Charts And Crafts
This week we’ve been treated to the dubious news that reported file sharing is down by half, that the RIAA’s scorched earth campaign against swappers has paid off and that sales are back up and on the rise. Sounds great. And it’s so simple. They’ve been telling us for years that file sharing is killing sales so it stands to reason that if they kill file sharing sales will come back to life. The info we got this week came from a survey known as the Pew report, and like its name suggests, there may be something off about the numbers.
To begin with file sharing is a worldwide phenomenon; it’s not exclusive to the U.S. where the survey was conducted nor tied to any particular locale. We can look at other countries to test the “file sharing kills sales” hypothesis and see if it’s actually true. We’ve already done it - and we know that it’s not. In the UK and Australia for instance with rampant hot beds of P2P use file sharing
and sales are up, and have been for years. We can explore other things that put lie to the statement that file sharing = lower sales but the fact is there is no easy correlation between the two. Massive trading can coexist with healthy sales in the same markets and often does. MP3’s and CD’s are different animals. One does not necessarily replace the other. But OK, say we forget about the UK and Australia, that for some strange reason the RIAA’s universal statements don’t apply in those other English-speaking countries and file sharing has no negative effects there (but only there...), can we still say that the reported decrease in sharing here in the U.S. has led to the reported increase in sales? Well, no – because the reporting methodology used is not strong enough to build that case. The Pew report is so tied to the specific as to be all but pointless in extrapolating to the general. As the articles in this week’s WiR show, the report focuses on a handful of programs and uses them to suggest they represent all other programs, that if use is down in four of them then usage must be down in all of them. The flaw in such thinking is widespread and misses any migrations that might be occurring from one program to another. Especially those where users move to stealthier apps when available. People aren’t particularly stupid; they’re more than capable of going around obstructions, it’s one reason why traffic reports are so popular on radio. If the cops are spot-checking cars getting off exit 8, most drivers will use exit 7 and avoid the hassles. It doesn’t mean there’s less traffic, it just means there’s less “trapable” traffic. The same is true for many things. No bright reporter would think of writing that car sales were down because a survey said less people were buying cars from General Motors, even a novice reporter would first see if sales were slow at other car companies too before filing such a story. If they couldn’t find out before publication then all they could truthfully report would be the survey’s results - as they applied to GM alone. If a small group of people are saying they’re not using Kazaa as much as they did last year, the matter needs to be fully
probed before one can state with any legitimacy that it means people countrywide are walking away from file sharing applications in general. It pays to remember that when Napster collapsed, file sharing went up. The same could be happening now.
We may be witnessing another major shift in the habits of filesharers as they move from open spaces to sheltered enclaves. Programs with decentralized and serverless protocols that are gatekeeper protected and inherently low profile. These are powerful utilities that are every bit as efficient in moving information around the world as Kazaa is - just ask anyone who’s using one (if they’ll tell you). You just won’t find them splashed across web-sites advertising for members - because there aren’t any corporations loading them up with spyware and hawking them. One reason adware infested Kazaa lasted as long as it did was because it had always been so easy getting clean, spyware free versions. Lately the company has been aggressively closing down the hobbyists responsible for those uncontaminated “lite” versions. That’s causing many users to migrate off the network taking their files with them. As the inventory drops people find the network less useful and the migrations increase. Corporately, Kazaa/Altnet’s actions alone may be chasing away network users and hurting the company’s financial outlook, witness Altnet parent Brilliant Digital’s delisting from the American Stock exchange. With alternatives comes choice. People are wary of coming home to spyware infested PC’s running who knows what in the background, sucking up resources, bandwidth and sending little notes home to cloaked strangers telling of usage habits and sites visited. They’re demanding change. Even mighty AOL, for years blissfully nonchalant about such matters has found out that surprise, its subscribers are no longer clueless about the problem. They hate the stuff, forcing the media giant to get rid of spyware. All this happens independently of the RIAA. And it can happen fast.
Simply owning a peer-to-peer does not immunize a company against shortsightedness. Two years ago the most popular post-Napster application was Morpheus and it crashed and burned over the course of a spectacular 72 hour period, going from millions of files to zero and losing all of it’s members in a blazing corporate flameout. It had nothing to do with the RIAA but it also had no effect on file sharing ultimately. All it took was a quick program download and all those previous Morpheus users were back online, trading like it was business as usual.
File sharing evolves and file sharing clients evolve as well. Sometimes all it takes is a better idea and an email. You rarely have to bend over backwards with surveys and tea leaves. Sometimes people, seeing a better system, gravitate towards it. Sometimes as Freud mused, a cigar is just is cigar.
The RIAA might have had a point if after all those files were harder to acquire.
Instead they’re easier to get than ever. Take it from me. Not that you have to, you probably already know.
Enjoy,
Jack.
Online Music Sharing Drops, But Do Figures Tell Real Story?D. Parvaz
The number of people downloading and sharing music online has dropped significantly since the recording industry began filing lawsuits against alleged copyright violators last fall, according to a survey by the Pew Internet & American Life Project.
About 18 million people admitted downloading music online, a 50 percent drop since the previous Pew survey, done in spring.
But whether those numbers capture the true behavior of music downloaders and file sharers is another thing.
The Pew study, released yesterday, didn't differentiate between paid online music services and free, file-swapping applications, but comScore data (which accompanied the Pew survey) indicate the number of file swappers is dropping and paid online services (a relatively new development in the world of online music) are growing at a steady pace.
Peer-to-peer, non-paid, file-sharing music sites seem to have taken the greatest hit, but some industry insiders say that survey numbers don't tell the whole story.
"I completely discount it all," says Wayne Rosso, former president of Grokster, which provides file-sharing software, and current CEO of Optisoft SL, the proprietary network for other file-sharing applications.
Rosso criticizes the Pew methodology because, he says, people lie, especially if they think file sharing will get them in trouble.
Pew Internet Project Director Lee Rainie says survey participants were more likely ignorant than dishonest. And he admits it would have been better if the questions distinguished between paid online music services and peer-to-peer file swapping. But, he says, that wasn't done because of the problems it would pose.
"People are confused and don't know what's going on with copyright laws," Rainie said.
Angie Beining, 19, seems to know what's going on with copyright laws. She says she used to be an avid music file swapper but isn't anymore.
"I used to swap songs online all the time. ... I hardly bought any CDs for a couple of years," she says, adding that now she doesn't do it "like ever, because I hear they're suing people." It's not worth the trouble, she says, but that doesn't mean she's started to buy songs online, either.
"Now I just rip them off a friend's CD or computer, or I just buy the CD myself." She knows that ripping CDs poses copyright issues, too, but says, "It's impossible to track."
Rainie says the recorded decrease in downloading was consistent among all survey groups, regardless of age, race, gender and household income. "I'm pretty confident that we've captured a reality of online life here."
Rosso disagrees.
"Our revenues aren't dropping, and I promise you Grokster's aren't. Nobody's been crying the blues," says Rosso, who adds Optisoft had 3 million unique users this year. "All these guys are really full of baloney."
Well, not quite, says comScore, whose numbers agree with Pew.
ComScore analyst Graham Mudd said its data were gathered with a program installed on 1.5 million computers, which allowed the firm to directly track the applications used.
Data gathered by the Virginia-based firm say things aren't looking good for file-swapping sites. The number of computers running any one of the four surveyed file- sharing applications is down (KaZaa is down 15 percent, Grokster 59 percent, WinMx 25 percent and BearShare 9 percent). These figures reflect the number of people running the applications on their computers, not necessarily the use of them.
"Without a doubt the number of people simply going to these sites or actively visiting them is on a downward trend," says comScore Senior Vice President Dan Hess.
But it's possible people were running other file-swapping applications that were not tabulated in the study, Graham says.
Grokster, the company with the greatest drop in users, doesn't have an official spokesperson. KaZaa did not respond to an interview request.
Paid music sites are a different story altogether, Hess says. ComScore data show that the numbers for sites such as Napster and Apple's iTunes are on an upswing.
"Those numbers, in all likelihood, are continuing to grow, and some of that has to do with starting from scratch," Hess says.
Indeed, the customer base for some of these legal downloading services, such as Seattle-based RealNetwork's Rhapsody, continues to swell. About two weeks ago, the company announced its second quarter of double-digit growth, this last quarter taking it from 250,000 subscribers to 350,000 for both its Rhapsody and RealRadio products.
"That's a dramatic increase from where we started the year," Rhapsody spokesman Matt Graves says, adding that the increase in numbers is on track with other tech music services such as broadband and home WiFi setups.
ITunes is one of the major players in the online music game, but a spokesperson declined to offer specific numbers for how many users were registered. ComScore, however, tracked the site as having 1,380,000 visitors in October and 2,663,000 in November.
MusicMatch.com also is reporting a steady increase -- the number of accounts has increased by 41 percent from November to December. A representative declined to give specifics.
The drop in non-paid downloads that Pew found might not continue, as the battle between record labels and the file-swapping community is just beginning. Legal judgments, such as last month's decision by the Dutch Supreme Court that KaZaa is not violating copyright laws for music or movie files swapped using its software, continue to shift the landscape of the online music world. (The U.S. version of the KaZaa lawsuit is pending in a Los Angeles district court.)
"This is definitely not the end," Rainie says.
http://seattlepi.nwsource.com/pop/15...wnloads05.html
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BitTorrent Users Chuckling Over Pew Peer-To-Peer Report
John Paczkowski
The suits over at the Recording Industry Association of America are likely a bit more smug than usual today thanks to a report that suggests the number of people swapping music files online has declined dramatically since the lobbying group began suing people who illegally trade copyrighted music online. According to a report released Sunday by the Pew Internet & American Life Project and comScore Media Metrix, the number of individuals illegally downloading music from the Internet plummeted from 35 million to 18 million between late May and mid-December. "Nothing has ever fallen off the cliff the way that downloading has," Lee Rainie, director of the Pew Internet project, told Newsday. "Obviously the lawsuits were a watershed, and they dramatically changed some online behavior." But just how did they change it? Pew researchers would have us believe that fewer people are downloading music illegally. But they sampled only four peer-to-peer applications - Kazaa, WinMX, BearShare and Grokster -- each of them known to be heavily monitored by the RIAA. What of BitTorrent? Or eDonkey and eMule? Or Carracho? Isn't it possible that more of the trafficking is just moving off the radar?
http://www.siliconvalley.com/mld/sil...sv/7637880.htm
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Why the Decline in Downloading?
Seth Jayson
In a discussion of yet another proposal for a new model of online music, I said, "Suing the file-swappers seems to have little deterrent value."
But earlier this week, the Pew Internet and American Life Project (PIP) released a report that disputes my assumption. The report claims that record industry lawsuits drove down the percentage of Americans who downloaded music files by 50% since last spring. The mainstream press picked up the story and trumpeted this as a success for the Recording Industry Association of America (RIAA).
I hate to play naysayer, but I'm not sure PIP found the true cause for the decline in downloading.
The PIP report claims that "a fifth of those who say they continue to download or share files online say they are doing so less often because of the suits." It also touted significant-sounding reductions in the use of peer-to-peer (P2P) software like KaZaa, WinMX, BearShare, and Grokster.
But if we look at the report through our skeptic's goggles, we see that it raises key questions. First, how big is this success when only 20% of the still-active cyber-pirates cite fear of lawsuits as a deterrent? And more important, is it accurate to say that the 50% overall drop in downloading is also attributable to the RIAA bogeyman?
I doubt it. But since PIP doesn't release its data until six months from now, we can't quibble with its methodology or analysis.
By now you are probably thinking, "So why do you think people are doing less file-swiping?"
I'm going to go way out on a limb and suggest that we might have hit the magical inflection point in music downloading, the point where paid services are actually beginning to be perceived as normal -- and more convenient than old-school P2P networks (or even CDs).
Anyone who has used common P2P software knows it isn't exactly free. In fact, it's an enormous pain. Most networks are supported by shady spyware and pop-up purveyors, like whipping boy Claria (formerly Gator). These programs load their invasive software on the backs of many file-sharing programs, slowing users' computers and generally being a nuisance.
On the side of the righteous, we have the first convenient, economical, and popular online music services, such as Apple's (Nasdaq: AAPL) iTunes -- which claims 70% of the market for legal music downloads -- and the black-hat-turned-white Napster. Wal-Mart (NYSE: WMT) is in the game, too, and Microsoft (Nasdaq: MSFT) is joining the party. As the cash costs for downloading continue to sink relative to the aggravation costs of pirating software, you can expect more people to pony up for their downloads.
So don't be fooled. The recent successes have come in spite of, not because of, the RIAA's shortsighted legalism.
http://www.fool.com/News/mft/2004/mft04010717.htm
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Getting A Handle On P2P
P2PNet
P2p goes to the very heart of the original Net concept - distributed autonomous processes communicating via a dumb packet network without central control.
But, "add the rapid and accelerating uptake of mass-market broadband IP access, and the result is rampaging bandwidth consumption that is threatening to choke the Internet on an uncontrolled diet of file-sharing traffic, much of it of dubious legality," says a new report by Heavy Reading chief technologist Geoff Bennett.
Called Controlling P2P Traffic and published by Light Reading and Boardwatch, "Welcome to the world of mass- market P2P media file sharing - the first killer application of the broadband age," it says.
"It's both popular and bandwidth intensive. What more could an ISP want? Yet how much are they making out of it? Zilch, pretty much, because it is all part of an undifferentiated traffic stream (and mostly offnet, to boot). And what is it costing them? An arm and a leg as new capacity fills up, congestion grows, and P2P non- enthusiasts (they exist) complain more loudly about falling service quality as their traffic gets squeezed out."
On some networks, more than 90% of traffic is p2p at times and worse, "ISPs may not even realize how much P2P traffic they have, as standard methods of analyzing traffic by looking at TCP ports are frequently fooled by P2P applications using random ports or those usually assigned to other applications," says the report.
But, it goes on, p2p doesn't have to be the first ISP-killer application - "the hyphen is important".
In fact, because it's a highly efficient and resilient way to distribute content over IP, it makes a lot of sense from both an engineering and business viewpoint to think of ways of exploiting these virtues and, "it can be done, but only by making the network more intelligent and application-aware.
"Current network architectures just aren't designed to cope with P2P traffic patterns or even to distinguish them. Yet, with the right tools and application management platforms, P2P traffic can be identified, classified, controlled - and eventually built into revenue generating services."
p2p background
Already, three distinct generations of p2p technology have emerged, says Bennett's report.
In the beginning was Napster, a centralized system. Then came Gnutella, "which distributed everything (files and file-location database) to avoid the legal issues of Napster". The third generation is a hybrid of the first two with New Gnutella, FastTrack, KaZaA, and Grokster as current examples.
And, "In KaZaA, for example, some of the nodes become supernodes, which hold the lists of files and the locations of the clients from which they can be downloaded. The term 'client' here is in the context of the control plane of KaZaA, where ordinary nodes only have control connections to supernodes, and the supernodes form their own higher-level mesh of connections."
It's Terabytes Now
P2p apps are the most downloaded and p2p now accounts for 50% to 70% of all Internet traffic, Controlling P2P Traffic goes on and although KaZaA leads worldwide, Winny leads in Japan, with runners-up eDonkey and WinMX. Newcomers on the scene include Piolet and BitTorrent: "So in network terms P2P is big - and it is creating big problems for carriers and service providers."
It seems to trap service providers between falling revenues on one side and rising capacity investment costs on
the other - effectively giving an ugly negative return on investment.
"Provider survival is going to depend on abuse control and the meaningful offering of tiered levels of service for different types of application," Bennett states. "To do this, providers must look much more closely at their network usage and how it can be managed."
What's happening to traffic P2p appl "have some very striking - and somewhat unexpected - effects on aggregate network traffic flows. Critically important is that upstream and downstream flows are pretty much symmetrical. In other words, the aggregate volume of traffic downstream over a period is similar to the volume sent upstream."
This matters, says the report, because mass-market broadband access networks such as residential DSL are based on the idea that downstream traffic will dominate, as it does with browsing and streaming media and, ""The whole assumption of ADSL is that it can steal some of the upstream spectrum without damaging application performance. But if flows are symmetrical, this argument flies out the window.
"At the level of a single subscriber doing a P2P download, the traffic is, of course, asymmetric because there is a small customer file sent upstream, followed by a larger file being transferred downstream. So the download traffic by itself looks just like the client/server model of the Web. But, because subscribers are sharing files as peers, at any given time a home PC may be a client or a server, so this combination of different subscribers uploading and downloading at the same time makes the aggregate traffic for file sharing symmetrical.
And P2P traffic is always on, meaning a lot of file sharing occurs in the background - "probably even when some subscribers are sleeping, having left their PCs switched on.
"Another critical fact is that bandwidth for standard interactive applications is most needed during peak hours, as this is when most customers are active and form their perceptions of service quality. To have interactive bandwidth and Web traffic competing with huge quantities of P2P traffic during these hours is a recipe for trouble."
Traffic and Applications
So P2P users are creating a vast wall of bytes that's hitting the Net. For example, the report continues, Ellacoya Networks measured 37 terabytes in total over 35 days behind one 12,000-subscriber cable-modem termination system alone, "utterly dwarfing the other application categories".
And yet, it's estimated that although p2p users can account for only about a quarter of online users at a time
(although this proportion is increasing), they can be 'hogging' more than 90% of the bandwidth and, "The upshot is that the popularity of P2P traffic is causing network-capacity issues for providers, not only because of total amount of traffic, but also from its unique nature compared to traditional applications, such as browsing and email."
P2p wasn't planned from the service-provider viewpoint, and now they're actively looking at a solution to try to address these issues, says the report.
"However," it says, "this isn't easy, because P2P applications have some pretty weird characteristics compared to the applications and protocols service providers are used to dealing with. They tend to be nonstandard or proprietary, and are often developed by hackers with the deliberate intention of fighting back against efforts made to control them. So they can use port hops to random port numbers, including those assigned to other applications, and some are now moving to using an encrypted mode (for example, Winny, which uses random port selection as well)."
'Combatting' P2P
Controlling P2P Traffic says there are various possible solutions, "and the good news is that these can be deployed together in certain combinations".
Keep cranking up the bandwidth.
"This is fine to a very limited extent, but P2P tends to expand to fill the bandwidth available and drives a lot of
off-net bandwidth, which is expensive for service providers. And they don't get any extra revenue from their customers who are running P2P traffic."
So, why not just shut down P2P?
"There are several reasons why this isn't going to happen. Service providers could potentially be sued by the P2P companies, for instance. But probably the biggest reason is that the first ISP that blocks KaZaA will lose a huge number of customers overnight; these are the applications that are driving the rollout of residential broadband. However, there's a special case with the enterprise network. Here the CIO really must get a grip over nonbusiness P2P traffic and shut it down. CIOs have a solid legal position, and the Recording Industry Association of America (RIAA) has threatened to sue companies that allow their networks to be used for the downloading of copyright-infringing files." [Our emphasis]
What about capping?
"In practice, such caps go down like a lead balloon with customers. In the U.K., NTL Inc. had only to mention that it was thinking of applying bandwidth caps to receive a wave of complaints from users."
Or what about prioritizing traffic to throttle back P2P volumes?
This, says the report, can be hard with conventional IP filters because P2P traffic tends to masquerade as other traffic.
Another option is to cache content, but, "Of course, caching makes sense only if the frequency distribution of downloaded files is heavily skewed, but this seems to be so. It turns out that a big chunk of P2P traffic comes from a tiny proportion of files - there are definitely top-100 lists for both music and movie files.
"The issue with caching may well be its legality. ISPs are currently safe from prosecution by the RIAA because they aren't responsible for the nature of traffic that passes through their network. However, if they use caches, they are technically storing illegal material. The legal position has yet to be settled."
The final option is the most elegant, says Bennett: "apply traffic management and service control to the P2P traffic. This puts control back in the hands of the service provider, which can now create tiered services or apply priorities as desired.
Service Control
Service control and optimizing the network for peer-to-peer traffic is a two-step process.
"The first step is to gain a much better, or more granular, view of the traffic on the network. The goal is to develop a clearer view of what applications are running on the network, and to analyze this information to understand traffic patterns - for example, by time of day, or whether traffic is off-net or on-net traffic - and even to identify some of the top users of P2P.
"The second step is to control the amount of P2P traffic on the network, taking into account the other applications that are running and the service provider's overall objectives for the network. So the provider might decide to halve the bandwidth currently being used by P2P and instead use the freed-up capacity to improve the service experience for other applications - and also to introduce new revenue-generating services."
In particular, "upstream file-sharing bandwidth control is very effective at reducing bandwidth and goes undetected by an ISP's paying subscribers, as typically over 93 percent of traffic is served off-net to nonsubscribers."
How and Where to Control P2P
Service providers can control P2P bandwidth, "on an aggregate or on a per-protocol basis, or control upstream only, or control downstream only," the report goes on. "They can apply control in both directions and at different rates. And control can be applied to an entire group of subscribers, or just to subgroups or even individual subscribers. And all these options can be combined in various ways, and applied differently at different times during the day."
But, it states, there's a further angle to service control and traffic management that potentially goes far beyond P2P congestion control and capacity optimization: differentiated services.
P2P Differentiated Services
"By implementing service control in the network, service providers are adding a layer of intelligence to make the network smarter," Bennett says at the coinclusion of his report.
"Being able to identify P2P applications and optimize the network clears the ground for the next stage of
providing differentiated services.
They can create new application-based plans, which is a new way of thinking for them. Traditionally, providers have concentrated on speed tiers through, for example, Gold, Silver, and Bronze services offering decreasing bandwidths. But application-based plans could involve tiers such as:
Basic Internet (email and Web) + Basic P2P (limited shared bandwidth)
Basic Internet + Premium P2P (channels for specific applications, such as gaming)
Further, providers can think in terms of driving the consumption of legal content by providing new services – for example, by faster downloads and integrated billing with content distribution partners and, "Apple iTunes is a specific example of this opportunity.
"Each download of a $0.99 iTunes track is treated as a separate transaction and attracts a standard credit-card fee to Apple of 1.735% + $0.20 (about $0.22). Financially, this is not very efficient, both for Apple and the content providers. Apple could, of course, improve matters by grouping transactions, but service providers historically have been masters at billing efficiently for small amounts. So collecting payments efficiently for content providers could become an important new revenue stream for the service providers."
But to make this transformation possible, providers need a new piece of kit: a service-management platform that has to perform four tasks:
* Accurate identification and classification of traffic on a per-application and per-subscriber basis
* Real-time control over classified traffic - for example, bandwidth shaping or application blocking
* Adaptation to changes in protocol encoding and rapid support for new applications because of the rapid turnaround needed for supporting emerging P2P applications
* Support for high-speed network rates and large subscriber capacity, which means classifying, analyzing, controlling, and reporting at gigabit line rates
"Once service-management platforms are installed, service providers can transform their broadband networksinto efficient, intelligent, application-aware distribution networks," the report concludes. "And this presents a real opportunity to turn P2P into a legitimate application to everyone's benefit.
"P2P is undoubtedly the killer application that broadband has been waiting for, but so far the commercial opportunity has been missing. The people who are effectively funding the P2P revolution at the moment are unfortunately the copyright owners. But one very positive thing that has come out of P2P is that it is a very efficient and very resilient distribution-network architecture.
"So there is a real opportunity here for broadband service providers to take P2P as a serious business proposition for content distribution. And there is growing evidence - witness iTunes - that subscribers are willing to pay for legal content if it is reasonably priced and easy to obtain. Providers would receive carriage fees for the content they carry, while offering faster downloads as a premium channel. By integrating download transactions onto a cable or broadband bill they could eliminate transaction fees - one of the bugbears of distribution. And they would be exploiting the high subscriber penetration of Tier 1 operators."
http://p2pnet.net/ez/index.php/content/view/full/475/
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Macrovision Sues DVD-Copying Firm
John Borland
Copy-protection company Macrovision said Wednesday that it sued DVD-copying software producer 321 Studios, joining the movie industry in a legal fight against the small software maker.
Macrovision claims that by making copies of DVDs, 321's software also is copying Macrovision's own patented anticopying technology, which guards against a different copying process.
"This lawsuit is based on a fundamental cornerstone of the American economic system--protection of intellectual capital," Macrovision Chief Executive Officer Bill Krepick said in a statement. "It is ironic that 321 Studios itself employs a sophisticated mechanism to prevent people from making illegal copies of its software, while at the same time selling products that aid in the theft of the intellectual property created by moviemakers."
Hollywood's lawsuit against 321 remains one of the most closely watched outstanding intellectual property cases.
The studios argue that the company's software, which makes virtually perfect copies of DVDs, violates the Digital Millennium Copyright Act, which forbids distribution of tools that break through digital copyright locks. A handful of other companies that produce similar products also have been sued.
Although initial arguments in the case were heard last May, both sides are still waiting for a judge to decide whether an injunction should block sales of the software, which is available in stores such as CompUSA. The decision could come at any time.
Executives at 321 Studios said they had not seen the lawsuit, nor had they been contacted by Macrovision.
"Macrovision is a company that manufactures an analogue copy-protection device that has absolutely nothing to do with anything of 321 Studio's products," 321 President Robert Moore said. "We are puzzled by Macrovision's press release today and disappointed that the company officers did not contact 321 Studios directly to clear up any misperceptions or confusion they have about our product."
http://news.com.com/2100-1025-5137077.html
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Consumers Sue Over Anti-Copy CDs
BBC
Major record labels are being sued by a European consumer group over copy-protected CDs that fans say are faulty.
Belgium-based Test-Achats says new technology that stops CD copying also stops fans playing them on some devices and making legitimate back-up copies.
The group wants EMI, Universal, Sony and BMG to stop releasing copy-protected CDs and to reimburse fans.
But the International Federation of the Phonographic Industry (IFPI), a trade group, said the suit was baseless.
The copy protection technology was introduced two years ago by record companies who faced a sales slump and wanted to stop pirated CDs reaching the black market.
It usually works by placing a layer of data on a CD that only enables playback on a home stereo or portable hi-fi device.
But Test-Achats, known as Test-Aankoop in Dutch, said it had received 200 complaints from fans who were angry at the fact that they could not listen to the discs on some CD players.
Big-selling releases including Shakira's Laundry Service and Radiohead's Hail to the Thief were affected, they said.
Test-Achats spokesman Mechels Ivo said: "We are trying to establish legal precedent in this matter. Then we expect other consumer organisations will follow."
'Protect'
But an IFPI statement said: "European law is clear that record companies and other copyright holders have the right to protect their works through technical means."
Industry observers say the lawsuit is the biggest European legal challenge yet to the music industry's practice of releasing copy-protected discs, according to the Reuters news agency.
The lawsuit is expected to be heard in a Belgium court this week.
Warner Music is the only one of the five major music labels not named.
http://news.bbc.co.uk/1/hi/entertain...ic/3372859.stm
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The RIAA Goes Back To Washington
Donna Johnson Edwards
Let's start with the fact that some people just don't seem to be concerned about the property of others. If one can get something for nothing, one tends to do just that. Just look at the music industry, the Recording Industry Association of America (RIAA) and Verizon Communications, Inc. have been involved in a bleeding edge controversial legal battle that could eventually be settled by the U.S. Supreme Court if it keeps the legal pace set in 2003.
The basis for the skirmish is the controversial law, Digital Millennium Copyright Act (DMCA) which, among other things, was enacted to protect Internet Service Providers (ISP) from becoming entangled in copyright infringement suits. But in this well publicized legal conflict, it may be your privacy that is the ultimate loser.
Here is the background -- the RIAA is a watchdog group representing the recording industry. The group routinely nabs music software pirates (people illegally exchanging music files) and seeks prosecution under U.S. Copyright laws. The laws protecting the interests of copyright holders provide for both civil and criminal punishments of infringers. Fines of $150,000 per incident of infringement are hefty incentive for the RIAA to track down offenders and that is just what they have done.
In a provision of the 1998 DMCA, if an ISP is informed by a copyright holder that infringing material is being hosted on the ISP's site, the ISP must promptly remove the infringing material and in doing so will be protected from being included in a copyright infringement lawsuit.
The RIAA identified Verizon and other ISP's subscribers who were using the Kazaa peer-to-peer (P2P) file service to exchange pirated music. Pirated music is, quite simply, songs for which the copyright holder has not been paid a proper fee for use. The RIAA could not determine the offender's names; only that Verizon was the ISP. The RIAA asked Verizon to turn over the names of the suspects; however Verizon refused to comply without a subpoena on the grounds that doing so would violate customer privacy rights as well as due-process. Good for you Verizon!
The DMCA allowed copyright holders to request a subpoena by asserting that a copyright had been infringed to force an ISP to divulge the names of the accused. The subpoena could be requested on a single page form and subsequently issued by a clerk of the court, not even requiring review by a judge. Ouch!
Verizon argued in court that the DMCA subpoenas only applied when the infringing material was hosted on the ISP's network and not on the infringer's own computer. In other words, Verizon was simply the conduit not the host. It lost that case and was ordered to turn over the subscriber's name. Verizon appealed the federal judge's decision and requested a stay of the order to allow the appeal case to be heard. A 14 day stay was allowed but the U.S. Court of Appeals in Washington would not suspend the order and forced Verizon to turn over the subscribers names.
The RIAA has issued more than a 1,000 of these subpoenas to ISPs, universities and businesses demanding the names, addresses and sometimes the e-mail addresses of users it alleges are engaged in copyright infringement through music file swapping. The subpoenas were issued from the U.S. District Court in Washington, DC which had to reassign clerks to help with the backlog! Your tax dollars at work my friends!
Verizon, other ISPs, as well as privacy groups contend that clerk-issued subpoenas open the door for abuse by, not only the RIAA, but potentially pedophiles, stalkers and the like. All the while there was an uncontested avenue for the RIAA and other watchdog groups to ascertain this information. All that was required of the RIAA was to file "John Doe" lawsuits, in which they needed to convince a judge that the user's identity should be revealed. Thought that avenue has been available, the RIAA sought to shortcut the legal process by requesting the names via clerk- issued subpoenas.
Now a three-judge panel from the U.S. Court of Appeals for the District of Columbia has overturned the trial judge's ruling that enforced the clerk- issued subpoenas and has now ruled that the streamlined subpoena process being used to compel alleged file-swappers' ISPs to reveal their identities is illegal!
However, before this latest ruling, the RIAA reached out-of-court settlements with over 200 Internet users after tracking their actions on- line and forcing Internet providers to provide their names. Some of those caught in the high-speed net were grandmothers and even a 12 year-old girl (a fact that caused some very bad publicity for the RIAA).
My head is spinning trying to keep up with the legal game show hosted by the music industry! I expect it will not be long before the RIAA comes up with another approach and we can only hope that Verizon and other ISP haven't emptied their legal coffers and will continue to protect our privacy.
The fact of the matter is this, since the explosion of subpoenas, a plethora of new on-line music sites have evolved providing a legitimate source to download music at reasonable prices. Did it really take all of this legal mess to prompt the industry to solve its own inadequacies?
It is possible this conundrum will only be settled by the U.S. Supreme Court and whichever side of this digital war comes out ahead in the courtroom, it is likely that modifications to the DMCA will indeed be made to clarify the intent of the law.
Meanwhile, like many, I'm still not buying overpriced CDs. I'm not downloading "free" or "for fee" music either. I'm just turning on the radio and changing the channel when a commercial interrupts the tunes. It is appropriate for musicians to be compensated for their artistic work. But it's hard to have much sympathy for the artists when the music industry associations are attacking our children and our privacy.
The belief one is "anonymously" surfing the Internet is now a part of history. Watchdog groups no longer ignore individuals who violate copyright laws. What is happening on your organization's IT systems? What is happening on your own home PC? Could you or your organization afford to pay the stiff fines associated with these laws? Has every precaution been taken to prevent this type of activity from taking place in your organization? Understanding the law and protecting the integrity of an IT infrastructure is essential. Ask yourself this question: Who will be the next casualty of the RIAA, will it be your university, your business or your children?
http://www.richmond.com/business/out...tical=Business
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iTunes DRM Cracked Wide Open For Gnu/ Linux
Andrew Orlowski
Exclusive
Norwegian programmer Jon Lech Johansen, who broke the DVD encryption scheme, has opened iTunes locked music a tad further, by allowing people to play songs they've purchased on iTunes Music Store on their GNU/Linux computers.
"We're about to find out what Apple really thinks about Fair Use," Johansen told The Register via email.
Johansen cracked iTunes DRM scheme in November by releasing code for a small Windows program that dumps the stream to disk in raw AAC format. This raw format required some trivial additions to convert it to an MP4 file that could be played on any capable computer.
But in the best Apple ease-of-use tradition, Johansen has now made this completely seamless, integrating it with the VideoLAN streaming free software project.
How it works
Johansen deduced that the system key which locks the locked music to a single Windows computer is derived from four factors: the serial number of the C: drive, the system BIOS version, the CPU name and the Windows Product ID.
"When you run the VideoLAN Client under Windows it will write the user key to a file. The user key is system independent and can thus be used by the GNU/Linux version of VLC," he explains.
While Apple's iTunes Music Store is restricted to Windows and Apple computers, and Apple only supports its own iPod player as a playback device, VideoLAN is GPL software that runs on a wide variety of computers including Linux, the BSDs, Solaris and even QNX. Although users are at present permitted to burn a CD with music they've purchased, only three Apple or Windows computers are "authorized" at any time. These terms may be tightened at any time, Johansen himself noted recently.
"The RIAA can at any time change the DRM rules," he wrote in November, "and considering their history, it's likely that they will when the majority of consumers have embraced DRM and non-DRM products have been phased out. Some DVDs today include commercials which can't be skipped using 'sanctioned' players. If the RIAA forces Apple to include commercials, what excuses will the Mac zealots come up with? 'It's a good compromise'?"
Reaction
"The restrictions are very frustrating for consumers, and frankly, are unnecessary," Electronic Frontier Foundation attorney Fred Von Lohmann told The Register.
"Every song on iTunes Music Store has been available on the Peer to Peer networks within four hours. All the DRM does is frustrate legitimate consumers; it doesn't stop file sharing," he says. "The real innovation of the last several years was Kazaa and the other file sharing applications. These are leaps and bounds more relevant than iTunes Music Store."
Although the number of downloaders has diminished in the face of lawsuits by the RIAA, tens of millions of Internet users continue to share music on the P2P networks, dwarfing the number of locked- music downloads from DRM stores such as Apple's iTMS.
Apple is widely expected to announce more locked music playback hardware at the MacWorld show in San Francisco this week. But with support growing for flat fee licensing models even amongst record industry executives, today's DRM Goldrush (and the ensuing iTunes vs Windows Media war) could be a very short lived skirmish.
Johansen broke the CSS encryption scheme on DVDs - a case the Norwegian government finally let go - so he could watch a movie that he'd legitimately purchased on his Linux PC. Now millions of Linux users can do the same with iTunes locked music. You can download the code
here.
http://www.theregister.co.uk/content/6/34712.html
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ThinDivide.com Launches Industry's First P2P Network for Pay-Per-Download Music Distribution.
Press Release
ThinDivide.com, home of the first peer-to-peer music distribution platform that provides music content owners with security and distribution control, allowing for cost efficient and prompt music promotion. You decide what music, song or artist you want to promote and when, not the other way around.
ThinDivide ensures that your music file is accurately, instantly and securely delivered to the end-user for their preview and potential purchasing. ThinDivide.com has created a revolutionary way to securely distribute and assist content owners in promoting artists’ new singles or albums instantly to millions of listeners, worldwide. Distributing music content via ThinDivide will never interfere with the usage of end users’ computers, nor will they notice any performance disturbances when the song is downloading and getting ready to play.
ThinDivide.com offers non-exclusive, cost effective online music distribution and promotional campaigns. Thindivide insures that your music is accurately, instantly and securely delivered to the listeners, without interruption of services or loss in content quality. "We have created the ultimate equalizer for the music industry and have priced it within the budget of most every music professional.", expresses Daniel Nichols, Director of Business Development.
ThinDivide is dedicated to utilizing its Peer-to-Peer network to help put the control of music content distribution back into the hands of the content owners. Take control of your band or labels' future and contact
www.thindivide.com today!
http://www.emediawire.com/releases/2004/1/emw97083.htm
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Peer-to-Peer File Replication
RDS enables mission critical scheduled replication and synchronization of file systems over networks regardless of content, volume or production environment.
RDS is for enterprises running both UNIX and Windows operating systems in production environments, performing a one-to-one and cascaded file replication.
RDS scales to handle very large files and huge replication trees - without maximum size limit or performance degradation as content volume grows. The synchronization time does not depend on the total volume of data to be replicated, but only on the volume of changes.
Replication processes run unattended. The scheduling framework provides automated recovery that is resilient to any failure including reboot, power outage and loss of network connectivity. Failure recovery resumes at the exact point of failure once connectivity is restored.
RDS is flexible and feature rich, allowing the user to configure replications according to business needs. Replications can be tuned to include or exclude specific files and folders, to perform pre and post replication tasks, and to be sensitive to network bandwidth or server CPU. RDS is built to accommodate high-speed LAN networks as well as slow WAN networks or busy networks where replication bandwidth use needs to be controlled.
Either GUI, command line or API interface can be used to define, monitor, and control file replication processes from anywhere on the network. Centralized reporting and logging options provide replication related data at corporate IT level. Runs as an unattended service or daemon with control from anywhere on the network. Detailed centralized reporting and logging functions.
RDS provides secured replication. Being TCP/IP based and not relying on windows networking, it is firewall friendly. Data transfer is encrypted and authenticated.
http://products.enterpriseitplanet.c...073216813.html
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Time For File-Sharing's Day In Court
Kate Taylor
What I'd really like to see in 2004 is a few good music-industry lawsuits make it to the courts.
That's not just journalistic schadenfreude. One of the difficulties in sorting through the rights and wrongs of the downloading debate that raged throughout 2003 is that much of the law it involves is untested -- or at least untested as it applies to the new technology.
Is downloading illegal? Probably not, but it's complicated. Is uploading illegal? Probably so, but it's complicated. Are the answers to these questions different in Canada than there are in the United States? Could be. Can the courts force Internet service providers to release their customers' addresses? We'll have to wait and see. This doesn't exactly produce the simple rules that would be needed to convince file sharers that they are infringing copyright law even if the music industry insists they are.
The U.S. record companies' legal campaign suffered a recent set back when a federal appeals court ruled that the 1998 copyright law under which the industry was garnering addresses from the ISPs predated file sharing and thus didn't apply, but the mere threat of the lawsuits does seem to have borne fruit: U.S. use of Kazaa, the popular file-sharing website, was down more than 40 per cent this fall according to Nielsen/NetRatings.
This has encouraged the Canadian industry to consider the same tactics. After $1-million education campaign proved to have little effect in changing attitudes, the Canadian Recording Industry Association is now saying it will sue file sharers in 2004, and will obtain their addresses through court orders.
CRIA has specifically stated, however, that it will not sue mere downloaders. Although CRIA argues the practice is illegal, when you download a music file from the Net, you could be considered to be making a single copy for personal use, which is permitted under copyright law. When you upload, that is when you allow other users to copy your copy, you are on much shakier legal ground because you are distributing the music. And it is the users with thousands of music files sitting on their computers and available for sharing who are the industry's target for lawsuits.
The notion that downloading is probably okay is specially well recognized here because the Copyright Board of Canada has placed a levy on the sale of blank CDs, tapes and, most recently, MP3 players, that is intended to compensate artists and record companies for copying. The U.S. also has a levy system established in the early 1990s, but because it prematurely picked the wrong technology -- digital audio tape rather than CDs -- it raises a pittance.
The levy has many critics -- including a coalition of groups that includes the retailers who sell the targeted technology, telecommunications companies and academics favouring more liberal copyright -- who don't like the way it indiscriminately makes all customers pay no matter what their intended usage, but this fall did see the start of some discussion in the U.S. about a Canadian-style levy as a solution to the problem.
Still, the levy has proved a double-edged sword for the Canadian music industry, which lobbied hard for its establishment. It's a case of be careful what you wish for. CRIA doesn't consider the few million raised by the levy to be compensation for $250-million in CD sales lost in the last three years, but opponents can argue that, in Canada, users are already paying for their copying. The levy has also been used as a weapon as the two sides argue over whether Canada should follow the U.S. lead and ratify two international treaties established by the World Intellectual Property Organization to extend copyright into the digital era.
The federal government is currently examining how it would bring Canadian law into sync with the treaties, which the music industry wants to see ratified as soon as possible, but opponents argue that Canada would then have to extend its levy to international artists to the tune of hundreds of millions of dollars. The pro-treaty forces dismiss these doubts as a red herring, arguing that Canada would only pay such fees to countries who have similar systems in place and thus are already paying us, which doesn't include the all-important U.S. market.
As the legal whizzes on both sides battle it out, it would be very interesting to hear what a judge has to say about the implications of the levy system for downloading and file sharing, and to know just how much use of music files the courts consider permissible. File-sharing technology has created a wide boulevard of music where fans are gleefully joy-riding; it's going to take a more authoritative cop than the music industry to turn it into a narrow, one-way street.
http://www.globetechnology.com/servl...3/TPTechnology
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Ruling May Affect University File-Sharing Case
Emily Steel
A recent decision by a federal appeals court could trickle down to preserve the anonymity of the UNC student accused of making songs available for downloading.
The student has enlisted the help of the American Civil Liberties Union and has filed to quash the latest subpoena, issued Nov. 12 by the Recording Industry Association of America as part of its battle against illegal file-sharing.
The RIAA withdrew its first subpoena, filed Oct. 6, because it was filed in Washington, D.C., and was invalid in North Carolina.
Judges in the U.S Court of Appeals in Washington ruled Dec. 19 that Internet service providers are not required to release the names of computer users who share songs.
Aden Fine, a staff attorney for the ACLU, said the federal court's decision most likely will affect the result of the motion filed by the ACLU Nov. 21 at the U.S. District Court in Greensboro.
"By stating that the RIAA's actions are unconstitutional, this case should certainly have an impact," he said.
David Parker, senior associate University counsel, said University officials are waiting to release to the RIAA the name of the UNC student accused of illegal file- sharing until a judge makes a decision on the case.
Fine said all briefs have been filed in this case and judges probably will set a date for a hearing within the next month.
ACLU filed the last brief Dec. 31 in response to the RIAA's brief.
The reply brief argues that the allegedly incriminating information is not on the University's system and that the subpoena violates the due process clause of the Fourteenth Amendment because it does not adequately protect against the curtailment of constitutionally protected expression.
It also states that the motion violates a mandate that court actions and judicial processes be obtained only in pending cases and controversies.
"In this case, each argument the recording industry is making in the UNC case was firmly rejected by the appellate court," Fine said. "The decision is now in the hands of the court."
He predicted that the federal case will change the RIAA's approach to its crackdown on illegal file-sharing.
"This case is still very important not just to what the RIAA is doing, but should affect how the University will respond to subpoenas," Fine said.
Parker said University officials will continue to follow court orders when subpoenaed to disclose the identity of students accused of illegal file-sharing.
"The University will do whatever the court orders us to do."
http://www.dailytarheel.com/vnews/di.../3ffc0a7b0b3d5
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Five Tech Giants Unite To Deter File Sharing
John Markoff
The technology and entertainment industries have long been at odds over the best way to secure intellectual property rights, as digital technology advances.
Now, five of what industry executives say are the world's most powerful computer, cell phone and electronics companies are planning a new system for protecting digital music, video and software from illicit file sharing that they hope will at least narrow that gap.
A global consortium of technology companies is laying the groundwork for a campaign to convince Hollywood and the recording industry that it has finally found an acceptable way not to just limit the copying of music CDs and movie DVDs, but to protect digital content in the fast-growing market for handheld devices capable of playing music, video clips and computer games while wirelessly connected to the Internet.
As these groups prepare to converge on Las Vegas this week for the annual Consumer Electronics Show--by far the biggest trade show for the makers of digital devices and the shapers of what goes into them--the fight over what has come to be known as "digital rights management" is expected to move to the back burner, at least briefly.
That way, everyone can celebrate the long-awaited recovery for the consumer electronics and entertainment businesses that manifested itself in their best holiday buying season since the late 1990s. But the issue will not go away. The consortium--known as Project Hudson and made up of Intel, Nokia, Samsung, Toshiba and Matshushita-- plans to announce its new approach in early February to precede the Grammy music awards and the movie industry's Academy Awards ceremony, executives say. Unlike the system used to protect DVD content, an Internet-based wireless protection plan could permit users of handheld devices to share movie or music files on a limited basis or permit files to be shared for promotional purposes. Users could also hear a song before deciding whether to buy it.
For the entertainment industry, the Internet has often been viewed primarily as a threat, because it makes it possible to transmit copies of just about any original work that can be converted to digital code to just about anyone in the world. But it is increasingly being viewed more positively by some entertainment strategists, who recognize that the Internet's nature as an "always on" medium makes it possible to refine new "digital leashes" to help ensure that copy protection plans are not subverted.
Beyond trying to convince Hollywood and the recording industry that new technology can prevent illegal sharing of digital content without unduly restricting use, the consortium's approach represents an effort to control the standards and garner the rewards from developing a successful system. Project Hudson pits the new group against other copy protection systems that are being advanced by Sony and Royal Philips Electronics, Apple Computer, RealNetworks and others. But the most important target is probably Microsoft.
"They would say they are anti-Microsoft forces," a recording industry executive close to the companies said. "The alternative is to sign up with Redmond."
Microsoft, based in Redmond, Wash., is promoting its own plan, known as the Windows Media Rights Manager. But it has been held back, in part, by a legal challenge over the infringement of software patents that belong to a smaller American company, InterTrust Technologies, which Sony and Philips acquired in late 2002.
Fears in Hollywood and the recording industry over Microsoft's potential control had also stalled the software maker's thrust into the world of digital media. But those fears have lessened lately, in part because of the emergence of competing technologies from Apple, RealNetworks, Roxio and others. Digital content providers are increasingly finding ways to use some of Microsoft's technology without giving up control of their content.
"There had been a general fear that Microsoft would own the entire security stack," said William Randolph Hearst III, a partner at Kleiner Perkins Caufield & Byers, a prominent Silicon Valley venture capital firm in Menlo Park, Calif. But companies are starting to tell Microsoft that they are willing to use only part of its software protection technologies, he said.
Another new consortium of companies is engaged in an effort to create a set of standards that will make it possible to universally distribute digital content across different platforms and technologies. That group, known as the Content Reference Forum and backed by Microsoft, Nippon Telegraph and Telephone, Universal Music Group, VeriSign and others, announced its effort in December.
The group cites an example of a personal computer user who wishes to share a digital video file with a friend. Instead of sending the file directly, the file owner would first send a "content reference," a digital pointer that permits the file to be downloaded and tailored to the receiver's own country as well as the specific computer or other playback device. If the file needed to be purchased, the system would perform the commercial transaction before sending the file.
The interest in new copy protection approaches has also been spurred by Apple's successful iTunes music store, which has shown that consumers are willing to put up with digital copy protection plans that do not seriously interfere with their ability to enjoy entertainment products easily when and wherever they want and, within limits, share what they buy.
"If you put up the right kind of speed bump, people will generally honor it," said Mike Godwin, a lawyer who represents Public Knowledge, a group in Washington, D.C., that advocates giving consumers greater weight in the struggle with business interests over intellectual property rights.
Adding to the interest in developing new copy protection approaches was Sony's announcement last May that it expects to introduce a new wireless handheld device in time for the 2004 holiday buying season.
Sony, with its Walkman line, was once the leading force in the field of portable electronics, but it has lost a lot of ground by not keeping up with innovations from others, particularly Apple's increasingly popular iPod digital music player.
To help itself get back in the game, Sony, which controls its own digital content and technology standards, is also expected to introduce a smaller audio CD standard.
Other consumer electronics companies consider the potential popularity of the format a threat, said Richard Doherty, an industry consultant who is president of The Envisioneering Group of Seaford, N.Y.
After years of separate development of various handheld digital devices, industry executives expect music and video players, cell phones, personal digital assistants and handheld video game players to increasingly converge on common portable platforms. Moreover, such devices will have data-networking capabilities that rival personal computers connected to the Internet via high-speed cable modems and digital subscriber lines.
Sony has a great deal riding on its new handheld player. Ken Kutaragi, the Sony executive who created the company's highly successful PlayStation business, has referred to it as a "Walkman for the 21st century."
He said the Japanese electronics company will go to great lengths to create strong data protection plans for what it is now calling the PSP (PlayStation Portable), after facing extensive software piracy of video game titles designed for its first-generation PlayStation.
Balancing the proliferation of competing digital information protection plans is a growing realization that the industry needs common standards.
That failure is hampering the growth of digital technologies, said Leonardo Chiariglione, an Italian electrical engineer who founded the group that developed the original MP3 digital audio-compression standard widely used to play music on computers and share it across networks.
"Content should be as transparent as it is today with MP3," Chiariglione said. "It should be movable anywhere and still be protected. If we stay with digital islands, people have a legitimate excuse to piracy."
http://news.com.com/2100-1025-5135586.html
Shoe - Macnelly
Secret Movie Moguls
In a highly elite realm of the Internet, ego-driven pirates race to be the first to post films illegally. Profit is not the object.
Jon Healey
Nearly halfway around the world from Hollywood, a 17-year-old high-school student is trying to make a name for himself as a film distributor.
Unlike the moguls in Tinseltown, though, he and his colleagues in a group called MysticVCD don't cut deals, take meetings or campaign for Oscars. Instead, their goal is to put a movie on the Internet first, long before it's officially released on tape or disc. If MysticVCD wins the race, the digital copy it produces will be downloaded onto tens of thousands of computers around the globe, potentially reaching more screens than the film itself did in theatrical release.
MysticVCD is one of dozens of "ripping" or "release" groups that obtain, prepare, package and feed movies, songs and games into a secretive and complex distribution scheme that functions a bit like the illegal drug trade — minus the bloodletting.
Insiders and piracy experts say the groups are motivated mainly by ego. Instead of cash, the online underground is powered by bartering — admission to these elite circles is granted only to those with something valuable to offer, such as computer parts or a pre-release copy of a DVD.
"I am in the scene in order to provide movies to the people" and to gain access to private sites with pirated goods, the founder of MysticVCD said via e-mail. Asking not to be named, he would say only that he lives in the Greenwich mean time zone, which stretches from the British Isles south to western Africa.
There's also a social aspect to the scene even though most groups' members know one another only by code names such as "markalso" and "bambino" and never meet in person.
Common to most groups is a disdain for selling pirated goods in favor of giving free access to anything and everything.
"Please remember: We do this for FUN. We do not make money off this whole business," said a posting from a group called Centropy. "All of us go to the movies regularly and pay for our tickets just like everyone else."
Not everyone in the scene is so pure. Some players — including members of Centropy — are suspected of selling pirated movies and music to commercial bootleggers who have made billions of dollars peddling knockoff CDs and DVDs on the streets of cities around the world.
Regardless of whether there's money involved, what the ripping groups do violates copyright law. Federal agents recently mounted three sweeps of online piracy groups that netted at least 46 guilty pleas and 19 prison sentences. Those nabbed range from a 40-year-old Australian to a 20-year-old student at Duke University. More investigations are underway.
"The risk that really wasn't there for them a few years ago is now, I would say, pretty significant," said Bob Kruger, vice president of enforcement for the Business Software Alliance, which has been chasing online software pirates since the early 1990s.
On the whole, however, music and movie groups have operated with near impunity, protected in part by the elaborate steps they take to screen participants, conceal their identities and disguise their locations. The entertainment industry has focused on filing suits against file-sharing networks such as Kazaa and their users, who ultimately copy much of the ripping groups' works. The industry also is trying to deter piracy at the grass-roots level with electronic locks for CDs, DVDs and downloadable items.
Kruger said online piracy groups have been around at least since the early 1990s. The initial focus was "warez," or computer programs that had been stripped of their anti-piracy protections.
Although most piracy groups still concentrate on software and computer games, a steadily growing number dedicate themselves to movie and music piracy. NFOTemple.com, a site that catalogs the boastful explanatory notes, or NFO files, posted by release groups, listed 140 crews devoted to movies in 2003, up from 32 in 2002.
The growth was fueled by the skyrocketing capacity of computer hard drives and the proliferation of high-speed Internet connections. The technology for turning analog audio and video signals into compact digital files improved rapidly too, slashing the time needed to transmit movies or albums online.
The scene is closed to much of the world; would-be participants have to gain the trust of insiders and prove their worth before gaining entry. And the lifespan of groups tends to be short, at least on the Net, where players come and go.
The ripping groups often share similar structures, with officers who grant or revoke privileges, set policies and assign duties to the members. And their members, who share a love for free access to virtually any movie, song, game or software program, include not only teens but also 30-something professionals with families.
The first task for a movie-focused group is getting its hands on a film, possibly by obtaining a disc or tape from someone in the industry's distribution pipeline before its official release. A ripping crew that calls itself Chosen Few alluded to these sources in a recent online posting.
"If you or someone you know works at a video store, movie review affiliate, DVD distribution warehouse, production studio, Academy Awards/Oscar staff and/or have some other means of getting your hands on screener/retail VHS or DVDs ahead of store date, contact us now."
Another approach — the one typically used first — is to sneak a digital camcorder into a cinema, then record the film as it is projected. That's what MysticVCD did in November, obtaining a version of "Elf."
Music-oriented groups, meanwhile, try to grab pre-release copies of CDs and vinyl records from radio stations, reviewers and record-label insiders. For example, the group RNS obtained and released a copy of "In Time: The Best of R.E.M." a week before the disc went on sale in late October.
Once a movie is in a ripping group's hands, it may be passed along a virtual assembly line where members with different skills perform time-consuming tasks. For example, an encoder would convert the tape or disc into a computer file, then leave it for other members to edit out the identifying marks studios insert to track copies, break the file into pieces small enough to move easily through the Net and check the final package for errors.
The next step is to release the pirated goods online and claim the credit.
Many groups, particularly the more established ones, have at least one member operating private Internet sites as banks for their pirated goods. These members — often skilled computer technicians who work on corporate or university networks — have access to computer servers with ultra-fast connections to the Internet, which they use to power the group's sites.
Other crews release the fruits of their labor to sites operated by better-known groups. To make sure everyone knows whom to credit, ripping crews include their monikers in each release's file name and add a boastful explanatory note to the package.
Mike Nguyen, a network administrator, operated two sites for the warez group Drink or Die until federal agents descended on him late in 2001. He pleaded guilty to criminal copyright infringement and was sentenced in September to five years' probation, with an obligation to perform 2,400 hours of community service.
Although he told group members that he'd hidden the sites' hardware in an air conditioning duct at the California university where he worked, Nguyen actually kept the two computers tucked under his workbench. The computers were stuffed with extra hard drives and other upgrades that Nguyen had collected from people who wanted to be granted access to the site's goods. The drives gave each computer 20 to 40 times the storage of a typical PC, enough to hold "the functional equivalent of every piece of software, music and movie sold at a Best Buy or Circuit City or CompUSA," said Assistant U.S. Atty. Christopher Johnson.
A few dozen digital vaults known as "topsites" have acquired a leading role by having the fastest Internet connections, the largest capacity, the earliest copies of the most sought-after goods and the most capable couriers for delivering material around the Net.
As soon as an item is released online, a second set of groups, called couriers, goes into high gear. Like drug mules or drones in an anthill, the couriers' job is to move pirated goods to other private sites on the Net.
Even groups with their own topsites want their releases copied to other sites. The point, said a source close to the scene, is to spread the word of their exploits and earn praise from the rest of the groups, which is the main reward for 99% of the people involved.
Sometimes group members will send files to other sites themselves, using a technique called File Transfer Protocol instead of e-mail. But there's so much data involved — a typical movie can consume 2 gigabytes — that using multiple couriers with fast Internet connections in various locations around the globe accelerates the process.
Couriers who bring new booty to a site are rewarded with credits that they can use to download other pirated goods. These credit accounts act as a sort of currency and fuel the rapid and widespread distribution of movies, music and other digital goods online.
It's not easy to get into any of the private sites, which typically conceal their Internet addresses and communicate only with pre-approved computers.
The general rule, Nguyen said, is that "you have to know someone who can vouch for you or have something you can offer that is of interest to that site operator or group." Topsite operators tend to have everything they want, "but on non-topsites you might be able to work a deal."
Such a deal might involve providing storage capacity and bandwidth, especially outside the United States.
Another way to gain entry is to offer a movie that is in high demand. The main factors affecting the value of a pirated film are how early it's released, how good the video and sound are and how highly it's rated on the Internet Movie Database.
"The higher the IMDB rating, the more sites that will accept it," said the source close to the scene.
MysticVCD's release was the fifth version of "Elf" to hit the Net — three came out before the movie's Nov. 7 premiere, two after — but the group justified it by claiming superior picture quality. It was released on three topsites operated by members of the group, the founder said, adding that he expects to be offered access to more sites after the group puts out more movies.
He may have to improve the quality of his product first. MysticVCD's version of "Elf" got mixed reviews from online commentators, with some praising the effort but others complaining about blurry images.
According to Nguyen, it takes minutes for a newly released item to reach all of the topsites, but it may take hours or days to reach the lower echelon of private sites. After that, the digital booty leaks out intermittently to online areas more accessible to the public, such as chat channels and news groups.
That process, which is haphazard, can take days or even weeks. "The lower down the totem pole you go, things are not as organized as they are in the higher echelons," Nguyen said.
"When things start flying around on the Internet," Kruger said, "I don't know that you can identify where they're coming from."
One way pirated goods move from private to public sites is through a new layer of groups that operate on the chat channels. These groups compress and re-release the ripping groups' movies, often adding their own brand to the file names. Unlike the private sites, most of the chat channels and news groups are open to anyone who can master their relatively arcane protocols.
The last stop is one or more online file-sharing networks, which is where the piracy problem mushrooms for the movie industry and other copyright owners. The cross- pollination often comes from a "middle-level geek" who trolls the chat channels and news groups for newly pirated goods, then offers them on a file-sharing network, said the source close to the scene.
Randy Saaf of MediaDefender, an anti-piracy company based in Los Angeles, estimated that 20,000 to 30,000 people have access to the private sites and close to 100,000 use the news groups. By contrast, at any given moment more than 3 million people around the world are using Kazaa, the most popular file-sharing network.
According to BayTSP, another anti-piracy firm, nearly 15,000 copies of "Elf" were on the three leading file-sharing networks as of Dec. 15. That's pretty tame compared with "Finding Nemo," which showed up on more than 100,000 file sharers' computers in June.
"As long as there's material potentially out there, there's going to be people dedicated to doing it," said Tom Temple, director of worldwide Internet enforcement for the Motion Picture Assn. "All it takes really is two people, or even one person who's motivated to keep up the activity, and then it will go on."
http://www.latimes.com/technology/la...nes-technology
LA Times’ “Chain of Piracy”
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