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Old 04-11-09, 07:38 AM   #1
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Default Peer-To-Peer News - The Week In Review - November 7th, '09

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"I read the indictment — it’s complete bullshit. I’ll tell you right now I’m not going to plead guilty." – Ryan Harris



































November 7th, 2009




EU Breaks Deadlock in Debate Over Right to Internet Access
Paul Meller

After months of often bitter debate, European Union lawmakers reached agreement on how to preserve citizen's rights to Internet access in a meeting that ended in the early hours of Thursday morning.

The issue, which pits citizens' civil liberties against the rights of content owners such as record and movie companies to protect creative works on the Internet, has blocked the passage of a wide range of laws collectively dubbed the telecoms package.

Although the compromise reached by representatives of the European Parliament, the 27 national governments and the European Commission has still to be confirmed, it is seen as a watershed moment for the proposed laws, which aim to enhance competition among telecoms providers and to adapt users' rights to better suit the Internet age.

The text of the telecoms package now contains a new Internet freedom provision that states that access to the Internet is a human right of every E.U. citizen, and that if authorities take away that right people must have the opportunity to defend themselves; citizens also have an automatic right to mount a legal challenge.

However, the text does not demand that authorities in the 27 countries of the E.U. obtain a court order before cutting off someone's Internet connection, as the European Parliament demanded when it last voted on the issue in early summer.

The issue is very sensitive, and not just in Europe, where a number of countries including France and U.K. are passing laws threatening to sever users' Internet connections if they are found to have breached the copyright on music or movies.

The subject is under discussion at a gathering in South Korea this week. The U.S. is trying to garner support from other countries for a treaty that would force Internet service providers to take action against subscribers to their networks involved in illegal file sharing.

The so-called Anti-Counterfeiting Trade Agreement (ACTA) has attracted condemnation from many law experts and civil liberties activists because of the secretive way it is being drafted, and for the dramatic changes it would impose on the way people engage with the Internet.

The European Parliament has been criticized for caving in on the issue of prior judicial review. It was forced to back down because its call for a court order to be issued before someone is cut off from the Internet was legally uncertain, it said in a statement Thursday.

"There were serious doubts as to the legal validity of the amendment, as it would seem to go beyond the European Community's competences in this field," the Parliament said.

The Parliament's now infamous Amendment 138 would "arguably have required a harmonization of Member States' judicial systems," it said, adding that if it was adopted as part of the telecoms package, it faced being annulled by the European Court of Justice at a later date.

The European Commission welcomed the breakthrough. "It is very good news for Europe's citizens," said Viviane Reding, European Commissioner for Telecoms and the Information Society. The Commission initiated the reforms in the telecoms package.

"This Internet freedom provision is unprecedented across the globe and a strong signal that the E.U. takes fundamental rights very seriously, in particular when it comes to the information society," Reding said.

Agreement on the issue of Internet access means that the whole package can be adopted at the E.U. level by early next year, Reding said. Member states would then have 18 months to transpose the laws into their national statute books.

The telecoms package creates a new E.U.-wide regulatory body with powers to tackle monopoly abuse by former state-owned telecoms incumbents, including the power to force them to separate their networks from services they distribute through those networks, if they are found to be competing unfairly against other service providers.

The package aims to safeguard the neutrality of the Internet and to better protect people's privacy while they are online. It also paves the way for the redistribution of radio frequencies freed up by the transfer from analog to digital TV.

Greater competition and better consumer protection will strengthen the single E.U.-wide market for telecoms, thus bringing down prices, boosting innovation and helping to give all citizens access to high speed Internet, the Commission said.
http://www.pcworld.com/businesscente..._access.h tml





MPAA Wants Congress to ‘Encourage’ 3 Strikes, Filtering
David Kravets

The Motion Picture Association of America wants Congress to “encourage” internet providers to filter out pirated movies, and to punish customers who repeatedly engage in piracy with a “graduated response” that might include disconnection from the net.

The nation’s motion picture lobbying group floated the ideas in a 35-page lobbying letter to the Federal Communications Commission on Friday. The FCC is drafting recommendations to Congress for a national broadband plan.

“Working in cooperation with ISPs, MPAA’s member studios and other creators can utilize a variety of technological tools and policy approaches to address the threat of unlawful conduct online,” reads the MPAA’s letter (.pdf) .

“These efforts, which include graduated response policies as well as technologies such as watermarking and filtering, have proven to be successful in various contexts,” the group continues. “MPAA strongly urges the commission to recommend that Congress encourage multiple efforts to deter unlawful activity” and to refrain from enacting a policy that would limit the MPAA’s options.

The FCC letter is the second time the studios have publicly embraced internet filtering. But it’s the first time Hollywood has officially endorsed a “graduated response” policy, more commonly referred to as a three-strikes program. Among other things, such a policy could require ISPs to halt service to repeated copyright infringers.

The MPAA said it was not immediately prepared to comment on the letter, which comes as other countries, including South Korea, France, Sweden, Great Britain and Spain are enacting or openly contemplating three strikes measures.

The FCC’s final recommendations to Capitol Hill should urge “that content creators and ISPs be encouraged to develop the best available solutions — even though it is impossible today to identify what all of those solutions may look like,” the MPAA argued. “Whether in the form of forensic tools or policies designed to discourage consumers from engaging in unlawful conduct, the government should give private industry-wide latitude to find effective strategies.”

Toward that goal, the group’s lobbying letter asks the FCC to review broadband policy of other nations, including South Korea. In April, Korean lawmakers allowed for the termination of a copyright infringer’s internet access for up to six months, and also called for shuttering websites and message boards transmitting infringing content.

“South Korea ignored the problems of intellectual property crimes for far too long, but fortunately, it is no longer sitting idly by as theft ravages its creative industry,” the MPAA wrote.

The MPAA’s counterpart, the Recording Industry Association of America, is also pushing U.S.-based ISPs for a three-strikes plan, but has been largely unsuccessful as network providers await government guidance on the issue.

Public Knowledge, a digital rights group in Washington, D.C., counters that filters designed to detect copyrighted data are unable to differential between pirated content and content that’s authorized or constitutes a fair use of the material. Public Knowledge spokesman Art Brodsky says filtering amounts to a privacy breach as well.

“You don’t break into peoples’ houses to see if people have stolen books,’ Brodsky says. “This is an assumption of guilt that they have to look through everybody’s bits.”

The MPAA’s lobbying effort is in response to the American Recovery and Reinvestment Act of 2009, the $800 billion bailout package that included a $7 billion investment in broadband. The measure requires the FCC to recommend to Congress by February how best to revamp American broadband policy.

Of dozens of comments to the FCC on the topic, the MPAA’s proposal is the least consumer friendly, Brodsky says.
http://www.wired.com/threatlevel/2009/11/mpaa-filtering





Spanish Govt Rules Out Three-Strikes Law
Howell Llewellyn

Spain does not intend to disconnect Internet users who repeatedly ignore warnings not to download copyright protected content, culture minister Angeles González-Sinde said on a breakfast-time TV show today (Nov. 5).

This is despite a European Union agreement allowing its 27 member states the possibility of cutting Internet access without prior judicial permission.

The government "is not considering punitive measures for the end user of Internet," González-Sinde told TVE1's "TVE Breakfasts." This ruled out following the three-strikes tendencies of France or the United Kingdom against illegal downloaders.

González-Sinde said the first thing to do is "attack the origin of all these products that are on the Web sites, as well as those who benefit from them." She added that Internet piracy was "a very complex matter," and would surely be very present in debates during Spain's six-month presidency of the European Union that begins Jan. 1.

Her comments came as the EU gave the green light to the governments of member states to cut Internet access to piracy offenders without the need for a judicial order, although it still requires a fair and impartial procedure.

Last month, the Spanish government set up an inter-ministerial commission to look into violations of the intellectual property law and seek ways to ensure that the availability of cultural content on Internet does not reduce the copyright income of creators or content providers. The commission must deliver its report by Dec. 31.

Gonzáles-Sinde's views are in line with those of both the culture industry through the Coalition of Creators and Content Industries, and Spanish ISP companies grouped in Redtel.
http://www.billboard.biz/bbbiz/conte...71fbb550c4a247





Illegal Downloaders Spend MORE on Music than Those Who Obey the Law

Illegal music downloaders spend more on singles and albums than anyone else

People who illegally download music spend more on official releases than anyone else, according to a new survey.

The study, published today by think-tank Demos, found those who admit to file sharing spent an average Ł77 a year on singles and albums - Ł33 more than those who claim never to have wrongly accessed music for free.

Researcher Peter Bradwell said the findings should force companies and politicians to 'wake up to the changing nature' of the music industry as the Government plans to disconnect illegal downloaders from the internet in a 'three strikes and you're out' rule.

An estimated seven million UK users download files illegally every year, which will cost the industry Ł200million in 2009, according to trade association, the British Phonographic Industry.

Artists Lily Allen and James Blunt recently voiced support for the Government plans, while Latin pop star Shakira claims illegal file sharing brings her closer to her fans.

The survey also revealed nearly two thirds of file sharers said new and cheaper music services would encourage them to stop accessing illegal services. It found that by lowering the price of music available online to 45p per track - compared to between 59p and 99p on iTunes - providers could expect to double interest in legal sales.

Eight-three per cent of people downloading music illegally said they buy more music as a result, while 42 per cent said they did so to 'try before you buy'.

But the Government is pressing ahead with plans for harsher punishments to act as a deterrent.

A Digital Economy Bill is expected to be introduced to parliament later this month, with its draft promising to create a 'robust legal and regulatory framework to combat illegal file sharing'.

Mr Bradwell said: 'This research demonstrates that cutting file sharers off may not be the best solution for the Government if they are intent on helping the music industry.

'Politicians and music companies need to wake up to the changing nature of music consumption and embrace the demand for new business models that offer lower prices and easier access to music.'

A 1,008 people aged between 18 and 50 were quizzed last month for the survey.

A spokesman for the Department for Business, Innovation and Skills said: 'The scale of unlawful file-sharing poses a real threat to the long-term sustainability of our creative industries. The Government can not sit back and do nothing.

'While surveys asking people about unlawful behaviour should be treated with caution, it's encouraging that the findings signal that the three-pronged approach set out by the Government this week - a mix of education, enforcement and attractive new commercial deals - provides the best way forward for industry and consumers.'
http://www.dailymail.co.uk/news/arti...-obey-law.html





iiNet Did Not Act on Evidence of Piracy, Court Told
Andrew Colley

IINET'S Federal Court bid to fend off a landmark copyright lawsuit was weakened yesterday when chief executive Michael Malone conceded the company had refused to act on strong evidence its network was being used for piracy.

The Australian Federation Against Copyright Theft brought a lawsuit against iiNet after a 59-week investigation during which it sent a series of notices to the internet service provider containing detailed evidence of piracy by its customers.

IiNet has rejected allegations that it breached the studio's copyright and said the notices constituted unfounded allegations that it was not required to act upon without a court order.

However, on taking the witness box for the first time since the trial began last month, Mr Malone told the court he accepted that the notifications contained "compelling evidence" that iiNet's customers were breaching copyright. In a vigorous cross-examination during which he frequently became impatient with his witness, AFACT lead barrister Tony Bannon SC accused Mr Malone of running a company that relied on internet piracy to profit.

Pointing to statements that iiNet made shortly after the litigation commenced, in which the ISP told customers it would not act against customers on the basis of the notices, Mr Bannon accused Mr Malone of countenancing piracy.

"Your main objective was to make it clear to your customers you are not going to do anything to lift a finger to help copyright owners," Mr Bannon said.

Mr Malone denied the allegation.

Mr Bannon took aim at a central plank in iiNet's case. The internet provider has argued to the court it was unable to act on the notifications as that would breach telecommunications and privacy laws. Under cross-examination Mr Bannon drew Mr Malone's attention to an email exchange between himself and two senior executives from WestNet -- an ISP that iiNet acquired in May last year -- shortly after the litigation was bought against iiNet.

The email revealed that iiNet had been passing on copyright infringement notices to its customers in apparent contradiction of its legal argument that passing on the notices was a breach of telecommunications laws. Asked how long WestNet had maintained that policy under his managing directorship, Mr Malone repeatedly said he did not know.

Mr Bannon then accused Mr Malone of being evasive.

"Mr Malone you're fencing with the court aren't you?" he said.

AFACT has argued that iiNet engaged in secondary copyright infringement by failing to "take reasonable and appropriate steps" to stop some of its customers illegally sharing files on its network.

AFACT's law suit marks the first time the studios have teamed up to make a serious legal challenge to the notion that internet providers cannot be held responsible for what their customers do online.

If its case is successful it could provide the studios with massive legal leverage to make all internet companies disconnect customers using their connections for piracy. The Internet Industry Association has independently applied to be heard by the court under amicus curiae (friend of the court) provisions.

The court is not expected to rule on whether to allow the IIA to be heard until all evidence in the case has been tabled and read.

The trial is expected to run for another two weeks and a ruling is expected in about six to nine months.
http://www.australianit.news.com.au/...-15317,00.html





We Couldn't Disconnect Clients: Malone
Andrew Colley

IINET chief Michael Malone has told the NSW Federal Court that the ISP's service agreements did not provide it with sufficient contractual rights to take action against customers who infringe copyright online.

Mr Malone made the comments during his third day of cross-examination by lawyers representing a loose coalition of 34 entertainment companies – represented by the Australian Federation Against Copyright Theft -- pursuing a landmark copyright claim against the ISP.

The studios claim that iiNet authorised its customers to illegally share movies on its network by refusing to act on a series of infringement notices the studios' online piracy investigators began sending to the company in July 2008.

However, Mr Malone told the court he believed that laws regulating the way that carriers can use customer information prevented iiNet from helping content owners enforce their copyrights.

ISPs are required to "reasonably implement" a policy to disconnect customers that repeatedly infringe online in order to qualify for safe harbour provisions of the Australian law that limit damage claims against carriers arising from copyright infringement lawsuits. However, iiNet has told the court that doing so would breach telecommunication and privacy laws.

AFACT lawyers have questioned the sincerity of the ISP's legal view. They argue that the telecommunications laws allow carriers routinely to use service agreements to secure customer consent to use their information for ordinary business activities, including disconnection.

Mr Malone's testimony supported a key pillar in the company's bid to fend off the lawsuit which is being run by AFACT.

Since July 2008, AFACT has been sending iiNet notifications containing allegations and evidence that some of iiNet’s customers have been using the ISP's network to illegally share digital copies of movies.

Mr Malone last week conceded in court that the notices contained "compelling evidence" of copyright infringement but he has steadfastly told the court and AFACT that iiNet won't act on the notices unless it is supplied with a court order or new telecommunication legislation introduced.

Earlier this week, AFACT's lead barrister Tony Bannon SC invited Mr Malone to comment on a number of hypothetical situations in which an ISP might disconnect a customer, including being presented with evidence of child pornography distribution.

Mr Malone played a flat-bat to all of them and stuck to the legal view that the ISP couldn't act without a court order or alterations to legislation.

Mr Malone was referring to Australian telecommunications laws designed to protect customer privacy by prohibiting carriers from disclosing or using customer information.

However, AFACT lawyers argued that terms of iiNet's service agreements allow it to qualify for an exception to the law which says a carrier can use a customer's information if he or she "has consented to the disclosure, or use, as the case requires, in the circumstances concerned."

When Mr Bannon put it to Mr Malone that iiNet customers had given their consent by agreeing to the contracts, he replied: "I don't see how. I think there's a bit of a leap there."

On a previous occasion in court Mr Malone had described current legal views on the implications of the telco laws as "a bit grey".

Mr Bannon told the court iiNet's customer service agreements legally allowed the company to use its information to disconnect customers.

Throughout the trial iiNet has persistently maintained that it discourages its customers from breaching copyright laws.

However, Mr Bannon argued that if the company was "concerned about helping copyright holders", it would have taken steps to fix any contractual limits that it believed might inhibit its ability to disconnect customers.

The trial continues.
http://www.theaustralian.com.au/aust...-1225794772423





IFPI Loses: Telenor Will Not Block The Pirate Bay
enigmax

Earlier this year, the IFPI gave Norwegian ISP Telenor an ultimatum – block access to The Pirate Bay within days or get taken to court. Telenor refused, IFPI followed through with its threat and the case was heard earlier this month. The decision was announced today. IFPI lost the case and Telenor will not have to block The Pirate Bay.

This March, IFPI – backed by several Hollywood movie companies – gave Telenor, Norway’s largest ISP, a warning: block your users from accessing The Pirate Bay within 14 days or we will take legal action.

Without any legal basis, Telenor refused to comply.

“This would be the same as demanding that the postal service should open all letters, and decide which ones should be delivered,” said Telenor boss Ragnar Kĺrhus.

The verdict in the case was due to be delivered October 30th, but was delayed until today.

IFPI has lost the case and Telenor will not have to block The Pirate Bay.

The court ruled that Telenor is not contributing to any infringements of copyright law when its subscribers use The Pirate Bay, and therefore there is no legal basis for forcing the ISP to block access to the site.

“Obviously we are pleased that the District Court has arrived at this conclusion,” said Telenor’s Ragnar Kĺrhus in a statement.

“At the same time it is important for us to emphasize that this case is not about being in favor of or opposed to copyright, but about whether or not it is reasonable to saddle Internet service providers with a censorship role in respect of content on the Internet,” he added.

Kĺrhus went on to say that the most important way for IFPI and other rights holders to maintain healthy revenue streams, is to develop business models and services that render the use of sites like The Pirate Bay less attractive to Internet users.

In making its decision, the court also had to examine the repercussions if it ruled that Telenor and other ISPs had to block access to certain websites. This, it said, is usually the responsibility of the authorities and handing this task to private companies would be “unnatural”.
http://torrentfreak.com/ifpi-loses-t...te-bay-091106/





The ACTA Internet Chapter: Putting the Pieces Together

The Anti-Counterfeiting Trade Agreement negotations continue in a few hours as Seoul, Korea plays host to the latest round of talks. The governments have posted the meeting agenda, which unsurprisingly focuses on the issue of Internet enforcement. The United States has drafted the chapter under enormous secrecy, with selected groups granted access under strict non-disclosure agreements and other countries (including Canada) given physical, watermarked copies designed to guard against leaks.

Despite the efforts to combat leaks, information on the Internet chapter has begun to emerge (just as they did with the other elements of the treaty). Sources say that the draft text, modeled on the U.S.-South Korea free trade agreement, focuses on following five issues:

1. Baseline obligations inspired by Article 41 of the TRIPs which focuses on the enforcement of intellectual property.

2. A requirement to establish third-party liability for copyright infringement.

3. Restrictions on limitations to 3rd party liability (ie. limited safe harbour rules for ISPs). For example, in order for ISPs to qualify for a safe harbour, they would be required establish policies to deter unauthorized storage and transmission of IP infringing content. Provisions are modeled under the U.S.-Korea Free Trade Agreement, namely Article 18.10.30. They include policies to terminate subscribers in appropriate circumstances. Notice-and-takedown, which is not currently the law in Canada nor a requirement under WIPO, would also be an ACTA requirement.

4. Anti-circumvention legislation that establishes a WIPO+ model by adopting both the WIPO Internet Treaties and the language currently found in U.S. free trade agreements that go beyond the WIPO treaty requirements. For example, the U.S.-South Korea free trade agreement specifies the permitted exceptions to anti-circumvention rules. These follow the DMCA model (reverse engineering, computer testing, privacy, etc.) and do not include a fair use/fair dealing exception. Moreover, the free trade agreement clauses also include a requirement to ban the distribution of circumvention devices. The current draft does not include any obligation to ensure interoperability of DRM.

5. Rights Management provisions, also modeled on U.S. free trade treaty language.

If accurate (and these provisions are consistent with the U.S. approach for the past few years in bilateral trade negotations) the combined effect of these provisions would to be to dramatically reshape Canadian copyright law and to eliminate sovereign choice on domestic copyright policy. Having just concluded a national copyright consultation, these issues were at the heart of thousands of submissions. If Canada agrees to these ACTA terms, flexibility in WIPO implementation (as envisioned by the treaty) would be lost and Canada would be forced to implement a host of new reforms (this is precisely what U.S. lobbyists have said they would like to see happen). In other words, the very notion of a made-in-Canada approach to copyright would be gone.

The Internet chapter raises two additional issues. On the international front, it provides firm confirmation that the treaty is not a counterfeiting trade, but a copyright treaty. These provisions involve copyright policy as no reasonable definition of counterfeiting would include these kinds of provisions. On the domestic front, it raises serious questions about the Canadian negotiation mandate. Negotations from Foreign Affairs are typically constrained by either domestic law, a bill before the House of Commons, or the negotiation mandate letter. Since these provisions dramatically exceed current Canadian law and are not found in any bill presently before the House, Canadians should be asking whether the negotiation mandate letter has envisioned such dramatic changes to domestic copyright law. When combined with the other chapters that include statutory damages, search and seizure powers for border guards, anti-camcording rules, and mandatory disclosure of personal information requirements, it is clear that there is no bigger IP issue today than the Anti-Counterfeiting Trade Agreement being negotiated behind closed doors this week in Korea.

Update: Further coverage from IDG and Numerama.

Update II: InternetNZ issues a press release expressing alarm, while EFF says the leaks "confirm everything that we feared about the secret ACTA negotiations." Electronic Frontiers Australia provides an Australian perspective on the ACTA dangers.
http://www.michaelgeist.ca/content/view/4510/125/





Comcast Internet Throttling is Up and Running

Cunning plan replaces P2P blocking
Egan Orion

COMCAST, the second-largest US cable television and Internet communications service provider, has a new broadband traffic throttling scheme installed and operating in all of its markets.

The ISP's new regime for restricting its customers' bandwidth utilisation replaces its former stealthy practice of arbitrarily blocking subscribers' peer-to-peer (P2P) upload traffic, which was criticised by the FCC last year after it was exposed by the Associated Press and others.

Comcast's filing with FCC says it has put in new hardware and software technology at its Regional Network Routers locations to effect this cunning traffic management plan.

Its network throttling implements a two-tier packet queueing system at the routers, driven by two trigger conditions.

Comcast's first traffic throttling trigger is tripped by using more than 70 per cent of your maximum downstream or upstream bandwidth for more than 15 minutes.

Its second traffic throttling trigger is tripped when the Cable Modem Termination System you're hooked-up to – along with up to 15,000 other Comcast subscribers – gets congested, and your traffic is somehow identified as being responsible.

Tripping either of Comcast's high bandwidth usage rate triggers results in throttling for at least 15 minutes, or until your average bandwidth utilisation rate drops below 50 per cent for 15 minutes.

The Comcast two-tier traffic throttling system enforces different quality-of-service levels. Internet packets to and from a specific subscriber are assigned 'Priority Best Effort' (PBE) queueing by default, and the traffic rate is throttled by switching packets to lower priority 'Best Effort' (BE) queueing.

Comcast uses a bus analogy to explain how its two-tier traffic throttling system works:

"If there is no congestion, packets from a user in a BE state should have little trouble getting on the bus when they arrive at the bus stop. If, on the other hand, there is congestion in a particular instance, the bus may become filled by packets in a PBE state before any BE packets can get on. In that situation, the BE packets would have to wait for the next bus that is not filled by PBE packets."

According to the company, upstream and downstream traffic is managed separately, and its router packet queueing increments - the waiting time between each 'bus' in its analogy - are two milliseconds, or 1/500th of a second.

Comcast says that a throttled subscriber's connection that is forced into the lower BE quality of service queue "may or may not result in the user's traffic being delayed or, in extreme cases, dropped before PBE traffic is dropped."

Thus, Comcast's latest traffic throttling method can lead to transfers being blocked, too. But only in 'extreme cases' it says, so that's alright then.

Comcast has also imposed a monthly 250GB bandwidth usage cap on all of its customers, and it will, after one warning, terminate service for one year to those who exceed that cap twice within a six-month period.

So you punters who signed up with Comcast as your ISP can be assured that the company will deliver only about half of the maximum bandwidth it advertises, on a consistent basis.
http://www.theinquirer.net/inquirer/...ttling-running





Outrage Over Wall Blocking Free U2 Berlin Concert
Kirsten Grieshaber

Irish rockers U2 returned to Berlin for a free mini-concert Thursday in front of the Brandenburg Gate, playing its classic singles and a duet with Jay-Z even as the show was obscured from public view by a nearly 6-1/2-foot (two-meter) high metal barrier.

Bono greeted the crowd with the German words "Berlin, Du bist wunderbar!" (Berlin, you are wonderful!) and the band played a 30-minute, six-song set that featured "Sunday, Bloody Sunday," "One Love" and "Beautiful Day."

Rapper Jay-Z appeared as a surprise guest and performed Bob Marley's "Get Up, Stand Up" with Bono.

The show, which was free to 10,000 ticket holders who snapped up the tickets online last week in just three hours, drew some controversy because of the barrier surrounding the gig.

Both Berliners and tourists alike saw the irony in building a wall around a concert dedicated to the wall that already has come down.

"It's completely ridiculous that they are blocking the view," said Louis-Pierre Boily, 23, who came to Berlin even though he failed to get U2 tickets. "I thought it's a free show, but MTV probably wants people to watch it on TV to get their ratings up."

Boily, from Quebec City, was among several hundred people who gathered earlier in the day against the new fence, which was draped with a white tarp that blocked the view of the stage from the street. Some fans already were trying to tear down the tarp before the concert.

The music network MTV, which organized the concert, said it worked with the local promoter, the city and Berlin police to install a temporary fence "around the site to ensure the safety and security of the attendees at the event as well as residents and businesses in the area."

U2's publicist RMP refused comment about the barrier.

Though U2 performed six songs, only one was being shown on television later Thursday as part of MTV's European Music Awards, according to MTV.

The Berlin Wall fell on Nov. 9, 1989, ending almost 30 years of Cold War division between the communist East and the democratic West. Throughout those decades, the Brandenburg Gate stood just inside East Berlin.

In 1988, musicians such as Pink Floyd and Michael Jackson performed in a three-day "Berlin Rock Marathon" on the western side of the concrete barrier, with the landmark as a backdrop.

Concertgoers in the West hurled bottles and firebombs at the wall, while some 2,000 youths gathered on the eastern side to listen, many shouting "The wall must go!"
http://news.yahoo.com/s/ap/20091105/...rope_awards_u2





Lawmakers Call For Performance Rights Act Negotiations
Ed Christman

With both the House Judiciary Committee and the Senate Judiciary Committee now having approved the Performance Rights Act, the chairman of both committees - respectively Rep. John Conyers, Jr. (D-Mich.) and Senator Patrick Leahy (D-Vt.) - with a bipartisan group of committee members are asking key stakeholders in the legislation to negotiate a resolution.

In a letter to musicFirst Coalition executive director Jennifer Bendall; National Assn. of Broadcasters president and CEO Gordon Smith; the National Assn. of Broadcasters chairman of joint radio and television board Steve Newberry; the two chairman and other key members of both committees requested that the key stakeholder "enter into negotiations before this legislation is considered on the floor of either House. The negotiated resolution will be considered by Congress as it takes up passage of this Act."
They further requested that negotiations begin on Nov. 17 and continue through Dec. 1. "The negotiations will be led by members and staff of the Judiciary Committees, taking into consideration issues important to both sides, the letter stated. "We will request a recommendation from Committee Members and staff resulting from the negotiations."

The musicFirst coalition is in favor of the legislation, which if passed, would for the first time have terrestrial radio make royalty payments to master copyright owners and the performers on the masters, something that occurs in most other countries around the world and also here in the U.S. For music played on satellite and internet radio. The NAB opposes the legislation, calling it a radio tax.

The House committee approved their version of the legislation on May 14 while the Senate approved their version on Oct. 15.

"musicFIRST will participate in the discussions hosted by members and staff of the Senate and House Judiciary Committees," said Jennifer Bendall in an e-mailed statement. "We have always said we are ready to sit down with NAB and others in the music radio business to create a performance right that is fair to artists, musicians and rights holders and fair to radio.”

Commenting on today's letter, NAB Executive VP Dennis Wharton issued the following statement: "NAB is of course willing to talk with members of Congress on this issue and any issue that could negatively impact the ability of free and local hometown radio stations to serve our listeners. We would hope that any discussions would also include the nearly 300 members of Congress who oppose the RIAA-backed bill."

While the music industry has worked hard in getting the Performance Rights Act off the ground, the NAB induced congressional members to introduce the Local Radio Freedom Act, which opposes what the NAB calls a performance tax. So far, 252 House lawmakers and 27 U.S. Senators have signed the resolution, according to the NAB.
http://www.billboard.biz/bbbiz/conte...e5aab9d45f554d





CRE Dispels Myths About Music Listening
FMQB

A new study from the Council for Research Excellence (CRE), dubbed How U.S. Adults Use Radio and Other Forms of Audio, dispels many of the myths about how people today listen to music. The study, which measures listening of radio, CDs and digital music, tracked 752 days of audio media usage of participants in five markets - Atlanta, Chicago, Dallas, Philadelphia and Seattle - in parts of spring and fall of 2008.

For starters, CRE says that AM/FM radio has the broadest reach of any music medium and commands the most listening time. Terrestrial radio has a daily reach of 77.3 percent of participants and gets an average of 122 minutes per day from listeners. The CRE also found that 79.2 percent of listeners from age 18 to 34 listen to broadcast radio, and they average 104 minutes per day. Amongst 35 to 54 year olds, 80.6 percent listen to the radio for an average of 107 minutes per day.

Perhaps surprisingly, the study found that CDs and cassettes are second in reach behind radio, and get an average of 72 minutes per day from users. CDs represented 16.1 percent of daily listening time in the study, over twice that of satellite radio and over three times the share of portable MP3 players. The study also said that young listeners listen to CDs more often than older listeners, as just under half the 18 to 34 age group listen to CDs every day, and they average 78 minutes per day. Only 36.2 percent of the 35 to 54 group listen to CDs daily, averaging 74 minutes per day.

Meanwhile, MP3 players had an 11.6 percent piece of the pie in daily reach. Even among the 18 to 34 age group, MP3 players account for only 7.5 percent of each day's listening time.
http://fmqb.com/article.asp?id=1573371





Music Industry Changes Tune of New Program to Fight File Sharing
Jeffrey R. Young

Under a blanket of secrecy, six colleges have begun testing an experimental service from major recording labels that lets students legally download all the music they want and put it on any device. But some innovative features have been stripped from the service since it was proposed, leaving it similar to existing services that have not made much of a dent in illicit file-sharing.

The experimental service, led by Warner Music Group, is called Choruss. It has no informational Web site, no brochure, and almost nothing in writing to describe it, even though it is slated to be up and running for students on the six campuses in January. The participating colleges have asked not to be identified, in part because the music industry's efforts have been criticized in the past and the issue is a political land mine for campus officials.

The only source of public information about Choruss is Jim Griffin, the Warner Music adviser leading the effort. In an interview with The Chronicle, he said the model for the proj ect has changed since his first discussions with college leaders, more than a year ago.

On the basis of those initial talks, the colleges would pay the music industry a blanket licensing fee, similar to what radio stations pay to air popular songs. There was also discussion of the record labels' signing a "covenant not to sue" for any illegal downloading of their songs by users on participating campuses, he said.

Some popular blogs about technology quickly criticized that scheme after Mr. Griffin began pitching it to college leaders. TechDirt called Choruss a music tax for students, and other observers noted that it might not fully shield colleges and students from legal action if the downloaded songs were by artists not participating in the program.

Mr. Griffin said the bloggers and other critics were basing their complaints on misinformation. However, it seems that the most unusual aspects of the initial plan have been jettisoned since those early talks.

For instance, when asked about the "covenant not to sue," Mr. Griffin said, "We'd initially considered the idea but have now decided to use a traditional license approach."

Another substantial change from the early days of the proj ect is that the licenses now would be with individual students rather than with colleges—although on some campuses, student governments or other groups may agree to pay the fee on behalf of students.

As Mr. Griffin described the current plan, it sounded much like previous efforts to sell digital music to students. Account holders would log into a Web site, enter a user name and password, and be granted access to a catalog of millions of songs from major and independent labels. "They can then access a large pool of songs for a flat fee," he said.

Each of the six campuses will test a different price to see which attracts the most usage. "The most exciting question for me is what terms and conditions and price points will optimize the revenue to the rights holder," Mr. Griffin said. That is key to making sure artists get compensated for their creative work, he said.
Lifetime Download Privileges

The most unusual feature of Choruss is that users would be able to download any song in the collection to their own computers, with no restrictions. Unlike Apple's iTunes, which charges about a dollar per song for unrestricted downloads, this would be an all-you-can-grab song buffet. Want to make CD's? Sure. Put thousands of songs on your iPod? No problem. Even after students stop paying the Choruss subscription fee, they will be able to keep all the songs they have downloaded. "They get to keep them the rest of their lives," as Mr. Griffin put it. That differs from some subscription music services, which allow access only while users are active members of the service.

What's to stop students from paying for one month and downloading the whole collection? "Nothing," said Mr. Griffin.

The basic premise, he said, is that it is so easy to download music from unauthorized Web sites that some model has to be developed to persuade users to do the right thing and pay for the content instead. "If you find a way to make it faster, easier, and simpler to pay, we think people will pay," he said. "Our gut tell us that the right model is flat fee, unlimited use."

Many campus-technology leaders wonder just who the secret beta testers are. Cornell University officials have denied a report that they are involved, as have officials at Pennsylvania State University, Illinois State University, and the University of Chicago.

Why the secrecy? A college official familiar with the discussions, who asked not to be named, said colleges just don't want to be attacked by critics of the music industry, especially since they may choose not to participate after the initial experimentation phase. "They've been burned before by premature discussion about this and other proj ects," said the official. "So, up until the point at which they have their own message nailed down, there's no upside to discussing it and plenty of potential downside."

More details apparently will be made public this spring, when students on the test-bed campuses will be asked to pay a monthly fee to try it out.

Already, however, other companies are queuing up competitors that promise more-radical reform.

Noank Media, a company based on a Harvard University research proposal, is working on a blanket-license program that would charge colleges and other institutions a flat fee. Users would install software that would count every time they played a song, for the purpose of distributing royalties to the musicians.

"We're not going to stop file sharing—it's probably going to happen in one form or another, and it's probably folly to try and stop it," said Charlie Moore, a Noank official who has traveled to campuses in the past few months to drum up interest. "If we're able to use consumption data to compensate the rights holders of a particular recording, then we think we've got a handle on a fair and equitable model for rights going forward."

The company is still negotiating with the music industry, and if all goes well, it could have a product ready for use by next fall, said Mr. Moore. (It has run a test of the technology with a small Internet-service provider in China.)

When asked about Noank, Mr. Griffin indicated that the music industry is not opposed to the many experiments going on with digital music. "Any school or company would be smart to work with them," he said. "And we at Choruss are happy to work with them where that makes sense."
http://chronicle.com/article/Music-I...Tune-of/49034/





The Golden Age of Infinite Music
John Harris

Not long ago, if you wanted music, you had to save up your pocket money, take a trip to the local record shop and lovingly leaf through its racks.

Now, it's almost all free, instant and infinite. And our relationship with music has changed forever.

We all know what the alleged future of music will look like. The record industry will be reduced to a smouldering ruin, the album replaced by endless individual songs and music rendered pretty much worthless by the fact that it's universally free.

Empty record shops will be overrun with weeds and old CDs will be used as coasters. Your Madonnas, U2s and Coldplays will prosper, but for anyone further down the hierarchy, the idea of making much of a living will be a non-starter.

That's the accepted wisdom, at least. Some of it will probably prove to be true.

But that grisly picture ignores subtler and more fascinating changes in our relationship with music that people have barely begun to understand.

Now, just to make this clear from the off: I'm nearly 40. Having recently moved house and consigned my CD collection to cardboard boxes, I've been surprised to find that I don't miss it at all.

I use the free version of the music streaming application Spotify almost every day - and I now understand that it represents a genuine revolution in music consumption (and makes iTunes look pathetically old-fashioned).

Should the music industry finally get its act together and insist on some kind of subscription model, I'll pay for the same kind of service. But I wouldn't imagine that will alter my new listening habits.

All that said, my musical mindset is still rooted in an increasingly far-off past, where to be a true fan of a band took real dedication, access to obscure information - and, frankly, money.

I've just poured the music-related contents of my brain into a book, and I would imagine that 30-ish year's worth of knowledge about everyone from Funkadelic to The Smiths has probably cost me a five-figure sum, a stupid amount spent on music publications, and endless embarrassed moments spent trying to have a conversation with those arrogant blokes who tend to work in record shops.

Last weekend, by contrast, I had a long chat about music with the 16-year-old son of a friend, and my mind boggled.

At virtually no cost, in precious little time and with zero embarrassment, he had become an expert on all kinds of artists, from English singer-songwriters like Nick Drake and John Martyn to such American indie-rock titans as Pavement and Dinosaur Jr.

Though only a sixth-former, he seemingly knew as much about most of these people as any music writer.

Like any rock-oriented youth, his appetite for music is endless, and so is the opportunity - whether illegally or not - to indulge it. He is a paid-up fan of bands it took me until I was 30 to even discover - and at this rate, by the time he hits his 20s, he'll have reached the true musical outer limits.

What does all this tell us? Clearly, for anyone raised in the old world, the modern way of music consumption has all kinds of unforeseen benefits.

A good example: though I've always heard plenty of talk about the utter awfulness of such infamous albums as Lou Reed's Metal Machine Music (a double album of guitar feedback and white noise) or Deep Purple's Concerto For Group And Orchestra (don't ask), I can now listen to them for nothing, and have an opinion of my own.

They're both terrible, incidentally, but that isn't the point. What really matters is the fact that I can so easily tune in - and what that says about a new world of completely risk-free listening.

Most importantly, as the great digital revolution rolls on, bands are no longer having to compete for people's money. Instead, they're jockeying for our time. And the field is huge, crossing not just genres, but eras.

Who do you want to investigate today: TV On The Radio or Crosby, Stills and Nash? Do you fancy losing yourself in the brilliant first album by Florence And The Machine, or deriving no end of entertainment from how awful The Rolling Stones got in the 1980s? Little Richard or La Roux? White Lies or Black Sabbath?

As one of my music press colleagues use to say, there's no longer any past - just an endless present.

For musicians, it's self-evident that there are all kinds of new openings for their music, but even if they break through, much less concerted attention will be paid to it.

They may get an audience, but it will be very easily distracted. After all, endlessly playing the same album so as to extract your "money's worth" is behaviour that will soon seem like something from the dark ages.

Woe betide the act that decides to make the kind of record that tends to be charitably described as a "grower" - something that may account for, say, the scant interest paid to the last U2 album.

Certainly, as a record company MD told me a couple of weeks ago, stuffing your albums with mere filler is no longer a sensible option.

So, yes, the record industry may yet have to comprehensively reinvent itself, or implode. Sooner or later, given that the need to read reviews before deciding what to listen to is fading fast, I rather fear that even music journalists may be rendered irrelevant.

But for now, this is a truly golden age - the era of the teenage expert, albums that will soon have to be full of finely-honed hits and the completely infinite online jukebox.

Even if the music business manages to somehow crack down on illicit downloading and claws back a few quid via annual subscriptions in return for that self-same endless supply of music, the same essential rules will apply. Really: what's not to like?
http://news.bbc.co.uk/go/pr/fr/-/2/h...nt/8330633.stm





Show Me the Money: Wacky Facts About Music Royalties
Allison Ford

Writing a song ain’t easy, but getting paid for the music you create is even tougher. Recording artists depend on hit songs to sell records and generate income, and when they sign a record contract, they usually get a 7 to 10 percent cut of their album’s profits. If they write their own songs, the payout is even larger, because songwriters and producers earn money every time a song is played in public, used on television, or recorded by another artist. For some people, that ends up meaning big bucks. But for every time a musician receives a fair share of the profits, there are stories of artists’ being cajoled and legally maneuvered out of their royalties by greedy record executives or unscrupulous music publishers. These five incredible stories illustrate how the inner workings of the music business have affected some of our favorite musicians and their work.

Happy Payday to You
Certain standard songs aren’t protected by copyright laws. You might think a song as ubiquitous as “Happy Birthday” would have become part of the public domain long ago, but you’d be wrong. The song we know as “Happy Birthday” was written in 1893 and was originally called “Good Morning to You.” It was used and played extensively in the 1920s and early ’30s without being licensed, until the writer’s sister secured the copyright in 1934. Changes in copyright law in the past few decades have extended the protection for the song until 2030. That means if you want to play “Happy Birthday” in public, you have to pay up.

The song generates about $2 million per year in licensing fees. Of course, lawyers won’t go after a family singing the song at home, but they will file suit against movies or television shows that feature the song without authorization, as well as any other public performance. If you’ve ever been in a restaurant and noticed the staff singing a different version of a birthday tribute, it’s because that establishment is trying to avoid paying for performance rights and prevent copyright infringement lawsuits.

TLC Goes Crazy
R&B act TLC was one of the top-selling acts of the 1990s. Their 1994 album CrazySexyCool sold over ten million copies, which should have translated into a huge payday for the three members of the group. Instead, their record company sent them each a check for a mere $50,000. The label had “recouped” its investment by charging the group for production costs and marketing fees associated with the album, as well as for the hugely expensive video for the band’s single “Waterfalls.” In October 2009 on The Mo’Nique Show, Tionne “T-Boz” Watkins revealed that after this slight, she and the other members of TLC went to the home of record executive Clive Davis and used loaded weapons to bully him into giving them a bigger share of the album’s profits. It worked, and luckily, Davis didn’t press charges. As T-Boz explained, “You live and learn in the music business.”

C’mon, Get Sue-Happy
Retail stores and restaurants need to pay performance licenses to play any music for their customers, and a woman in Scotland recently discovered just how serious the rights holders are about collecting what they’re owed. After the store where she worked was threatened with a lawsuit if employees didn’t turn off the radio, Sandra Burt kept busy by singing quietly to herself as she stocked the shelves. To the Performing Rights Society, though, her “public performance” was illegal, too. The organization, which collects royalties on behalf of songwriters, threatened to sue Burt if she didn’t stop singing their songs without authorization. But after the BBC reported her story, PRS backed down and even sent Burt flowers to apologize for its litigiousness.

A Bittersweet Hit
For a time in the 1990s, it was nearly impossible to turn on a radio without hearing the Verve’s “Bitter Sweet Symphony.” Despite the fact that it was a massive hit and voted the 382nd greatest song of all time by Rolling Stone, the band members themselves have received no royalties from it. While writing their 1997 album, Urban Hymns, the Verve negotiated the rights to use a snippet of the melody of an obscure, instrumental Rolling Stones track from 1965, “The Last Time.” The original deal called for the Verve to split the profits evenly with ABKCO Records, the company that owns the publishing rights to Rolling Stones songs, but after the record was released, ABKCO filed a lawsuit alleging that the song used “too much” of the sample, and demanded 100 percent of the profits, as well as primary songwriting credits. The Verve had to either acquiesce or pull the song off the album. Even though “Bitter Sweet Symphony” features a mostly original melody and original lyrics by lead singer Richard Ashcroft, its entire profits now go to ABKCO, Mick Jagger, and Keith Richards. The guys in the Verve even need permission to play the song at their own concerts now.

Stairway to the Bank
The most profitable song of all time, according to calculations by Portfolio magazine, is Led Zeppelin’s “Stairway to Heaven.” Released in 1971, it’s been on the radio an estimated 2,985,000 times, equal to about forty-five years of uninterrupted airtime. With public-performance fees, album and DVD sales, sheet-music sales, and royalties from other artists’ covers, it has generated an estimated $562 million. Songwriters Jimmy Page and Robert Plant, however, are notoriously protective about their work, usually refusing to license their songs for use in television and movies. Only since 2002 have they allowed selected songs to appear in commercials and made their albums available on iTunes. If the band took advantage of the song’s full licensing potential, the total profits could be millions more.

The music business is notoriously convoluted and litigious, threatening to sue just about anybody and everybody when there’s cash to be made. Few people realize just how little money their favorite artists make off their own music, and the industry is only more paranoid and controlling now that digital piracy is rampant. The next time you hear your favorite song on the radio or in a commercial, think of all the people who are making money off the artist’s work. And next time you sing “Happy Birthday” in a restaurant, make sure to lower your voice.
http://www.divinecaroline.com/22318/...ky-facts-music





uTorrent 2.0 To Elimininate The Need For ISP Throttling
Ernesto

BitTorrent Inc. is about to launch a completely improved implementation of the BitTorrent protocol that will benefit both users and ISPs. uTorrent 2.0, which is currently being tested by thousands of people, will eliminate the need for ISPs to throttle or stop BitTorrent traffic, and will optimize the download experience for its users.

ISPs have been throttling BitTorrent traffic for years already. Although the true reasons for this are not always clear, some ISPs have argued that a high number of BitTorrent connections are slowing down other applications and traffic.

In early 2007, when network neutrality was still a non-issue for most people, BitTorrent inventor Bram Cohen told us that ISPs should find a way to cope with BitTorrent.

“ISPs have to invest in making their networks better and faster rather than stifling applications which consumers use and love,” he said, while encouraging users to switch to non throttling ISPs if possible, or complain to their ISP’s customer services.

A lot of things have changed in the years that followed. Comcast started to prevent its users from seeding content on BitTorrent, and many other ISPs took similar actions to throttle BitTorrent traffic. As a direct result, network neutrality was placed on the political agenda in many countries. It also inspired BitTorrent Inc. to look for solutions that would eliminate the need for throttling entirely, solving the problem at its root.

This is where uTP comes in. uTP is a new and improved implementation of the BitTorrent protocol which is designed to be network friendly. The current implementation often causes interference with other applications, which is the main reason why ISPs try to slow it down, or even stop it altogether. uTP aims to solve this problem.

With uTP, uTorrent (and the Mainline client) will become network aware by throttling itself if congestion in the network is detected. This will have a huge impact on ISP networks according to Simon Morris, BitTorrent’s VP of Product Management. “If uTP is successful it should result in a multi-billion dollar windfall in terms of savings for ISPs,” Morris told TorrentFreak

This means that the new uTorrent will eliminate the need for ISPs to throttle BitTorrent traffic in their networks. Of course, uTorrent users will also be affected by the new protocol. When needed, uTorrent will decrease the upload or download speed to avoid congestion.

According to Morris it’s mainly the upload speed that will be affected. “The throttling that matters most is actually not so much the download but rather the upload – as bandwidth is normally much lower UP than DOWN, the up-link will almost always get congested before the down-link does,” he explained.

“uTP measures the time a packet takes to get sent from peer A to peer B, so in theory uTP will detect congestion anywhere on that path, although in practice the congestion most often happens somewhere on the first-mile uplink connection.”

So does this mean that the new uTorrent will result in slower download times? Not necessarily. Since there is less congestion, uTorrent users will experience no slowdowns in web-browsing, and ideally less congestion and a more efficient use of the network may result in faster download speeds. uTP is currently being tested in uTorrent v2.0 beta and thus far none of the testers have reported any significant problems.

“There are already a couple of hundred thousand people using our v2.0 beta client, and things seem to be progressing very nicely. Our v2.0 client will initiate outgoing uTP connections by default whenever it can. Previous versions of our clients will accept incoming uTP connections – they just won’t initiate them,” Morris said.

“We’re excited that this creates a better experience for millions of consumers, and it also potentially has a massive impact on ISPs – greatly reducing (even eliminating) any justification to manage or shape BitTorrent traffic and allowing ISP networks to handle more BitTorrent traffic, without resulting congestion forcing capital network upgrades ahead of schedule or the ‘need’ to invest in DPI or other traffic shaping gear.”

It is hard to tell if uTP really is BitTorrent’s savior, but if it lives up to the expectations it will be beneficial to both users and ISPs. The specs for uTP will eventually be open so other clients will have the opportunity to implement it too. However, since uTorrent and the Mainline client together are used by two thirds of all BitTorrent users, the effects should be immediately noticeable to both those users and ISPs.
http://torrentfreak.com/utorrent-2-0...ttling-091031/





Demonoid is Alive, The Tracker Has Returned
Ernesto

It has been many weeks since the popular semi-private BitTorrent tracker Demonoid went offline. The site’s owner claimed the downtime was due to hardware issues and warned of the loss of both torrents and user data. Today, however, there is hope on the horizon, as Demonoid’s tracker is now up and running again.

Since Demonoid went down in September there has been a lot of speculation about what had caused it, and how long it would take for the site to recover.

As always, Demonoid staff kept quiet about the site’s future and all its users could do is wait for a sign of life, which quietly arrived earlier today.

A few hours ago Demonoid’s tracker started to respond again. It appears that it’s still hosted in the Ukraine, and although the frontend of the site hasn’t updated yet, this comeback might indicate that the site is preparing for a full return.

The current situation stirs memories of Demonoid’s downtime back in 2007. At the time the tracker also returned before the site itself became accessible again, which took two more months. Many Demonoid members are undoubtedly hoping that this chain of events will complete more quickly this time around.

When the site returns, it’s likely that members that joined the site more recently will have to sign up again, while others may have to resubmit their torrents. “A loss of some months worth of activity including registered users and torrent submissions is to be expected,” Demonoid staff warned earlier.

The tracker’s return in itself is already being welcomed by the thousands of users whose torrent clients are not supporting trackerless torrents. Many of them might have been staring at several unfinished downloads for weeks, and now they are finally able to complete their downloads.
http://torrentfreak.com/demonoid-is-...turned-091105/





Unfinished Windows 7 Feature Turns Laptops Into Wi-Fi Hotspots
Gregg Keizer

A Philadelphia developer has rooted out an unfinished feature of Windows 7 that turns any laptop into a wireless access point, allowing other Wi-Fi-enabled devices to share the connection without special software.

Nomadio, which specializes in military network consulting and development, used the new "Virtual Wi-Fi" feature in Windows 7 to create Connectify, a free application that it released as a beta last Friday.

Virtual Wi-Fi was crafted in Microsoft's research group as a way to "virtualize" one wireless card as several separate adapters. The project was discontinued in 2006, but the work made its way into Windows 7 as "Native 802.11 Virtual Wireless Fidelity (Virtual Wi-Fi) object identifiers (OIDs)" .

"A year ago, Microsoft talked a lot about this as a big feature in Windows 7," said Alex Gizis, the CEO of Nomadio. "But driver support didn't get finished. The low-level code is in there, but the driver-level stuff isn't. And there's no app or setting in Windows to turn it on."

Explaining that the feature was "half there" in Windows 7, Gizis said his company realized "we have the rest of the software here, in our networking work."

The resulting Connectify differs from the Internet connection sharing that Windows already supports via an "ad hoc" network connection, which lets several Windows computers share a single connection. "For one thing, it shows up as a real wireless access point," Gizis said. "Two, Internet connection sharing has issues. It returns to the default settings every time you shut down a connection. And three, you can join another wireless network and still run the Connectify Hotspot on the same Wi-Fi card."

One application came immediately to mind, Gizis continued. "You're sitting in a coffee shop that charges you for a wireless connection. With Connectify, I can pay for that connection, and still have all my other devices, like my iPhone, connected to the Internet."

Connectify lets a Windows 7 laptop "tether" other wireless devices to a single Internet connection by effectively turning that PC into a software-based wireless router, added Gizis. "We've done a lot of military networking, including a lot of mesh networks," he said, "where special routers connect to each other." That technique, he said, was ideal for keeping in-the-field troops connected to the Internet.

Gizis has used his Connectify-equipped Windows 7 laptop as a wireless access point for his Apple iPhone, for example, and to provide a wireless connection to multiple PCs when only one Ethernet jack was available.

"There are a lot of neat scenarios where this comes in handy," he said. "For example, people can use a wireless printer without any setup, which usually requires that you first plug the [wireless] printer into the computer with a USB cable so it can select the network."

Although the Connectify beta is free to download, Gizis said that Nomadio would likely pin a price on the final, full-featured version when that's ready to release in about six weeks. "I think we'll end up with two-tier model, one that's free, potentially ad-supported, and then sell a full version," said Gizis.

Windows 7 is required on the notebook acting as a wireless hotspot, but any wireless-equipped device, including PCs running Windows XP or Vista, or even Mac laptops, can reach the Web through Connectify without any additional software. Connectify also encrypts the traffic to and from the software "hot spot" using WPA2-Personal (AES) encryption.

The beta of Connectify can be downloaded from Nomadio's Web site.

Apple's Mac OS X already offers a similar feature under the "Internet Sharing" preferences setting.
http://www.pcworld.com/article/18104...ml?tk=rss_news





Windows 7 Vulnerable to 8 Out of 10 Viruses

Now that we in the northern hemisphere have had some time to digest the Windows 7 hype and settle in for the coming winter, we thought we would get some more hard data regarding Windows 7 security.

On October 22nd, we settled in at SophosLabs and loaded a full release copy of Windows 7 on a clean machine. We configured it to follow the system defaults for User Account Control (UAC) and did not load any anti-virus software.

We grabbed the next 10 unique samples that arrived in the SophosLabs feed to see how well the newer, more secure version of Windows and UAC held up. Unfortunately, despite Microsoft's claims, Windows 7 disappointed just like earlier versions of Windows. The good news is that, of the freshest 10 samples that arrived, 2 would not operate correctly under Windows 7.

User Account Control did block one sample; however, its failure to block anything else just reinforces my warning prior to the Windows 7 launch that UAC's default configuration is not effective at protecting a PC from modern malware.

Lesson learned? You still need to run anti-virus on Windows 7. Microsoft, in the Microsoft Security Intelligence Report released yesterday, stated that "The infection rate of Windows Vista SP1 was 61.9 percent less than that of Windows XP SP3."

But let's not get complacent. Microsoft seems to be saying that Vista is the least ugly baby in its family. You can be sure the next report will highlight its even less ugly younger sibling, Windows 7.

Why do I say this? As of October 31st www.netmarketshare.com states that Windows Vista has a 19% market share against Windows XP's 70.5% and Windows 7's 2%. Approximately 1 in 5 Windows users is using either Vista or Windows 7. These users often have newer computers, automatic patching, and firewalls and anti-virus software in place.

With millions of hosts still infected with Conficker, ZBot and Bredo, it is obvious a lot of unprotected machines are still out there, and it is no surprise that most of those are XP.

As the chart above shows, Windows 7 users need not feel left out. They can still participate in the ZBot botnet with a side of fake anti-virus. Windows 7 is no cure for the virus blues, so be sure to bring your protection when you boot up.
http://www.sophos.com/blogs/chetw/g/...s-7-vulnerable





Microsoft Links Malware Rates to Pirated Windows

PCs running bogus Windows more likely to be infected because pirates won't use Windows Update
Gregg Keizer

Microsoft today said computers in countries with high rates of software piracy are more likely to be infected by malicious code because users are leery of applying security patches.

"There is a direct correlation between piracy and the malware infection rate," said Jeff Williams, the principal group program manager for the Microsoft Malware Protection Center. Williams was touting the newest edition of his company's biannual security intelligence report.

According to Williams, the link between PC infection rates -- the percentage of computers that have been cleaned by the updated monthly Malicious Software Removal Tool, or MSRT -- and piracy is due to the hesitancy of users in countries where counterfeit copies abound to use Windows Update, the service that pushes patches to PCs.

China's piracy rate is more than four times that of the U.S., according to Microsoft's report, published today, but the use of Windows Update in China is significantly below that in the U.S.

Brazil and France also have a higher piracy rate, and lower Windows Update usage, than the U.S., Microsoft maintained.

But the company's own data doesn't always support William's contention that piracy, and the hesitancy to use Windows Update, leads to more infected PCs. China, for example, boasted a malware infection rate -- as defined by the number of computers cleaned for each 1,000 executions of the MSRT -- of just 6.7, significantly lower than the global average of 8.7 or the U.S.'s rate of 8.2 per thousand.

France's infection rate of 7.9 in the first half of 2009 was also under the worldwide average.

Of the three countries Microsoft called out as examples of nations whose users are reluctant to run Windows Update because of high piracy rates, only Brazil fit William's argument: Brazil's infection rate was 25.4, nearly three times the global average.

Other countries with higher-than-average infection rates, however, also have high piracy rates, according to data published last May by the Business Software Alliance (BSA), an industry-backed anti-piracy organization, and research firm IDC. Microsoft is a member of the BSA.

By Microsoft's tally, Serbia and Montenegro had the highest infection rate in the world, with 97.2 PCs out of every 1,000, nearly 10%, plagued by malware. Turkey was No. 2, with 32.3, while Brazil, Spain and South Korea were third through fifth, with infection rates of 25.4, 21.6 and 21.3, respectively.

The BSA put Serbia's piracy rate, the percentage of the in-use software that's not licensed, at 74% in 2008, while Turkey, Brazil, Spain and Korea had estimated piracy rates of 64%, 58%, 42% and 43%, respectively. By comparison, the U.S.'s piracy rate was pegged at 20%, and the worldwide average at 41%.

Although Microsoft wants users to patch vulnerabilities with Windows Update, people running counterfeit copies of Windows have traditionally been less-than-eager to apply fixes, believing that Windows Update will recognize their software as illegal and mark it as such with nagging on-screen messages.

Microsoft's anti-piracy efforts, particularly the technology it pushes to users that sniffs out unlicensed copies of Windows, have met with resistance. Last year, for example, Chinese users raised a ruckus when Microsoft updated its Windows Genuine Advantage (WGA) anticounterfeit validation and notification technology.

American users have complained about the technology, too. In June 2006, Microsoft infuriated users by pushing a version of WGA to XP users via Windows Update, tagging it as a "high-priority" update that was automatically downloaded and installed to most machines. A year later, a day-long server outage riled thousands of users who were mistakenly fingered for running counterfeit copies of Windows.

The 2006 incident sparked a lawsuit that accused Microsoft of misleading customers when it used Windows Update to serve up WGA. Last month, Microsoft filed a motion opposing a move by the plaintiffs to turn the case into a class-action lawsuit.

Microsoft's security intelligence report can be downloaded from its Web site in PDF or XPS document formats.
http://www.computerworld.com/s/artic...irated_Windows





Google Offers Users a Peek At Stored Data
Miguel Helft

Google, which has been criticized frequently for amassing large amounts of data about people, is giving users an easy way to find out what information it stores in their accounts.

At a European privacy conference in Spain Thursday, the company unveiled a new service called Google Dashboard that summarizes the data that Google collects in users’ accounts for products like Gmail, Picasa Web Albums, Web History, Checkout, Reader and YouTube. Users will be able to adjust their privacy settings for the various Google products directly from the dashboard.

Much of the information was previously available in the accounts and settings sections for each product, so Dashboard simply brings all that information together in one place.

“For the most part, the data was accessible to you in a piecemeal fashion,” Shuman Ghosemajumder, business product manager for trust and safety, said in an interview Wednesday. “This is about providing you with a one-stop shop to see all of the data about you in various products.”

Mr. Ghosemajumder said Dashboard will offer users more transparency and control. The dashboard for Gmail, for example, will list the number of conversations in your inbox and the total number of conversations in your account, as well as how many chat session it has stored. Links for changing settings will be easily accessible.

Dahsboard provides information only about users’ Google accounts for products that require users to log in or products where the log-in is optional. It does not address the search records of people who are not logged into Google or the cookie data that Google uses to aim ads at people. Many advocates say that the collection and storage of such data may raise the biggest privacy concerns. They also say that while such data, which typically includes a computer’s Internet Protocol, or IP, address, is not associated with personally identifiable information such as names and addresses, it can often be linked with individuals.

Dashboard also does not change any of Google’s policies with regards to the retention of use of data.

Still, some privacy advocates hailed the product.

“It is a significant step forward in terms of trying to unite the user experience for people who use Google products,” said Ari Schwartz, chief operating officer of the Center for Democracy and Technology, an independent advocacy group that receives some funding from Google and other technology companies. “We still need a lot more to protect consumers’ privacy.”

Mr. Schwartz said Google’s move mirrored efforts by Facebook to offer users more transparency about privacy settings. He said he hoped that more Internet companies will offer products like Dashboard.

Others were more critical.

“Dashboard requires a Google account,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “Google is trying to move Internet users to the single sign-on model.” Mr. Rotenberg noted that the Federal Trade Commission had opposed a similar effort by Microsoft in 2002 after consumer groups said it would raise privacy and security risks.

John Simpson, of Consumer Watchdog, a frequent critic of Google, said that Dashboard gives users the appearance of control over privacy, but did not really prevent Google from tracking users across the Web.

“What the Dashboard does is list all the information linked directly to your name, but what it doesn’t do is let you know and control the data directly tied to your computer’s IP address, which is Google’s black box and data mine, Mr. Simpson said in a press release. “Google isn’t truly protecting privacy until it lets you control that information.”
http://bits.blogs.nytimes.com/2009/1...tored-data/?hp





Amazon Video vs. Netflix: Which Will Prevail?
Brad Stone

Which business model for watching movies online will be the winner? Paying upwards of $8 a month for unlimited and instant online access to an older catalog of films and TV shows from a company like Netflix? Or forking over $2 to $3 a film for access to newer releases from a service like Amazon’s Video on Demand?

The Catalyst Group, a New York research company that studies how people use technology, inquired into this question. The company conducted extensive interviews in August with 11 people they introduced to the $99 Roku player — a device that connects to the TV and the Internet and gives owners access to both Netflix and Amazon Video on Demand.

The findings? Perhaps most interestingly, according to Nick Gould, chief executive of Catalyst, the participants were mostly surprised by the ability to choose from a large selection of movies and watch them instantly. “They were shocked that this is something you can do. Early adopters aside, the availability of a service like this is still not universally known,” Mr. Gould said.

People’s preference between the two services then depended largely on their film habits. Frequent movie watchers preferred Netflix and its flat monthly fee, which entitles them to the DVD-by-mail service and access to the online films and TV shows. Others preferred the Amazon service, which resembles pay-per-view, a model they were already familiar with.

And almost everyone had the same beef with both: they disliked how they had to shift from the television to the PC to manage their Netflix “watch instantly” queue and search for new films, and to activate their Amazon Video on Demand service and link it to the Roku player. They also found it difficult to search for a movie on Amazon through their televisions.

“The parties were unanimous in their wish that more of the experience be away from the computer,” Mr. Gould said. “People are expecting and really preferring a simpler, more straightforward experience that doesn’t involve the PC,” he said.

Though the findings are not exactly groundbreaking, the study got me thinking about which business model for online movies might prove to be more popular. In our home, we pay for Netflix, so we’re much more likely to stream movies from Netflix (via our TiVo) — or wait for a DVD to be delivered. That’s no knock against Amazon; it just feels like we’ve already paid for most of those films with our monthly Netflix subscription.
http://bits.blogs.nytimes.com/2009/1...l-prevail/?hpw





Best Buy Plans Movie Download Service with Sonic

Best Buy Co Inc plans to start an online service that allows consumers to buy, rent and download movies and television shows, the electronics retailer said on Tuesday.

The system, based on Sonic Solutions' Roxio CinemaNow service, would be built into devices sold at its stores, including television sets, portable media players, computers, mobile phones and other devices from a variety of manufacturers.

Best Buy said it has set a multiyear agreement to license Roxio CinemaNow technology. Under the terms of the agreement, Best Buy acquired warrants enabling it to purchase shares of Sonic Solutions common stock.

It expects to provide access to new movies, independent films, and older catalog movies, with some new titles available on the same day as the comparable DVD goes on sale.

The service could compete with a number of established online media destinations including Amazon.com Inc, and Apple Inc's iTunes store.

"Our relationship with Sonic Solutions allows Best Buy to quickly establish a strong position in the digital delivery of video entertainment," Brian Dunn, chief executive of Best Buy, said in a statement.

Best Buy bought digital music service Napster Inc about one year ago in an effort to compete with Apple's dominant iTunes service.

The company did not give the name of the service, or when it would launch.

(Reporting by Franklin Paul, editing by Gerald E. McCormick)
http://www.washingtonpost.com/wp-dyn...110300687.html





Pentagon Eyes Crash Analysis on 1,300 Satellites
Andrea Shalal-Esa

The U.S. military said on Tuesday it is now tracking 800 maneuverable satellites on a daily basis for possible collisions and expects to add 500 more non-maneuvering satellites by year's end.

The U.S. Air Force began upgrading its ability to predict possible collisions in space after a dead Russian military communications satellite and a commercial U.S. satellite owned by Iridium collided on February 10.

General Kevin Chilton, commander of U.S. Strategic Command, called the collision the "seminal event" in the satellite industry during the past year and said it destroyed any sense that space was so vast that collisions were highly improbable.

He said military officials had wanted to do more thorough analysis of possible collisions in space, but had lacked the resources. Before the collision, he said they were tracking less than 100 satellites a day.

"It's amazing what one collision will do to the resource spigot," he told a space conference in Omaha, Nebraska.

The crash, which was not predicted by the U.S. military or private tracking groups, underscored the vulnerability of U.S. satellites, which are used for a huge array of military and civilian purposes.

Chilton said the Air Force was tracking more than 20,000 satellites, spent rocket stages and other objects in space, up from just 14,000 a few years ago.

But he said that was just what U.S. could "see" and there were estimates that the actual number was much greater, posing a potential threat to satellites on orbit.

Air Force Lieutenant General Larry James, who heads U.S. Strategic Command's Joint Functional Component Command for Space, told reporters the Air Force met its goal for tracking possible collisions among 800 satellites that have the ability to be moved in September, ahead of an October target date.

"Our goal now is to do that conjunction assessment for all active satellites ... roughly around 1,300 satellites ... by the end of the year and provide that information to users as required," James told reporters on a teleconference during a space conference in Omaha, Nebraska.

Some of the 500 satellites still to be assessed cannot be shifted because they do not carry extra fuel that would be needed to move them once in orbit.

To increase its ability to predict possible collisions, the Air Force has been buying more computers and hiring analysts. It also works with commercial satellite operators to share data collected by their spacecraft and by U.S. government sources.

Chilton lauded the efforts, but said the work was still too reliant on Air Force analysts and needed further improvement. "We are decades behind where we should be," he said.

Victoria Samson, with the nonprofit Center for Defense Information, said the Air Force needed more trained operators to do the analyses and the goal of adding 500 more satellites to the analysis might be "somewhat optimistic." (Reporting by Andrea Shalal-Esa, editing by Alan Elsner and Chris Wilson)
http://www.reuters.com/article/scien...5A24WG20091104





Alissa Rosenbaum

Ayn Rand’s Revenge
Adam Kirsch

AYN RAND AND THE WORLD SHE MADE

By Anne C. Heller

Illustrated. 567 pp. Nan A. Talese/Doubleday. $35

A specter is haunting the Republican Party — the specter of John Galt. In Ayn Rand’s libertarian epic “Atlas Shrugged,” Galt, an inventor disgusted by creeping American collectivism, leads the country’s capitalists on a retributive strike. “We have granted you everything you demanded of us, we who had always been the givers, but have only now understood it,” Galt lectures the “looters” and “moochers” who make up the populace. “We have no demands to present you, no terms to bargain about, no compromise to reach. You have nothing to offer us. We do not need you.”

“Atlas Shrugged” was published 52 years ago, but in the Obama era, Rand’s angry message is more resonant than ever before. Sales of the book have reportedly spiked. At “tea parties” and other conservative protests, alongside the Obama-as-Joker signs, you will find placards reading “Atlas Shrugs” and “Ayn Rand Was Right.” Not long after the inauguration, as right-wing pundits like Glenn Beck were invoking Rand and issuing warnings of incipient socialism, Representative John Campbell, Republican of California, told a reporter that the prospect of rising taxes and government regulation meant “people are starting to feel like we’re living through the scenario that happened in ‘Atlas Shrugged.’ ”

Rand’s style of vehement individualism has never been universally popular among conservatives — back in 1957, Whittaker Chambers denounced the “wickedness” of “Atlas Shrugged” in National Review — and Rand still has her critics on the right today. But it can often seem, as Jonathan Chait, a senior editor at The New Republic recently observed, that “Rand is everywhere in this right-wing mood.” And while it’s not hard to understand Rand’s revenge-fantasy appeal to those on the right, would-be Galts ought to hear the story Anne C. Heller has to tell in her dramatic and very timely biography, “Ayn Rand and the World She Made.”

For one thing, it is far more interesting than anything in Rand’s novels. That is because Heller is dealing with a human being, and one with more than her share of human failings and contradictions — “gallant, driven, brilliant, brash, cruel . . . and ultimately self-destructive,” as Heller puts it. The characters Rand created, on the other hand — like Galt or Howard Roark, the architect hero of “The Fountainhead” — are abstract principles set to moving and talking.

This is at once the failure and the making of Rand’s fiction. The plotting and characterization in her books may be vulgar and unbelievable, just as one would expect from the middling Hollywood screenwriter she once was; but her message, while not necessarily more sophisticated, is magnified by the power of its absolute sincerity. It is the message that turned her, from the publication of “Atlas Shrugged” in 1957 until her death in 1982, into the leader of a kind of sect. (This season, another Rand book, by the academic historian Jennifer Burns, is aptly titled “Goddess of the Market: Ayn Rand and the American Right.”) Even today, Rand’s books sell hundreds of thousands of copies a year. Heller reports that in a poll in the early ’90s, sponsored by the Library of Congress and the Book of the Month Club, “Americans named ‘Atlas Shrugged’ the book that had most influenced their lives,” second only to the Bible.

Rand’s particular intellectual contribution, the thing that makes her so popular and so American, is the way she managed to mass market elitism — to convince so many people, especially young people, that they could be geniuses without being in any concrete way distinguished. Or, rather, that they could distinguish themselves by the ardor of their commitment to Rand’s teaching. The very form of her novels makes the same point: they are as cartoonish and sexed-up as any best seller, yet they are constantly suggesting that the reader who appreciates them is one of the elect.

Heller maintains an appropriately critical perspective on her subject — she writes that she is “a strong admirer, albeit one with many questions and reservations” — while allowing the reader to understand the power of Rand’s conviction and her odd charisma. Rand labored for more than two years on Galt’s radio address near the end of “Atlas Shrugged” — a long paean to capitalism, individualism and selfishness that makes Gordon Gekko’s “Greed is good” sound like the Sermon on the Mount. “At one point, she stayed inside the apartment, working for 33 days in a row,” Heller writes. She kept going on amphetamines and willpower; the writing, she said, was a “drops-of-water-in-a-desert kind of torture.” Nor would Rand, sooner than any other desert prophet, allow her message to be trifled with. When Bennett Cerf, a head of Random House, begged her to cut Galt’s speech, Rand replied with what Heller calls “a comment that became publishing legend”: “Would you cut the Bible?” One can imagine what Cerf thought — he had already told Rand plainly, “I find your political philosophy abhorrent” — but the strange thing is that Rand’s grandiosity turned out to be perfectly justified.

In fact, any editor certainly would cut the Bible, if an agent submitted it as a new work of fiction. But Cerf offered Rand an alternative: if she gave up 7 cents per copy in royalties, she could have the extra paper needed to print Galt’s oration. That she agreed is a sign of the great contradiction that haunts her writing and especially her life. Politically, Rand was committed to the idea that capitalism is the best form of social organization invented or conceivable. This was, perhaps, an understandable reaction against her childhood experience of Communism. Born in 1905 as Alissa Rosenbaum to a Jewish family in St. Petersburg, she was 12 when the Bolsheviks seized power, and she endured the ensuing years of civil war, hunger and oppression. By 1926, when she came to live with relatives in the United States and changed her name, she had become a relentless enemy of every variety of what she denounced as “collectivism,” from Soviet Communism to the New Deal. Even Republicans weren’t immune: after Wendell Willkie’s defeat in 1940, Rand helped to found an organization called Associated Ex-Willkie Workers Against Willkie, berating the candidate as “the guiltiest man of any for destroying America, more guilty than Roosevelt.”

Yet while Rand took to wearing a dollar-sign pin to advertise her love of capitalism, Heller makes clear that the author had no real affection for dollars themselves. Giving up her royalties to preserve her vision is something that no genuine capitalist, and few popular novelists, would have done. It is the act of an intellectual, of someone who believes that ideas matter more than lucre. In fact, as Heller shows, Rand had no more reverence for the actual businessmen she met than most intellectuals do. The problem was that, according to her own theories, the executives were supposed to be as creative and admirable as any artist or thinker. They were part of the fraternity of the gifted, whose strike, in “Atlas Shrugged,” brings the world to its knees.

Rand’s inclusion of businessmen in the ranks of the Übermenschen helps to explain her appeal to free-marketeers — including Alan Greenspan — but it is not convincing. At bottom, her individualism owed much more to Nietzsche than to Adam Smith (though Rand, typically, denied any influence, saying only that Nietzsche “beat me to all my ideas”). But “Thus Spoke Zarathustra” never sold a quarter of a million copies a year.

Rand’s potent message could lead to intoxication and even to madness, as the second half of her life showed. In 1949, Rand was living with her husband, a mild-mannered former actor named Frank O’Connor, in Southern California, in a Richard Neutra house. Then she got a fan letter from a 19-year-old college freshman named Nathan Blumenthal and invited him to visit. Rand, whose books are full of masterful, sexually dominating heroes, quickly fell in love with this confused boy, whom she decided was the “intellectual heir” she had been waiting for.

The decades of psychodrama that followed read, in Heller’s excellent account, like “Phčdre” rewritten by Edward Albee. When Blumenthal, who changed his name to Nathaniel Branden, moved to New York, Rand followed him; she inserted herself into her protégé’s love life, urging him to marry his girlfriend; then Rand began to sleep with Branden, insisting that both their spouses be kept fully apprised of what was going on. Heller shows how the Brandens formed the nucleus of a growing group of young Rand followers, a herd of individualists who nicknamed themselves “the Collective” — ironically, but not ironically enough, for they began to display the frightening group-think of a true cult. One journalist Heller refers to wondered how Rand “charmed so many young people into quoting John Galt as religiously as ‘clergymen quote Matthew, Mark, Luke and John.’ ”

Inevitably, it all ended in tears, when Branden fell in love with a young actress and was expelled from Rand’s circle forever. That he went on to write several best-selling books of popular psychology “and earned the appellation ‘father of the self-esteem movement’ ” is the kind of finishing touch that makes truth stranger than fiction. For if there is one thing Rand’s life shows, it is the power, and peril, of unjustified self-esteem.
http://www.nytimes.com/2009/11/01/bo.../Kirsch-t.html





Google Redefines Disruption: The “Less Than Free” Business Model
Bill Gurley

I like to think of myself as an aficionado of business disruption. After all, as a venture capitalist it is imperative to understand ways in which a smaller private company can gain the upper hand on a large incumbent. One of the most successful ways to do this is to change the rules of the game in such a way that the incumbent would need to abandon or destroy its core business in order to lay chase to your strategy. This thinking, which was eloquently chronicled in Clay Christiansen’s The Innovator’s Delimma, is the key premise behind recently successful business movements like SAAS (Software as a Service), open source software, and the much-discussed Freemium Internet model. And while each of these disruptions are impressive in their own right, when I read this week that Google was including free turn-by-turn navigation directions with each and every Android mobile OS, I had an immediate feeling that I was witnessing a disruptive play of a magnitude heretofore unseen.

Google has long had an interest in maps. Early in its history, the company added “Maps” as one of the coveted tab alternatives offered at the top of the screen above its famed search box. At that time, Google did what many others did to enter the mapping business – they licensed data from the two duopolists that ruled the mapping business – Tele Atlas and NavTeq. Over the years, as these two companies gained more and more power, and larger and larger market capitalizations, Google’s ambitions were growing too. Google wanted to spread its maps across the web, and to allow others to build on top of its mapping API. The duopolists, recognizing a fox in the henhouse, were apprehensive to allow such activity.

In the summer of 2007, excitement regarding the criticality of map data (specifically turn-by-turn navigation data) reached a fever pitch. On July 23, 2007, TomTom, the leading portable GPS device maker, agreed to buy Tele Atlas for US$2.7 billion. Shortly thereafter, on October 1, Nokia agreed to buy NavTeq for a cool US$8.1 billion. Meanwhile Google was still evolving its strategy and no longer wanted to be limited by the terms of its two contracts. As such, they informed Tele Atlas and NavTeq that they wanted to modify their license terms to allow more liberty with respect to syndication and proliferation. NavTeq balked, and in September of 2008 Google quietly dropped NavTeq, moving to just one partner for its core mapping data. Tele Atlas eventually agreed to the term modifications, but perhaps they should have sensed something bigger at play.

Rumors abound about just how many cars Google has on the roads building it own turn-by-turn mapping data as well as its unique “Google Streetview” database. Whatever it is, it must be huge. This October 13th, just over one year after dropping NavTeq, the other shoe dropped as well. Google disconnected from Tele Atlas and began to offer maps that were free and clear of either license. They would based on a combination of their own data as well as freely available data. Two weeks after this, Google announces free turn-by-turn directions for all Android phones. This couldn’t have been a great day for the deal teams that worked on the respective Tele Atlas and NavTeq acquisitions.

Too understand just how disruptive this is to the GPS data market, you must first understand that “turn-by-turn” data was the lynchpin that held the duopoly together. Anyone could get map data (there are many free sources), but turn-by-turn data was remarkably expensive to build and maintain. As a result, no one could really duplicate it. The duopolists had price leverage and demanded remarkably high royalties, and the GPS device makers (TomTom, Garmin, Nokia) were forced to be price takers. You can see evidence of this price umbrella in the uniquely high $99.99 price point TomTom now charges for its iPhone application. When TomTom bought Tele Atlas, the die was cast. Eat or be eaten. If you didn’t control your own data, how could you compete in the GPS market? This is what prompted the Nokia-NavTeq deal.

Google’s free navigation feature announcement dealt a crushing blow to the GPS stocks. Garmin fell 16%. TomTom fell 21%. Imagine trying to maintain high royalty rates against this strategic move by Google. Android is not only a phone OS, it’s a CE OS. If Ford or BMW want to build an in-dash Android GPS, guess what? Google will give it to them for free. As we noted in our take on the free business model, “if a disruptive competitor can offer a product or service similar to yours for ‘free,’ and if they can make enough money to keep the lights on, then you likely have a problem.” It would be one thing if this were merely a mean-spirited play by Google to put an end to the GPS data duopoly. But it is not. There are multiple facets to this remarkably disruptive move.

While it is obvious that this maneuver creates a problem for the multi-billion dollar GPS market, it also poses real challenges for the leading smart phone players – RIM’s Blackberry and Apple’s iPhone. Without access to their own mapping data, these vendors now face an interesting dilemma. Do you risk flying naked without free navigation or do you suck it up and swallow the above average royalty fee for each and every handset? Neither option is stellar. This problem isn’t nearly as daunting as the one now faced by the Windows Mobile and Symbian teams. As software providers, they are lucky to get a per unit royalty equal to that extracted by the GPS data guys. If they are now forced to integrate this data merely to keep their product competitive, their gross margin just went negative. Ouch!

This is not just incredible defense. Google is apt to believe that the geographic taxonomy is a wonderful skeleton for a geo-based ad network. If your maps are distributed everywhere on the Internet and in every mobile device, you control that framework. Cash starved startups, building interesting and innovative mobile apps, will undoubtedly build on Google’s map API. Its rich, it is easy to use, and quite frankly the price is right. In the future, if you want to advertise your local business to people with an interest in your local market, chances are you will look to Google for that access.

Introducing the “Less Than Free” Business Model

Google’s brilliance doesn’t stop there. It is hard not to have been surprised by the rapid rise in recent buzz surrounding the Google Android Smartphone OS. When I asked a mobile industry veteran why carriers were so willing to dance with Google, a company they once feared, he suggested that Google was the “lesser of two evils.” With Blackberry and iPhone grabbing more and more subs, the carriers were losing control of the customer UI, which undoubtedly represents power and future monetization opportunities. With Android, carriers could re-claim their customer “deck.” Additionally, because Google has created an open source version of Android, carriers believe they have an “out” if they part ways with Google in the future.

I then asked my friend, “so why would they ever use the Google (non open source) license version.” Here was the big punch line – because Google will give you ad splits on search if you use that version! That’s right; Google will pay you to use their mobile OS. I like to call this the “less than free” business model. This is a remarkable card to play. Because of its dominance in search, Google has ad rates that blow away the competition. To compete at an equally “less than free” price point, Symbian or windows mobile would need to subsidize. Double ouch!!

“Less than free” may not stop with the mobile phone. Google’s CEO Eric Schmidt has been quite outspoken about his support for the Google Chrome OS. And there is no reason to believe that the “less than free” business model will not be used here as well. If Sony or HP or Dell builds a netbook based on Chrome OS, they will make money on every search each user initiates. Google, eager to protect its search share and market volume, will gladly pay the ad splits. Microsoft, who already was forced to lower Windows netbook pricing to fend off Linux, will be dancing with a business model inversion of epic proportion – from “you pay me” to “I pay you.” It’s really hard to build a compensation package for your sales team on those economics.

Naysayers to these assertions will likely have the same retort – quality is key. They will argue that Google’s turn-by-turn apps are inferior to their well honed market leading products. With regard to Android, Google will lack the user interface or embedded software expertise necessary and will deliver a subpar product. Plus, because the Android OS will be so splintered, QA testing will be difficult and incompatibility issues will abound. In the short run, these issues will exist.

Despite these challenges, it would be a dangerous strategy for any of the many threatened players in these markets to hang on to this “quality” rationalization very long. First, Google’s products will get better over time. The sheer volume of the Android phones in the market will give them new data feeds to compliment their own mapping effort. Also, they can create UGC hooks for users to embellish their own maps (like in Google Earth), offering themselves further differentiation. With regard to Android, version 3 will be better than version 2 will be better than version 1. Microsoft knows this game well.

Another perhaps even more important factor is that when a product is completely free, consumer expectations are low and consumer patience is high. Customers seem to really like free as a price point. I suspect they will love “less than free.”
http://abovethecrowd.com/2009/10/29/...usiness-model/





In Defense of Extreme Pornography

Why Janet Romano and Rob Zicari have no business being in federal prison.
Greg Beato

In late September, as a controversial movie director spent the first week of her year-long sentence at FCI Waseca, a federal prison in Minnesota, Harvey Weinstein didn’t bother to circulate a petition demanding her release. Debra Winger didn’t issue a statement protesting the director’s incarceration and anticipating her next masterwork. Peg Yorkin, founder of the Feminist Majority Foundation, didn’t publicly wonder why the government had spent the last seven years trying to put the director in jail.

Maybe Janet Romano should have drugged and sodomized a 13-year-old. Or, at the very least, had better cinematic taste. Unlike Roman Polanski, Romano has never won an Oscar for Best Picture. In fact, the 31-year-old porn auteur, whose credits as a director include Pain and Suffering, I Love to Hurt You, Cannibalism, and Sexual Intrusive Dysfunctional Society 2, has never even won an AVN Award for Most Outrageous Sex Scene.

Still, you’d think many of the creative types rallying around Polanski would be equally sympathetic to Romano’s plight. Essentially, she’s in prison for rape, too—as is her husband, Rob Zicari. But as Whoopi Goldberg might have put it, the rape that landed them in the slammer wasn’t actually rape-rape. It wasn’t even ‘70s-style-libertine rape. Instead, it was movie rape, a scene enacted by consenting adults.

Zicari and Romano, known in the porn industry as Rob Black and Lizzy Borden, were the primary figures behind Extreme Associates, a production company, which, along with a few others, began pushing the boundaries of what the mainstream adult video industry depicted in the late 1990s.

Of course, it wasn’t just porn that was growing more extreme in those days—all pop culture was. It was the heyday of Marilyn Manson and Eminem, South Park, professional wrestling, Jackass, Fear Factor, World’s Wildest Police Videos, Girls Gone Wild, Tom Green, and most of all, the Internet, where websites like Rotten.com and Stileproject.com were assembling vast visual libraries of any taboo or depravity that could be digitized: gruesome crime and accident scene photos, animal snuff, people disfigured by bizarre medical conditions.

Along with everyone from NBC executives to computer nerds living in their parents’ basements, Zicari and Romano simply jumped into the fray. Hollywood slasher films chopped nubile teens into pieces, so why couldn’t they simulate similar antics in their own efforts? Hollywood reality shows featured contestants eating pig rectums for money, so why couldn’t they engage in their own gross-out stunts?

In their videos, female performers (and the occasional male one) were slapped, spat on, and verbally degraded. Rapes and murders were depicted. Vomit was vomited, then consumed again along with other bodily fluids. And of course there was explicit hardcore sex. Had Zicari and Romano stuck to just rape and murder, with some R-rated nudity to complement artful scenes of mutilation and dismemberment, as Hollywood does in movies like Hostel and House of 1000 Corpses, they could’ve avoided a lot of trouble. Likewise, had they focused on hardcore sex and kept the violence and puke out of it.

By mixing these various elements, however, they earned a 10-count indictment on obscenity charges in 2003. In the eyes of many in the adult industry, they’d brought this trouble on themselves. A year earlier, a PBS Frontline documentary on porn included shots of Romano filming simulated rapes and murders that the members of the Frontline crew found so disturbing they fled the set. At a time when anti-porn organizations were increasingly pressuring the Bush Administration to resume obscenity prosecutions against the adult porn industry—which had fallen by the wayside during President Clinton’s years in office—this was not exactly the kind of PR effort that mainstream adult companies like Vivid Entertainment and Wicked Pictures wanted to put out there. Nor was Zicari’s combative rhetoric appreciated. “We've got tons of stuff they technically could arrest us for,” Zicari told Frontline. “I'm not out there saying I want to be the test case. But I will be the test case. I would welcome that.”

In 2004, when I interviewed Zicari for a Reason article on the federal government’s newly energized campaign against the porn industry, he remained defiant. “This is the World Series, and they're the Boston Red Sox,” he exclaimed. “They're getting a chance that they haven't had in 9 billion years, and if they blow this, they can never come back. Because where can you go after a jury says there's nothing wrong with these movies? How do you go after a movie involving a husband and wife and the guy's wearing a condom? How do you get someone to go after that, when you couldn't even prosecute a tape where the guy comes in the girl's mouth, and then he fucking stabs her? This is their one shot, and they fucking know it.”

In January 2005, it seemed as if the federal prosecutors had whiffed—U.S. District Judge Gary Lancaster dismissed the charges against Romano and Zicari, ruling that federal obscenity laws were unconstitutional because they violated one’s “right to sexual privacy, which encompasses a right to possess and view sexually explicit material in the privacy of one’s own home.” Later that year, however, an appeals court reversed this controversial ruling, and the government resumed its case against the couple.

As the case dragged on, it attracted less and less attention, ultimately becoming the the judicial equivalent of the celebrity who you thought died years ago but is actually quite extant. And while the federal government never really ramped up its crusade against the porn industry enough to satisfy the anti-smut forces or terrify Playboy subscribers, it did continue to intensify its efforts. In 2005, Attorney General Alberto Gonzales expanded the government’s anti-obscenity efforts by creating the Obscenity Prosecution Task Force, which, he explained, would be staffed with the DOJ’s “best and brightest” prosecutors.

In 2008, those prosecutors won a victory against Paul Little, aka Max Hardcore, convicting him on 10 counts of violating federal obscenity laws, a verdict that led to a 46-month prison sentence. Earlier this year in March, just a few weeks before their own case was scheduled to go before a jury, Zicari and Romano accepted a plea bargain when the government offered to reduce its case against them to a single count of conspiracy to distribute obscene material.

“We felt like they had the best chance to get the least amount of time if they pled,” says Jennifer Kinsley, an attorney at Sirkin Pinales & Schwartz, the law firm that represented Zicari and Romano throughout their seven-year legal battle. “Financially, this case really destroyed them. People became afraid to do business with them on the production side and the distribution side.” Their business no longer exists. Neither one has produced or directed a video since 2005. “They went from living in a very nice house that they owned to sharing a small apartment with a roommate.”

Now, they’re in prison, Romano at FCI Waseca in Minnesota, and Zicari at FCI La Tuna in Texas. According to Kinsley, Zicari was supposed to serve his sentence at FCI La Tuna’s minimum-security satellite facility, but he mistakenly reported to its primary facility 30 miles away. Instead of transferring him to the satellite facility, however, prison officials kept there. “But then they ended up putting him in solitary confinement [for nearly a month] because that was the only space they had available,” Kinsley says.

Granted, hardcore pornographers don’t make for the most sympathetic victims, even when they’re financially strapped and thrown in the hole simply for poor navigation skills.

Ultimately, however, two American citizens are currently spending a year in prison for making movies that involved adult actors participating in fictional scenarios with their full consent. The rapes and murders they staged were no less imaginary than the rapes and murders Hollywood stages with far greater verisimilitude every day. The gross-out stunts they engaged in were no grosser than the bug-eating contests of reality TV or the bodily fluids gags that can be found in countless Hollywood comedies.

Unfortunately, Romano and Zicari had the audacity to mix genres of entertainment that, while permissible on their own, are apparently not allowed to be combined. And thus they managed to achieve what not even John Waters ever accomplished: They were sent to prison for having bad taste.

But those with better taste shouldn’t expect immunity now that the Obscenity Prosecution Task Force has extended it winning streak. As Rob Zicari told Frontline 2002, it’s not as if anti-porn advocates make distinctions between good pornography and bad pornography: “They want to get rid of everybody. The Christian right, the fundamentalists, they don't like pornography. It doesn't matter if their movie is a married couple having sex in the bed, and they're loving each other, or it's our kind where it's like some pimp having sex with some street hooker in an alley for crack or something. They don't look at it that way. They look at it as sex, filming it, and distributing it to the masses…”

Currently, the Obscenity Prosecution Task Force is led by Alberto Gonzales appointee Brent Ward, a man who once led a crusade in Utah to get nude art-class models to wear bikinis. According to Jennifer Kinsley, the Task Force isn’t just continuing old cases that began in the Bush era, it’s also actively seeking out new ones. “Someone was asking me the other day why this is still happening,” she says. “I think the reason is that Brent Ward is still there. Had he been asked to resign, I don’t think these cases would still be going on. But basically the Obama Administration has left the previous decision-makers in their offices.”

Those decision-makers remain in office in part, no doubt, because so few people have even acknowledged, much less objected, to the fact that our federal government is sending people to prison for thought-crimes. In the July 2009 issue of Reason, Jacob Sullum reported on the case’s outcome, but throughout the mediasphere, coverage was scant. The New York Times made no mention of Zicari and Romano’s conviction or subsequent sentencing. Nor did The Washington Post. The Los Angeles Times ran a 131-word AP story. Now that the two convention-flouting provocateurs are actually sitting in jail, though, perhaps their ordeal will seem compelling enough to inspire their Hollywood brethren to at least circulate a petition or two on their behalf in the name of artistic freedom.
http://reason.com/archives/2009/10/2...f-extreme-porn





DVR, Once a Mortal Foe, Is a Friend After All
Bill Carter

In what may seem a media business version of the Stockholm syndrome, television network executives have fallen in love with a former tormentor: the digital video recorder.

The reason is not simply that more households own DVRs — 33 percent compared with 28 percent at this point in 2008 — helping some marginal shows become hits. It is also that more people seem content to sit through the commercials than networks once thought.

These factors combined mean DVR ratings now add significantly to live ratings and thus to ad revenue.

“The DVR was going to kill television,” said Andy Donchin, director of media investment for the ad agency Carat. “It hasn’t.”

Against almost every expectation, nearly half of all people watching delayed shows are still slouching on their couches watching messages about movies, cars and beer. According to Nielsen, 46 percent of viewers 18 to 49 years old for all four networks taken together are watching the commercials during playback, up slightly from last year. Why would people pass on the opportunity to skip through to the next chunk of program content?

The most basic reason, according to Brad Adgate, the senior vice president for research at Horizon Media, a media buying firm, is that the behavior that has underpinned television since its invention still persists to a larger degree than expected.

“It’s still a passive activity,” he said.

And those passive viewers are watching in numbers big enough to turn some hits (“House” on Fox) into even bigger moneymakers, some middling successes (“How I Met Your Mother” on CBS) into healthier profit centers, and some seemingly endangered shows (“Heroes” on NBC) into possible survivors.

Two years ago, in a seismic change from past practice, Nielsen started measuring television consumption by the so-called commercial-plus-three ratings, which measure viewing for the commercials in shows that are watched either live or played back on digital video recorders within three days. This replaced the use of program ratings.

At the time, network executives fiercely resisted the change, fearing that they would never get credit for recorded shows because viewers would skip through all the commercials. But the figures show otherwise.

“It’s completely counterintuitive,” said Alan Wurtzel, the president of research for NBC. “But when the facts come in, there they are.”

Almost across the board, the gains for playback are growing. The best preseason estimate for the current season, said David F. Poltrack, the chief research officer for CBS, was about a 1 percent increase from playback over the live program for the networks combined. Instead, many are in the range of 7 to 12 percent, with some shows having increases of more than 20 percent when DVR ratings are added. The four networks together are averaging a 10 percent increase.

“It’s the magnitude that’s really surprising us,” Mr. Poltrack said.

In the 18-to-49 group of viewers — the one prized by networks because most ad sales are directed there — Fox has the biggest percentage increase, from an average rating of 2.39 (which translates into about 2.5 million viewers) for its live programs to a 2.71 rating (about 3.1 million viewers) when the three-day DVR playback results are added in.

The numbers for ABC were a 2.5 rating live (2.87 million viewers) to a 2.81 (3.27 million) after three days. CBS had a 2.62 live (just over three million) and a 2.79 (3.2 million) after three days. NBC had 1.79 live (2.05 million) and 1.91 (2.19 million) after three days.

Individual shows have gained substantially. “House,” second among all shows in its live program rating (to “Grey’s Anatomy” on ABC), became the top show in terms of commercials viewed within three days with a 5.68 rating (about 6.53 million), gaining almost 18 percent. NBC’s comedy “The Office” had one of the single biggest gains — 26 percent from its live program rating — to 3.92 (4.5 million) for its rating including playbacks.

The supposedly struggling NBC drama “Heroes” jumped 22 percent, as did another apparently flagging drama, “Fringe” on Fox. And a new ABC drama, the appropriately named “Flash Forward,” looks even more like a hit than it did with its original rating because its rating increased 14 percent with playbacks.

“Nobody knew the commercial ratings would be as robust as they are,” Mr. Wurtzel said.

Networks initially opposed the commercial-plus-three system because 6 percent to 8 percent of commercials were already being avoided during live broadcasts because people switched channels. With the explosive growth of the DVR, which clearly promoted skipping commercials, the whole network business model looked to be headed for cancellation.

“This was going to spell the demise of the network TV model,” said Mr. Adgate of Horizon. “Now they seem to be reveling in it.”

Success has not been universal. NBC, has seen a significant fall-off year to year in ratings with playbacks, Mr. Wurtzel said. “The Leno effect is the reason.”

When NBC added the “The Jay Leno Show” at 10 each weeknight, it boasted that the show would be “DVR proof,” meaning that because the humor was topical, viewers were more likely to watch it live, avoiding much of the commercial-skipping that was expected to plague recorded shows.

Now being “DVR proof” looks like a disadvantage. Mr. Leno’s shows were among the few with three-day commercial ratings lower than their live ratings. Not enough people have been recording the show and playing it back to overcome the commercial-skipping being done by a percentage of its live viewers.

Mr. Donchin said that many commercials are being made better. Preston Beckman, the executive vice president for strategic program planning at Fox Broadcasting, said, “We’re getting smarter about keeping people engaged.”

The Fox series “Bones” has experimented with inserting into the middle of a group of commercials a segment with the show’s main characters discussing the story so far. That can induce a sudden stop in the playback.

Mr. Beckman suggested a simpler reason why viewers do not zip through the commercials: “Sometimes you just forget.”

The system even builds in a bonus for advertisers. Although the commercials are rated for only three days, networks receive program ratings for playback over seven days — and the numbers go up again. All that incremental viewing is free to the advertisers.

At least for now: with viewing by time-shifting growing, the system is bound to get tweaked.

“The networks are a little like the airlines: they want to charge for everything,” Mr. Donchin of Carat said.
http://www.nytimes.com/2009/11/02/bu...02ratings.html





Got HDTV? Get Ready For UHD-TV
Amy Vernon

While everyone's still trying to replace their DVD players with Blu-ray and their standard def TVs with HDTVs, the industry already is worrying about the market for UHD — Ultra-High Definition.

Apparently, UHD will debut in the next five to 10 years (if that seems like a long time, remember how long HDTV was being talked about and then how it felt when it "suddenly" hit), but is expected to take a long time before it reaches a "critical mass," deemed to be taking up residence in 5 percent of households globally, according to market research firm In-Stat.

UHD will come in two resolution levels: 7680 x 4320 pixels (8K) and 3840 x 2160 pixels (4K) and provide four to 16 times the resolution of Blu-ray or 1080p high-def. And "22.2 multichannel three-dimensional sound."

In-Stat's study concluded that high resolution digital cinema would drive consumers to UHDTVs so they could experience the same quality on their home television sets and that broadcasters would start providing content in the lower-resolution UHD by 2017 and the high-resolution technology by 2022. The market in Europe is expected to hit 5 percent penetration by 2021 and then zip up to more than 28 percent by 2025. According to the In-Stat survey, UHDTV, aka Super Hi-Vision will follow a similar track of adoption as HDTV did:

• The rising popularity of high resolution digital cinema will expose consumers to high resolution content. Then, early UHDTVs will be made available to provide a digital cinema high resolution viewing experience in the home. Ultimately, broadcasters will start offering UHD content to an addressable market of UHDTVs, between 2017 and 2022.
• In-Stat expects the total installed base of UHDTVs Europe to approach 5% household penetration until 2021, and increase to over 28.2% penetration by 2025.
• In Asia-Pacific, Japan will be among the early adopter countries.

Ultra HDTV Requirements: (credit: UltraHDTV.net)

• Ultra HDTV requires 300Mb/second transmissions using a compressed image at 24 FPS, while 60 FPS will require a new compression system to meet with realistic household fiber-optic connections.
• In addition, Ultra HDTV displays will require new electrode materials to power the 4x high-speed pixel requirements.
• Processing power is also a major requirement with Ultra HDTV. Current technology is unable to effectively process the Ultra HDTV signal. At 60 FPS, this signal requires processing power at 2400 GOPS.

Globally, the "mass market" for UHD is expected in 2023 or 2024, when about 10 percent of consumers will have sets at home.
http://hothardware.com/News/Got-HDTV...ady-For-UHDTV/





Hit Streaming Service Spotify Eyes U.S. Music Fans
Antony Bruno

MTV Urge ... Yahoo Music Unlimited ... Virgin Digital ... Since 2003 -- when iTunes launched in the United States -- all of these digital music services have come and gone, without challenging Apple's market dominance, despite the backing of resource-rich parent companies.

Add in all the startups that have crashed and burned in the same time period and it starts to look as if no service could ever rival iTunes' traction with customers and critics.

Until now.

The Sweden-based startup Spotify, launched for public access in October 2008, has momentum like no other digital music service of the last six years. It offers on-demand music streaming, in both free and premium services, and now claims to have more than 6 million users in Sweden, Norway, Finland, the United Kingdom, France and Spain. At one point it reported signing up new members at a rate of 50,000 per day, although that figure has fallen since September, when the service restricted its free version to invited guests in the United Kingdom.

Spotify has won high marks from reviewers for the ease with which it provides access to a catalog of more than 6 million tracks from majors and indies alike and the unobtrusive way it delivers advertising.

Spotify's recently launched mobile version -- available for the iPhone and Android-powered devices in Europe to premium subscribers who pay the equivalent of around $15 per month -- has won similar praise. Although Spotify doesn't comment on its fund-raising activity, it has reportedly won $50 million worth of backing from investors -- at a valuation of $250 million, an almost unheard-of sum for a music venture in today's stingy venture capital environment. The European service also has the full support of the major labels, which reportedly negotiated a collective 18 percent stake in the company.

Yet this momentum will be tested severely as the company prepares to enter the United States -- the No. 1 music market in the world -- with a launch expected either late this year or early next, depending on how fast it completes its negotiations with the majors.

"It's been talked about so much I don't think it can meet everyone's expectations," says Forrester Research analyst Sonal Gandhi. "If the Spotify experience can be as good as hyped, it has a lot of potential."

With negotiations ongoing, U.S. labels are reluctant to comment on the service. According to music industry sources, the labels are impressed with Spotify's achievements but want the service to start generating real revenue. To do so, it must take care not to let the usage model outpace the business model.

There are certainly early signs of success. In August, Per Sundin, managing director of Universal Music Sweden, told the Swedish press that his company now earns more revenue from Spotify than iTunes. But that's in Sweden, where the service was born and where iTunes doesn't have the dominant hold on the digital music market it does elsewhere.

"We've seen income from Spotify follow a steep growth curve since launch," says Paul Smernicki, director of digital and direct-to-consumer at Universal U.K.'s Polydor Records. "Excluding mobile, they are pretty high up the list as a revenue stream for us. But we're certainly not in the same position as Sweden."

Scott Cohen, the London-based founder/VP of international at the digital distribution and marketing company the Orchard, says Spotify is already boosting income for labels in two ways.

"First, the more tracks are streamed on Spotify the more downloads occur on other services," he says. "We are not seeing any cannibalization. Second, revenue streams from advertising have been steadily increasing and have overtaken many niche stores in Europe."

But the ad-supported free service alone can't generate the revenue Spotify needs to pay for the music it plays. The company reported a net loss of $4 million last year, and its decision to limit its free service in the United Kingdom to invited guests implies a high burn rate.

That means Spotify has to increase the number of users for its premium service. So far, however, music subscription services like Rhapsody and Napster haven't been able to reach a mass audience. In its most recent quarterly earnings report, RealNetworks said Rhapsody has about 750,000 subscribers. Napster had 700,000 subscribers when Best Buy acquired the company last year, but hasn't released updated figures since.

While Spotify plans to make mobile access a key element of its conversion strategy, the mobile music market has also yet to take off. Spotify has confirmed it will launch in the United States with a "slightly different model" than in Europe, although it has yet to disclose details.

The Ad-Funded Model

Calling Spotify a free ad-funded music streaming service would be accurate but unfair. The company has paying customers, but they number less than 10 percent of its user base, according to comments from CEO Daniel Ek at a recent London conference. And company executives say that's unlikely to change.

"We expect the large majority of our users to stay with free," says Gustav Soderstrom, who left his job as director of business development at Yahoo to join Spotify as its head of mobile. "We're monetizing it through ads and through selling downloads (through its partnership with 7digital), so it's a significant revenue source."

So far, no ad-funded service has been able to turn a profit from advertising and download revenue alone. Which is why Spotify doesn't intend to. Using the "freemium" model, the company hopes to convert a portion of its free user base to the premium tier.

The free Spotify service could be seen as a customer acquisition play -- and perhaps not the most expensive one out there. Napster once estimated its customer acquisition cost at $100 per user, due to all the advertising needed to explain its subscription model.

"It makes the (customer acquisition) process easier than (it would be) if you start with no users," Soderstrom says. "You have to put a lot of marketing dollars into getting users' attention to even consider signing up. We don't have to do that."

Free access to any song on demand is powerful bait and Spotify offers what amounts to an indefinite trial period. Rhapsody and Napster usually limit their trial periods to about a week, after which users either need to pay or use only 30-second samples. (Rhapsody allows non-paying users to stream 25 free songs per month.) That may not be enough time to get users hooked on the access model.

Despite the popularity of Spotify's free tier in Europe, Rhapsody America VP of business management Neil Smith doubts it will roll out the same way stateside.

"The reason Spotify blew up so big and so fast was it was free," he says. "That model isn't going to happen in the U.S. anytime soon, maybe ever. The U.S. is the market where the labels make all their money. They can't afford to have a service that doesn't generate substantial revenue suck up all the usage. If it was $15 (per month) out of the gate, it wouldn't have a million users. Once you take the free piece away, we compete pretty well."

So Spotify will have to ensure its ad-supported service remains worthwhile and not degrade it in order to push users to the paid version. Devaluing the free service would risk losing users, which in turn would threaten its function as a customer acquisition tool as well as limit any hopes of generating revenue from it.

The Subscription Model

For all the hype Spotify gets for the popularity of its free tier, there's no guarantee it can match that success as a paid service.

Until its mobile option launched, Spotify's premium tier only offered the elimination of ads -- which weren't very intrusive to begin with -- and slightly better audio quality. The iPhone and Android apps add portability to that mix, but it's still not much different in price or function to portable subscription offers from Rhapsody and Napster.

"The value proposition of subscription has to change," Forrester's Gandhi says. "There has to be ownership. There has to be something besides just renting music."

Gandhi specifically points to subscription plans that allow users to keep a certain number of songs per month, such as the five tracks Napster gives away as part of its $5-per-month streaming plan and Zune's 10 free downloads.

Another option comes from Pali Capital analyst Richard Greenfield, who recently suggested that mobile operators and Internet service providers should bundle the Spotify premium service into their data plans. The idea of bundling is nothing new, but Spotify's ability to synch content across the different platforms makes it a more viable option.

Soderstrom says Spotify would consider such options, but only if they weren't exclusive.

The Mobile Model

Spotify is hanging its hopes of converting free users to paid users on the mobile application. But it doesn't want to position itself as a mobile service.

"I wouldn't say Spotify is a mobile service first," Soderstrom says. "You're going to do the majority of your browsing and discovery on your desktop, at least for some time. But if you want to use Spotify as your primary music service, then you're going to need the mobile option."

Previous portable subscription options required transferring tracks from desktop to portable device, which users needed to synch with an online service at least once per month to refresh the licenses. Services were based on digital rights management technology from Microsoft that had a reputation for being unreliable--and the dominance of the iPod had made them irrelevant.

Spotify gets around this by using mobile phones to stream the music rather than download it. Since mobile networks are notoriously unreliable, it created a way to temporarily cache more than 3,000 songs on supporting mobile phones, without using the 10 GB of storage normally required to do so--although users must still connect to Spotify every 30 days to verify their premium subscriber status.

Mobile options have already paid huge dividends for music services like Slacker, Pandora and Clear Channel's iheartradio. Pandora, for example, says more than 45,000 of the 65,000 new registrations it gets every day come from its various mobile apps.

"Our future is going to be more mobile-centric than I had even thought, and sooner," Pandora founder Tim Westergren says.

But those are free applications. Rhapsody beat Spotify to the U.S. market with an iPhone app that lets users paying $15 per month stream any song from the service's catalog as well as their playlists and Internet radio stations, but to date it doesn't have a local caching option.

The U.S. mobile music market is also much tougher than that of Europe, where Spotify launched its mobile service in early September. According to a Forrester Research study, 27 percent of U.K. mobile subscribers with Internet access use their phone to play music at least monthly. In the United States, that figure is only 10 percent. U.S. mobile operators and labels alike hope Spotify will help goose these figures.

"There's definitely potential there," says one mobile operator. "I think we'll get the typical technology hype curve -- lots of hype going into market, pause and then either decline or hype again based on reality. Spotify has a chance to be a big deal."

The European Model

Spotify's European success is impressive, but the U.S. market can be more competitive -- and more fickle.

"Spotify has a good chance of success in the States if they can make the right distribution partnerships," the Orchard's Cohen says. "But it will require a different strategy than in Europe."

And a win stateside would do much more than just cement Spotify as a legitimate player in the global digital music game. It will finally broaden the digital music market beyond iTunes and add a new usage model beyond track sales.

"Spotify is not the first streaming service in the world, just like iTunes wasn't the first digital download store," Cohen says. "What it does that is so special is make a fairly complex model seem easy to execute. They have a great team running the company and I wouldn't bet against them."

And while other U.S. music industry sources remain only cautiously optimistic, Spotify has confidence.

"There are certainly more music services in the U.S. than there are in Europe," Soderstrom says. "So, yes, it's more competitive. But I still think we have a better experience and a better offer. We wouldn't do it if we thought we were going to lose."
http://www.reuters.com/article/techn...5A10YD20091102





Inside The Making Of The Beatles Remastered Catalog

Two of the studio engineers discuss the process with us.
Ken Richardson

I’ve come to Electric Lady Studios in New York City for — what? Yet another remastering of the Jimi Hendrix catalog? Actually, that’s coming next year (I kid you not). But the subject at hand, after a 22-year wait, is the Beatles making only their second appearance on CD. And it’s time for a first listen to a handful of songs and a chat with some members of the remastering team.

Over the past 4 years, that team has worked at Abbey Road Studios to transfer (and sometimes repair) the Beatles’ original recordings at 192 kHz/24 bits. And because of the size of the project — the entire catalog, both mono and stereo — it really did take a team. Led by project coordinator Allan Rouse, it included recording engineers Guy Massey, Paul Hicks, and Sam Okell; audio restoration engineer Simon Gibson, and mastering engineers Steve Rooke and Sean Magee. Each has had years of experience working on-staff at Abbey Road. Some have since gone freelance; others are still there. All have spent a good portion of their professional lives safeguarding the sound of the Beatles.

Personally, I haven’t really minded the 22-year wait. I always prefer a catalog to be handled judiciously, in moderation. But after all these years, I do have questions. And here at Electric Lady, I’m sitting in a control room with Rouse and Massey. As the project’s senior recording engineer, Massey was in charge of the stereo remasters. A few weeks later, I will call London to speak with Hicks, who was in charge of the mono remasters.

Okay, Messrs. R. and H. and M. — time to assure the public!

Sound + Vision: The press release mentions some of the “state-of-the-art recording technology” used for transferring the original recordings, such as a Pro Tools workstation and a Prism A/D converter. Why did you choose the Prism?

Massey: Abbey Road uses that converter in its present systems: the Prism Sound ADA-8XR. We were very happy with it.

Sound + Vision: What about the “vintage studio equipment” that was also used?

Massey: The Studer A80 tape machine was the main piece of vintage gear.

Rouse: And the EQ was from an old EMI console. In addition, we tried out valves — sorry, tubes — and yes, they provided that warmth. But ultimately, in terms of noise levels and other things, for the stereo remastering . . .

You’ve got to remember: The recordings are 40 years old, so you’ve got fans of them for 40 years. But also, this is a remaster, and what we’re attempting to do is hopefully keep the recordings going for another 10, 15, 20 years, until they’re remastered again.

In the meantime, we were actually considering, what with the onset of The Beatles: Rock Band, if all these kids go out and buy that videogame — or if their parents go out and buy it for them, which is more likely, because the parents want to play it, too, and then the kids start to play it and think, ‘What else has this band done?’ — we wanted to improve the recordings at least to an extent that helps them sound better, perhaps, for the 21st century. I suppose you could argue that you should remaster them twice: once for the people from the ’60s, and again for the new generation.

Then there’s mono vs. stereo. I grew up with the Beatles, yet I have no huge desire to listen to mono; I prefer stereo. I’m well aware of the history, of when the Beatles sat in the studio and made their decisions. They were nearly never in the studio for the stereo mixes. But that doesn’t mean those stereo mixes aren’t . . .

Everybody says that Sgt. Pepper in mono is it. But for me, it’s not. It’s stereo for me. Everybody has their own different views about the monos and the stereos. But primarily, the monos are going to be for those people who grew up during that period of time and who recognize that, strictly speaking, those are the “real” masters.

Sound + Vision: As for the American capitol “masters,” I won’t go there . . .

Rouse: I won’t say anything about those.

Sound + Vision: No baking of the original multitrack tapes was necessary?

Massey: No. Some of the leader tape was coming apart; the glue had dried. But there were no problems at all with the actual oxide. The tapes have really been looked after.

Sound + Vision: So all of the music we’re hearing is from the original tapes?

Both: Yes.

Sound + Vision: Some recording “imperfections” have been fixed. Can you give any specific examples?

Massey: I’ve got a little demonstration CD here if you’d like to have a listen . . .

Sound + Vision: Oh, sure.

Massey: First, dropouts. There weren’t many across the whole catalog — maybe four or five. [Massey plays the A/B disc to demonstrate dropouts fixed in the guitar solo at 0:59 in “Kansas City” and also during the line “tried to please her” at 1:50 in “Day Tripper.”] Next, microphone pops in the vocals. [Demos a pop removed from the second “p” in the line “not what I appear to be” at 0:10 in “I’m a Loser.”] This second one is a noise that’s quite subtle, like a rumble, as if John touched the mike stand. [Plays the very first word, “She’s,” from “Happiness Is a Warm Gun.”] Now we move on to click removal. [Cuesup “Eleanor Rigby” at 0:14.] Finally, de-noising. [Plays guitar intro to “The Continuing Story of Bungalow Bill” to demonstrate hiss removed.] The de-noising was subtle, subtle. We were very aware of not going overboard with that. And fewer than 5 minutes of the catalog were treated this way. Overall, if there were extraneous things that interfered with the listening experience, we took them out. A few things we left because we believed they were acoustical noises. We tried to take out only the things that were electrical in nature.

Rouse: So the squeaky chair at the end of “A Day in the Life”: It’s still there.

Massey: And Ringo’s often squeaky drum pedal: It’s still there.

Sound + Vision: Mastering engineer Bob Ludwig has said: “I often say how grateful I am that, when the Beatles were doing their recordings, digital limiters didn’t exist, because if those recordings had been squashed to death like so many contemporary records are, they would never have the longevity that they have had.” In light of that, it’s admirable that you have used limiting on the stereo versions only — and only, as the press release says, “moderately.”

Massey: We were obviously aware of the Loudness Wars — squashing, brickwalling, all that sort of stuff — and we didn’t want to do that. We wanted to retain the original dynamics. So for the loudest part of the loudest songs, there may be limiting of 3 to 4 dB, but for most of the songs, most of the time, there isn’t any limiting.

Sound + Vision: And so this was an effort to help make the primitive-stereo mixes come across more powerfully to the new generation?

Massey: Yes.

Rouse: And I would take issue a tiny little bit with what Bob Ludwig said. If you would quote again the last part of what he said.

Sound + Vision: “. . . because if those recordings had been squashed to death like so many contemporary records are, they would never have the longevity that they have had.”

That statement doesn’t give much credit to the songs. Because the Beatles aren’t just about sound; they’re about the fact that they were particularly good songwriters and musicians. The very thought that people wouldn’t have continued buying Beatles records because of the sound — sorry, I can’t agree with that.

Sound + Vision: Were there any forest-for-the-trees instances where, after working on individual tracks for a while, something new became apparent when you relistened to the album as a whole?

Massey: I do remember that, once we’d done Revolver for the first time, Allan did come up with quite a few suggestions. Overall, he thought we might have been a little too reverent.

Sound + Vision: It’s such a great hard-rock record. The guitars are—

Massey: Blistering. With “She Said She Said,” for example, the vocal is very bright and cutting, and we did want to try to bring that through — while still retaining all those guitars. I’m really pleased with the way it came out. But Revolver was challenging. We did have to revisit it a couple of times.

Sound + Vision: Has that album’s original engineer, Geoff Emerick, heard any of the remasters?

Rouse: No. Neither has Ken Scott, Glyn Johns, or Phil Macdonald. Or George Martin. And neither did Norman Smith; he’s no longer around, sadly. [Smith died in March 2008 at the age of 85.] The thing is, I started on the Beatles’ projects when Neil Aspinall resurfaced for Apple’s first major job in a long time, Live at the BBC. Immediately after that, it was the Anthology CDs; I spent a year in my room at Abbey Road listening with George Martin, feeding material upstairs to Paul Hicks, who was working with Geoff Emerick. And then Guy first came in as the assistant engineer on the 5.1 mix for the Yellow Submarine DVD.

The point I’m trying to make is this: Guy, Paul, and I were building a team, which has remained more or less the same through the Help! DVD, the Let It Be . . . Naked CD, and the Love CD+DVD-Audio, right up to now. We started the current reissue series — we may have been lucky, but we did start it — which immediately led to the next job, which immediately led to the next job. So there was never really any consideration that the previous engineers would be involved in these remasters. I also wonder: If you’ve engineered something yourself, you’re gonna be very close to it. We’re more neutral.

Sound + Vision: Were Paul Mccartney and Ringo Starr sent the remasters for listening?

Rouse: Oh, yes. That’s the case every time we do a job. The first time that the Beatles were actually brought back into the studio was for the DVD of Yellow Submarine, because it was the first time that the music was being remixed for 5.1.

They didn’t have 5.1 systems at home. So Paul and Ringo came in together, sat down, and listened to it with a broad grin throughout the whole sequence of songs. George Harrison came in; same response. Ever since, if we couldn’t bring the Beatles in to listen to a project, we’d send them a disc. And then we’d just sit and wait for the phone to ring and for them to say, “It’s approved.”

Sound + Vision: Any comments from Paul or Ringo on the CD remasters?

Rouse: There have never been any specific comments from them on any of the jobs we’ve ever done. So I’d like to read into that that they quite like what we’ve been doing. It has been stated that the lack of bonus tracks is due to the desire to maintain “the authenticity and integrity of the original albums.” If that’s the case, why do the official stereo releases of Help! and Rubber Soul have George Martin’s 1987 remixes and not the original 1965 mixes?

I’ll ask you a question: Is your name George Martin? [Laughs.] The point is, George in 1987 decided to remix them. None of us is going to ring him up and say, “We actually don’t think we should be putting out your new mixes just because you decided they’re better.” So it was a very simple decision. George wanted it. That’s the way it stays. But, knowing full well that people would still want to have the 1965 stereo versions, you get those, too, as extras in the mono boxed set.

Sound + Vision: Guy, you did some of the best Beatles surround mixes to date for the DVD of Help! How about a 5.1 mix of the entire catalog? Isn’t that something you’d love to do?

Massey: What do you think? [Laughs.] Yeah, of course, I would love to be given that opportunity.

Sound + Vision: There are no plans?

Rouse: We have to wait for the phone to ring. But it would be fantastic.
http://www.soundandvisionmag.com/fea...d-catalog.html





Beatles Remasters Heading to USB
Andre Paine

The Beatles remasters are coming out on a limited-edition apple-shaped USB drive in time for Christmas, marking the first time the Fab Four's catalog has officially been sold as digital files separate from the CDs.

The USB version of all the albums will be released on December 7 in the U.K. and December 8 in North America. The USB is available for pre-order at the online Beatles store, priced at $279.99.

Limited to 30,000 units, the 16MB USB features 14 Beatles stereo releases as well as all of the remastered CDs' visual elements, including 13 mini-documentary films about the studio albums, replicated original U.K. album art, rare photos and expanded liner notes.

A specially designed Flash interface has been installed, and audio and visual contents will be provided in FLAC 44.1 Khz 24 bit and MP3 320 Kbps formats. The content is fully compatible with Mac and PC.

Vinyl versions of the reissues are expected soon. The Beatles reissued their albums on CD worldwide on September 9.
http://www.reuters.com/article/techn...5A34ZK20091104





Google Seeks to Turn a Profit from YouTube Copyright Clashes

Group is working to persuade music and video companies to cash in rather than clamp down when their content is uploaded

Google is seeking to drag YouTube into profit by convincing music and film footage rights owners to make advertising revenue from their content rather than remove it from the video-sharing site for breach of copyright.

The company has been touting a fingerprinting system for rights holders that means YouTube can identify their material even when it has been altered and made part of user-generated content such as wedding videos or satirical clips.

First developed two years ago, the ContentID system is attracting record labels, TV producers and sports rights owners keen to make more money from the web. Google's computers compare all the material uploaded to YouTube – around 20 hours every minute – against "ID files" from a 100,000-hour library of reference material from the rights holders. The system creates reports of what is viewed where and how often.

Rights holders then have the choice to either block their content or make money from it. That means putting advertising alongside the video and sharing the revenues with YouTube, which takes a small cut. They can also make money by linking to sites selling DVDs, downloads and CDs of the original content.

Google declines to give a number but says the majority of rights holders choose to monetise their content. It points to Mr Bean as a recent beneficiary of the system.

Already one of the biggest comedy programmes worldwide, with its language-free format helping it secure broadcasting deals in hundreds of countries, Mr Bean is also a hit on YouTube. Producer Tiger Aspect has been able to claim more than 5,000 user uploads of Mr Bean so far and has decided to monetise most of them.

The ContentID system has also thrown up some unexpected market intelligence about Rowan Atkinson's hapless character. He turns out to be hugely popular in Saudi Arabia. The company that manages the use of Mr Bean footage online, MyVideoRights, says that this creates commercial opportunities for the producer, which can negotiate deals with broadcasters and DVD distributors in the country.

Ashley MacKenzie, chief executive of MyVideoRights, says better fingerprinting of web content means more companies now feel they are in control of their copyright material. "Up until two years ago Mr Bean and Tiger Aspect couldn't have done anything. Now we can go into this system and claim back content," he said.

Across material from all his clients, about 20% gets blocked for reasons such as a user piggybacking on footage to push their own website or because the use does not fit the original's values. Mr Bean, for example, is a family brand and so the producers want any user-generated content containing the character to reflect that. But about 80% of material is left on the web and monetised.

That trend is bringing YouTube a badly needed increase in revenues. Three years after Google bought the site for $1.65bn, it has yet to turn a profit and there are concerns the division is devouring the internet group's cash reserves.

Analysts say the company has struggled to sell online advertising against YouTube's eclectic content and they estimate that it is losing Google at least $175m a year as a result. Less conservative estimates suggest the figure could be as high as $470m.

But Google executives have been at pains to stress that YouTube can become profitable in the near future and ContentID is seen as a key part in that.

But there is some way to go. At the moment YouTube says it streams 7bn videos a week and only 1bn of those are monetised. Of those 1bn, a third make money through the ContentID system.
http://www.guardian.co.uk/technology...netise-content





Columnist Quits After Newsday Starts Charging for Its Web Site
Richard Pérez-Peńa

There aren’t many journalists walking away from paying jobs these days. With news organizations struggling and newsroom jobs disappearing, each week brings new calls from writers and editors who believe their flagging employers should save themselves by charging for Internet access.

So count Saul Friedman a contrarian twice over.

Mr. Friedman, who had written a column for Newsday since 1996, quit last week over the paper’s decision to require some readers to pay for access to its Web site.

Customers of Cablevision, the cable and Internet provider that owns Newsday, and people who subscribe to Newsday in print will still be able to browse Newsday.com unfettered. But Newsday recently announced that everyone else will have to pay $5 a week to see much of the site, making it one of the few newspapers in the country to take such a plunge.

That did not sit well with Mr. Friedman, a freelancer who wrote Gray Matters, a weekly column on aging. He explained his departure in a note to Jim Romenesko’s media blog. In an interview, Mr. Friedman said, “My column has been popular around the country, but now it was really going to be impossible for people outside Long Island to read it.” That includes him; living outside Washington, he is not a subscriber to Newsday or Cablevision.

Mr. Friedman, who is 80, said he would continue to write about older people for the site timegoesby.net, but he called his decision an end to more than 50 years in newspapers. He wrote for Newsday for more than 20 years, including several years as a staff writer in its Washington bureau.

John Mancini, the editor of Newsday, declined to comment.
http://www.nytimes.com/2009/11/02/bu...02elderly.html





Pirate Bay Closure Sparked File-Sharing Boom
Stewart Mitchell

The temporary closure of the Pirate Bay had the unforeseen side effect of forcing torrent sharers underground and causing a 300% increase in sites providing access to copyright files, according to McAfee.

In August, Swedish courts ordered that all traffic be blocked from Pirate Bay, but any hope of scotching the piracy of music, software and films over the web vanished as copycat sites sprung up and the content took on a life of its own.

“This was a true 'cloud computing' effort,” the company said in its Threats Report for the third quarter. “The masses stepped up to make this database of torrents available to others.”

“Pirate Bay is just a redirect site to lead people to sources where they can get media and other files,” McAfee security analyst Greg Day told PC Pro. “Once it was temporarily shut down, those people still wanted the torrents so they went elsewhere, and that meant lots of other sites popped up to take advantage – we saw a 300% increase in sites hosting and distributing movies and software."

According to Day, in the days prior to the shutdown, treasure-hunters used anonymising software to gain access and copy the indexes that Pirate Bay used to redirect users to other computers hosting torrents.

Once the indexed data was in the public domain, open-source code was available to anyone who wanted to help with redistribution of torrents. While the Pirate Bay was offline there were four times as many sites offering access to the torrents.

“The Pirate Bay example shows how difficult it is to 'stop' data once it is on the web,” the report says. “A website can be shut down, but anyone who has accessed the content may still be able to redistribute it.”
http://www.pcpro.co.uk/news/broadban...e-sharing-boom





Will 'The Terminator' be Back? Sci-Fi Franchise Could Sell for $200 Million
Sam Gustin

For sale: One slightly-used Terminator. Still works, minor attitude problems, get it cheap now!

Have you ever wanted your own Terminator -- a T1000 perhaps? With enough cash, you could own the rights to future projects bearing the Terminator name. That's right, the blockbuster sci-fi franchise that brought us Arnold's "I'll be back," Linda Hamilton's Sarah Connor, and a grim view of a future in which humans are subject to machines, is for sale. The franchise auction will be a closely-watched barometer of the entertainment market at a time that the broader economy is showing fitful signs of returning to life.

Beginning in the 1980s, the Terminator series portrayed the efforts of a lethal corps of cyborgs sent back from the future to kill John Connor, who would become the leader of the human resistance after machines -- controlled by a malevolent network called Skynet -- took control of Earth in a nuclear war.

The rights to the franchise are being sold by Halcyon Company, the production company behind Terminator Salvation, the latest iteration in the series, which grossed $380 million worldwide. The two most recent films failed to garner the acclaim of the first two films, which struck a chord with many fans who saw the series as a metaphor for humanity's increasing reliance on computers and technology.

The Terminator auction comes three weeks after the rights to Teenage Mutant Ninja Turtles were sold for $60 million. The Terminator franchise, which does not include rights to the first two films, is expected to fetch as much as three times that, according to the Financial Times, which first reported the news.

The films depicted a dystopian future in which an artificial-intelligence network called Skynet had become self-aware, initiated a nuclear holocaust that wiped out most of mankind, and then taken control and dominion of the survivors. The use of time-traveling cyborgs to alter the course of history gave the series its mind-twisting quality, and the enduring faith in human agency to rebuild the future attracted a wide and devoted following, even in a cluttered field field of sci-fi competitors like The Matrix trilogy.

Brought to life by uber-director James Cameron, who is about to unleash the ambitious computer-animated tech-spectacle Avatar on the public, the first two Terminator films were pitch-perfect personifications of society's moody ambivalence toward increasingly advanced technology.

All the big film studios have expressed interest in the Terminator sale, with Sony Pictures a leading contender. Other interested bidders include Platinum Equity, the Beverly Hills firm that owns Delphi, the auto parts maker. Summit Entertainment, the company behind the Twilight series, is interested, as is Media Rights Capital, which produced Sacha Baron Cohen's Brüno, the Financial Times added.

Halcyon recently filed for Chapter 11 bankruptcy protection after a dispute with Pacificor, a Santa Barbara-based hedge fund that lent Halcyon funds to purchase the Terminator rights; the sale is being conducted by FTI Capital Advisors. Halcyon bought the franchise from longtime Terminator producer Mario Kassar for $25 million two years ago.

In December 2008, the original Terminator film, released in 1984, was added to the National Film Registry as one of 25 films that will be preserved to help "understand the diversity of America's film heritage."
http://www.dailyfinance.com/2009/11/...ould-sell-for/





Marvell Unveils New E-Reader Platform
Gabriel Madway

Chipmaker Marvell Technology Group Ltd on Monday jumped into the fast-growing electronic reader market, unveiling a platform that the company says will allow for a new generation of zippier, lower-cost devices.

Marvell said it has teamed up with E Ink, a developer of e-paper display technology, to create an integrated application processor. E-readers based on the technology are expected to hit the market in the first quarter of 2010.

The first devices include the already announced enTourage Edge, a combination e-reader and netbook; the Alex reader from Spring Design, and an offering from Plastic Logic.

Marvell's platform is based on its new Armada family of processors, announced last month. Marvell makes a wide array of chips -- including those used for Wi-Fi, Bluetooth, and cellular connectivity -- that the company said allows it to offer the complete chip solution e-reader makers need.

The company is also partnering with FirstPaper, which is backed by media giant Hearst Corp, for content and graphics technology.

Weili Dai, Marvell's co-founder and general manager of its consumer and computing business unit, estimated the entry level price point of a e-reader based on the Marvell platform at roughly $150 -- cheaper than devices currently on the market, which range upward from $199.

"We always envisioned that the e-book was going to be a very big, important segment," she said, with applications in consumer, business, education and health customers.

The company said its technology will also allow for faster page loads of less than one second.

The e-reader market has exploded this year. Besides the Kindle from market leader Amazon.com Inc and Sony Corp's Reader, Barnes & Noble Inc recently unveiled the Nook.

Roughly 3 million e-readers are expected to be sold in the United States this year, with sales doubling in 2010, according to Forrester Research.

Prices for e-readers are already coming down as new competitors enter the market.

Other devices include Interead's "Cool-er" and the Cybook OPUS from Bookeen, with new e-readers expected from iRex Technologies, a spin-off of Royal Philips Electronics, and Taiwan's Asustek.

(Editing by Steve Orlofsky)
http://www.reuters.com/article/techn...5A15B120091102





Feds Charge Cable Modem Modder With ‘Aiding Computer Intrusion’
Kevin Poulsen

An Oregon hardware hacker and author has been hit with federal criminal charges arising from his longstanding business of selling unlocked cable modems that can be used to steal extra speed from a broadband provider, or obtain free service.

Ryan Harris, known by his pen name DerEngel, was charged in Boston with a conspiracy count, and charges of aiding and abetting computer intrusion and wire fraud.

“I read the indictment — it’s complete bullshit,” says 26-year-old Harris, author of the 2006 book Hacking the Cable Modem. “They’re filling in their own blanks. From my website I never would never sell to anyone who had the intent to break the law.”

Harris is the project organizer of TCNiSO, a band of tinkerers specializing in cable modem hacking. For five years the group has been producing tutorials on how to bypass the firmware locks on Motorola Surfboard modems — a process that sometimes involves soldering a special cable to a hidden terminal inside the device, or exploiting a buffer overflow in the modem’s web interface.

TCNiSO also openly sells pre-modded modems for $100 which are already loaded with the group’s custom firmware, which lets the user control the modem’s functionality. Harris sold two unlocked Motorola Surfboard modems to an FBI agent through TCNiSO.net.

The group’s work has been a boon to cable modem “uncappers,” who use the customized modems to crank up the speed of their internet access by downloading special configuration files from an ISP’s server. Users have also wielded the hacked modems to get free service by spoofing another customer’s MAC address — an attack that only works from a home that’s wired to the cable network but hasn’t had service officially activated.

But Harris has long publicly distanced himself from the criminal applications of his work. “I never had instructions on my website to teach people how to do this,” he says. “I never condoned this type of behavior.”

Indeed, most of the charges in the six-count indictment announced Monday focus on the activities of others. Four wire fraud charges are based entirely on the fact that a juvenile computer hacker known as “Dshock” downloaded TCNiSO’s firmware and used it to steal broadband.

Dshock pleaded guilty in Boston last year to computer intrusion and interstate threats in connection with DDoS and swatting attacks, and has since been sentenced to 11 months in custody. But the feds don’t allege that he knew or worked with Harris; just that he was one of the thousands of people to use the TCNiSO site.

The indictment (.pdf) notes, however, that users openly sought and shared advice on uncapping and stealing cable on TCNiSO.net’s public forums. And the FBI allegedly found a single damning message on the forum posted personally by “DerEngel” in 2007. “Does anyone have any verified MAC addresses and/or config files for Phoenix (Az)? If sensitive, just pm me. Rewards will follow

The government says that TCNiSO has generated revenues of more than $1 million since 2003.

Harris is free on his own recognizance and scheduled to appear in court in Boston later this month. He vows to fight the case. “I’ll tell you right now I’m not going to plead guilty.”

He’s making a list of the legitimate uses of unlocked modems — he says he’s sold some to cable modem companies as diagnostic gear — and is trying to raise funds for a private attorney.

“The only evidence they have is the business I’ve been running for the last five years,” says Harris. “It’s like arresting every firearms dealer, because handguns can be used to commit murder.”
http://www.wired.com/threatlevel/2009/11/derengel/





MPAA Propaganda Hits 60 Minutes
Ernesto

The MPAA scored a victory last night when millions of people tuned in to CBS’s 60 Minutes. The ‘investigative’ news magazine ran a propaganda piece on movie piracy yesterday, allowing the MPAA to insinuate once again that organized crime and BitTorrent go hand in hand.

The MPAA getting free airtime on one of the most watched television programs in the U.S. is not really a surprise, since CBS has close ties to Hollywood. However, for a program that claims to do ‘investigative’ journalism, yesterday’s item on movie piracy was not very well researched.

What bothered us the most is that the item conveniently mixed file-sharing with commercial piracy, while linking it to organized crime, human trafficking and child prostitution. This setup is a bit misleading to say the least. That aside, the claimed role that piracy plays in organized crime is based on an MPAA-funded study we have previously debunked.

The MPAA’s stance didn’t really surprise us that much though. Their job is to manipulate public opinion in the hope that less people will engage in illicit file-sharing. But it was disappointing to see that CBS didn’t care to bring someone in to counter the arguments of the anti-piracy lobbyists.

No, instead they managed to get director Steven Soderbergh on, who joined the movie industry trade group by providing more twisted facts. Reciting the MPAA’s propaganda, Soderbergh said he wished the Internet was never invented. “Piracy is costing Hollywood $6 billion a year at the box office,” he told the reporter, adding that “as the margins of profit shrink, fewer projects get made, which means fewer people go to work.”

These statements are both inaccurate, or at least highly doubtful. The $6 billion statistic Soderbergh is referring to actually comes from an MPAA-funded report for which the sources were never revealed. In fact, the MPAA itself had to release a statement saying that they “made a mistake” with one of the figures, but they continue to use the report nonetheless.

Similarly, Soderbergh’s claim that “fewer projects get made” was debunked only last week after Sony boss Michael Lynton made a similar statement. The opposite seems to be true. Hollywood is far from bankrupt. In the past decade box office earnings actually increased significantly.

The only piece of the entire item that was pretty accurate and worth watching was the explanation of how BitTorrent works. John Malcolm, a former Director of Worldwide Anti-Piracy Operations for the MPAA shows that his work for the trade group paid off, as it turned him into a BitTorrent expert (video below).

The entire piece is disappointing nevertheless. It fails to ask the questions about why people download movies illegally and acts as if the movie industry is a powerless victim. Perhaps Hollywood should start to see the millions of illegal downloaders as potential customers instead of thieves. There’s a huge demand for online entertainment, so why not compete with piracy instead of spending millions of dollars fighting it?
http://torrentfreak.com/mpaa-propaga...inutes-091102/





EBay Settles Suit Over Skype Sale
Brad Stone

EBay has formally settled the litigation around its sale of the Skype online calling service.

The founders of Skype, Niklas Zennstrom and Janus Friis, will drop their lawsuits against the company and a consortium of buyers whose bid to purchase 65 percent of Skype was announced last month, according to an announcement released by eBay before the opening of the stock markets Friday.

As part of the complex agreement, the founders will own a 14 percent stake in the new Skype and receive two seats on the board.

EBay’s share of the new Skype will fall to 30 percent, and the buyers consortium will now own 56 percent of the company. The founders will also transfer the disputed intellectual property owned by their company Joltid, which was at the heart of the legal battle, over to Skype.

“Skype will be well positioned to move forward under new owners with ownership and control over its core technology,” said John J. Donahoe, eBay’s chief executive, in the statement. “At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core e-commerce and payments businesses.”

As reported earlier this week, Index Ventures, which had played a key role in organizing the buyout bid for the calling service, and whose role was central in the litigation spawned by the sale, has left the deal altogether. In a statement announcing the deal, Danny Rimer, a partner at Index, said that “the deal terms changed for Index such that it no longer matches our investment criteria, and thus we have decided not to participate in the transaction.”

As part of the settlement, the Skype founders received a 10 percent share of the new Skype, and they also paid $83 million for another 4 percent of the company. The deal is expected to close by the end of the year.

“Everything is settled and aligned,” said Marc Andreessen, partner at Andreessen Horowitz, which contributed $50 million to the buyout. “There’s been a lot of drama but fundamentally it is still a good deal.”

Skype allows its 520 million registered users to make free calls to one another using their computers or mobile devices that run Skype software, and it charges low rates to call regular phones. Skype brought in $185 million for eBay in the last quarter and was the fastest-growing part of its business. Despite the dispute surrounding the sale, users of the service will not be affected by the transition.

The settlement caps almost a year of hardnosed and clever maneuvering by the Skype founders. The pair first bid to buy Skype back from eBay almost a year ago, putting up hundreds of millions of their own money alongside cash from several private equity funds, including Elevation Partners in Silicon Valley.

The Skype founders, according to a person familiar with that deal, had ambitious plans to free Skype from the demands of short-term financial performance and to concentrate on expanding the service on mobile phones and in the developing world.

EBay, however, did not respond to their bid, and the founders resorted to litigation to scare away other potential buyers. In a lawsuit filed in March in a British court, they said eBay had violated the copyright to the underlying source code of Skype’s peer-to-peer network, owned by Joltid, another company they controlled.

EBay did not purchase this part of the Skype technology in 2005 because the Skype founders, and Joltid’s other shareholders, were asking for additional hundreds of millions, and stated that they intended to use the technology for other unrelated ventures, like their video startup Joost.

EBay was also promised a long-term license to the Joltid technology, and at the time, Mr. Zennstrom was committed to staying on as Skype’s chief executive. He left in 2007.

Things got even more complicated last month when the founders’ legal ploy appeared to fail. EBay announced it was selling Skype to a rival consortium, organized by Index Ventures and led by Silver Lake Partners, another Silicon Valley private equity firm. The deal came together partly because one partner at Index Ventures, Michelangelo Volpi, who had worked for the Skype founders at Joost, was confident he could extricate Skype from the Joltid technology.

Threatening to scuttle the deal, the founders then sued eBay and the buyers in two American courts, alleging copyright infringement and saying Mr. Volpi was unfairly using confidential information to complete the transaction.
http://www.nytimes.com/2009/11/07/te...s/07skype.html





Pirate Party Gets Second Seat in European Parliament
Ernesto

With the Lisbon Treaty being signed by all European Union member states, the Pirate Party has gained another seat in the European Parliament. The second Pirate Party seat will be occupied by the 22 year old Amelia Andersdotter, who will become the youngest Member of the European Parliament.

With more than 7 percent of the vote, the Swedish Pirate Party secured a seat in the European Parliament in June, and the possibility of gaining another if the Lisbon Treaty was signed by all member states.

The Lisbon Treaty was ratified yesterday by Vaclav Klaus, President of the Czech Republic, who was the last to sign the document.

Ironically, The Pirate Party was against the Lisbon Treaty, which has now doubled the number of seats the party has in the European Parliament.

The newly gained seat will be awarded to Amelia Andersdotter, who will become the youngest Member of the European Parliament. In order to free up time for her political career, Amelia recently decided to quit Economics and Spanish at Lund University in Sweden.

Besides fighting for fairer and more sensible copyright legislation, she will also spend time on education and the development of Europe’s knowledge economy.

“The Parliament needs to be going for a sustainable knowledge economy, and that’s where I come into play,” Amelia told TorrentFreak.

Amelia will officially take her seat in Brussels on December 1st, where she will be joining Christian Engstrom. The two will have plenty of work to do in the years to come, countering the growing influence from pro-copyright lobby groups.
http://torrentfreak.com/pirate-party...iament-091104/





Internet Censorship Seen Liable to WTO Challenge
Jonathan Lynn

Censorship of the Internet is open to challenge at the World Trade Organization as it can restrict trade in services delivered online, a forthcoming study says. A censorship case at the WTO could raise sovereignty issues, given the clear right of member states to restrict trade on moral grounds -- for example, by blocking access to child pornography websites.

But a WTO ruling could set limits on blanket censorship and compel states instead to use more selective filtering, according to the study, to be published on Thursday by think-tank ECIPE.

"Censorship is the most important non-tariff barrier to the provision of online services, and a case might clarify the circumstances in which different forms of censorship are WTO-consistent," said the study by Brian Hindley and Hosuk Lee-Makiyama.

"Many WTO member states are legally obliged to permit an unrestricted supply of cross-border Internet services," they wrote in their report, obtained in advance by Reuters.

Many countries censor the Internet for political or moral reasons. China has developed one of the most pervasive systems, in Cuba all unauthorized surfing is illegal, and many Western countries limit access to child porn sites.

Internet use is particularly strong in Asia. China, with 298 million people online, overtook the United States in numbers of Internet users in 2008, the study said.

Business Impact

Internet censorship can have a serious impact on businesses, it said, noting how local search engine Baidu, which follows official rules on censorship, has overtaken global leader Google in the Chinese market.

There have even been reports that the authorities rerouted requests for Google.com and other international search engines to Baidu's site.

In the third quarter of 2009 Baidu had 64 percent of the 2 billion yuan ($293 million) Internet search market in China, while Google had 31.3 percent.

Back in 2002, Baidu had 3 percent and Google 24 percent, the study said.

In Japan, where Google might face similar linguistic entry barriers to China, foreign-owned search engines have more than 90 percent of the market.

A challenge at the WTO by Antigua to U.S. laws restricting online gambling showed that a member's commitment -- once made -- to opening up in a sector takes precedence over subsequent bans and restrictions, even if they do not discriminate between domestic and foreign suppliers, the study noted.

And a WTO panel ruled against Chinese restrictions on imports of audio-visual entertainment, including the use of domestic distributors to control access to the material, in response to a U.S. challenge. China is appealing against that ruling.

WTO rules allow members to restrict trade to protect public morals or public order, but those measures must be necessary and disrupt trade as little as possible.

The study argues that a strong case can be made against disproportionate censorship that disrupts commercial activities by more than necessary to achieve the goals of the censoring government.

Proportionate censorship would mean selective filtering rather than arbitrary and entire blockages or permanent bans.

Some states might argue such filtering would impose an impractical burden, but others, such as China with its "Golden Shield" -- known in the West as the "Great Firewall of China" -- already have well-staffed infrastructure in place for selective censorship.

"There is a good chance that a panel might rule that permanent blocks on search engines, photo-sharing applications and other services are inconsistent with (WTO services) provisions, even given morals and security exceptions," it said.

(For full ECIPE study go to link.reuters.com/kem28f )
http://www.reuters.com/article/techn...5A520220091106





Copyright Treaty Is Policy Laundering at Its Finest
David Kravets

The blogosphere is abuzz over an apparently leaked document showing the United States trying to push its controversial DMCA-style notice-and-takedown process on the world. But since Threat Level already lives in the land of the DMCA, we’re more bothered by the fact that the U.S. proposal goes far beyond that 1998 law, and would require Congress to alter the DMCA in a manner even more hostile to consumers.

At issue is the internet section of the Anti-Counterfeiting Trade Agreement being developed under a cloak of secrecy by dozens of countries. The leaked document is a three-page European Commission memo written by an unnamed EU official, which purports to summarizes a private briefing given in September by U.S. trade officials.

The language in the Sept. 30 memo shows the United States wants ISPs around the world to punish suspected, repeat downloaders with a system of “graduated response” — code for a three-strikes policy that results in the customer eventually being disconnected from the internet with the ISP alone deciding what constitutes infringement and fair use.

While the proposal specifically says that three strikes wouldn’t be mandated, it might as well be. That’s because companies that refused to implement the policy would be ejected from the “safe harbor” that otherwise protects them from copyright infringement lawsuits over the actions of their customers.

Currently, the DMCA grants immunity or a “safe harbor” to internet companies that promptly remove allegedly infringing content at the request of the copyright holder. Only if they fail to do so can they be held liable in court, and face up to $150,000 in damages per infringement.

Under the U.S. proposal described in the memo, removing infringing content would no longer be enough to qualify for safe harbor. Companies would have to actively work to combat the flow of unauthorized copyrighted material through their pipes, and specifically implement the “graduated response” program.

Here is the key paragraph:

“On the limitations from 3rd party liability: to benefit from safe-harbours, ISPs need to put in place policies to deter unauthorized storage and transmission of IP infringing content (ex: clauses in customers’ contracts allowing, inter alia, a graduated response). From what we understood, the US will not propose that authorities need to create such systems. Instead, they require some self-regulation by ISPs.”

Threat Level obtained the document on condition it not be posted, and we haven’t independently verified its authenticity, or that it accurately reflects the positions of the U.S. trade representatives. The document indicates the U.S. refused to turn over anything in writing itself, and briefed EU representatives on the plan orally in the hope of avoiding leaks.

The Obama administration has been obsessively secretive about the draft ACTA treaty — even, at one point, claiming national security could be jeopardized if the proposed treaty’s working documents were disclosed to the public. Now, it seems, we know what the administration is hiding.

Obama hasn’t asked Congress to implement a three-strike policy, which could anger consumers and watchdog groups. But if the administration gets three strikes written into ACTA, and the United States signs and ratifies the treaty, Congress would be obliged to change the DMCA to comply with it, while the administration throws its hands in the air and says, “It wasn’t our idea! It’s that damn treaty!”

That practice is common enough to have a name: policy laundering.

Language in the leaked text throws open the door to ISP filtering for unauthorized content, though there’s no way for filters to know whether the material constitutes fair use. That plan is similar to a proposal by the Motion Picture Association of America, which wants ISPs to filter for unauthorized motion pictures.

The three-strike language would be gold to companies like MediaSentry, which browse peer-to-peer networks for infringing content, and identify a user’s IP address and ISP. MediaSentry’s work was crucial in the RIAA’s 6-year-long litigation campaign that amounted to about 30,000 copyright lawsuits against individual file sharers using Kazaa, Limewire and other services.

Until today, the most alarming thing in the proposed ACTA treaty has been the secrecy surrounding it. But now the threat level is higher. It seems the executive branch would rather negotiate with other nations, instead of its own elected officials, about the future of a free and open internet.
http://www.wired.com/threatlevel/200...cy-laundering/

















Until next week,

- js.



















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