[JackSpratts]

The Gambling Is Virtual; the Money Is Real
Matt Richtel and Heather Timmons

Can the United States handcuff online wagering?

Glen Walker, a professional sports bettor in North Carolina who places up to 70 bets a week of $2,000 to $5,000 each during football season, does not think so. “They’re not going to stop the offshore sports books,” Mr. Walker said. A crackdown will “just force it back to the black market.”

Last week, one such wagering site, BetOnSports.com, a publicly traded company in Britain, became the focal point of an American crackdown on offshore casinos, where gamblers anywhere in the world can use the highly profitable sites to place wagers on sporting events. They can also play casino games like blackjack and poker from their personal computers.

Federal agents arrested the British chief executive of BetOnSports, David Carruthers, who was in the United States on a flight layover. He is in custody in Fort Worth; the betting site has temporarily suspended operations to satisfy a temporary restraining order that prohibits the company from taking bets from United States residents. Mr. Carruthers is awaiting a hearing on his detention.

In Washington, the House overwhelmingly approved legislation recently that would clamp down on Internet casinos in part by restricting the ability of American financial institutions to process wagers.

The legislative-prosecutorial one-two punch appears to be the most concerted effort yet by the federal government to undermine Internet gambling in an era of well-organized, publicly owned offshore casinos. For the first time, Washington has succeeded in temporarily shutting down a publicly owned site and its effort has gained the attention of the operators, whose share prices plummeted last week.

Still, few experts expect the crackdown to do anything more than dent the industry. Sebastian Sinclair, an analyst with Christiansen Capital Advisors, which tracks online gambling trends, said offshore gambling could be “curtailed but it cannot be stopped.”

Other experts see the recent moves as little more than an elaborate cat-and-mouse game serving only to benefit Las Vegas and Atlantic City casinos, along with Indian gambling operations, rather than seriously protecting Americans from falling prey to excessive gambling.

Some eight million Americans like Mr. Walker wager $6 billion annually through the Internet, many making bets on their favorite sports team or the N.C.A.A. basketball pool. About half of all online wagers come from the United States.

Critics say that online gambling is the equivalent of putting a slot machine in every home, providing an easy chance to lose money with a few mouse clicks, all without the social controls at a bricks-and-mortar casino.

Mr. Walker disagrees. “We’re not doing anything immoral or illegal,’’ he insisted. “I just don’t see that I’m harming anyone.”

While prosecutors argue that Internet casinos violate the law, there is no federal prohibition against actually placing a bet. So how much success the federal push can have “is a very profound question,” said Representative Jim Leach, Republican of Iowa, the co-author of the legislation, who says the gambling is detrimental to families and the economy.

But even he concedes that Washington’s best efforts will lead only “to a reduction but not necessarily to an ending” of online gambling.

The question of further curbing Internet gambling has been a perennial issue in Congress in recent years. But people involved with the legislation say the reason for its success, at least in the House, is mainly explained by lawmakers wanting to distance themselves from the corruption scandal involving the convicted lobbyist Jack Abramoff and his association with Indian casinos. Mr. Abramoff had lobbied vigorously against versions of the bill in the past. Still, some politicians in the House came out strongly against the bill, including Representative Barney Frank, Democrat of Massachusetts, who called it “cultural authoritarianism.”

Industry executives and analysts say similar bills have failed in the Senate, and many feel that it is unlikely to gain traction there. Analysts from Dresdner Kleinwort in London call the measure inconsistent and unenforceable.

Nevertheless, executives, lawyers and analysts say that Washington, depending on the resources it is willing to commit, can at least make life more miserable for the offshore casinos. They say the effort resembles attempts to restrict the sex and drug trades, an endless pursuit in which users and suppliers constantly develop new ways to skirt law enforcement.

Offshore casinos “are going to continue to thumb their noses at the Department of Justice,” Mr. Sinclair said. “The operators will say, ‘I’m sitting here in Costa Rica drinking a mai tai. What are you going to do?’ ”

And, he said, if the government succeeds in shutting some sites, others will pop up.

This is not the first time that the American government has taken on Internet gambling. In 2001, a federal court sentenced Jay Cohen, the operator of an Internet sports book in Costa Rica, to 21 months in prison for taking bets from Americans.

But there is a new intensity to this latest crackdown, particularly with the simultaneous attacks from Congress and law enforcement. Legislators and prosecutors said their efforts were not coordinated, but industry analysts view it as a powerful combination.

And by going after Mr. Carruthers, a British citizen who runs a company listed on the London Stock Exchange, Washington has upped the ante. “This is absolutely a legitimate business in the U.K.,” said Tim Evans, a lawyer representing Mr. Carruthers.

Mr. Carruthers, among the outspoken executives in the industry, has traveled frequently to the United States to meet with investors and media companies, and to debate the merits of online gambling. In April, he took part in a debate on the subject with Representative Leach.

Catherine L. Hanaway, the United States attorney for the Eastern District of Missouri, who brought the indictment against Mr. Carruthers, said the fact that the activity was legal in Britain and Costa Rica, where BetOnSports has major operations, “does not entitle them to do business in the United States.”

Asked if Mr. Carruthers’s British citizenship created a problem for the prosecutors, Ms. Hanaway said, “thus far, no.”

Mr. Evans said his client faced up to 20 years if convicted of conspiring to operate an illegal gambling operation.

Lawrence Walters, a lawyer who specializes in Internet gambling law, said prosecutors faced serious jurisdictional questions. One central question is whether any illegal activity is taking place on American soil; the bettors, he said, are not breaking the law, because placing a wager is legal.

Further, he said, there are legal questions about whether prosecutors can establish that offshore casinos have met the test for “minimum contact” in the United States, a standard needed for prosecutors to have jurisdiction.

“The government has to show that BetOnSports has sufficient ties and contacts with the U.S.,” he said. “That’s an open question — they have no offices or representatives here.’’

Many online gambling companies based outside Britain list on the London Stock Exchange because the British government made offshore gambling companies legal as part of a sweeping Gambling Act passed in 2005. The government’s intent is to regulate the industry and stop gambling proceeds from going to criminal interests.

The investors in the companies have included some of America’s largest investment houses, among them Goldman Sachs and the FMR Corporation, parent of Fidelity Investments, which bought shares for some of its mutual funds. Share prices of those funds plummeted after the arrest of Mr. Carruthers, but have recovered somewhat in recent trading.

The issue has fueled a political fire in Britain, where the United States recently extradited several white-collar suspects in an effort to prosecute them for actions that Britain did not consider illegal, or that British courts chose not to prosecute.

Opponents say that United States prosecutors are reaching outside their boundaries and the opponents are lobbying the British government to protect its own citizens.

But Mr. Walters said prosecutors might be able to mitigate the jurisdictional challenges because they also brought charges against BetOnSports’ founder, Gary Kaplan, and several of his relatives, who worked for the company and are American citizens.

The government could argue that the company has a fundamentally American origin and continuing ties, he said.

The case could dictate how much breadth and power prosecutors have to enforce gambling laws. It “could be a chance to clear up the gray area that’s always existed” as to the legality of offshore casinos, said Kevin Smith, a spokesman for BetOnSports.

Prosecutors argue that the Wire Act of 1961 prohibits not just Internet sports betting but also casino games, including online poker. Some industry executives, legal experts and analysts, even those without a vested interest, say it is not clear that the Wire Act was intended to cover those casino games.

The legislation approved by the House would make it explicit that the wire act covers these games. It also seeks to create a new enforcement mechanism by criminalizing the processing of payments for Internet gambling. It would prohibit banks, credit card companies and online payment processors, like PayPal, from transacting such business.

“For the first time, we have a methodology that has enforcement clout,” Mr. Leach said. “This legislation has a lot of teeth.”

Yet this is not the first effort to cut off payment methods. In November 2001, many major banks that issue credit cards began voluntarily refusing to process credit card payments for gambling. That gave rise to new overseas payment processors, like Neteller and FirePay, in which customers can deposit money to be forwarded to offshore casinos.

Having new overseas processors can spring up does present a problem, Mr. Leach said. But if the bill becomes law, it would also prohibit American financial institutions from transferring money to overseas payment processors known to do a lot of business with casinos. In turn, it could make people work harder to place bets.

“It could quite effectively reduce impulse betting,” Mr. Leach said. “It might be a slightly less-effective barrier to some of the poker kinds of games. I aspire to total curtailment. But I cannot guarantee that will occur.”
http://www.nytimes.com/2006/07/25/bu.../25gamble.html





BetOnSports PLC Removes CEO After Arrest

Online gambling company BetOnSports PLC said Tuesday it had fired its chief executive following his arrest in the United States on racketeering charges.

The sports-betting Web site operator said it was terminating the contract of David Carruthers and removing him as a director as a consequence of his detention.

"Clearly, while he remains in the custody of the U.S. government, he is unable to perform his duties," the company said in a statement.

Carruthers, 48, was arrested July 16 at Dallas-Fort Worth International Airport in Texas while trying to make a connecting flight from the United Kingdom to Costa Rica, where BetOnSports is based.

The company suspended trading of its shares two days later.

Carruthers and 10 others, including the founder of BetOnSports, were named in a 22-count indictment unsealed this week by federal prosecutors in St. Louis. The government says BetOnSports fraudulently took bets from U.S. residents by phone and the Internet, and failed to pay excise taxes.
http://hosted.ap.org/dynamic/stories...07-25-06-55-53





Army to Require Built-In Security
Cheryl Gerber

In the next few weeks, the Army’s Network Enterprise Technology Command (Netcom) will announce that the Trusted Platform Module is a servicewide requirement for hardware-based security in all of its new computers, according to Army officials. TPM will take advantage of security features in Microsoft’s forthcoming Vista operating system.

Before Netcom publicly issued its TechCon guidelines, the Army Small Computer Program (ASCP) acted on the requirement in its solicitation and last buy in March. “We didn’t want to put computers into the Army inventory that will have to be replaced prematurely, so Netcom asked us to institute the requirement before the actual issuance of the TechCon,” said Micki LaForgia, ASCP project director.

The upcoming technical guidelines require TPM Version 1.2 as a standard Army configuration baseline for all of the service’s computers. The service will apply the standard configuration during a consolidated purchase next month.

Developed by the Trusted Computing Group, TPM is a dedicated security chip on the motherboard that conforms to the group’s standard specifications. Chipmakers have developed TPM versions of their chipsets, such as Intel’s LaGrande Technology and Advanced Micro Device’s Secure Execution Mode. IBM’s product has two TPM-compliant chips -- the Embedded Security Subsystem and ThinkVantage Technology. Hewlett-Packard, Fujitsu and Winbond also offer TPM chips.

The Trusted Computing Group was founded in 2003 to develop vendor-neutral standard specifications for hardware and software security that works across multiple platforms. The group has 141 industry members, and many of those contributed to and instituted the standard specifications.
http://www.fcw.com/article95422-07-26-06-Web





Radio Rants

"They Sentenced Me To 20 Years Of Boredom. For Trying To Change The System From Within."
- Leonard Cohen, "First We Take Manhattan"

Well, new CBS news anchor Katie Couric dropped by the house this week to see what I think. Here's what I told her: CBS Radio laid off 115 people nationwide and afterwards President Joel Hollander said "this will blah, blah, blah, blah, blah." Whatever. Mike Lyons

Meanwhile, here in Orlando this month, the CBS alternative WOCL, was busy trying to beat their format competitor, Clear Channels' WJRR, to be the first station to exclusively label their afternoon show, "B.S." First, WOCL's Program Director Bobby Smith hired former CC talk talent Savannah to be his afternoon on-air partner. Their show, then, would be known as the "B.S." show. Bobby & Savannah. That same Monday four weeks ago, WJRR started referencing their afternoon jock, Buckethead, as their afternoon-drive "B.S." show. The Buckethead Show.
Since both owners also have access to them, billboards touting each "B.S." show instantly erupted across the greater Orlando landscape.

Then, last Wednesday, WOCL shifted Savannah to their morning show and moved their talented music director Mel Taylor into the afternoon slot with PD Bobby. That same day, Clear Channel announced that Buckethead was moving over to Tampa to be the new morning host at Clear Channel's WXTB. No replacement has yet been named for Buckethead at WJRR.
The billboards remain up.
But the bullshit just goes on and on and on and on.

The only reason I bring you this story is because it is testament to how unbelievably lazy, lame and unconnected with the audience rock radio has become. Somebody in the respective offices of these companies obviously decided that the quick way to a half-share jump in the ratings was to invoke the abbreviation for "bullshit" onto their airwaves.
Might have been naughty and cute. In the 60's or 70's!
It might be easier to accept if any of the involved talent was remarkably good with, say, some market heritage. They're not.
Both B.S. shows are dominated by attitude sans material. 'So & so is recording a new album.' No shit.

That's what they do. 'They may be coming in concert and we'll let you know first.' Neither point out that Dashboard Confessional was at the House of Blues Friday night. This is what kills me about current rock radio. Nothing but cliches and jargon and attitude. No actual relating to a listeners life.
Who are they targeting? The kids left long ago to their iPods and the Web. Obviously for good reasons.

And here's another complaint. You know that song with the chorus, "She is the prom queen. I'm in the marching band." Catchy-as-hell pop. Driving rhythm. A girl sings it.
After four months and at least 70 listens on the Clear Channel Top-40 WXXL (Yes. I still listen to terrestrial radio. A lot), I've still never been told once who it is. And by now the song is in recurrent so it always comes up on the other side of sweepers. So I'll never know...
Is it any wonder today why people have dropped "listening to radio" way down their list of things to pay attention to?
Songs and appropriate lifestyle events don't get mentioned.
And two major radio station ownership groups spend an immense amount of time and money trying to acquire the exclusive claim on the use of an abbreviation of a (giggle) dirty word?
This is silly. Not just lame. Silly.
In today's world of compressed time and instant gratification, who can take seriously such nonsense?
"But surely AAA must be doing something that makes business sense" said Ms. Couric.
"Of course," I responded. "And by the way, great legs Kathleen."

I then told her that The University of Pennsylvania's WXPN has just signed up former PD Jim McGuinn of the late Philly alternative station Y100 for shows Wednesday, Thursday and Friday nights after the World Cafe starting on August 31.
Katie gave me that world-class beaming smile as I added that the WXPN-Y100 streaming from the on-demand XPN web site would begin even earlier, on August 1, offering the sixth largest market in America both AAA and alternative radio of remarkable quality and depth.

Commercial free.
Both Katie and I locked our eyes as the wisdom of business guru Tom Peters filled our heads. Suddenly we both screamed in unison:
"Reducing expenses is not good business. Making a better product to attract more customers is!"
I advised her not to sing anything from on top of a piano when she starts in September.
Even if she is the prom-queen.

MOVIES: Disney's Pirates of the Caribbean: Dead Man's Chest took in another $62.2 million to remain at the top of the weekend's box-office results. It passed Spiderman 2 as the fastest film to reach $200 million and has now taken in over $258 million in just ten days in theaters. The Wayans brothers' Little Man debuted in second place with $21.7 million beating out fellow newcomer You, Me and Dupree which took in $21.3 million for third place. Fourth was Superman Returns with $11.6 million. Still under-performing for WB but worldwide biz should put it into profit. In fifth place, The Devil Wears Prada continues to out-perform expectations with another $10.4 million. Two films on limited screens continued to play well as Richard Linklater's A Scanner Darkly took in $1.18 million for tenth place this weekend on only 216 screens while Al Gore's An Inconvenient Truth was in eleventh place with another $1.1 million on just 570 screens...Opening next weekend are Sony's animated Monster House and Warner Brother's poorly-reviewed Lady In The Water from M.Night Shyamalan. Consensus has it that his "gotcha" bag of trick endings may have run its course.

TV: This week's number one relief from television's summer re-run doldrums is coincidentally, a re-run.
This Wednesday at 10pm, Comedy Central will finally replay the controversial South Park episode "Trapped in the Closet," which deftly sends up Tom Cruise, Scientology and R. Kelly. The show originally was broadcast on November 16, 2005 but had it's subsequent re-run on March 22 abruptly cancelled in a move some interpreted as an attempt to appease Cruise, who allegedly threatened to not promote Mission Impossible 3 which was made for Paramount, which, like Comedy Central, is a division of Viacom. Perhaps the passage of time or MI3's lackluster box-office or more likely, South Park's Emmy nomination for Outstanding Animation Program last week made this re-run finally happen...Rescue Me has been on a terrific run this summer. Great acting and writing from creator Dennis Leary along with a killer cast has led to ratings FX wants to continue. They renewed Rescue Me for a fourth season this week...Leno has the guests this week including Ray Davies on Tuesday and Tom Petty & The Heartbreakers both Thursday night and Friday night when Tina Fey also drops by...Pink is on Letterman Thursday...Conan welcomes Matthew Sweet and Susannah Hoffs Tuesday, Los Lonely Boys Wednesday and The New York Dolls on Thursday...The Daily Show with Jon Stewart has Nuclear Showdown author Gordon Chang on Monday, director/actor M.Night Shyamalan on Tuesday, Impresario author James Maguire on Wednesday (Impresario is an Ed Sullivan bio by the way) and actor Paul Giamatti is Stewart's guest Thursday...Guests on the Colbert Report this week are molecular biologist Lee Silver on Monday, football player Dhani Jones on Tuesday, MSNBC's Joe Scarborough on Wednesday and Tom Brokaw on Thursday.
Finally, on everybody's secret fave cable channel VH-1 Classic, there's a new Elvis Costello Decades Rock: Live show this Friday from 8-9:30pm.

FINALLY: You gotta love this. Last week, the European Court of First Instance sent Sony and BMG back to the drawing board to rework their previously approved merger. The Court called the European Union Commission's 2004 OK "an extremely cursory examination". In other words, a rubber stamp. The bottom line here is that it was a rubber stamp exam by the EU. Sony and BMG didn't even have to roll out their big gun legal defense i.e. the explosion of the digital music business as their competition.
Nevertheless, this applies only to Europe and in any case, those Sony, BMG, EMI and WMG attorneys can now be expected to earn their retainers. Everybody's seen this train coming down the tracks for awhile now.

The Court of First Instance?

Whoa. I'm just in the marching band.
http://triplearadio.com/the_forest/





Radio Execs Urge Delay In Music Vote
Brooks Boliek

A dozen of the nation's most powerful radio industry CEOs are urging leaders of the Senate Judiciary Committee to postpone consideration of legislation that requires satellite, cable and Internet broadcasters to pay fair market value for digitally transmitting music.

The leadership of the Senate Judiciary Committee has been considering a committee vote Thursday (July 27) on the bill known as the Perform Act. While committee aides said Friday (July 21) that a decision on exactly what would come up during Thursday's bill-writing session had yet to be decided, broadcast and record label executives said the committee's leadership was considering bringing the bill up.

The legislation sponsored by Sens. Dianne Feinstein, D-Calif., and Lindsey Graham, R-S.C., and Senate Republican leader Sen. Bill Frist, R-Tenn., is being pushed by the RIAA, music publishers and musicians groups.

Broadcasters oppose the legislation because they fear it will force them to have to pay for music transmitted digitally over the Internet. The bill also would force services like XM2go to pay an additional royalty to rights holders when customers digitally record music using those services.

Broadcasters contend that moving the legislation would be "premature" given that there is little agreement between the industries affected by the legislation.

"After a number of meetings and discussions, the parties remain divided," the broadcasters wrote in a letter mailed Friday. "The lack off accord is largely due to the complex nature of the subject matter. Many within the various industries and congressional staff have questions that simply remain unanswered."

While passage of the legislation is far from assured, given the short time left in an election-year Congress, a vote by the committee on the legislation would put more pressure on broadcasters to make a deal.

Record industry executives say the broadcasters' are stonewalling the bill in an attempt to get Congress to do for them what the courts wouldn't. While broadcasters don't have to pay the record labels for music they air on terrestrial radio broadcasts, the federal appeals court in Philadelphia in 2003 upheld a lower court ruling that said radio stations have to pay royalties to the labels and recording artists when they stream their programming over the Internet.

"They took us to court in Philadelphia, and they lost," one record industry executive said. "They've made it clear to us that they do not want to let a Section 114 (the part of the copyright code that governs many music royalty payments) legislation move unless they can expand the exemption for over-the-air broadcasts to Internet streams."

The broadcasters told Judiciary Committee chairman Sen. Arlen Specter, R-Penn., and Sen. Patrick Leahy, D-Vt., the panel's senior Democrat, that the panel should wait until after the lawsuit between XM and the record labels over the satellite radio company's digital recording service is completed.

"Final resolution of this lawsuit could well impact the interpretation of what constitutes fair use and thus how any digital audio protection system should be designed under copyright law," they wrote.

The record labels say the broadcasters are simply confusing the matter. The XM suit and broadcaster's royalty obligations are two different things, they argue.

"That's all B.S.," the industry executive said. "The XM suit doesn't have anything to do with what broadcasters are trying to do. They just don't want to pay us."

CEOs signing the letter include Clear Channel's Mark Mays, Cox Radio's Robert Neil, Emmis Communications' Jeff Smulyan and Entercom Communications' David Field.
http://billboardradiomonitor.com/rad..._id=1002878052





Return of the New York Dolls, What’s Left of Them
Will Hermes

AS frontman for the New York Dolls, a band credited with inspiring, if not inventing, punk rock, David Johansen, 56, seems to regard the movement as one might an upstart kid brother.

“A lot of punk was really whiny,” he said last month over lunch at T, a tea salon on East 20th Street in Manhattan. “I think of all the bands that came out of that alleged genre, the Clash was the best. That was a real rock ’n’ roll band.”

“Our total attitude towards art,” he added, “was, like, get up and do something — quit sitting there whining. That’s what we stood for, that do-something spirit.”

For a band that effectively lasted three years, made two records and achieved but a dusting of fame, the Dolls’ do-something spirit left a huge, platform-booted imprint on rock history. In the early 1970’s their hooky primitivism offered a back-to-basics model amid the excesses of the progressive rock scene. And their lipsticked decadence suggested a stylistic alternative to headbands that would eventually be blamed for glam-metal. (More on that in a minute.)

Mr. Johansen, a wayward Catholic-school student from Staten Island, has spent a lot of time talking about his band’s legacy since deciding, to the surprise of many, to reunite with the surviving Dolls for a British music festival in 2004. That one-shot performance quickly sold out; a second was added. Then came a third, and a fourth. And now, what’s left of the East Village group that ignited the city’s rock scene in the 1970’s but imploded before cashing in on it has made its third studio album, 32 years after its second. It’s called “One Day It Will Please Us to Remember Even This.” And most remarkable of all — as these sorts of latter-day reunions go — it’s very good.

The timing seems perfect. Catchy, punk-inflected shout-alongs that reflect the Dolls legacy is rock’s main toehold in the pop arena these days. And there is a general return to the Dolls’ dress-up-and-put-on-a-show approach in the preening style of bands like the Killers and My Chemical Romance; even Green Day is sporting mascara.

Wearing a tight ribbed white V-neck top, black jeans and a tangle of amulets around his neck, Mr. Johansen shows his taste in couture has clearly mellowed from the days when the Dolls were notorious for their transvestite fashion sense. He still has the unmistakable bearing of a rock star. Lithe and sinewy, his face deeply creased, he is a hometown bohemian: tossing off wisecracks in a phlegmy New Yawk baritone while discussing the ritual of performance or the “antidualistic” nature of Latin music, he comes off as a cross between a veteran street urchin and a matronly hipster-intellectual.

In their early days the Dolls were a spectacle: five scrappy young dudes looking like hard-luck prostitutes, they played loud, sloppy, three-minute songs when rock was increasingly about virtuoso drum solos and 20-minute jams. “Musically we wanted to bring back stuff with that Little Richard punch to it,” Mr. Johansen said. “You know, you’d see him play, he’d come on and in like two and a half minutes he’d wreck the place. It wasn’t like these guys with their backs to the audience, noodling on the guitar.”
The Dolls magic was erratic, though, and their shows could be disasters. The group landed a modest deal with Mercury and made two records that, while now considered classics, sold poorly. Their back-to-basics antics didn’t translate well at the time; they were misread as camp or comedy or sheer incompetence. When they appeared on the BBC’s “Old Grey Whistle Test” in 1973, the tut-tutting host memorably introduced them as being “to the Stones what the Monkees were to the Beatles, a pale and amusing derivative.”

Yet certain young fans who saw that performance on British television were more impressed. They included Mick Jones (of the Clash) and Stephen Morrissey (of the Smiths), two of many musicians who cite the Dolls as a primary influence. “I grew my hair like Johnny Thunders’s,” said Mr. Jones, recalling the shock-wig crop of the Dolls guitarist. The Clash, he admitted, “took a lot from the New York Dolls. A lot.”

Mr. Morrissey, a huge Dolls fan since he was 13, can be credited with the band’s reunion. He was given carte blanche to curate the 2004 Meltdown festival at Royal Festival Hall in London, and naturally a Dolls reunion was at the top of his list. So he called Mr. Johansen. But he wasn’t optimistic.

“I had met David previously,” Mr. Morrissey said in an interview after the festival, “and I’d known that historically he would always just pull the shutters down at the mention of the Dolls. I expected him to laugh at me and put the phone down.”

Mr. Johansen, sipping Irish breakfast tea with his pinky outstretched, recalled: “I hemmed and hawed. I remember saying, ‘Would you do it?’ ” referring to Mr. Morrissey’s famous unwillingness to reunite the Smiths. That British singer’s reply, which Mr. Johansen repeated in a mock English accent, was “absolutely not.” He laughed, then continued: “But I had this, like, mantra, that I decided to try to not be so dismissive of things, you know? I said I’d think about it. And I figured it’d be fun.”

Mr. Johansen’s fellow surviving Dolls — the guitarist Sylvain Mizrahi, a k a Sylvain Sylvain, and the bassist Arthur Kane, known as Killer — were easier to persuade. (The guitarist Johnny Genzale, a k a Johnny Thunders, and the drummer Jerry Nolan died in the early 1990’s; the original drummer, Billy Murcia, died while touring with the band in 1972.) Mr. Kane, in particular, had spent most of his hardscrabble post-Dolls life longing for a reunion, and literally praying for one: when his struggle with alcoholism and other demons left him at rock bottom, he joined the Mormon church. When he got word of the reunion, he was working in Los Angeles at the church’s Family History Center library.

As it happened, his prayer came true, but just briefly. After playing the two Meltdown festival shows, Mr. Kane returned to Los Angeles and, only weeks after his long-awaited comeback, became ill. He checked himself into a hospital, learned he had leukemia, and died hours later. Coincidentally, Greg Whiteley, a fellow Mormon who was captivated by Mr. Kane’s life story, had been making a film about his return to rock ’n’ roll. The documentary, “New York Doll,” had a much different ending from what Mr. Whitely first imagined, but it won a Grand Jury Prize nomination at last year’s Sundance Film Festival.

The timing of Mr. Kane’s death was in keeping with what Mr. Morrissey has called “probably the unluckiest band in the history of the world.” Mr. Murcia died in a drug-related mishap while the group was in England on its first big tour and on the brink of signing a record deal, a tragedy the band arguably never recovered from. He was replaced, but drugs and clashing egos soon hobbled the band. And despite the 11th-hour appearance of an enterprising young manager named Malcolm McLaren (who went on to manage the Sex Pistols), the group ground to a halt in Florida while touring in 1975.

Mr. Johansen found some success with various solo acts (most notably the lounge lizard alter ego Buster Poindexter) and the occasional film role; he recently became host of the well-regarded “Mansion of Fun Show” on Sirius satellite radio. Mr. Thunders and Mr. Nolan were recognized as punk forefathers when they formed the short-lived, heroin-plagued Heartbreakers; both died young. Mr. Mizrahi played a bit with other bands, drove a cab for a few years and raised a son as a single parent.

Meanwhile the next generation had stepped in. Fellow outer-borough rockers the Ramones tightened and further simplified the Dolls’ stripped-down sound (and rethought the wardrobe), and along with the heavily Dolls-influenced Sex Pistols, received full credit for giving birth to punk. Bands like Ratt, Poison and most famously Guns N’ Roses would become superstars with a Dolled-up hard rock style. Along with countless bootlegs, the two New York Dolls studio records have remained in print. But royalty payments from Mercury remain in dispute, making for a familiar industry story.

The new Dolls is, obviously, a new animal. In some ways “One Day It Will Please Us to Remember Even This” feels as though it’s more about the New York Dolls than it is by them. Its brashly classic sound points to the band’s often-overlooked roots in blues and Brill Building pop. It is smartly written and well played (but, thankfully, not too well played) by Mr. Johansen, Mr. Mizrahi and a seasoned gang of New York-based rockers: the bassist Sami Yaffa (formerly of the Dolls-worshipping pop-metal act Hanoi Rocks), the guitarist Steve Conte, the keyboardist Brian Koonin, and the drummer Brian Delaney. Iggy Pop, a fellow punk forefather, adds backing vocals, as does R.E.M.’s Michael Stipe, a longtime fan of the Dolls.

But what’s perhaps most striking about the new record is its tone. Alongside characteristic, happily debased romps like “Fishnets and Cigarettes” and “Rainbow Store” (in which the singer apparently gets swept off his feet by a tough girl at a lesbian boutique) is a wistfulness and a sort of wisdom, plus a quality you could almost call spiritual, a word that wouldn’t have been used to describe the old Dolls except in reference to alcohol.

“Feel excited from the divine

Me and these sad friends of mine

Just waitin’ down here, drinkin’ beer

And losin’ time”

Mr. Johansen sings on “Plenty Of Music,” which could almost be a Ronettes tune. Similarly, “Seventeen” sounds like an enlightened high school lament:

“Yet here we all stood

Confident in smug world view

That nothin’ higher will sweep

Out of the heavens anew.”

Mr. Johansen, who laughingly described himself as “a Catholic Taoist,” isn’t exactly born again. But his perspective has clearly broadened over the years. “I don’t know if it’s more spiritual,” he said of the new Dolls record. “But it’s more worldcentric, y’know what I mean? It’s not as colloquial as when we first came out. We were really just entertaining the neighborhood at that point. We were the band of the East Village that everybody danced to.”

The new record’s best song, “Dance Like a Monkey,” is a rock ’n’ roll answer to a timely theological question. Trying to woo a “pretty creationist,” the singer invites her onto the dance floor. “Evolution is so obsolete,” Mr. Johnansen shouts like a leering old bluesman. “Got to stomp your hands and clap your feet.”

The band’s new label, the hard-rock indie Roadrunner, hopes the song might be a breakout hit this summer. And it could be, with its driving Bo Diddley-flavored beats and Mr. Mizrahi’s heady falsetto “oooo-oooohs.” Either way it makes its case for rock ’n’ roll as a spiritual force in its own right, a valid enough reason for the Dolls’ return.

“It’s been so long since we had the other band,” Mr. Johansen concluded. “This just fell together, and then all the guys turned out to be great. I really love them, so what we do onstage is really genuine, there’s a lot of love in it, and hopefully that will affect the audience.”

“I mean, I have my ideas about music and rock ’n’ roll and all that kind of stuff,” he added. “I don’t know if it’s actually necessary for the species, but it sure makes life fun. It sure made my life fun. And I like to show other people that.”
http://www.nytimes.com/2006/07/23/ar...ic/23herm.html





P2P Innovative Announces the Launch and Availability of the IP2P Network -- the Most Versatile and Robust Peer-to-Peer Network in the World
Press Release

P2P Innovative, the world leader in the design and implementation of advanced peer-to-peer technology, announces the launch and availability of the iP2P network.

The iP2P network was engineered from scratch to address the needs of the expanding world of distributing large media files and the fast growing P2P community. The iP2P network infuses our proprietary network technology with DHT and BitTorrent compatibility to create a fully decentralized, secure community that is highly scalable and efficient. iP2P was built to evolve seamlessly as new application layers and advanced protocols are added. The iP2P network will soon become the standard platform for the future of media distribution as well as community building and sharing.

P2P Innovative is now licensing the proprietary iP2P network to top Internet and media companies as a cost-effective solution for media distribution and live content streaming. P2P Innovative will also be engaging innovative joint venture projects using the power of the iP2P network.

P2P Innovative will continue to create exciting solutions for new P2P applications. We are looking for partners in the software and hardware industry who want to implement our P2P network or technology to create applications in areas such as below:
-- Efficient File Distribution
-- Worldwide Media Streaming
-- Voice Over IP
-- Live Events
-- Massive Multiplayer Gaming
-- Mobile Device P2P Networking
-- Shared CPU Processing
-- Community Building
-- Virtual BitTorrent Tracking
-- Video/Audio Submissions and Sharing

Current top non-exclusive licensees of P2P Innovative's technology are Warez.com and Warez P2P, the third largest decentralized, proprietary P2P file-sharing network in the world with 1.5 million simultaneous online users and over 25 million downloads to date. Warez P2P has chosen the iP2P network for its next generation peer-to-peer system in the upcoming version 3.0.

iPhox, the top VoIP alternative to Skype (http://www.marketwire.com/mw/release...ease_id=113042), has licensed the iP2P network for its upcoming upgrade. P2P Innovative is helping with the integration of P2P media sharing, entertainment streaming, and advanced conferencing within the iPhox communication system.

P2P Innovative welcomes partners with exciting ideas and creative applications using P2P technology. We can tailor our P2P technology to create a private network for your unique application. Create your own user base or access our base of millions.

Contact us regarding your project to see if a joint venture or licensing our iP2P network is your optimal solution. Visit our site at www.p2pinnovative.com. Send emails to admin@ip2p.com.
http://www.marketwire.com/mw/release...ease_id=147170





Mideast Conflict Unfiltered On The Web
David Bauder

The rapid development of video-sharing sites such as YouTube.com is giving computer users the chance to see unfiltered images of how the fighting between Israel and Lebanon is affecting people caught in the middle.

The short, broadband videos include simple reporting and pointed political statements, and are usually posted without identifying who's behind them.

Videos available on YouTube.com on Tuesday, for example, included slide shows of people hurt by Israeli bombing attacks in Lebanon. They have graphic images that are not usually seen in TV news reports - the mangled body of a child, a badly hurt baby in a hospital bed, a person on fire in a road during an attack.

One operator keeps his camera fixed on a horizon with smoke rising from a bombing, and the sound of airplanes overhead. "They're coming back," the narrator says.

On the other side, one video is shot from the roof of a home in Israel. Sirens wail in the background, followed by the boom of a missile hitting. Another video shows damage from a missile strike at a train station, while yet another features Israelis and American tourists passing the time in a bomb shelter by singing a song.

Filmed in his office study, a man identified as Reb Moshe describes how Israelis are coping. "We hear much more bombings than are listed on CNN," he said.

"They're getting an unfiltered experience," said J.D. Lasica, co-founder of the Web site Ourmedia.org. "We're used to the idea of neatly packaged presentations by traditional media and this is like the events are happening in your backyard."

But Barbara Cochran, president of the Radio-Television News Directors Association, said it's important to note the difference between some of what is posted by amateur videographers and the material gathered by professional journalists.

"There's a big gap between the two and it has to do with credibility, verification and context," she said.

TV networks have tended to keep this material at arm's length. CNN, for example, will occasionally air snippets of videos posted online during specific segments on what people are talking about online.

Several videos posted on YouTube, for example, use parts of news reports or interviews to make a certain point.

And Lasica said it's likely within a year someone will caught fabricating a story.

"It's exciting," Cochran said, "but it certainly isn't what you would rely on to tell you what is happening."
http://hosted.ap.org/dynamic/stories...07-25-17-48-49





Costs of Competition Send Amazon Profit Down 58%
Laurie J. Flynn

The online retailer Amazon.com reported a steep drop in its quarterly profit yesterday, while its sales continued to rise. The results showed the effects of higher expenses as Amazon offered free shipping and lower prices in response to heightened competition.

The report caused a sell-off of Amazon’s shares late in the day. The stock fell more than 12 percent, or $4.09, in after-hours trading, after declining 72 cents, to close at $33.59, before the report was released.

Profit at Amazon dropped 58 percent, to $22 million, or 5 cents a share, in the second quarter, down from $52 million, or 12 cents a share, in the period a year earlier. Analysts had forecast a profit of 7 cents a share.

“I think there’s a negative trend throughout the business right now,” said Steve Weinstein of Pacific Crest Securities. “And I don’t think they’ve hit bottom yet.”

Revenue rose 22 percent, to $2.14 billion, from $1.75 billion a year earlier — slightly higher than analysts’ average estimate of $2.10 billion, according to Thomson Financial.

Total operating expenses increased 34 percent, to $462 million from $346 million.

The company entered the grocery business during the second quarter, with more than 14,000 dry-goods products. It invested in new technology, hired technology employees, opened its own toy business and continued to offer promotions.

In a conference call with analysts yesterday, the chairman and chief executive, Jeffrey P. Bezos, said that Amazon needed to spend heavily on new projects and promotional shipping programs. One of those programs, Amazon Prime, introduced in February 2005, gives subscribers unlimited two-day shipping for a fee of $79 a year. So far this year, the number of Amazon Prime subscribers has doubled, the company said.

Executives declined to say how much the program cost the company, although the chief financial officer, Thomas J. Szkutak, estimated that it had saved customers more than $500 million in shipping fees.

Mr. Bezos said programs like Amazon Prime led to higher sales because customers tended to make more purchases across different product categories.

“We see a lift in sales after they become Amazon Prime members,” he said. “While it certainly is an expensive investment, it builds what will be a bigger and more important company in the long run.”

Mr. Weinstein, the analyst, said he agreed that Amazon had little choice but to continue its spending, given the competitive online climate and an increasingly demanding consumer.

Amazon’s operating income declined to $47 million in the quarter from $104 million a year earlier, with the company citing the impact of a contract dispute with Toys ‘R’ Us.

This quarter, Amazon is forecasting sales of $2.17 billion to $2.33 billion, roughly in line with analysts’ expectations. The company raised its sales estimate for the full year to a range of $10.15 billion to $10.65 billion, up from a previous $9.95 billion to $10.50 billion, and surpassing Wall Street forecasts of $10.14 billion.

But Amazon forecast lower operating income for the year, a range of $310 million to $440 million, compared with its previous forecast of $390 million to $520 million.
http://www.nytimes.com/2006/07/26/te.../26amazon.html





EMI Calls Off Efforts to Merge With Warner
Jeff Leeds and Jeremy W. Peters

The EMI Group, the British music giant, has decided to call off its efforts to merge with the Warner Music Group, ending for now the possibility that two of the music industry’s leading companies could combine.

The decision by EMI comes after each company rejected takeover offers from the other, and after a European court ruling raised doubts about whether a merger could win regulatory approval.

EMI said today that those two factors led it to abandon plans for a merger. Pointedly, however, EMI did not rule out bidding for Warner in the future.

“When the board of EMI put forward its proposals to acquire Warner Music, it believed, and continues to believe, that there are good arguments for regulatory approval of a combination,” EMI said in a statement.

Last month, Warner’s board rejected EMI’s latest offer of $31 a share, which valued Warner at about $4.6 billion, after a series of bids and counterbids that started in May.

For its part, Warner said today that it would stop trying to acquire EMI for now, citing the court ruling as its main reason. “WMG does not believe that it would be prudent to pursue a combination of WMG and EMI,” the company said in a statement. “Accordingly, WMG does not intend to make an offer for EMI at this time.”

The court, known as the European Court of First Instance and based in Luxembourg, issued its ruling two weeks ago, overturning a 2004 decision by European Union regulators approving a merger of the music units of Sony and Bertelsmann and plunging the industry into confusion. The ruling obliged regulators to re-examine the Sony-Bertelsmann venture, called Sony BMG Music Entertainment — a process that could take as long as a year — though analysts expect the regulators to ultimately allow the merger.

Still, the court issued a sharp critique of the regulators’ review process, prompting speculation that any new deals would face significantly tougher scrutiny.

EMI said immediately after the ruling that the court focused on the “particular evidence” of the Sony BMG case, and that EMI’s own offer for Warner remained sound.

Warner and EMI proposed a merger in 2000, but European regulators objected and the plan was dropped. Then EMI tried to buy Warner Music from its former parent, Time Warner, in 2003, but was outbid by a consortium of private investors led by Edgar Bronfman Jr., the former Seagram chief executive. Mr. Bronfman’s team purchased Warner Music for $2.6 billion and later took it public.

Many analysts continue to believe Warner and EMI will eventually combine, because together they could cut costs by hundreds of millions of dollars by eliminating overlapping functions.

But for the moment, the court ruling and the abandonment of takeover attempts solidifies the industry’s current lineup of four major music companies. EMI ranks third and Warner fourth among the giants by market share; together, they would have eclipsed Sony BMG to move into second place behind Vivendi’s Universal Music Group.
http://www.nytimes.com/2006/07/27/bu... ner=homepage





For Apple, Europe Becoming A Tougher Customer
Thomas Crampton

The German duo Bodenständig 2000 works in a musical genre known as Bitpop, which transforms the beeps, squeaks and whistles of 1980s- era home computers into clubbing music. But despite a dedication to technology and thirst for stardom, the pair recently forced the removal of one of their songs from Apple's iTunes music store.

"We wanted to remove our song because everything sold on iTunes can only be played on an iPod," said Dragan Espenschied, whose preferred musical instrument is a 12-year-old computer operating with MS-DOS. "We do not create our songs to help sell iPods for Apple."

The withdrawal of Bodenständig 2000 from iTunes will have little financial impact on Apple or the group - iTunes sales of the song amounted to three or four singles, worth a total of about 40 euro cents - but it is one of many recent moves in Europe to rebel against Apple's online music sales methods.

The dominance by Apple has prompted a growing number of European governments and consumer rights organizations to demand that online music be playable on all digital devices.

Such "interoperability" would mean, for example, that music bought on Sony's music site would be playable on an iPod, and a song bought on the iTunes site would be playable on a Sony machine.

"While the U.S. inclination is to resist regulatory intervention, Europe has a lot of proposals now that could affect iTunes and others," said Jonathan Zittrain, professor of Internet governance and regulation at Oxford University. "The very nature of a networked product means that changes in Europe could bring changes to the product in all markets."

Those who argue for interoperability say it will lead to a bigger, healthier market, much in the way that the decision by European governments to force cellphone companies to adopt the GSM standard meant that for many years, the European cellphone market was far healthier and grew faster than the fragmented U.S. market, which still has competing standards.

Apple, which has declined to comment on most attacks, issued a terse statement Friday regarding new legal proceedings announced last week by the Federation of German Consumer Organizations against the iTunes user terms.

"We are looking at the complaint," said Alan Hely, a spokesman based in London for Apple, "and look forward to resolving this matter."

"ITunes offers the right model for digital music downloads that consumers want," he said.

Those in the United States who are battling against controls placed on digital music have been following moves in Europe with envy.

"Europe has managed to shift the debate into a conflict between citizens and digital controls," said Peter Brown, executive director of the Free Software Foundation, a group that opposes proprietary software. "This is great because the discussion has been limited to technology circles for too long."

Among the consequences of the European rebellion against competing digital controls could be government- enforced standardization of digital music formats, said Richard Owens, director of the copyright, e-commerce technology and management division at the World Intellectual Property Organization, an agency of the United Nations.

"The lack of compatibility we are seeing grow in the wired world begs us to wonder what governments can do to encourage interoperability," Owens said. Any solution "could come down to the green-eyeshade people at standard-setting organizations who used to determine the dimensions of a screw," he said.

The charge against Apple in Europe has been led by French legislators who last month passed a law intended to stop the sale of music or video in formats that prevent users from playing on any digital device they choose.

The next challenge to Apple is coming from Scandinavia, where the government ombudsman of Norway, Bjorn Erik Thon, has objected to conditions set by the iTunes end-user agreement as well as the fact that iTunes cannot be played on other companies' music devices.

The ombudsmen in Sweden and Denmark - who have worked in concert on issues that affect citizens of all three countries - expressed solidarity with Norway's position.

Thon, whose role is to advocate consumer rights and who has the authority to impose fines, sent a letter to Apple describing the iTunes terms of service as "unclear and unbalanced." Apple has been given a deadline of Aug. 1 to respond.

He criticized Apple's assertion that it can unilaterally change the usage rights of a song that has already been purchased, its disclaimer of responsibility in case of loss due to hacking, viruses or hardware defects on the iPod and an assertion that English law governs Norwegian users. Regarding the impossibility of playing an iTunes-purchased song on music devices other than an iPod, Thon warned that such a business model would threaten the sharing of cultural material.

"The future availability of cultural digital content may be dependent on the good will of those who provide the technical platforms," Thon said in his letter to Apple. "If it is no longer profitable to make old cultural content compatible with new technical platforms, this cultural content may be lost."

In addition to pressing Apple in Scandinavia, Thon said he had sought support from consumer advocates in France, Britain, Germany, Belgium and Poland.

He also aims to place the issue high on the agenda at a gathering of consumer ombudsmen in the International Consumer Protection and Enforcement Network in October in Poland.

"I am trying to build an alliance with consumer organizations in other nations against iTunes because I have real problems with their contract terms and lack of interoperability," Thon said. "This is an important issue that we are not going to drop easily."

Others have already started taking action. In addition to the action in Germany, Poland's Office of Competition and Consumer Protection said last week that it would press to make iTunes and other music services interoperable through an intellectual property law coming under discussion in Parliament.

In Britain, a report released last month by the All Parliamentary Internet Group, a forum of Parliament members focused on Internet issues, highlighted Apple's method of tying customers to the iPod.

"There is still an issue of being 'locked in' to particular technologies, even if other offerings are more attractive or less expensive," the report said, making a reference to how people still can circumvent iTunes limitations by burning songs into the unprotected MP3 format. "There are currently practical - albeit not necessarily lawful - ways of addressing this problem for iPods, but this may not be true for all formats."

The parliamentary group report concluded by recommending that the Office of Fair Trading enact label regulations that make the limits placed on song use "crystal clear" to consumers.

European Union regulators have not addressed the interoperability issue, but competition authorities in Brussels did open an investigation into pricing on the iTunes site following a request by Britain's Office of Fair Trading.

Users of the British iTunes site pay 79 pence, or $1.45, for most iTunes tracks, while French users pay 99 euro cents, or $1.25.

Looking to past technology standard clashes - the primacy of VHS over Betamax for videotapes being a prime example - it is difficult to say where Europe's rebellion against closed online business models like Apple's may lead, said Owens of the World Intellectual Property Organization.

"By the time governments might intervene with forced licensing, the technology will be out of date," Owens said. "In a few years, the questions we are asking today will seem irrelevant."
http://www.iht.com/articles/2006/07/...ey/music17.php





Judge Dismisses Phone Records Lawsuit
Mike Robinson

Citing national security, a federal judge Tuesday threw out a lawsuit aimed at blocking AT&T Inc. from giving telephone records to the government for use in the war on terror.

"The court is persuaded that requiring AT&T to confirm or deny whether it has disclosed large quantities of telephone records to the federal government could give adversaries of this country valuable insight into the government's intelligence activities," U.S. District Judge Matthew F. Kennelly said.

A number of such lawsuits have been filed around the country in the wake of news media reports that AT&T and other phone companies had turned records over to the National Security Administration, which specializes in communications intercepts.

Kennelly's ruling was in sharp contrast to last week's decision from U.S. District Judge Vaughn Walker of San Francisco, who said media reports of the program were so widespread there was no danger of spilling secrets.

Kennelly ruled in a lawsuit filed by the American Civil Liberties Union of Illinois on behalf of author Studs Terkel and other activists who said their constitutional rights were violated because of an NSA program of gathering phone company records.

Justice Department attorneys had argued that it would violate the law against divulging state secrets for AT&T to say whether it had provided telephone records to the supersecret spy agency.

The ACLU argued that the practice was no longer secret, because numerous news reports had made it clear that phone records had been given to the agency.

But the judge said the news reports amounted to speculation and in no way constituted official confirmation that phone records had been turned over.

He also said Terkel and the other plaintiffs in the lawsuit, which sought class-action status, had not shown that their own records had been provided to the government. As a result, they lacked standing to sue the government, he said.

ACLU legal director Harvey Grossman said in a statement that his group respectfully disagreed.

"A private company — AT&T — should not be able to escape accountability for violating a federal statute and the privacy of their customers on the basis that a program widely discussed in the public is secret," Grossman said.

The San Antonio-based company, known as SBC Communications Inc. until it acquired AT&T Corp. last year, is poised to become the nation's largest phone company later this year when it completes its proposed purchase of BellSouth Corp., announced in March.

In his ruling, Kennelly noted that he had received written statements from National Intelligence Director John Negroponte and NSA Director Lt. Gen. Keith Alexander in his chambers, with ACLU lawyers not allowed to be present.

The statements were designed to reinforce with confidential material the government's argument for the need for secrecy.

Kennelly said that his public decision was not premised on the classified materials. But he added that he was issuing a separate memorandum discussing the points raised in the classified material.

It too, he said, would have to be classified and "unavailable for inspection by the public or any of the parties or counsel in this case other than counsel for the government."
http://news.yahoo.com/s/ap/20060726/...tkBHNlYwM3MTg-





What Does the NSA Know About You?
Barry Levine

Americans are discovering that, in addition to nearly 3,000 fellow citizens who died, another casualty of September 11, 2001, might be privacy in the digital age.

While there have been many recent reports in the news media pointing to an erosion of privacy, the major stories have concerned the mysterious National Security Agency (NSA). Like an onion being peeled layer-by-layer, the NSA has been the subject of one revelation after another concerning a domestic-spying program that takes advantage of the world's dependence on high technology. After 9/11, the program moved into high gear in an all-out effort to find al-Qaeda operatives and other terrorists.

But as each new layer is revealed, some people fear that what is underneath might be enough to bring tears to any civil libertarian: a real-world 1984 in which one's every word and deed is monitored in the name of security.

The Most Intelligence in the World

You might picture the NSA as a small, top secret committee with a mix of ad hoc agents and high-tech equipment, like the mysterious governmental network in The X-Files TV series. Or perhaps you're thinking of the den of assassins in the movie Enemy of the State.

Regardless, the NSA has historically denied easy description. Dubbed "No Such Agency" by observers and "Never Say Anything" by its staff, it was the Area 51 of government agencies -- so secret that even its existence was barely acknowledged.

But today the NSA is coming into clearer focus. According to James Bamford, author of Body of Secrets, the NSA, established in 1952, is currently the world's largest and most powerful intelligence agency -- far bigger than its better-known cloak-and-dagger cousin, the CIA.

Bamford, who covered the same subject 25 years ago in his book Puzzle Palace, has written that the NSA has nearly 40,000 employees, a massive "Crypto City" of more than 60 buildings hidden in suburban Maryland, and the most powerful computers on the planet. NSA scientists, Bamford says, are secretly working to develop computers capable of more than 1 septillion operations per second -- that's a 1 followed by 24 zeroes.

The NSA breaks codes, operates listening posts around the world, takes information from spy satellites, taps into phone conversations, sifts through data transmissions for leads on cases, and creates and releases computer viruses to disrupt enemy systems.

But, like many other aspects of American life, the NSA's activities are divided by a bright line marked "9/11."

Before 9/11, the NSA's focus was outside the United States. It couldn't spy in the U.S. without permission granted under the auspices of the Foreign Intelligence Surveillance Act (FISA). In fact, the NSA's charter specifically prohibits it from "acquiring information concerning the domestic activities of United States persons."

"What changed after 9/11," says John Pike, director of the public-policy and research organization GlobalSecurity.org, "was that they started to listening to everybody" -- inside and outside the country.

The First Few Layers

Late last year, The New York Times peeled off the first layer of the onion and revealed some of what the NSA has been doing since 9/11. Based on sources within the intelligence community, the Times reported that the NSA had been monitoring international calls and international e-mails that originated in the U.S., without court-approved warrants. The story reported that the calls might number in the hundreds, possibly thousands, but that they did not involve domestic-only communications.

In May, USA Today reported that the NSA was operating the world's largest database, keeping records (times, numbers called, durations, and so on) on all phone calls made through AT&T, Verizon, and BellSouth -- domestic and international. This operation involved billions of calls, the paper reported, and, again, was done without warrants.

The fallout was immediate: Verizon and BellSouth have denied that they entered into any contract with the government to turn over data, and Qwest Communications, which says it was approached for information but did not hand any over, has suddenly become the network of choice for those who think the Bush administration overstepped its bounds.

For its part, AT&T is revising its privacy policy to explicitly declare that it owns customers' records and that it may use that information in combating "any threat," with or without legal orders. The policy had previously stated that the company would only turn over customer records as required by subpoenas or other legal orders.

After first denying the story, the White House claimed that no personal information was ever revealed. Some legal experts have suggested that warrants are not needed to look for patterns in the kind of anonymous data obtained by the government.

Since May, there have been other reports that phone conversations have been monitored, possibly including domestic-only calls. Seymour Hirsch of The New Yorker has reported that government sources told him that "tens of thousands of Americans" have had their calls monitored "in one way or the other."

In the uproar that followed this and later revelations, the Bush administration responded with the argument that presidential war powers give it the right to spy in the U.S. without FISA oversight.

For Frank Gaffney, president of The Center for Security Policy and a former assistant Secretary of Defense in the Reagan administration, this makes sense. "We're in a war, and these communications we're trying to monitor are battlefield intercepts -- except the battlefield is here."

In such an environment, he says, the right to conduct warrantless eavesdropping is "inherent in the president's authority."

A Different Sort of Battlefield

But because this is a new kind of war, being waged in such a different environment than previous wars, the issues surrounding the NSA's activities are complex and fraught with controversy.

The surveillance is part of a war on terrorism, with an unseen enemy who might be anywhere. It takes place in the digital, networked environment of the early 21st Century, in which highly sophisticated, massive, across-the-board monitoring is possible. And, in the arguments it raises about preserving American liberties, it compels us to debate exactly what those liberties are.

Taking on an unseen enemy in modern America involves radically new approaches for two old intelligence objectives: targeting a known individual or a group, and looking around the general landscape for clues about individuals or groups not yet discovered.
The recently reported intelligence gathering of financial records, for example, appears to be a reflection of targeted searches. The U.S. Treasury has said that it is only gathering financial intelligence on those who are under investigation for suspected terrorist activity.

But it is the NSA's wholesale searching of phone records, Internet communications, and phone conversations that has alarmed critics. This kind of "data mining" is used in several industries to search for proverbial needles in the haystack, frequently without even knowing what the needles look like.

In an often-cited example, a major grocery chain might data-mine all customer purchases and eventually discover that beer and diapers are often bought together. Finding a nonintuitive pattern such as this might lead to new ways of marketing or product placement.

Similarly, identifying a pattern that links terrorists to a specific time or place might lead to the foiling of a dangerous plot. Whatever specific discoveries the NSA has made, however, remain secret. Given that the agency operates what is likely the world's largest and most-sophisticated data-mining operation, the layers that have been peeled back so far suggest a very big onion.

So how much of the total U.S. communications traffic is being watched?

"I think that it's a lot of it," says Christopher Calabrese of the American Civil Liberties Union (ACLU), "because of where their taps are, right in the middle [of the main traffic switches]." The new model for surveillance, he says, is to grab as much information as you can and sift through it later.

GlobalSecurity.org's Pike says that there used to be a physical limit to what could be monitored, pointing to a time when many communications were on paper or analog media. But now, he says, thanks to rapidly increasing computer power and switches that sit on the main arteries of the communications networks, "They can monitor all of us, all the time."

And recently, two former AT&T workers told The New York Times that the company's facility in St. Louis had a separate room, protected by double doors and retinal/fingerprint scanners, where "a government agency" monitored network traffic.

Engaging Conversations

Experts disagree on whether the NSA's scrutiny is fixed only on text- and data-based communications, which computers can readily process, or on phone conversations as well.

According to Bamford, the NSA is listening only to a relatively small number of targeted conversations, even as it uses computers for massive scanning of text and data communications. "For every voice conversation," he says, "it takes at least one human being to listen." Using a voice-to-text program to streamline the process would be very limiting, he says, since many of the conversations in question involve heavy accents and do not translate accurately with current technology.

GlobalSecurity.org's Pike disagrees.

He believes that the NSA might be using highly advanced voice-to-text programs on powerful computers to scan heavily accented or foreign language conversations, possibly on a massive scale.

If highly efficient voice-to-text software was not now available at the NSA, Pike said, "It would be a scandal." His reasoning is that text-to-text translation software, such as Babblefish, and optical-character recognition software were operational at U.S. spy agencies 15 to 20 years earlier than the consumer versions. Since general-market voice-to-text software is now available -- decent but not industrial-strength -- the NSA must have technology that is at least a decade or more advanced, Pike says.

Even if bulk processing of voice-to-text is not yet available at the NSA, he says, the agency is still capable of searching conversations on a broad scale. Seymour Hirsch has, in fact, reported that computerized keyword-searching of actual conversations is taking place.

How Effective Has It Been?

Some observers point out that, since the anthrax attacks in the immediate weeks following 9/11, there have been no terrorist attacks on U.S. soil.

According to the Bush administration, the NSA program has helped to prevent attacks. The White House cited a plot to destroy the Brooklyn Bridge with blowtorches, an operation it says was disrupted because of NSA eavesdropping. A plot to use fertilizer-based bombs in Great Britain has also been uncovered in part through this program, according to the administration.

But in a recent report in The New York Times, FBI sources maintained that the NSA leads were a waste of time, at least when it came to following terrorism cases inside U.S. borders. Because the NSA is not an enforcement agency, it hands off the information it collects to the FBI for domestic enforcement and to the CIA or other agencies for foreign enforcement. Much of the information provided by the NSA has led to dead ends or to targets already under surveillance, FBI sources told the Times.

Former Assistant Secretary of Defense Gaffney disputes the significance of that assertion, saying the FBI's standards are not necessarily the standards for intelligence. "What do you expect? The FBI has been trained to prosecute cases. But the NSA is looking for a needle in a haystack, not prosecutable evidence."

For the ACLU's Calabrese, the issue of whether the eavesdropping works to deter terrorism should be secondary. "The first question is, whether it is legal."

The ACLU has never had a problem, he says, with using a warrant to obtain information, assuming the warrant itself is the result of lawfully obtained leads. The ALCU is currently suing the feds on the grounds that the government is listening to phone conversations without warrants.

The basic problem, says Bamford, is that nobody really knows the scale or the effectiveness of the NSA program, because the mechanism that was meant to guarantee checks and balances -- FISA -- has now been bypassed.

"You now literally have a rogue agency," he says.

The Shadow of FISA

In 1978, following revelations of illegal spying on U.S. citizens by American intelligence agencies, the Foreign Intelligence Surveillance Act (FISA) was passed. The law attempted to regulate intelligence by balancing security needs with civil liberties.
Established as the "exclusive means" for domestic electronic surveillance, FISA allows for quick-response electronic surveillance in several ways.

For example, during the first 15 days of a declared war, electronic surveillance may be conducted without a warrant. The stated Congressional intent at the time was to allow for immediate wiretapping after an attack, and to allow 15 days for Congress to amend the law to provide for further warrantless spying if needed.

FISA also allows eavesdropping for up to 72 hours, as long as a warrant is retroactively obtained. An emergency warrant can be obtained within hours, and it has been rare when any judge has denied a warrant.

The Bush administration, through the Department of Justice (DOJ), has acknowledged that it did not comply with FISA. It contends it doesn't need to.

DOJ has said that the NSA is authorized to conduct warrantless wiretapping because of Congress' Authorization for Use of Military Force against al-Qaeda, which was passed the week after 9/11. Justice has also said that Bush, as the commander in chief, has the unlimited authority to collect "signals intelligence" on the enemy.

Many legal scholars have weighed in on the subject, with a fair number coming down against the Bush administration's interpretation of its powers. One group that included a former deputy U.S. attorney general, the former deans of the Yale and Stanford law schools, a former counsel to the president, and a former director of the FBI, declared that the warrantless NSA spying "fails to identify any plausible legal authority for such surveillance."

Essentially, Bamford says, the NSA has now taken the power to authorize its eavesdropping in the U.S. away from a FISA judge and "given it to a shift supervisor." Bamford echoes the ACLU in contending that no one is saying that the NSA should be denied the ability to eavesdrop inside the U.S. to prevent terrorism. "But when it's done," he adds, "it has to be legal."

Living in America 2.0

For GlobalSecurity.org's Pike, the rules have vanished. The Bush administration's position -- which Pike summarized as "We can do whatever we want to, and we don't have to tell you what we're doing" -- has led to confusion winning the day.

"If the NSA can do it electronically, without rules, then the CIA is permitted to infiltrate Lord knows what," Pike says. He argues that the next iteration could be cameras on street corners with industrial-strength face-recognition software, installed and operated without warrants. According to Pike, there's no real difference between data mining on the street and data mining through warrantless eavesdropping. Such surveillance, he says, would lead to a very different kind of United States. "It would definitely be America 2.0."

But do we need FISA 2.0? This question arises when looking at how to obtain a warrant without knowing the pattern or the person you're looking for.

One solution might be putting wholesale data collection in a black bag, so that agents can only look for patterns, not people. ACLU's Calabrese suggests that data miners could encrypt information going in and leads coming out. Then, when there is a pattern, "You could get a warrant to remove the anonymity."

But Kim Taipale, executive director of the Center for Advanced Studies in Science and Technology Policy, says the problem is FISA.

"FISA is broken," he argues. His view is that it does not provide a way to take advantage of state-of-the-art surveillance methods, such as using automated means at the wiretap itself to look for patterns. He also points out that, in an age of proxy servers and packet-based communications, it may not even be possible to determine if a particular communication takes place in the U.S.

There needs to be some process to accommodate this new world, Taipale says. "But it's dangerous to say FISA is all we have and let's just apply it."

Up until a decade or so ago, before the Internet and before all transmitted communications became digital, paper and analog were still major players. Paper letters were commonly written, newspapers were printed daily, political rallies and rock concerts were publicized with leaflets. Electronic communication was analog, and processing it efficiently, on a massive scale, was impractical.

Now, we are networked and digital. Home videos, soccer schedules, phone conversations, bank and credit card records, instant messages, online calendars, business e-mails, even the records of which movies you rent -- all have become digital media. When was the last time you actually wrote and mailed a paper letter?

"We've gone from a world, years ago, with a tremendous amount of privacy, for business, for love letters, whatever," Bamford says. "But there's been a tremendous loss of privacy in the last few years. Our final bit of privacy is gone if neither Congress nor people do anything about it."
http://news.yahoo.com/s/nf/20060724/bs_nf/44218





From October 2004

The Long Tail

Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
Chris Anderson

In 1988, a British mountain climber named Joe Simpson wrote a book called Touching the Void, a harrowing account of near death in the Peruvian Andes. It got good reviews but, only a modest success, it was soon forgotten. Then, a decade later, a strange thing happened. Jon Krakauer wrote Into Thin Air, another book about a mountain-climbing tragedy, which became a publishing sensation. Suddenly Touching the Void started to sell again.

Random House rushed out a new edition to keep up with demand. Booksellers began to promote it next to their Into Thin Air displays, and sales rose further. A revised paperback edition, which came out in January, spent 14 weeks on the New York Times bestseller list. That same month, IFC Films released a docudrama of the story to critical acclaim. Now Touching the Void outsells Into Thin Air more than two to one.

What happened? In short, Amazon.com recommendations. The online bookseller's software noted patterns in buying behavior and suggested that readers who liked Into Thin Air would also like Touching the Void. People took the suggestion, agreed wholeheartedly, wrote rhapsodic reviews. More sales, more algorithm-fueled recommendations, and the positive feedback loop kicked in.

Particularly notable is that when Krakauer's book hit shelves, Simpson's was nearly out of print. A few years ago, readers of Krakauer would never even have learned about Simpson's book - and if they had, they wouldn't have been able to find it. Amazon changed that. It created the Touching the Void phenomenon by combining infinite shelf space with real-time information about buying trends and public opinion. The result: rising demand for an obscure book.

This is not just a virtue of online booksellers; it is an example of an entirely new economic model for the media and entertainment industries, one that is just beginning to show its power. Unlimited selection is revealing truths about what consumers want and how they want to get it in service after service, from DVDs at Netflix to music videos on Yahoo! Launch to songs in the iTunes Music Store and Rhapsody. People are going deep into the catalog, down the long, long list of available titles, far past what's available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).

An analysis of the sales data and trends from these services and others like them shows that the emerging digital entertainment economy is going to be radically different from today's mass market. If the 20th- century entertainment industry was about hits, the 21st will be equally about misses.

For too long we've been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics. Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.

The main problem, if that's the word, is that we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment.

The first is the need to find local audiences. An average movie theater will not show a film unless it can attract at least 1,500 people over a two-week run; that's essentially the rent for a screen. An average record store needs to sell at least two copies of a CD per year to make it worth carrying; that's the rent for a half inch of shelf space. And so on for DVD rental shops, videogame stores, booksellers, and newsstands.

In each case, retailers will carry only content that can generate sufficient demand to earn its keep. But each can pull only from a limited local population - perhaps a 10-mile radius for a typical movie theater, less than that for music and bookstores, and even less (just a mile or two) for video rental shops. It's not enough for a great documentary to have a potential national audience of half a million; what matters is how many it has in the northern part of Rockville, Maryland, and among the mall shoppers of Walnut Creek, California.

There is plenty of great entertainment with potentially large, even rapturous, national audiences that cannot clear that bar. For instance, The Triplets of Belleville, a critically acclaimed film that was nominated for the best animated feature Oscar this year, opened on just six screens nationwide. An even more striking example is the plight of Bollywood in America. Each year, India's film industry puts out more than 800 feature films. There are an estimated 1.7 million Indians in the US. Yet the top-rated (according to Amazon's Internet Movie Database) Hindi-language film, Lagaan: Once Upon a Time in India, opened on just two screens, and it was one of only a handful of Indian films to get any US distribution at all. In the tyranny of physical space, an audience too thinly spread is the same as no audience at all.

The other constraint of the physical world is physics itself. The radio spectrum can carry only so many stations, and a coaxial cable so many TV channels. And, of course, there are only 24 hours a day of programming. The curse of broadcast technologies is that they are profligate users of limited resources. The result is yet another instance of having to aggregate large audiences in one geographic area - another high bar, above which only a fraction of potential content rises.

The past century of entertainment has offered an easy solution to these constraints. Hits fill theaters, fly off shelves, and keep listeners and viewers from touching their dials and remotes. Nothing wrong with that; indeed, sociologists will tell you that hits are hardwired into human psychology, the combinatorial effect of conformity and word of mouth. And to be sure, a healthy share of hits earn their place: Great songs, movies, and books attract big, broad audiences.

But most of us want more than just hits. Everyone's taste departs from the mainstream somewhere, and the more we explore alternatives, the more we're drawn to them. Unfortunately, in recent decades such alternatives have been pushed to the fringes by pumped-up marketing vehicles built to order by industries that desperately need them.

Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots.

This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance. And the differences are profound.

To see how, meet Robbie Vann-Adiba, the CEO of Ecast, a digital jukebox company whose barroom players offer more than 150,000 tracks - and some surprising usage statistics. He hints at them with a question that visitors invariably get wrong: "What percentage of the top 10,000 titles in any online media store (Netflix, iTunes, Amazon, or any other) will rent or sell at least once a month?"

Most people guess 20 percent, and for good reason: We've been trained to think that way. The 80-20 rule, also known as Pareto's principle (after Vilfredo Pareto, an Italian economist who devised the concept in 1906), is all around us. Only 20 percent of major studio films will be hits. Same for TV shows, games, and mass-market books - 20 percent all. The odds are even worse for major-label CDs, where fewer than 10 percent are profitable, according to the Recording Industry Association of America.

But the right answer, says Vann-Adiba, is 99 percent. There is demand for nearly every one of those top 10,000 tracks. He sees it in his own jukebox statistics; each month, thousands of people put in their dollars for songs that no traditional jukebox anywhere has ever carried.

People get Vann-Adiba's question wrong because the answer is counterintuitive in two ways. The first is we forget that the 20 percent rule in the entertainment industry is about hits, not sales of any sort. We're stuck in a hit-driven mindset - we think that if something isn't a hit, it won't make money and so won't return the cost of its production. We assume, in other words, that only hits deserve to exist. But Vann-Adiba, like executives at iTunes, Amazon, and Netflix, has discovered that the "misses" usually make money, too. And because there are so many more of them, that money can add up quickly to a huge new market.

With no shelf space to pay for and, in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees, a miss sold is just another sale, with the same margins as a hit. A hit and a miss are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.

The second reason for the wrong answer is that the industry has a poor sense of what people want. Indeed, we have a poor sense of what we want. We assume, for instance, that there is little demand for the stuff that isn't carried by Wal-Mart and other major retailers; if people wanted it, surely it would be sold. The rest, the bottom 80 percent, must be subcommercial at best.

But as egalitarian as Wal-Mart may seem, it is actually extraordinarily elitist. Wal-Mart must sell at least 100,000 copies of a CD to cover its retail overhead and make a sufficient profit; less than 1 percent of CDs do that kind of volume. What about the 60,000 people who would like to buy the latest Fountains of Wayne or Crystal Method album, or any other nonmainstream fare? They have to go somewhere else. Bookstores, the megaplex, radio, and network TV can be equally demanding. We equate mass market with quality and demand, when in fact it often just represents familiarity, savvy advertising, and broad if somewhat shallow appeal. What do we really want? We're only just discovering, but it clearly starts with more.

To get a sense of our true taste, unfiltered by the economics of scarcity, look at Rhapsody, a subscription-based streaming music service (owned by RealNetworks) that currently offers more than 735,000 tracks.

Chart Rhapsody's monthly statistics and you get a "power law" demand curve that looks much like any record store's, with huge appeal for the top tracks, tailing off quickly for less popular ones. But a really interesting thing happens once you dig below the top 40,000 tracks, which is about the amount of the fluid inventory (the albums carried that will eventually be sold) of the average real-world record store. Here, the Wal-Marts of the world go to zero - either they don't carry any more CDs, or the few potential local takers for such fringy fare never find it or never even enter the store.

The Rhapsody demand, however, keeps going. Not only is every one of Rhapsody's top 100,000 tracks streamed at least once each month, the same is true for its top 200,000, top 300,000, and top 400,000. As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it's just a few people a month, somewhere in the country.

This is the Long Tail.

You can find everything out there on the Long Tail. There's the back catalog, older albums still fondly remembered by longtime fans or rediscovered by new ones. There are live tracks, B-sides, remixes, even (gasp) covers. There are niches by the thousands, genre within genre within genre: Imagine an entire Tower Records devoted to '80s hair bands or ambient dub. There are foreign bands, once priced out of reach in the Import aisle, and obscure bands on even more obscure labels, many of which don't have the distribution clout to get into Tower at all.

Oh sure, there's also a lot of crap. But there's a lot of crap hiding between the radio tracks on hit albums, too. People have to skip over it on CDs, but they can more easily avoid it online, since the collaborative filters typically won't steer you to it. Unlike the CD, where each crap track costs perhaps one-twelfth of a $15 album price, online it just sits harmlessly on some server, ignored in a market that sells by the song and evaluates tracks on their own merit.

What's really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you've got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon's book sales come from outside its top 130,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are (see "Anatomy of the Long Tail"). In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: "The biggest money is in the smallest sales."

The same is true for all other aspects of the entertainment business, to one degree or another. Just compare online and offline businesses: The average Blockbuster carries fewer than 3,000 DVDs. Yet a fifth of Netflix rentals are outside its top 3,000 titles. Rhapsody streams more songs each month beyond its top 10,000 than it does its top 10,000. In each case, the market that lies outside the reach of the physical retailer is big and getting bigger.

When you think about it, most successful businesses on the Internet are about aggregating the Long Tail in one way or another. Google, for instance, makes most of its money off small advertisers (the long tail of advertising), and eBay is mostly tail as well - niche and one-off products. By overcoming the limitations of geography and scale, just as Rhapsody and Amazon have, Google and eBay have discovered new markets and expanded existing ones.

This is the power of the Long Tail. The companies at the vanguard of it are showing the way with three big lessons. Call them the new rules for the new entertainment economy.

Rule 1: Make everything available

If you love documentaries, Blockbuster is not for you. Nor is any other video store - there are too many documentaries, and they sell too poorly to justify stocking more than a few dozen of them on physical shelves. Instead, you'll want to join Netflix, which offers more than a thousand documentaries - because it can. Such profligacy is giving a boost to the documentary business; last year, Netflix accounted for half of all US rental revenue for Capturing the Friedmans, a documentary about a family destroyed by allegations of pedophilia.

Netflix CEO Reed Hastings, who's something of a documentary buff, took this newfound clout to PBS, which had produced Daughter From Danang, a documentary about the children of US soldiers and Vietnamese women. In 2002, the film was nominated for an Oscar and was named best documentary at Sundance, but PBS had no plans to release it on DVD. Hastings offered to handle the manufacturing and distribution if PBS would make it available as a Netflix exclusive. Now Daughter From Danang consistently ranks in the top 15 on Netflix documentary charts. That amounts to a market of tens of thousands of documentary renters that did not otherwise exist.

There are any number of equally attractive genres and subgenres neglected by the traditional DVD channels: foreign films, anime, independent movies, British television dramas, old American TV sitcoms. These underserved markets make up a big chunk of Netflix rentals. Bollywood alone accounts for nearly 100,000 rentals each month. The availability of offbeat content drives new customers to Netflix - and anything that cuts the cost of customer acquisition is gold for a subscription business. Thus the company's first lesson: Embrace niches.

Netflix has made a good business out of what's unprofitable fare in movie theaters and video rental shops because it can aggregate dispersed audiences. It doesn't matter if the several thousand people who rent Doctor Who episodes each month are in one city or spread, one per town, across the country - the economics are the same to Netflix. It has, in short, broken the tyranny of physical space. What matters is not where customers are, or even how many of them are seeking a particular title, but only that some number of them exist, anywhere.

As a result, almost anything is worth offering on the off chance it will find a buyer. This is the opposite of the way the entertainment industry now thinks. Today, the decision about whether or when to release an old film on DVD is based on estimates of demand, availability of extras such as commentary and additional material, and marketing opportunities such as anniversaries, awards, and generational windows (Disney briefly rereleases its classics every 10 years or so as a new wave of kids come of age). It's a high bar, which is why only a fraction of movies ever made are available on DVD.

That model may make sense for the true classics, but it's way too much fuss for everything else. The Long Tail approach, by contrast, is to simply dump huge chunks of the archive onto bare-bones DVDs, without any extras or marketing. Call it the Silver Series and charge half the price. Same for independent films. This year, nearly 6,000 movies were submitted to the Sundance Film Festival. Of those, 255 were accepted, and just two dozen have been picked up for distribution; to see the others, you had to be there. Why not release all 255 on DVD each year as part of a discount Sundance Series?In a Long Tail economy, it's more expensive to evaluate than to release. Just do it!

The same is true for the music industry. It should be securing the rights to release all the titles in all the back catalogs as quickly as it can - thoughtlessly, automatically, and at industrial scale. (This is one of those rare moments where the world needs more lawyers, not fewer.) So too for videogames. Retro gaming, including simulators of classic game consoles that run on modern PCs, is a growing phenomenon driven by the nostalgia of the first joystick generation. Game publishers could release every title as a 99-cent download three years after its release - no support, no guarantees, no packaging.

All this, of course, applies equally to books. Already, we're seeing a blurring of the line between in and out of print. Amazon and other networks of used booksellers have made it almost as easy to find and buy a second-hand book as it is a new one. By divorcing bookselling from geography, these networks create a liquid market at low volume, dramatically increasing both their own business and the overall demand for used books. Combine that with the rapidly dropping costs of print-on-demand technologies and it's clear why any book should always be available. Indeed, it is a fair bet that children today will grow up never knowing the meaning of out of print.

Rule 2: Cut the price in half. Now lower it.

Thanks to the success of Apple's iTunes, we now have a standard price for a downloaded track: 99 cents. But is it the right one?

Ask the labels and they'll tell you it's too low: Even though 99 cents per track works out to about the same price as a CD, most consumers just buy a track or two from an album online, rather than the full CD. In effect, online music has seen a return to the singles-driven business of the 1950s. So from a label perspective, consumers should pay more for the privilege of purchasing a la carte to compensate for the lost album revenue.

Ask consumers, on the other hand, and they'll tell you that 99 cents is too high. It is, for starters, 99 cents more than Kazaa. But piracy aside, 99 cents violates our innate sense of economic justice: If it clearly costs less for a record label to deliver a song online, with no packaging, manufacturing, distribution, or shelf space overheads, why shouldn't the price be less, too?

Surprisingly enough, there's been little good economic analysis on what the right price for online music should be. The main reason for this is that pricing isn't set by the market today but by the record label demi-cartel. Record companies charge a wholesale price of around 65 cents per track, leaving little room for price experimentation by the retailers.

That wholesale price is set to roughly match the price of CDs, to avoid dreaded "channel conflict." The labels fear that if they price online music lower, their CD retailers (still the vast majority of the business) will revolt or, more likely, go out of business even more quickly than they already are. In either case, it would be a serious disruption of the status quo, which terrifies the already spooked record companies. No wonder they're doing price calculations with an eye on the downsides in their traditional CD business rather than the upside in their new online business.

But what if the record labels stopped playing defense? A brave new look at the economics of music would calculate what it really costs to simply put a song on an iTunes server and adjust pricing accordingly. The results are surprising.

Take away the unnecessary costs of the retail channel - CD manufacturing, distribution, and retail overheads. That leaves the costs of finding, making, and marketing music. Keep them as they are, to ensure that the people on the creative and label side of the business make as much as they currently do. For a popular album that sells 300,000 copies, the creative costs work out to about $7.50 per disc, or around 60 cents a track. Add to that the actual cost of delivering music online, which is mostly the cost of building and maintaining the online service rather than the negligible storage and bandwidth costs. Current price tag: around 17 cents a track. By this calculation, hit music is overpriced by 25 percent online - it should cost just 79 cents a track, reflecting the savings of digital delivery.

Putting channel conflict aside for the moment, if the incremental cost of making content that was originally produced for physical distribution available online is low, the price should be, too. Price according to digital costs, not physical ones.

All this good news for consumers doesn't have to hurt the industry. When you lower prices, people tend to buy more. Last year, Rhapsody did an experiment in elastic demand that suggested it could be a lot more. For a brief period, the service offered tracks at 99 cents, 79 cents, and 49 cents. Although the 49-cent tracks were only half the price of the 99-cent tracks, Rhapsody sold three times as many of them.

Since the record companies still charged 65 cents a track - and Rhapsody paid another 8 cents per track to the copyright-holding publishers - Rhapsody lost money on that experiment (but, as the old joke goes, made it up in volume). Yet much of the content on the Long Tail is older material that has already made back its money (or been written off for failing to do so): music from bands that had little record company investment and was thus cheap to make, or live recordings, remixes, and other material that came at low cost.

Such "misses" cost less to make available than hits, so why not charge even less for them? Imagine if prices declined the further you went down the Tail, with popularity (the market) effectively dictating pricing. All it would take is for the labels to lower the wholesale price for the vast majority of their content not in heavy rotation; even a two- or three-tiered pricing structure could work wonders. And because so much of that content is not available in record stores, the risk of channel conflict is greatly diminished. The lesson: Pull consumers down the tail with lower prices.

How low should the labels go? The answer comes by examining the psychology of the music consumer. The choice facing fans is not how many songs to buy from iTunes and Rhapsody, but how many songs to buy rather than download for free from Kazaa and other peer-to-peer networks. Intuitively, consumers know that free music is not really free: Aside from any legal risks, it's a time-consuming hassle to build a collection that way. Labeling is inconsistent, quality varies, and an estimated 30 percent of tracks are defective in one way or another. As Steve Jobs put it at the iTunes Music Store launch, you may save a little money downloading from Kazaa, but "you're working for under minimum wage." And what's true for music is doubly true for movies and games, where the quality of pirated products can be even more dismal, viruses are a risk, and downloads take so much longer.

So free has a cost: the psychological value of convenience. This is the "not worth it" moment where the wallet opens. The exact amount is an impossible calculus involving the bank balance of the average college student multiplied by their available free time. But imagine that for music, at least, it's around 20 cents a track. That, in effect, is the dividing line between the commercial world of the Long Tail and the underground. Both worlds will continue to exist in parallel, but it's crucial for Long Tail thinkers to exploit the opportunities between 20 and 99 cents to maximize their share. By offering fair pricing, ease of use, and consistent quality, you can compete with free.

Perhaps the best way to do that is to stop charging for individual tracks at all. Danny Stein, whose private equity firm owns eMusic, thinks the future of the business is to move away from the ownership model entirely. With ubiquitous broadband, both wired and wireless, more consumers will turn to the celestial jukebox of music services that offer every track ever made, playable on demand. Some of those tracks will be free to listeners and advertising-supported, like radio. Others, like eMusic and Rhapsody, will be subscription services. Today, digital music economics are dominated by the iPod, with its notion of a paid-up library of personal tracks. But as the networks improve, the comparative economic advantages of unlimited streamed music, either financed by advertising or a flat fee (infinite choice for $9.99 a month), may shift the market that way. And drive another nail in the coffin of the retail music model.

Rule 3: Help me find it

In 1997, an entrepreneur named Michael Robertson started what looked like a classic Long Tail business. Called MP3.com, it let anyone upload music files that would be available to all. The idea was the service would bypass the record labels, allowing artists to connect directly to listeners. MP3.com would make its money in fees paid by bands to have their music promoted on the site. The tyranny of the labels would be broken, and a thousand flowers would bloom.

Putting aside the fact that many people actually used the service to illegally upload and share commercial tracks, leading the labels to sue MP3.com, the model failed at its intended purpose, too. Struggling bands did not, as a rule, find new audiences, and independent music was not transformed. Indeed, MP3.com got a reputation for being exactly what it was: an undifferentiated mass of mostly bad music that deserved its obscurity.

The problem with MP3.com was that it was only Long Tail. It didn't have license agreements with the labels to offer mainstream fare or much popular commercial music at all. Therefore, there was no familiar point of entry for consumers, no known quantity from which further exploring could begin.

Offering only hits is no better. Think of the struggling video-on-demand services of the cable companies. Or think of Movielink, the feeble video download service run by the studios. Due to overcontrolling providers and high costs, they suffer from limited content: in most cases just a few hundred recent releases. There's not enough choice to change consumer behavior, to become a real force in the entertainment economy.

By contrast, the success of Netflix, Amazon, and the commercial music services shows that you need both ends of the curve. Their huge libraries of less-mainstream fare set them apart, but hits still matter in attracting consumers in the first place. Great Long Tail businesses can then guide consumers further afield by following the contours of their likes and dislikes, easing their exploration of the unknown.

For instance, the front screen of Rhapsody features Britney Spears, unsurprisingly. Next to the listings of her work is a box of "similar artists." Among them is Pink. If you click on that and are pleased with what you hear, you may do the same for Pink's similar artists, which include No Doubt. And on No Doubt's page, the list includes a few "followers" and "influencers," the last of which includes the Selecter, a 1980s ska band from Coventry, England. In three clicks, Rhapsody may have enticed a Britney Spears fan to try an album that can hardly be found in a record store.

Rhapsody does this with a combination of human editors and genre guides. But Netflix, where 60 percent of rentals come from recommendations, and Amazon do this with collaborative filtering, which uses the browsing and purchasing patterns of users to guide those who follow them ("Customers who bought this also bought ..."). In each, the aim is the same: Use recommendations to drive demand down the Long Tail.

This is the difference between push and pull, between broadcast and personalized taste. Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare.

The advantages are spread widely. For the entertainment industry itself, recommendations are a remarkably efficient form of marketing, allowing smaller films and less-mainstream music to find an audience. For consumers, the improved signal-to-noise ratio that comes from following a good recommendation encourages exploration and can reawaken a passion for music and film, potentially creating a far larger entertainment market overall. (The average Netflix customer rents seven DVDs a month, three times the rate at brick-and-mortar stores.) And the cultural benefit of all of this is much more diversity, reversing the blanding effects of a century of distribution scarcity and ending the tyranny of the hit.

Such is the power of the Long Tail. Its time has come.
http://www.wired.com/wired/archive/12.10/tail.html





It May Be a Long Time Before the Long Tail Is Wagging the Web
Lee Gomes

Wired Magazine editor Chris Anderson's hot, new best seller, "The Long Tail," is causing a sensation with its eye-opening claims about the way the Web is rewriting the rules of commerce. But I've looked at some of the same data, and some more of my own, and I don't think things are changing as much as he does.

The book argues that while traditional companies are limited by shelf space to offering only a relatively small number of "hits," on the Web, they can carry a vastly bigger number of slower-selling items. These "misses," which make up the "tail" of the title, can, he says, add up to a big number -- maybe even bigger than sales of the hits.

That would be very different from the business world we know today; no wonder the book's cover promises "The New Economics of Culture and Commerce."

Let's start this discussion where Mr. Anderson starts his book, with his discovery of what he calls a paradigm-changing statistic. In the introduction, he tells how he learns from Ecast, a music-streaming company, that 98% of its catalog gets played at least once a quarter -- much more than most would predict.

This "98 Percent Rule," as Mr. Anderson names it, suggests the remarkable prospect that no matter how much inventory you put online, someone, somewhere will show up to buy it. He writes, "Everywhere I looked the story was the same. ... The 98 Percent Rule turned out to be nearly universal."

Except it's not. Ecast told me that now, with a much bigger inventory than when Mr. Anderson spoke to them two years ago, the quarterly no-play rate has risen from 2% to 12%. March data for the 1.1 million songs of Rhapsody, another streamer, shows a 22% no-play rate; another 19% got just one or two plays.

Mr. Anderson told me in an email that he only mentioned the 98 Percent Rule to show how he first got interested in the book's overall subject, adding, "I have no idea how broadly it applies today."

In the book's main sections, Mr. Anderson writes that as things move online, sales of misses will increase -- so much so that they can equal or exceed the sales of hits. The latter is the book's showstopper proposition; it's mentioned twice on the book's jacket.

I was thus a little surprised when Mr. Anderson told me that he didn't have any examples of this actually occurring. At Netflix and Amazon, two of his biggest case studies, misses won't outsell hits for at least another decade, he said. None of these qualifications are in the book.

Mr. Anderson told me the lack of an example of misses outselling hits doesn't diminish his basic point, which he said is simply that the role of the tail "is big and getting bigger."

By Mr. Anderson's calculation, 25% of Amazon's sales are from its tail, as they involve books you can't find at a traditional retailer. But using another analysis of those numbers -- an analysis that Mr. Anderson argues isn't meaningful -- you can show that 2.7% of Amazon's titles produce a whopping 75% of its revenues. Not quite as impressive.

Another theme of the book is that "hits are starting to rule less." But when I looked online, I was surprised to see what seemed like the opposite. Ecast says 10% of its songs account for roughly 90% of its streams; monthly data from Rhapsody showed the top 10% songs getting 86% of streams.

Bloglines, the widely used blog-reading tool, lists 1.2 million blogs; real ones, not computer-generated "spam blogs." The top 10% of feeds grab 88% of all subscriptions. And 35% have no current subscribers at all -- there's clearly no 98 Percent Rule in the blogosphere.

At Apple's iTunes, one person who has seen the data -- which Apple doesn't disclose -- said sales "closely track Billboard. It's a hits business. The data tend to refute 'The Long Tail.' "

Other economists, of course, are looking into these same questions, though some seem to be reaching far more restrained conclusions. Harvard's Anita Elberse, whom Mr. Anderson said was a consultant during his two-year research project, studies the video sales market, both online and off.

She said in an email that her work to date shows a "slight shift" toward the tail. But she also noted "a rapidly increasing number of titles that never, or very rarely, sell," which suggests "it is difficult for content providers to profit from the 'tail.' "

It would be wonderful if the world as Mr. Anderson describes it were true: one where "healthy niche products" and even "outright misses" collectively could stand their ground with the culture's increasingly soulless "hits."

But while every singer-songwriter dreams from his bedroom of making a living off iTunes, few actually do, mostly because so many others have the very same idea. And to the extent that Apple is making money off iTunes, thanks go to Nelly Furtado and other hitmakers. Indeed, you can make the case that the Internet is amplifying the role of hits, even in relation to misses, not diminishing them.

So maybe Mr. Anderson really has unlocked the sort of new business rules the cover promises. I say we wait before ripping up any business plans. Let's see how the tail shakes out.
http://online.wsj.com/public/article...html?mod=blogs





The Backlash, Chapter 1
Chris Anderson

I'll take it as a compliment that I now warrant a proper Wall Street Journal takedown for crimes of...well, I'm not quite sure what the crimes are. But Lee Gomes has tried mightily to find flaws with the Long Tail theory and deserves a response of some sort. I have no doubt that there are many parts of my analysis and data that could be improved. Unfortunately, Gomes, in his haste to find them, stumbles over statistics and more, and in the end simply makes a muddle of what might have been an interesting debate over the magnitude of the Long Tail effect.

He writes:

In the book's main sections, Mr. Anderson writes that as things move online, sales of misses will increase -- so much so that they can equal or exceed the sales of hits. The latter is the book's showstopper proposition; it's mentioned twice on the book's jacket.

I was thus a little surprised when Mr. Anderson told me that he didn't have any examples of this actually occurring.

First, the book doesn't claim that there are any cases where sales of products not available in the dominant bricks-and-mortar retailer in a sector (my definition of "tail") are larger than the sales of products that are available in that retailer ("head").

What it does say is that the current data at Rhapsody, Netflix and Amazon show that the tail amounts to between 21% and 40% of the market, with the head accounting for the rest. Although I don't discuss this in detail in the book, in the case of Rhapsody, the trend data suggests that the tail (as defined above) actually will equal the head within five years. Which is why the language Gomes cites from the book jacket is actually all phrased in the future conditional tense ("What happens when the combined value of all the millions of items that may sell only a few copies equals or exceeds the value of a few items that sell millions each?"). I asked him to quote the jacket copy in full context, but it apparently wasn't convenient to his thesis to do so, so he didn't.

Gomes continues:

Mr. Anderson told me the lack of an example of misses outselling hits doesn't diminish his basic point, which he said is simply that the role of the tail "is big and getting bigger."

By Mr. Anderson's calculation, 25% of Amazon's sales are from its tail, as they involve books you can't find at a traditional retailer. But using another analysis of those numbers -- an analysis that Mr. Anderson argues isn't meaningful -- you can show that 2.7% of Amazon's titles produce a whopping 75% of its revenues. Not quite as impressive.

Sigh. Gomes was determined to make this point, even after I and others pointed out the statistical fallacy at the core of it. As I wrote in this post, trying to define "head" and "tail" in percentage terms is meaningless in a market with unlimited inventory, because the denominator can grow infinitely large. Let me give you an example of why this doesn't work:

Let's say you have 1,000 items and the top 100 (10%) account for 50% of the sales. Then you add another 99,000 items to the catalog, and the sales of that top 100 fall to just 25% of the total, while it takes another 900 items to make up the next 25%. I would say that demand has shifted down the tail, because those top 100 items have dropped from half the market to just a quarter of it and the rest of the demand is spread over more items.

But by Gomes' math, we've gone from a market where 10% of products make 50% of the revenues to one where 1% of the products make 50% of the revenues--in other words, it's become more hit-centric. I think this is simply a misunderstanding of basic statistics, and I'm disappointed that Gomes, despite many emails from me and at least one economist to him on this point, chose to simply say that I don't agree with that approach (but not why).

Finally, a very annoying point. Gomes writes:

Other economists, of course, are looking into these same questions, though some seem to be reaching far more restrained conclusions. Harvard's Anita Elberse, whom Mr. Anderson said was a consultant during his two-year research project, studies the video sales market, both online and off.

She said in an email that her work to date shows a "slight shift" toward the tail. But she also noted "a rapidly increasing number of titles that never, or very rarely, sell," which suggests "it is difficult for content providers to profit from the 'tail.' "

As Professor Elberse told Gomes, she was only describing Nielsen VideoScan data, which is almost entirely taken from bricks-and-mortar sources. The Netflix data, which was the basis of the Long Tail analysis that she and I worked on together, tells a very different story (Elberse's terms of data access don't allow her to share that data; my terms allowed me to share what I published in the book). We both urged Gomes to make clear that the "slight shift" measured didn't refer to the Netflix data that was at the core of the book's conclusions. But he chose to make the point he wanted to make.

I'm actually quite an admirer of Gomes' work and he certainly did do a lot of research for this piece. But he started off with the wrong end of the stick (looking at the market in percentage terms, which doesn't work because the definition of "head" keeps changing) and sadly wouldn't let it go. As an editor, I've seen this happen before and we try to watch out for it. But sometimes the lure of the gotcha is too much to resist.
http://www.longtail.com/the_long_tai...ecking_my.html





Watch Your Back When Someone at Fox News Channel Wishes You Well

It's something like a kiss from a Mafia don.
David Bauder

If someone at Fox News Channel wishes you well, watch your back.

The seemingly benign sentiment is a creative signature of Fox's public relations, usually accompanied by a kneecapping. It's something like a kiss from a Mafia don.

MSNBC host Keith Olbermann was the latest to visit the wishing well. When The New York Times recently asked Fox its opinion of Olbermann, who has repeatedly used Bill O'Reilly as a pinata on his nightly news countdown, spokeswoman Irena Briganti replied:
"Because of his personal demons, Keith has imploded everywhere he's worked. From lashing out at co-workers to personally attacking Bill O'Reilly and all things Fox, it's obvious Keith is a train wreck waiting to happen. And like all train wrecks, people might tune in out of morbid curiosity, but they eventually tune out, as evidenced by Keith's recent ratings decline. In the meantime, we hope he enjoys his paranoid view from the bottom of the ratings ladder and wish him well on his inevitable trip to oblivion."

Have a nice day, Keith!

Plainly, public relations is a contact sport at Fox News Channel _ with, as Fox PR chief Brian Lewis explains, a sense of mischief sprinkled in.

"Has there ever been a more disingenuous phrase in the corporate handbook, or the PR handbook, than `we wish him well'?" asked Lewis. "`Earnings have fallen in the last eight quarters and we wish Joe well as he leaves the company to pursue other interests.' We know what they mean, so we just thought we'd have some fun and point out the hypocrisy of the term."

The list of people to get Fox News Channel's best wishes in print lengthens all the time. Here are some others:

-- Ted Turner. The CNN founder called Fox a "propaganda voice" of the Bush administration and compared its popularity to Adolf Hitler's rise in Germany before World War II. Briganti: "Ted is understandably bitter having lost his ratings, his network and now his mind. We wish him well."

-- Tim Russert. A journalist asked the NBC Washington bureau chief whether Fox would get better treatment from the White House with Tony Snow as press secretary and he replied, "no more than they get right now." Fox's Paul Schur shot back: "Tim's sour grapes are obvious here, but at least he's not using his father as a prop to sell books this time around. That said, we wish him well on his latest self-promotion tour."

-- George Clooney. Fox News branched out to Hollywood after the actor criticized O'Reilly. "We are disappointed that George has chosen to hurt Mr. O'Reilly's family in order to promote his movie," Schur said. "But it's obvious he needs publicity considering his recent string of failures. We wish him well in his struggle to regain relevancy."

-- MSNBC correspondent David Shuster. After leaving a job at Fox, Shuster said that critical reporting on the Bush administration wouldn't have been welcomed at his former employer. Briganti came back with: "We can understand David's disappointment in being let go by Fox News Channel, but he's too young to be so bitter. We wish him well in getting his career back on track."

-- Jonathan Klein. On the day the CNN U.S. president was hired, Briganti offered: "We wish CNN well in their annual executive shuffle." She later stuck the knife in further with: "We wish Jon well in his battle for second place with MSNBC."

Fox has essentially changed the language in the TV industry with its wishing well, turning a pleasantry into "take a hike."

Or worse.

The wishing well opened at Fox in the late 1990s. Look further back in the archives and you'll find examples of where the network wished someone well and actually appeared to mean it.

Whatever name is attached to it, a wish-well is generally a team effort by Fox's PR staff, Lewis said. Fox News chief Roger Ailes even contributed the memorable "his mind" line to the Turner kiss-off.

Each line is a counter-punch, Lewis noted. Fox doesn't "go nuclear" unless provoked. And he doesn't want the lines to lose impact by overdoing it.

"Not every attack on us deserves a response," he said. "It could be no response. That's a strategy. It could be mild, medium or spicy, depending on what our needs are."

Olbermann doesn't find the whole thing particularly amusing. He may be the most frequent target, and he enshrined Briganti in his "worst person in the world" feature for the latest attack.

"I've heard it all before and each time she's said it the ratings go up 25 percent in the ensuing year, so I'm encouraging her to say it as much as possible," Olbermann said. "They're just without humor and without understanding of the impact of their words. It's like O'Reilly. Every time he opens his mouth, I get more viewers."

He believes more people are laughing at Fox than with them.

"If they're going to come out and say these things, I'd much prefer the old muskrat line, whatever they said about Paula, then these attempts to sugarcoat these things," he said.

It was a raccoon, actually.

The reference is to one of Ailes' most famous quotes after Paula Zahn left Fox for CNN. He dismissed Zahn's ratings increases while at Fox as a reflection of the network's overall growth by saying, "I could have put a dead raccoon on the air this year and got a better rating than last year."

"We know (Olbermann) has thin skin," Lewis said. "Why else would he make a PR person one of the worst people in the world? Come on, we get that. What he's trying to do to O'Reilly, we're doing to him. It's obviously getting to him."
http://www.newstimeslive.com/enter/story.php?id=1006648





AOL Co-Founder Offers Merger Apology
AP

AOL co-founder Steve Case has offered a qualified apology for his role in architecting the online company's disastrous combination with Time Warner Inc. "Yes, I'm sorry I did it," Case said on PBS's "The Charlie Rose Show" last Friday.

But Case also reiterated his belief that it was a good idea at the time.

"It has been a disappointment, but you know, it goes back to the question, `Was it a good idea?'" Case said, according to a transcript provided by the show. "I think it was a good idea. I'm disappointed and frustrated that it hasn't developed in the way that that we all hoped at the time it could."

Time Warner's agreement to be bought by AOL at the height of the Internet bubble in early 2000 resulted in years of turmoil, including shareholder lawsuits, regulatory investigations into AOL's accounting practices, a plunge in the company's share price and a management purge. Since then, Time Warner has changed its name from AOL Time Warner Inc. to just Time Warner Inc.

AOL's fortunes are on the upswing thanks to its recent strategy of shifting to an advertising-driven business instead of providing Internet access. But Time Warner stock prices are now hovering near its 52-week low as the company, and Time Warner is considering making even more of AOL's services free to boost advertising.

Case resigned from Time Warner's board in October and relinquished his role as chairman two years ago.
http://hosted.ap.org/dynamic/stories...07-27-06-32-31





Steely Dan Demands Apology From Owen Wilson

70s rockers says they're doing it for the fans
Solvej Schou

Paging Owen Wilson. Steely Dan wants an apology.

The veteran group behind such jazz-rock hits as "Rikki Don’t Lose that Number" says Wilson ripped off its Grammy-winning tune "Cousin Dupree" for his title role as a slacker in the new comedy "You, Me and Dupree."

In a 10-paragraph letter posted July 17 on Steely Dan’s Web site, and addressed to Wilson’s brother Luke, band leaders Walter Becker and Donald Fagen asked Owen Wilson to appear at a show in Irvine, Calif., to apologize to the band’s fans.

Wilson, in return, would get Steely Dan merchandise and a chance to party with the group.

"He would have to cop to the fact that what he and his Hollywood gangster pals did was wrong and that he wishes he had never agreed to get involved with this turkey in the first place," says the pair.

Becker and Fagen claim that "some hack writer or producer" heard Steely Dan’s "Cousin Dupree," about a hormonal houseguest, and "when it came time to change the character’s name or whatever so people wouldn’t know what a rip the whole thing was, they didn’t even bother to think up a new (expletive) name for the guy!"

They go on to trash the movie (a "summer stinkbomb") and Wilson.

"Instant karma is a fact, Jack," the pair writes.

If karma doesn’t get the actor, they say, then an apparent tough guy they know might.

"One time we saw this guy, with his bare hands, do something so unspeakable, that – but, hey man, let’s not even let it get that way, you know?" say Becker and Fagen.

Larry Solters, a spokesman for the band’s management company, declined to comment on any details beyond the letter, including whether Wilson showed up to the July 19 concert or if legal action would be taken.

In 2001, "Cousin Dupree" landed a Grammy for best pop performance by a duo or group from Steely Dan’s album "Two Against Nature," which also snagged album of the year.

The group, known for a string of ‘70s hits, has been on tour since July 7 with Michael McDonald.

"You, Me and Dupree" co-stars Kate Hudson and Matt Dillon as a newlywed couple annoyed by Wilson’s Dupree, a partier who crashes out on their couch.

Owen Wilson’s publicist Ina Treciokas and Luke Wilson’s publicist Mara Buxbaum both declined to comment.
http://www.newstimeslive.com/enter/story.php?id=1006879

















Until next week,

- js.



















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