sell music.

Perhaps not coincidentally, this year, MySpace blocked widgets from Revver, a video-sharing site that embeds advertisements in its clips, and Imeem, a music buying service.

“Our users weren’t happy,” said Dalton Caldwell, Imeem’s chief executive, who was nevertheless ambivalent about the MySpace ban because he thought the move might encourage his users to visit his site directly. “If MySpace isn’t really ‘their space’ after all, maybe users will think about things differently.”

In the past, MySpace executives have said that the service failed to block companies like YouTube that began successful businesses from MySpace’s pages.

“We probably should have stopped YouTube,” Michael Barrett, chief revenue officer for Fox Interactive Media, a part of the News Corporation, said in an interview in late February. “YouTube wouldn’t exist if it wasn’t for MySpace. We’ve created companies on our back.”

MySpace and its corporate parent say they want to find ways to support and exploit the growing widget economy. Last year, Fox Interactive Media introduced a service called Spring Widget. The service provides tools to help developers create widgets for use both on computer desktops and online networks like MySpace.

In a recent use of its technology, the studio behind the horror film “Dead Silence” used a Spring Widget tool on its promotional MySpace page to count down the minutes until the film’s release.

Fred Wilson, a New York-based venture capitalist who invests in social media companies, said the strategy showed that the News Corporation was trying to take advantage of growing interest in widgets while also trying to carefully control what made it onto MySpace.

But that could be a dangerous strategy, Mr. Wilson said.

“Every attempt everyone has ever made to try to dictate what a person’s Internet experience will be has ended up coming up empty,” he said. “You have to accept the fact that you are never going to be the be-all and end-all of everyone’s experience. They are one click away from everyone else on the Web.”

As for Ms. Tequila, who wrote on her blog that she was a personal friend of Mr. Anderson, the MySpace co-founder, she wrote that she felt bad about blasting the site but that she could not stay silent.

“You guys used to be so cool,” she wrote of MySpace. “Don’t turn into a corporate evil monster.”


Louise Story contributed reporting.
http://www.nytimes.com/2007/03/20/te...20myspace.html





Milestones

John W. Backus, 82, Fortran Developer, Dies
Steve Lohr

John W. Backus, who assembled and led the I.B.M. team that created Fortran, the first widely used programming language, which helped open the door to modern computing, died on Saturday at his home in Ashland, Ore. He was 82.

His daughter Karen Backus announced the death, saying the family did not know the cause, other than age.

Fortran, released in 1957, was “the turning point” in computer software, much as the microprocessor was a giant step forward in hardware, according to J.A.N. Lee, a leading computer historian.

Fortran changed the terms of communication between humans and computers, moving up a level to a language that was more comprehensible by humans. So Fortran, in computing vernacular, is considered the first successful higher-level language.

Mr. Backus and his youthful team, then all in their 20s and 30s, devised a programming language that resembled a combination of English shorthand and algebra. Fortran, short for Formula Translator, was very similar to the algebraic formulas that scientists and engineers used in their daily work. With some training, they were no longer dependent on a programming priesthood to translate their science and engineering problems into a language a computer would understand.

In an interview several years ago, Ken Thompson, who developed the Unix operating system at Bell Labs in 1969, observed that “95 percent of the people who programmed in the early years would never have done it without Fortran.”

He added: “It was a massive step.”

Fortran was also extremely efficient, running as fast as programs painstakingly hand-coded by the programming elite, who worked in arcane machine languages. This was a feat considered impossible before Fortran. It was achieved by the masterful design of the Fortran compiler, a program that captures the human intent of a program and recasts it in a way that a computer can process.

In the Fortran project, Mr. Backus tackled two fundamental problems in computing — how to make programming easier for humans, and how to structure the underlying code to make that possible. Mr. Backus continued to work on those challenges for much of his career, and he encouraged others as well.

“His contribution was immense, and it influenced the work of many, including me,” Frances Allen, a retired research fellow at I.B.M., said yesterday.

Mr. Backus was a bit of a maverick even as a teenager. He grew up in an affluent family in Wilmington, Del., the son of a stockbroker. He had a complicated, difficult relationship with his family, and he was a wayward student.

In a series of interviews in 2000 and 2001 in San Francisco, where he lived at the time, Mr. Backus recalled that his family had sent him to an exclusive private high school, the Hill School in Pennsylvania.

“The delight of that place was all the rules you could break,” he recalled.

After flunking out of the University of Virginia, Mr. Backus was drafted in 1943. But his scores on Army aptitude tests were so high that he was dispatched on government-financed programs to three universities, with his studies ranging from engineering to medicine.

After the war, Mr. Backus found his footing as a student at Columbia University and pursued an interest in mathematics, receiving his master’s degree in 1950. Shortly before he graduated, Mr. Backus wandered by the I.B.M. headquarters on Madison Avenue in New York, where one of its room-size electronic calculators was on display.

When a tour guide inquired, Mr. Backus mentioned that he was a graduate student in math; he was whisked upstairs and asked a series of questions Mr. Backus described as math “brain teasers.” It was an informal oral exam, with no recorded score.

He was hired on the spot. As what? “As a programmer,” Mr. Backus replied, shrugging. “That was the way it was done in those days.”

Back then, there was no field of computer science, no courses or schools. The first written reference to “software” as a computer term, as something distinct from hardware, did not come until 1958.

In 1953, frustrated by his experience of “hand-to-hand combat with the machine,” Mr. Backus was eager to somehow simplify programming. He wrote a brief note to his superior, asking to be allowed to head a research project with that goal. “I figured there had to be a better way,” he said.

Mr. Backus got approval and began hiring, one by one, until the team reached 10. It was an eclectic bunch that included a crystallographer, a cryptographer, a chess wizard, an employee on loan from United Aircraft, a researcher from the Massachusetts Institute of Technology and a young woman who joined the project straight out of Vassar College.

“They took anyone who seemed to have an aptitude for problem-solving skills — bridge players, chess players, even women,” Lois Haibt, the Vassar graduate, recalled in an interview in 2000.

Mr. Backus, colleagues said, managed the research team with a light hand. The hours were long but informal. Snowball fights relieved lengthy days of work in winter. I.B.M. had a system of rigid yearly performance reviews, which Mr. Backus deemed ill-suited for his programmers, so he ignored it. “We were the hackers of those days,” Richard Goldberg, a member of the Fortran team, recalled in an interview in 2000.

After Fortran, Mr. Backus developed, with Peter Naur, a Danish computer scientist, a notation for describing the structure of programming languages, much like grammar for natural languages. It became known as Backus-Naur form.

Later, Mr. Backus worked for years with a group at I.B.M. in an area called functional programming. The notion, Mr. Backus said, was to develop a system of programming that would focus more on describing the problem a person wanted the computer to solve and less on giving the computer step-by-step instructions.

“That field owes a lot to John Backus and his early efforts to promote it,” said Alex Aiken, a former researcher at I.B.M. who is now a professor at Stanford University.

In addition to his daughter Karen, of New York, Mr. Backus is survived by another daughter, Paula Backus, of Ashland, Ore.; and a brother, Cecil Backus, of Easton, Md.

His second wife, Barbara Stannard, died in 2004. His first marriage, to Marjorie Jamison, ended in divorce.

It was Mr. Backus who set the tone for the Fortran team. Yet if the style was informal, the work was intense, a four-year venture with no guarantee of success and many small setbacks along the way.

Innovation, Mr. Backus said, was a constant process of trial and error.

“You need the willingness to fail all the time,” he said. “You have to generate many ideas and then you have to work very hard only to discover that they don’t work. And you keep doing that over and over until you find one that does work.”
http://www.nytimes.com/2007/03/20/bu.../20backus.html





$220,000 error

Computer Technician Accidentally Wipes Out Info on Alaska's $38 Billion Fund
AP

Perhaps you know that sinking feeling when a single keystroke accidentally destroys hours of work. Now imagine wiping out a disk drive containing information for an account worth $38 billion (€29 billion).

That is what happened to a computer technician reformatting a disk drive at the Alaska Department of Revenue. While doing routine maintenance work, the technician accidentally deleted applicant information for an oil-funded account — one of Alaska residents' biggest perks — and mistakenly reformatted the backup drive, as well.

There was still hope, until the department discovered its third line of defense, backup tapes, were unreadable.

"Nobody panicked, but we instantly went into planning for the worst-case scenario," said Permanent Fund Dividend Division Director Amy Skow. The July computer foul-up, which wiped out dividend distribution information for the fund, would end up costing the department more than $200,000 (€150,000).

Over the next few days, as the department, the division and consultants from Microsoft Corp. and Dell Inc. labored to retrieve the data, it became obvious the worst-case scenario was at hand.

Nine months worth of applicant information for the yearly payout from the Alaska Permanent Fund was gone: some 800,000 electronic images that had been painstakingly scanned into the system months earlier, the 2006 paper applications that people had either mailed in or filed over the counter, and supporting documentation such as birth certificates and proof of residence.

And the only backup was the paperwork itself — stored in more than 300 cardboard boxes.

"We had to bring that paper back to the scanning room, and send it through again, and quality control it, and then you have to have a way to link that paper to that person's file," Skow said.

Half a dozen seasonal workers came back to assist the regular division staff, and about 70 people working overtime and weekends re-entered all the lost data by the end of August.

Last October and November, the department met its obligation to the public. A majority of the estimated 600,000 payments for last year's $1,106.96 (€832.11) individual dividends went out on schedule, including those for 28,000 applicants who were still under review when the computer disaster struck.

Former Revenue Commissioner Bill Corbus said no one was ever blamed for the incident.

"Everybody felt very bad about it and we all learned a lesson. There was no witch hunt," Corbus said.

According to department staff, they now have a proven and regularly tested backup and restore procedure.

The department is asking lawmakers to approve a supplemental budget request for $220,700 (€165,900) to cover the excess costs incurred during the six-week recovery effort, including about $128,400 (€96,500) in overtime and $71,800 (€54,000) for computer consultants.

The money would come from the permanent fund earnings, the money earmarked for the dividends. That means recipients could find their next check docked by about 37 cents.
http://www.iht.com/articles/ap/2007/...-Lost-Data.php





Most Digital Content Not Stable: Archivists
CBC News

Those who maintain New Brunswick's provincial archives are concerned that much of the digital content produced today is not going to make it into the future.

Sound and moving image archivist Denis Noel transfers film and audio to digital, following painstaking and expensive international digitizing standards set out for archives.

"One of the problems is that [digital is] so susceptible, so vulnerable to damage," Noel said. "I've had audio tape come into the archives, for example, that had been submerged in water in floods and the tape was so swollen it went off the reel, and yet we were able to recover that. We were able to take that off and dry it out and play it back.

"If a CD had one-tenth of one per cent of the damage on one of those reels, it wouldn't play, period. The whole thing would be corrupted."

Archivists say the domestic digital formats available to the average consumer, such as standard CDs and DVDs, are not stable and were never intended to be used for long-term storage.

"Theoretically, life is far more documented than it's ever been in the past," said Fred Farrell, manager of private sector records. However, he adds it's not unrealistic to think all that documentation will be lost to deterioration over time.

Farrell says a digital black hole is looming over the information age, because most of the material the provincial archives receives comes from the public. He says if we're not looking after our digital records properly, there won't be anything for the archives to save.

"That's a pretty scary thing," Noel said. "Think of the implications for the province. I mean, if you look at the archives as the memory, the heritage of a thing, nobody wants to lose their mind. That's basically … your memory. It's who you are."

Noel is convinced that a safe and foolproof way to save digital material is right around the corner, but until then, it's up to everyone to do what they can to preserve their digital documents. He says if you want to preserve your visual and audio memories, make copies of copies on digital, but always keep the analog originals.
http://www.cbc.ca/canada/new-brunswi...alrecords.html





Local Radio Is Cutting the Static and Going Digital, Finally
John R. Quain

AS drivers pick their way down the West Side Highway of Manhattan, the noise is often more annoying than the traffic — and it’s not just the honking.

What’s so irksome is the static from the car’s sound system, a result of congestion in the radio frequency spectrum in an area packed with AM and FM stations. But that analog annoyance may fade away as radio broadcasters, carmakers and consumer electronics companies make the transition to digital radio.

While satellite radio customers have enjoyed the clean, crisp sound of digital reception, most people tuned to local stations are listening to analog broadcasts based on technology little changed in the last half-century. But more and more broadcasters are pushing a digital format called HD Radio, which rivals satellite radio quality and promises to eliminate the static.

Introduced three years ago, HD Radio is the brand name for a technology developed by the iBiquity Digital Corporation of Columbia, Md. (HD is not an abbreviation for high definition, as it is used by television broadcasters).

The HD system digitizes and compresses a station’s signal; the digital stream is then broadcast in the same frequency range used for the station’s analog AM and FM transmissions. The digital broadcast is sent alongside the analog signal, so you can listen to either analog or digital versions of the same content, and more important, there is no subscription charge. The HD signal also carries artist and title information that can be shown on the radio’s display panel.

The sound improves over a conventional AM station by delivering a better dynamic range — the difference between quiet and loud sounds. In addition, HD is better at reproducing the high notes of music: HD is capable of highs up to 15 KHz, compared with the current top end for analog AM of 10 KHz, making it sound as good as a traditional FM station. Better yet, HD FM stations can deliver audio that is nearly as good as a CD in quality, with a frequency response of up to 20 KHz, comparable to satellite radio.
To get this higher fidelity of HD broadcasts you don’t need a new antenna. But you will need a new radio tuner that can detect and decode the digital transmissions.

“There was the proverbial chicken-and-egg problem,” said Peter Ferrara, chief executive of the HD Digital Radio Alliance, a consortium of broadcasters including ABC Radio and Clear Channel Communications. “Consumer electronics people didn’t want to make radios until there was content available, and broadcasters didn’t want to invest in putting out the content until radios were available.”

But broadcasters decided to take the plunge at the end of 2005, according to Mr. Ferrara, by forming the alliance to promote digital radio and by committing to introduce HD Radio stations in the nation’s top 100 markets. That rollout is nearly completed, with 1,204 stations broadcasting in HD Radio as of last month, reaching a potential audience of 235 million listeners. The alliance expects there to be about 2,000 stations broadcasting in the digital format by the end of the year. (A list of stations that broadcast HD is available at hdradioalliance.com.)

Satellite radio initially gained traction by adopting a marketing approach similar to that used by cellphone companies. XM and Sirius entice listeners with relatively inexpensive tuners, often less than $100, but then charge buyers a monthly fee of $10 or more. HD Radio took the opposite approach: tuning in was free, but early HD-compatible radios were nearly $1,000.

But prices have dropped, with tuners costing half that much or less. JVC’s in-dash HD-W10 Mobile HD Radio, for example, costs $188 and includes a CD player. Wal-Mart began selling the JVC model at about 2,000 stores this month.

Carmakers have been much slower to adopt HD Radio. Among the major auto companies, only BMW, which had previously limited HD as an option on some premium models, will offer the HD Radio option on all of its vehicles this spring.

Add-on HD Radio tuners are also available. The Directed Car Connect HD Radio, for example, is $199 and connects to jacks on the back of existing in-dash head units using connectors known as RCA plugs. The model includes a display that can be mounted in or on the dash, but the company recommends having a professional install the tuner.

Visteon, the automotive electronics supplier, will also offer a similar product called the HD Jump for $249 next month. The HD Jump will include a cradle so that it can be used not only in a car, but also at home as a tabletop HD Radio.

While HD Radio does not offer a breadth of programming for different tastes comparable to XM or Sirius, it has thrown a new ingredient into the mix: multicasting. Also called HD2, multicables individual HD stations to divide the digital stream into as many as eight separate channels within their existing frequency.

For example, about 500 stations offer a second HD programming channel, enabling them to appeal to smaller audiences in niche markets. WKTU-FM in New York uses its second channel to broadcast country music. In Dallas, a Clear Channel station, KHKS-FM, offers Pride Radio for a gay audience on its second HD channel.

Nationwide coverage and acceptance of HD Radio is probably years away. One impediment is that the average cost for a station to add HD is about $100,000, according to iBiquity and the HD Alliance. And although several automakers have said they would offer HD Radio as an option, none besides BMW have made any announcement.

“It’s the last medium that hasn’t converted from analog to digital,” said Rob Lopez, national marketing manager at Panasonic, which has offered an in-dash HD Radio unit for several years. “So I’d like to think we’d see HD Radio as a standard feature in cars in the next five years.”

William Scully, a BMW spokesman, pointed out that listeners didn’t necessarily have to choose between satellite and HD Radio.

“It’s not an either-or kind of thing,” he said. “Our Logic 7 combo models come with satellite and HD radios.”

So ultimately, one way or another, car radios will enter the digital era. And that will bring better sound into autos, so that the only static you get in the city is from other drivers — not from the radio.
http://www.nytimes.com/2007/03/25/au...s/25RADIO.html





Playing Music Makes You Smart
Charles Q. Choi

Scientists have uncovered the first concrete evidence that playing music can significantly enhance the brain and sharpen hearing for all kinds of sounds, including speech.

"Experience with music appears to help with many other things in life, potentially transferring to activities like reading or picking up nuances in tones of voices or hearing sounds in a noisy classroom better," researcher Nina Kraus, a neuroscientist at Northwestern University, told LiveScience.

These new findings highlight the importance of music classes, she said.

"Music classes are often among the first to be cut when school budgets get tight," Kraus said. "That's a mistake."

Experiments started with 20 adult volunteers, who watched and listened to a movie of their choice. "'Men in Black,' 'The Incredibles,' 'Best in Show' were favorites," Kraus said.

As they watched movies, the volunteers also listened to Mandarin words that sounded like "mi" continuously at conversation level in the background. Mandarin is a tone language, where a single word can differ in meaning depending on its tone. For example, the Mandarin word "mi" means "to squint" when delivered in a level tone, "to bewilder" when spoken in a rising tone, and "rice" when given in a falling then rising tone.

The researchers recorded neural responses from the brains of volunteers during the experiments. Half the volunteers had at least six years of training in a musical instrument starting before the age of 12. The others had no more than three years of musical experience. All were native English speakers who had no knowledge of Mandarin.

"Even with their attention focused on the movie and though the sounds had no linguistic or musical meaning for them, we found our musically trained subjects were far better at tracking the three different tones than the non-musicians," said neuroscientist Patrick Wong at Northwestern University.

Wong emphasized these results were seen "in more or less everyday people. You don't have to be a top musician to find these kinds of effects."

Surprisingly, the researchers found these changes occurred in the brainstem, the ancient part of the brain responsible for controlling automatic, critical body functions such as breathing and heartbeat.

Music was thought largely to be the province of the cerebral cortex, where higher brain functions such as reasoning, thought and language are seated. The brainstem was thought to be unchangeable and uninvolved in the complex processes linked with music.

"These results show us how malleable to experience the brainstem actually is," Kraus said of the findings detailed in the April issue of the journal Nature Neuroscience. "We think music engages higher level functions in the cortex that actually tune the brainstem."

Much remains open for investigation. "How much musical training would you need for this to be helpful?" Kraus wondered. "Would music help children with literacy problems? How old would you have to be to see these effects?"
http://www.livescience.com/humanbiol...brainstem.html





Mmmm, fiber

Harry Potter Going Green
AP

The printing for the final Harry Potter book will not only be the biggest, but also the greenest.

Scholastic Inc. announced Tuesday that it had agreed with the Rainforest Alliance, a conservation organization that works with the business community, on tightened environmental standards for "Harry Potter and the Deathly Hallows," coming out July 21 with a first printing of 12 million.

J.K. Rowling's seventh Potter book will be a hulking 784 pages, Scholastic said, a comparable length to the last couple of Potter releases.

Among the details of Tuesday's agreement:

_The paper used will contain "a minimum of 30 percent post-consumer waste (pcw) fiber."

_Nearly two-thirds of the 16,700 tons of paper will be approved by the Forest Stewardship Council, an international organization with a mission to "promote environmentally responsible, socially beneficial and economically viable management of the world's forests."

_A "deluxe" edition of the new book, which has a first printing of 100,000, will be printed on paper that contains "100 percent post-consumer waste fiber."
http://news.newstimes.com/news/updates.php?id=1034765





Just don’t call them hacker-proof

New Technology Transforms Slots
AP

Engineers at PureDepth Inc. spent years developing tools for helping the military plot 3-D maps of war zones, eventually licensing top-secret technology to the U.S. Air Force and Navy.

But the Silicon Valley startup hit the jackpot in October when it inked a deal with International Game Technology Inc., the world's largest maker of slot machines.

Industry experts say a realistic digital video display is the final hurdle that will completely digitize one-armed bandits. The new displays by PureDepth and others -- set to debut later this year -- could profoundly change the $85 billion U.S. gambling industry and how it's regulated.

When high-tech slots are in place, programmers will be able to control nearly every aspect of the game -- cost, payout, even the images that line up on the payline. Casino operators will be able to make changes in real time through back-end servers that talk to computer chips inside the slot machines.

''This is the last piece of the puzzle,'' financial analyst Aimee Marcel Remey, who follows the gaming industry for Jefferies & Co. ''These new systems are so different from the slots out there now. You feel like it's an exact science, every time you pull.''

If the Beach Boys are playing the Luxor in Las Vegas, next-generation slots could display images of band members instead of cherries, numbers or other symbols. If band members' faces line up, an embedded printer could spit out front-row tickets.

Or suppose the penny slots area at a tribal casino empties out around 7 p.m., when big spenders arrive. With a few keystrokes, programmers could change the minimum bet to $1 and offer a progressive jackpot with all slots in the house -- or even with thousands of machines statewide.

''If the NASCAR folks are coming to Vegas, they could change the fruits to cars,'' said Fred Angelopoulos, CEO of Redwood Shores-based PureDepth, founded in 1999. ''You can start thinking outside the box, literally.''

Without digital displays and servers, employees would have to manually close out meters, change glass, change reel strips and physically relocate and remove machines.

Digital slots, however, are vulnerable to the same bugs and malfunctions that plague personal computers. Regulators say they'll be seductive targets for hackers, who have been trying to rig games for decades.

In 2000, a programmer in Edmonton, Canada, found a software glitch that let him regularly win $500 or more on some video poker machines. The maker of the machines -- WMS Industries Inc. -- estimated the incident cost at least $1 million and sued the man, who threatened to publish the flaw online.

The Nevada Gaming Control Board, which sets the pace for regulators nationwide, adopted new rules last year for digital machines. The board must approve all software modifications -- even pictures on reels. The approval process takes up to 30 days.

The board employs 11 experts in computer science, electronic security and wireless networking. It will double the number of these specialists by late 2007 and build a new research facility to deal with an expected profusion of digital slot machines, said Mark Clayton, who heads the board's technology division.

Executives at the top three manufacturers acknowledge that networked slot machines are a seductive target for hackers and are reluctant to call them hack-proof for fear of inviting challenges from would-be invaders. Instead, they're working with regulators to reduce the potential damage if such an attack occurred.

Roughly half the 835,000 slot machines nationwide have video displays and many are networked, but industry officials acknowledge that most are flops, lacking the visceral ''clunk-clunk-clunk'' of wheels hitting the payline.

Video slots with an authentic feel are the holy grail for manufacturers.

PureDepth searched for a mechanical alternative to the traditional optical tricks for fooling the eyes and brain into seeing depth. Such tricks -- fancy versions of 3-D glasses -- induced nausea and headaches and were rejected by casino operators, who stuck with mechanical reels or flat video displays with no depth.

With the cost of liquid crystal displays dropping, engineers at PureDepth's lab in New Zealand decided to house two or more LCDs in one physical unit to create depth -- a deceptively simple idea protected with 45 patents and roughly 70 patents pending.

Reno, Nev.-based IGT is hoping to debut the first machines with PureDepth's multilayer video display in November at the Global Gaming Expo in Las Vegas. The company won't say how much they'll cost, but they'll be more than mechanical reel machines, which cost up to $15,000.

A different approach on a 3-D video slot system will debut next month, when Waukegan, Ill.-based WMS is expected to introduce a ''Monopoly Super Money Grab'' slot machine. Its hybrid display features a mechanical reel behind a video display that activates when the payline hits certain combinations.

Traditional three- and five-reel slots have a finite number of combinations, but adding a video layer allows programmers to exponentially expand the possibilities.

''The mathematics drive the game, and the more mathematics you can derive, the more combinations you can create,'' said Larry Pacey, senior vice president of product development at WMS, which developed the patented technology with Tokyo-based Pachinko powerhouse Aruze Corp.

One thing that's unlikely to change in the new era of digital slots: the slim odds of winning big.

''Let's be honest: Everything about a casino design is meant to play on the player's psychology,'' said Jeffrey Allen, director of business development for Las Vegas-based Bally Technologies Inc., another top slot machine maker. ''Why else would there be no clocks and comfortable chairs and subdued lights?''

Ed Rogich, an IGT vice president, said players who tested video display prototypes earlier this year could hardly tell the difference between them and manual reels. That's a good sign: Many old-school gamblers prefer low-tech slots.

Earlier this month at Cache Creek Casino in Brooks, Margaret Spence criticized the present version of video slots and wistfully recalled the days of old-fashioned reels.

''I still miss pulling that old lever, and I miss that big tub of money that would fill up with coins when you hit the jackpot,'' said Spence, 71, a Concord resident who currently favors $1 ''Blazing 7s'' machines. ''The video machines seem like a waste of time -- like a video game.''
http://www.nytimes.com/aponline/us/A...ech-Slots.html





Dell Launches Low-Cost PC in China

Dell Inc., the world's second-largest personal computer maker, unveiled a low-cost PC on Wednesday for China, its fastest-growing market.

The PC is priced from 2,599 yuan to 3,999 yuan (about $335 to $520), the company said in a statement.

Earlier this month, Dell reported a sharp drop in quarterly profit while revenue fell short of Wall Street expectations, adding that it foresaw pressure on growth and profit margins in the next several quarters as it spends money to revamp its business.

The company had lost market share to global industry leader Hewlett-Packard Co. during the fourth quarter and in January.

In China, the world's second-largest PC market, Dell ranks third behind homegrown powerhouse Lenovo Group Ltd. and Founder Technology.

York Li, Dell's top manufacturing executive for China, told Reuters last month that the company expected production in China for domestic sales to keep growing at about 30 percent in the short term, meaning the PC giant might add another factory in the country in three to four years.
http://www.reuters.com/article/marke...26246620070321





How Apple Orchestrated Web Attack on Researchers
George Ou

Last summer, when I wrote "Vicious orchestrated assault on MacBook wireless researchers," it set off a long chain of heated debates and blogs. I had hoped to release the information on who orchestrated the vicious assault, but threats of lawsuits and a spineless company that refused to defend itself meant I couldn't disclose the details. A lot has changed since then: Researcher David Maynor is no longer working for SecureWorks, and he's finally given me permission to publish the details.

The scandal broke when Jim Dalrymple put out a hit piece on security researchers David Maynor and Jon "Johnny Cache" Ellch, saying that their research was a "misrepresentation." Dalrymple based his conclusion solely on the word of Apple PR director Lynn Fox. David Chartier went even further and said that, "SecureWorks admits to falsifying MacBook wireless hack" based solely on a SecureWorks disclaimer (it's no longer there) that merely reaffirmed what the original video was saying all along–that the hack demonstrated in the video was based on third-party wireless hardware. I had personally interviewed the two researchers before this whole scandal broke out, and I specifically asked Maynor and Ellch if they were using Apple's Wi-Fi hardware in their official Black Hat demonstration. They clearly said that no Apple Wi-Fi product was used for the exploit. That's why I was shocked to see the researchers blamed for changing their story and "admitting" they made the whole thing up when no one changed the story and no one admitted to anything. Yet the headline from Chartier, along with Dalrymple's story, was blasted all over the Web after it made Digg and Slashdot. Everyone simply assumed Maynor and Ellch were frauds because they supposedly "admitted it."

Through all of this, I've been accused of covering up for my "buddies" and losing my objectivity, but I had never met David Maynor and Jon Ellch–and last summer was my first trip ever to Black Hat and Defcon. It was by mere chance that I overheard them in an interview with another reporter in the press room. I asked them if I could videotape an interview with them afterward, and they said yes–which led to this interview. The Week in Review is edited and published by Jack Spratts. But when I read the news that the researchers "admitted to falsifying their research," I was shocked, and I almost believed it for a second–until I read the stories and saw that there was no admission but a simple reaffirmation of what had been claimed all along on SecureWorks' Web site in some obscure location that blogger Chartier just *happened* to find. It didn't matter that the so-called "evidence" wasn't an "admission" at all because it looked the part, and that's all that was needed to hang the two researchers and brand them as frauds. But did Chartier really just happen to come across the evidence?

When I called David Maynor to get to the bottom of this, it turned out that Apple PR director Lynn Fox (who was also cited by Jim Dalrymple as proof that the researchers "misrepresented" the research) was the puppetmaster from start to finish. She not only contacted sympathetic bloggers like Chartier and "journalists" like Jim Dalrymple, she was actually the one who got SecureWorks to publish the "clarification" in the first place. Once she got SecureWorks to publish a clarification that merely reiterated the fact that third-party hardware was used in the original video (and it was clearly disclosed in the first 20 seconds of the video that it was third-party hardware), she used that as "incriminating" evidence that the researchers admitted to falsifying the video and shared her "findings" with Apple-friendly press.

But how did Lynn Fox get SecureWorks to publish a clarification on its Web site? It turned out that Fox had actually wanted an even more incriminating statement from David Maynor himself and sent him an e-mail on 8/15/2006 (two days before the public accusations of fraud hit the Web) demanding that he post a confession word for word. Maynor refused and told Fox to speak to SecureWorks PR, and the two parties came to a compromise on 8/16/2006, where SecureWorks would simply post a clarification. SecureWorks never knew what hit them when the accusations of fraud hit on 8/17/2006 because they figured they were merely posting a clarification that reiterated what they had been saying all along. They had no idea that MacWorld and an unofficial Apple blog would tear them to pieces and simply assumed it was an admission that facts were originally misrepresented. As proof of how this all went down, here is the e-mail Lynn Fox sent to David Maynor demanding that he post the confession publicly. I was given a copy of it on 8/19/2006.

From: Lynn Fox <####@apple.com>
To: David Maynor <####@mac.com>
Cc: Moody David <####@apple.com>, Wiley Hodges <####@apple.com>
Date: Tue Aug 15, 2006 06:14:09 PM PDT
Subject: Your post on SecureWorks website

<<Original Attached>>

David,

Below is the note we drafted about the MacBook exploit confusion.

Please confirm that you've received this and will post it without text changes on your blog and front and center on SecureWorks' news & events page tonight. The placement of this post should be as prominent as the initial announcement of the exploit demo at Black Hat.

You are welcome to call me on my cell at 415-###-#### if you need to discuss any further.

Thanks,
Lynn

For the Record: MacBook is not inherently vulnerable to Black Hat-demonstrated exploit
By David Maynor

I want to clarify something about the wifi device driver exploit we demonstrated at Black Hat in Las Vegas a couple weeks ago.

Confusion has mounted as to whether the exploit I demoed at Black Hat and for Brian Krebs of the Washington Post is reliant the use of a third party driver. In short, the answer is yes. The MacBook is not inherently vulnerable to the attack, and I never said that it was.

Part of the confusion lies in the fact that we have not specifically named the third-party device driver; this is because we know that the vendor is working on a patch and we don't want to release the name of the chipset until the fix is in place.

I hope this clears up some of the confusion. Stay tuned for a live demo of this exploit live at Toorcon.

Note that I've masked out parts of the e-mail addresses and parts of Lynn Fox's cell phone number for privacy issues, but I can assure you it was the right phone number. I actually called the number to confirm that it was real, and Lynn Fox was quite upset and demanded to know where I got the number. I declined to answer since the e-mail at the time was given to me by David Maynor off the record. I asked Fox about the scandal, and she told me that her cell phone was breaking up and that she'd call me back. Within a minute, I had David Maynor instant-messaging me that Lynn Fox was on the phone with him in a rage. I told him I didn't disclose anything to Fox, and Maynor simply directed Fox to SecureWorks PR.

When I finally got Fox back on the phone, I asked her some questions about how MacWorld and the unofficial Apple blog got the information on the so-called confession. I got all my questions answered, but I can't disclose what she said since Fox refused to speak on the record. But the bottom line is that Lynn Fox played Jim Dalrymple, David Chartier, and the rest of the Mac press/blogosphere like a violin, though it was clear they were all willing participants. When I pointed out the flaws in their stories, Chartier and Dalrymple simply ignored me and stuck to their guns and Chartier erased all of my comments on his weblog.

So what was the end result of all this? Apple continued to claim that there were no vulnerabilities in Mac OS X, but came a month later and patched its wireless drivers (presumably for vulnerabilities that didn't actually exist). Apple patched these "nonexistent vulnerabilities" but then refused to give any credit to David Maynor and Jon Ellch. Since Apple was going to take research, not give proper attribution, and smear security researchers, the security research community responded to Apple's behavior with the MoAB (Month of Apple Bugs) and released a flood of zero-day exploits without giving Apple any notification. The result was that Apple was forced to patch 62 vulnerabilities in just the first three months of 2007, including last week's megapatch of 45 vulnerabilities.

Apple is a mega corporation that nearly smashed the reputation of two individuals with bogus claims of fraud. It didn't matter that they weren't the ones pulling the trigger because they were pulling all the strings. David Chartier should be ashamed of himself and his blog. Jim Dalrymple of Macworld and his colleagues who jumped on the bandwagon should be ashamed of their reporting. Frank Hayes was the only one of Dalrymple's colleagues who had the decency and honor to apologize. Most of all, shame on Apple.
http://blogs.zdnet.com/Ou/?p=451





YouTube and the Birth of YouPolitics
Frederick Lane

The most obvious group responsible for creating the YouTube video featuring Sen. Hillary Clinton superimposed in the now-famous "1984" ad for Macintosh computers is the Obama campaign, but Barack Obama himself said that his campaign couldn't have put the YouTube ad together. "[F]rankly," Obama told Larry King, "given what it looks like, we don't have the technical capacity to create something like this."

The first significant advertisement of the 2008 presidential campaign has been released -- but it's not showing on any of the major broadcast network channels. Instead, in a clear sign of things to come, the ad was posted to the video-sharing site YouTube.

The clip is a "mash-up" of the famous Ridley Scott-directed Super Bowl advertisement that introduced the Apple Macintosh in 1984. The original ad featured an auditorium full of apparently mind-controlled workers in anonymous gray uniforms, staring blankly at a massive screen on which an enormous Big Brother figure was speaking.

In the YouTube version, the male Big Brother is replaced by video clips of Sen. Hillary Clinton. The closing Apple logo has also been modified into the shape of an "O," followed by a link to BarackObama.com.

The parody ad was originally posted to YouTube on March 5, 2007 by an anonymous poster named "ParkRidge47." Senator Clinton was born in Chicago in 1947 and grew up in Park Ridge, Illinois.

Although the clip did not receive much attention initially, a mention on Drudge.com propelled the clip into the mainstream media, and into the stratosphere of YouTube popularity. As of Tuesday, March 20, the "Vote Different" clip had been viewed nearly one million times.

Rise of YouPolitics

"What this ad reflects is a completely different campaign environment, and it's going to change the way politicians approach the race," said Simon Rosenberg, the President of the New Democratic Network, a Washington-based advocacy group for progressive government.

Rosenberg said that the "Vote Different" political ad is likely to be just one of among thousands that will be posted over the weeks and months to come.

"With the barriers to entry into video production and web distribution falling so rapidly," Rosenberg said, "candidates will be challenged in ways they've never been before. I do think that it will put a premium on accessibility; in this social-networking environment, a candidate needs to be able to project the ability to connect with voters."

Will It Help?

Among the burning questions about the video mash-up are what group might be responsible and how that information will play with the public.

The most obvious culprit, the Obama campaign, has steadfastly disclaimed any knowledge of the parody clip, and Senator Obama himself said that his campaign couldn't have put it together. "[F]rankly," Obama told CNN talk show host Larry King, "given what it looks like, we don't have the technical capacity to create something like this."

Others, particularly on partisan Democratic blogs, have suggested that the video clip was actually created by a Republican operative and released in the hope of accelerating the traditional Democratic fratricide.

"Given the ease with which individuals can produce and distribute these types of ads," Rosenberg said, "there's certainly a lot of room for mischief. But I think that, ultimately, it's healthy for democracy. There's certainly no question that 21st-century politics is going to be very different from the 20th-century variety."
http://www.newsfactor.com/news/YouTu...d=11000A3XKAQI





Trading the hard way


Big tube

Swiss Dig World's Longest Tunnel
Imogen Foulkes

For centuries, the Alps have served as a natural trade barrier between northern and southern Europe.

Sending Italian wine to the Netherlands, or German washing machines to Greece, means a long, slow journey along narrow alpine valleys, through tunnels and over passes.

The amount of freight crossing the Alps in heavy goods vehicles has risen sharply over the last two decades. In 1990 an estimated 40m tonnes went by road, in 2001 that had risen to 90m tonnes, with further big increases expected by 2010.

But concerns for the Alpine environment and fears over safety have led to big pressure to move freight off the roads and onto the railways.

Both Switzerland's Gotthard road tunnel and France's Mont Blanc road tunnel have suffered major fires in the last 10 years in which many died.

Faster than flying

As long ago as 1994, the Swiss voted in a nationwide referendum to put all freight crossing their country onto the railways. Naturally, such an ambitious plan was not going to happen overnight, but now the project dubbed the engineering feat of the 21st Century is slowly taking shape.

Deep beneath the Alps, the Swiss are building a high-speed rail link between Zurich and Milan. It will include, at 57 kilometres (35 miles), the world's longest tunnel.

A key feature of the project, which is new to alpine transport, is the fact that the entire railway line will stay at the same altitude of 500 metres (1,650ft) above sea level.

This will allow trains using the line to reach speeds of 240km/h (149mph), reducing the travel time between Zurich and Milan from today's four hours to just two-and-a-half. That would make the journey faster than flying.

To see the work in progress, it is necessary to travel two kilometres underground, to the construction site between the southern Swiss towns of Faido and Biasca.

The scale of the work going on is enormous: 2,000 people are working on the tunnel, 24 hours a day, 365 days a year. Besides the two main railway tubes, the construction workers have to dig access tunnels for people and equipment.

Huge fans ensure a fresh supply of air and cool things down. Yet the temperature is above 30C.

"We've got two-and-a-half kilometres of Alps above us," explains engineer Albert Schmid. "That means millions and millions of cubic tonnes of earth pressing down on us, that increases the pressure and the temperature."

Difficult work

It also means that every time the workers dig out another few metres of the tunnel, mother nature tries to close it up again. Along the tunnel's length, reinforced steel rings have to be inserted, to prevent it collapsing in on itself.

Building the tunnel requires a variety of techniques. At one section the workers are blasting away the rock, and the air reeks of ammonia from the explosives.

At another section the world's biggest tunnel-boring machine is in operation; it is ten metres in diameter and covered in dozens of rock-cutting blades, which as the machine turns, hack away at the rock face.

"With this machine, in good conditions, we can excavate 40 metres in a day," says Mr Schmid. "That's an absolute record."

But conditions are not always good. The tunnel workers have run into serious geological problems; in some areas the rock is as soft as butter, making digging it out more complicated.

"In poor rock conditions, where the rock is very soft, we can only excavate around half a metre a day," says Mr Schmid. "So in these situations, the work is delayed, and the costs rise."

Soaring costs

In fact the price tag for the entire rail link has soared from about $8bn (£4bn) to almost $15bn and final completion is unlikely to be before 2018.

But that has not stopped the alpine communities from supporting the project, and from trying to ensure that the rail link brings some social benefits too.

The tiny village of Sedrun, population 1,500, lies along the tunnel's route, and while residents are pleased to be relieved of the heavy lorries, they are concerned that the tunnel may marginalise their community.

"The thing about this tunnel is that it makes the Alps disappear," explains local architect Arthur Loretz. "At the moment, when you drive from Zurich to Milan, you get a beautiful panoramic view. But this tunnel turns the Alps into a big black hole."

Alpine gateway

The original plans for the tunnel involved trains rushing beneath the Alps without stopping. But in Sedrun a 1,000-metre elevator and underground railway station have been built just to get the workers to the construction site.

"All the infrastructure is already there," points out Arthur Loretz. "What we want to do is use it in the future." The plan is to create a station, deep in the mountains, known as "Porta Alpina" (Gateway to the Alps).

Tourists will be able to arrive by train in the Alps in record time, and then be whisked up to fresh mountain air by way of the world's longest elevator.

"I think it will have great benefits," says Mr Loretz. "Not just for tourists, but for us. Look, over that mountain people speak Italian, and over that one there they speak German."

"And here we speak Reto Romansch - a language only spoken by around 50,000 people. Traditionally the mountains have divided us, but with this rail link, and with Porta Alpina, we can bring people together."
http://news.bbc.co.uk/go/pr/fr/-/2/h...pe/6471241.stm

















Until next week,

- js.



















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