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Old 10-08-22, 07:20 AM   #1
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Default Peer-To-Peer News - The Week In Review - August 13th, 22

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August 13th, 2022




‘Batgirl,’ David Zaslav and the End of Streaming Evangelism in Hollywood

Five years almost to the day after it began, Hollywood’s evangelistic fervor for streaming has been extinguished this week by the “Batgirl” imbroglio.
Cynthia Littleton

Warner Bros. Discovery’s decision to scrap the completed DC Comics film that was bound for HBO Max marks the boldest example of Old Media economic rigor being applied to contemporary content spending.

David Zaslav, CEO of the newly reconfigured media conglomerate, didn’t even mask his bewilderment at the decision-making process and optimistic profit projections made by the previous WarnerMedia regime. Zaslav and other executives spoke Aug. 4 during WB Discovery’s second-quarter earnings conference call with Wall Street analysts that ran 95 minutes as executives spoke with candor about the new world order.

Zaslav and WB Discovery chief financial officer Gunnar Wiedenfels said more than once, with palpable exasperation, that there was simply no business case to be made for spending $90 million on a DC Comics movie designed to skip theaters and go straight to HBO Max.

“We’ve looked hard at the direct-to-streaming business,” Zaslav said. “And our conclusion is that expensive direct-to-streaming movies in terms of how people are consuming them on the platform, how often people go there or buy it or buy a service for it and how it gets nourished over time is no comparison to what happens when you launch a film in the theaters. And so this idea of expensive films going direct-to-streaming, we cannot find an economic case for it. We can’t find an economic value for it.”

The emphasis on how “Batgirl” could – or could not – possibly recoup its costs was the equivalent of a bucket of ice water being thrown on the media and entertainment sector. Zaslav has already vowed that he’s not trying to “win the spending wars” as he made the pre- and post-merger rounds around the AT&T spinoff transaction with Discovery.

But the granular financial detail and significant strategy shifts outlined by Zaslav and Wiedenfels brought the curtain down on a period of irrational exuberance in Hollywood that began on Aug. 8, 2017 – the day former Disney CEO Robert Iger surprised many of those same Wall Street analysts by announcing plans to launch the streaming platforms that became Disney+ and ESPN+.

“I would characterize this as an extremely important, very, very significant strategic shift for us,” Iger said at the time.

That was the cap gun going off. From that day on, Disney outmaneuvered Comcast buy 20th Century Fox, AT&T went after what was then Time Warner and Paramount Global chair Shari Redstone redoubled her efforts to reunite Viacom and CBS under one roof in a deal completed in December 2019.

Disney’s strategy pivot toward a direct-to-consumer business model for most of its content – following the path blazed by Netflix as a platform with global reach – also crystallized the industry focus on content spending as measured in double-digit billions. Netflix drew talent like moths to a flame with its regular reveals of eye-popping content spending numbers. The traditional TV industry was already feeling the strain of Peak TV production levels, but Disney’s big move in 2017 set most of its Hollywood peers on a mission to further grow the volume of content production.

Five years later, there’s more content available than ever before but the path to seeing a return on movies and TV shows that are less than “Top Gun: Maverick” and “Stranger Things”-level smash hits is murkier than ever. It’s no secret that executives at Netflix, Amazon, Disney+ and others are looking at the worst-performing shows in their vast streaming libraries. There’s growing realization that there’s a financial imperative to consider some form of syndication licensing for little-watched shows in the hopes of seeing some kind of return by selling it to an outside buyer.

Paramount Global CEO Bob Bakish has been a proponent of taking a diversified approach to streaming. He has championed the company’s investment in free ad-supported TV (FAST) channels on its wholly owned Pluto TV platform, which is built on a revenue-share model with outside content providers, mixed with the premium subscription content offered by Paramount+ and the standalone Showtime streaming app.

“We believe our streaming business can get to TV Media-like margins (of 20%-25%) over time,” Bakish told Variety. “We’ve only been in streaming for a short time. It’s going to take a little while and that’s why we say our model has some real advantages.”

Heretofore, the major TV networks have never had to grapple with juggling so much movie and TV inventory – all of which comes with some level of residual fees due to creative partners. That’s another cold, hard financial reason why it made more sense for WB Discovery to ground “Batgirl” and take a big tax write-off on the movie rather than spend more money on a property that Zaslav made clear was not up to snuff for the valuable “Batman” franchise.

Wiendenfels acknowledged that WB Discovery’s thinking on content spending for its soon-to-merge streaming platforms – HBO Max and Discovery Plus – has changed over the 16 months since Discovery and AT&T first reached a deal on the spinoff transaction that created WB Discovery. Those changes were also surely accelerated by the volatility in equities markets and the plunge in WB Discovery stock price over the past few months. On Friday, the market cap of the company that is home to two of Hollywood’s glossiest brands — HBO and Warner Bros. — fell to $35.4 billion as the stock price sank 16% following the after-market earnings report.

Direct to consumer streaming is “one platform in a larger portfolio of assets and in a larger lineup of distribution outlets. We are not going to be religious about driving hard to fuel just one platform,” Wiedenfels said on the call. “DTC has its space and Warner Bros. Discovery is uniquely positioned with the enormous surface area with our customers to service them and to tell great stories for decades to come.”

Zaslav went further, saying that WB Discovery will return to pursuing international sales of content in select cases. Under the previous WarnerMedia regime led by Jason Kilar, the studio made the hard choice to forgo that third-party revenue in favor of stocking up titles that could only be found on HBO Max.

“Anything that’s important to us to growing HBO and HBO Max … we are going to keep that exclusively,” Zaslav said. “What kind of content could be non-exclusive and have no impact on us (that’s what) we want to monetize to drive economic value. And then there’s content that we are not even using right now — massive amounts of TV and motion picture content that we are not using.”

The steepness of the climb that Team Zaslav has ahead was underscored by a question from Morgan Stanley media analyst Ben Swinburne, who gently reminded the new owners that HBO not long ago was delivering about $2.5 billion in earnings (before interest, taxes, depreciation and amortization) a year as a linear cable offering.

But therein also lies the dilemma for Big Media. There’s no going back to the linear era of fat profit margins from traditional cable. The explosion of free and lower-cost options has led to a steady shrinkage of high-paying subscribers to linear MVPD providers like Comcast, Charter and DirecTV. The customer exodus is running about 4%-5% a year in the U.S. It’s carefully tallied every quarter because of pay-TV’s importance to Hollywood earnings.

WB Discovery is mulling a FAST channel iteration of HBO Max and Discovery+ to serve as a kind of barker service to lure paying subscribers. The exploding popularity of FAST channels has industry veterans clucking that consumers now have the means to recreate the traditional cable bundle but on economic terms that are far worse for content providers.

All of this volatility, coupled with the gathering macroeconomic headwinds, explain why media stocks have been pummeled so far this year. Once Netflix’s aura of invincibility came down with its Q1 surprise of subscriber losses ahead, the gospel of spend-at-all-cost to build platforms and gain market share has lost some of its hold on CEOs and CFOs.

The health of the subscription streaming market will get an important temperature check next week when Disney reports its fiscal Q3 earnings on Aug. 10.

Paramount’s Bakish has been gratified to see that the strategy he set off on in 2019 of assembling a mixed portfolio of FAST and pay channels is being embraced by Paramount’s larger rivals. With the road ahead more unclear than ever, Bakish said it’s the kind of business environment that creates its own opportunities, for companies that aren’t paralyzed by fear and second-guessing.

“You make your own decisions about what to do and then get on about doing it,” Bakish said.
https://variety.com/2022/digital/new...av-1235335069/





Disney Raises Streaming Prices after Services Post Big Operating Loss
Alex Sherman

• Disney+ with no ads is increasing $3 per month to $10.99.
• Disney+ with ads will be $7.99 per month.
• A bundle of Disney+ and Hulu, both with ads, will be $9.99 per month.

Disney unveiled a new pricing structure that incorporates an advertising-supported Disney+ as part of an effort to make its streaming business profitable.

Starting Dec. 8 in the U.S., Disney+ with commercials will be $7.99 per month — currently the price of Disney+ without ads. The price of ad-free Disney+ will rise 38% to $10.99 — a $3 per month increase.

The price of Hulu without ads will rise by $2 per month, from $12.99 to $14.99, effective Oct. 10. Hulu with ads will go up by $1 per month, rising from $6.99 to $7.99.

Disney announced last month that ESPN+ with ads would go up 43% to $9.99 per month.

The price increases reflect the growing operating loss for Disney’s streaming services. Disney+, Hulu and ESPN+ combined to lose $1.1 billion in the fiscal third quarter, $300 million more than the average analyst estimate, reflecting the higher cost of content on the services. The increased operating loss occurred even while Disney added about 15 million new Disney+ subscribers in the quarter, about 5 million more than analysts estimated.

Disney has previously stated it plans to lose money on Disney+ until 2024. Chief Financial Officer Christine McCarthy reiterated on Wednesday’s earnings conference call that Disney+’s losses will peak during the company’s fiscal 2022.

Average revenue per user for Disney+ decreased by 5% in the quarter in the U.S. and Canada due to more customers taking cheaper multiproduct offerings.

Overall, the company’s quarterly results, also announced Wednesday, beat analysts’ expectations on the top and bottom lines. Disney+ subscriptions rose to 152.1 million during the most recent period, higher than Wall Street’s projections of 147 million.

Counting Disney+, ESPN+ and Hulu (which is partially owned by Comcast), Disney has 221 million streaming subscribers.

Bundled pricing

Disney also announced new bundle prices incorporating its Disney+ product with commercials.

For existing customers only, a bundle of Disney+ without ads and Hulu and ESPN+ with ads will increase by $1, from $13.99 to $14.99.

The price of a bundle of Disney+, Hulu and ESPN+, all with ads, will be $12.99, or $1 lower than the current Disney bundle price.

Consumers will be able to purchase a Disney+ and Hulu bundle for $9.99 per month with commercials. That’s a discount to paying for Disney+ and Hulu with ads separately.

The price of a no-ad Disney+ and no-ad Hulu, with ESPN+, remains $19.99 per month.

Disney will also have new pricing for its Hulu with live TV bundles. Subscribers that want Hulu with live TV and Disney+, Hulu and ESPN+ with commercials will pay $69.99 per month. For existing customers, Disney will offer Disney+ without commercials in that bundle for $74.99. The premium bundle of Hulu with live TV along with Disney+ and Hulu without ads will be $82.99 per month.
https://www.cnbc.com/2022/08/10/disn...structure.html





Disney Surpasses Netflix in Global Paid Streaming Subscribers
Sara Fischer

Disney's stock spiked nearly 4% in after-hours trading Wednesday after the entertainment giant said it added 14.4 million Disney+ subscribers, blowing past Wall Street expectations.

Why it matters: Disney now has more than 221 million total subscriptions across all of its subscription streaming offerings globally, officially surpassing Netflix, which reported 220.7 million global subscribers last quarter, after losing nearly 1 million subscribers compared to the previous quarter.

Details: The company also beat expectations for its revenues and profits, thanks to strong results in its theme parks division.

• Live sports viewership gains helped give its TV business a boost.

Between the lines: Disney also announced a new pricing structure to support its new ad-supported tier, which is slated to debut in the U.S. on Dec. 8.

• Moving forward, Disney+ without ads will cost $10.99, up from $7.99 monthly and Disney+ with ads will cost $7.99 monthly.
• The price of Hulu's subscription without ads will also rise from $12.99 to $14.99, beginning Oct. 10. Hulu with ads will increase from $6.99 to $7.99.
• Disney already introduced a price increase for ESPN+ last month.

By the numbers, via CNBC:

• Earnings per share: $1.09 per share vs. 96 cents expected, according to a Refinitiv survey of analysts
• Revenue: $21.5 billion vs. $20.96 billion expected, according to Refinitiv
• Disney+ total subscriptions: 152.1 million vs 147.76 million expected, according to StreetAccount

The big picture: It's been a tumultuous year for streaming companies that are beginning to see slowed momentum coming out of the pandemic.

• Amid a brutal market sell-off, Wall Street has put more pressure on entertainment companies to begin proving that the business economics behind their expensive streaming services are worth it.
• Disney's streaming losses in particular have widened in the past few quarters, Axios' Tim Baysinger reports. Wall Street has in the past expressed concern about whether the company's long-term streaming strategy is most lucrative to investors.

https://www.axios.com/2022/08/10/dis...id-subscribers





Disney Now Has More Total Streaming Subscriptions Than Netflix — but Disney Generates Much Lower Per-Sub Revenue
Todd Spangler

One headline number out of Disney’s quarterly results Wednesday seemed to show a notable milestone: The Mouse House had 221.1 million total subscriptions worldwide across its streaming services (Disney+, Disney+ Hotstar, Hulu and ESPN+). At first glance, that makes it look like Disney is now just ahead of Netflix, which ended Q2 with 220.7 million total paid subscribers.

But the value of those subscriber bases is much different.

Domestically, for example, Disney+ generated about 39% as much revenue per subscriber as Netflix for the second calendar quarter, a measure referred to in the finance world as ARPU (average revenue per user). And overseas, the contrast is even starker: Disney+ Hotstar, which is available in India and other Southeast Asian countries — and represents 38% of the overall Disney+ customer base — had an ARPU of $1.20/month for the quarter ended July 2, while Netflix had an ARPU of $8.83/month for the Asia Pacific region.

Separately, Netflix takes issue with comparing Disney’s subscriptions to Netflix’s subscribers. According to the way Disney tallies its streaming numbers, one household that takes the Disney Bundle — with Disney+, Hulu and ESPN+ — is counted as three separate subscriptions. A much better apples-to-apples comparison would show Disney’s unduplicated streaming subscribers (i.e., households), but that’s a figure the company does not disclose.

When Disney+ first launched in November 2019, it rapidly amassed market share by pricing the streamer at the low, low price of $6.99/month. That was nearly half Netflix’s standard plan at the time.

But that low entry point has meant Disney’s flagship streamer makes less money than Netflix, the historical category leader. For the three months ended July 2, Disney+ domestic ARPU (U.S. and Canada) was $6.27 per month, a 5% decline from the year earlier, likely the result of a skew toward the Disney Bundle and inclusion of Disney+ (and ESPN+) in Hulu’s live TV package. That’s compared with Netflix, which reported an ARPU of $15.95 per month in the U.S./Canada region for Q2, up 10% due to price increases.

Now Disney+ is trying to raise its profitability profile, as U.S. streaming subscriber growth has slowed for not just Disney+ but nearly every player in the biz. In the U.S. and Canada, Disney+ picked up just 100,000 paid subs in the recent quarter, to reach 44.5 million.

Concurrent with its earnings release, Disney announced a 38% price hike for the “premium” Disney+ no-ads version of the service, which will go up to $10.99/month on Dec. 8, 2022. That same day, the media company will introduce Disney+ Basic, an advertising-supported tier that will be available at the previous $7.99/month price.

That, of course, is designed to drive up Disney+’s ARPU, with the combo of the price increase (offset by the inevitable resulting churn) and the into of the ad-supported Disney+ Basic tier, which could produce higher ARPU if the Mouse House can successfully monetize it at the high ad rates execs have touted.

Hulu also is set for a price hike in Q4: On Oct. 10, the price of Hulu with ads will go up a buck, from $6.99 to $7.99 per month, while the ad-free tier will go up two dollars, from $12.99 to $14.99 per month. For the most recent quarter, the ARPU for Hulu’s subscription VOD service (available only in the U.S.) was $12.92 per month — down 2% year over year, again likely because of bundle discounts. That’s higher than Disney+, but still below Netflix’s ARPU in the region.

ESPN+ ARPU nosed up 2%, to $4.55/month, for the quarter ended July 2. As previously announced, ESPN+ rates will increase by three dollars monthly in August, going from $6.99 to $9.99 per month.

Disney expects Disney+ to reach profitability in fiscal year 2024 (which ends that September). In the most recent quarter, the media conglomerate’s streaming losses increased: Disney’s direct-to-consumer revenue was $5.06 billion for the quarter, up 19% — but below Wall Street expectations of $5.2 billion, per FactSet. The operating loss for the DTC segment ballooned to $1.06 billion, versus $293 million in the year-earlier period. (Netflix posted Q2 revenue of $7.97 billion and net income of $1.44 billion.)

“As a result of this slowdown in new subscriber additions, we have seen many in the industry pivot to a new wave of sobriety” — with a focus on streaming profitability, MoffettNathanson principal analyst Michael Nathanson wrote in an Aug. 11 research note. “We on Wall Street have taken notice. Gone are the sum-of-the-parts models using revenue multiples or even the metric of EV/content spending. From here on out, we hope the focus for streamers is return on invested capital and free cash flow generation.”

Also note that while Disney expects “core Disney+” growth to continue on its expected trajectory through 2024, the company cut projections for Disney+ Hotstar over that time period given the loss of Indian Premiere League cricket rights. With the warning about a slowdown in India, Disney lowered the subscriber target for Disney+ over to 215 million-245 million global subscribers by the end of its fiscal year 2024, down from 230 million-260 million previously.
https://variety.com/2022/digital/new...ix-1235338752/





Walmart Ponders Streaming Deal With Paramount, Disney and Comcast

The retail giant is exploring bundling a streaming service into its Walmart+ membership program.
Benjamin Mullin and Brooks Barnes

Walmart has held discussions with major media companies about including streaming entertainment in its membership service, according to three people with knowledge of the conversations, part of an effort to extend its relationship with customers beyond its brick-and-mortar stores.

In recent weeks, executives from Paramount, Disney and Comcast have spoken with Walmart, the people said, as the retailer ponders which movies and TV shows would add the most value to its membership bundle, called Walmart+. The people spoke on the condition of anonymity because the discussions were private.

It is unclear whether any of the streaming companies are inclined to reach a deal with Walmart. Disney operates the Disney+, ESPN+ and Hulu streaming services; Comcast owns the Peacock streaming service; and Paramount runs the Paramount+ and Showtime services.

A Walmart+ membership, which costs $12.95 per month, includes free shipping on orders and discounts on fuel. It also includes a free six-month subscription to the Spotify Premium music service.

A spokesman for Walmart declined to comment.

As the streaming field gets more crowded, the biggest media companies have turned to giants in other industries to find new subscribers. Wireless providers like Verizon and T-Mobile have struck deals to offer their customers free or discounted subscriptions to streaming services like Disney+ or Paramount+ as an extra incentive to sign up. Media companies, in turn, receive an influx of new customers whose subscriptions are subsidized by their wireless partner.

The logic is similar for Walmart, according to two people familiar with the company’s strategy. The retailer is increasingly looking to build its relationship with its customers beyond the footprint of its big-box stores, particularly given the dominance of Amazon.com’s Prime membership program.

Walmart, with its thousands of stores frequented by millions of customers weekly, has long been a center of gravity in the entertainment sector. The retailer’s power to sell music, movies and merchandise made the company’s headquarters in Bentonville, Ark., a destination for studio chiefs, musicians and entrepreneurs looking to court the company’s favor.

As consumption of music, movies and TV shows shifts online, Walmart has explored different strategies to retain its media primacy, including buying a streaming service called Vudu and investing in Eko, an interactive video company.

But the retailer has struggled to compete with some of its rivals in the costly video-streaming business. Walmart sold Vudu to Comcast’s Fandango in 2020, and the service has so far failed to capture as much demand as its largest competitors, according to the streaming data firm Parrot Analytics.
https://www.nytimes.com/2022/08/09/b...streaming.html





A Fifth of US Teens Use YouTube 'Almost Constantly,' with TikTok Not far Behind

A Pew survey suggested Instagram and Snapchat adoption rose, but Facebook and Twitter are less popular among teens than in 2015.
Kris Holt

Pew Research has published a new report that examines social media usage trends among US teens. The organization found that a whopping 95 percent of them use YouTube, while 19 percent are on the platform "almost constantly."

Perhaps unsurprisingly, two-thirds (67 percent) said they used TikTok, with 16 percent claiming they are on the app "almost constantly." The third most-popular social media platform among teens is Instagram, per Pew, with 62 percent using it. A tenth say they use it almost all the time — despite the app occasionally telling them to take a break. A previous poll conducted in 2014-15 found that 52 percent were using Instagram (Pew didn't ask about YouTube usage for that survey and TikTok didn't exist at the time).

Snapchat also rose among teens, with 59 percent using it in 2022, compared with 41 percent in the previous poll. Facebook was the top social media app among teens seven years ago, with 71 percent of them using it, but that figure has dropped to 32 percent. Teen adoption of Twitter (down from 33 percent to 23 percent) and Tumblr (14 percent to five percent) has fallen over the same period too.

The 2014-15 poll didn't ask about Twitch, WhatsApp or Reddit. These days, a fifth of teens use Twitch, 17 percent are on WhatsApp and 14 percent are accessing Reddit. For what it's worth, the earlier poll suggested 33 percent of teens used Google+, while a quarter used Vine. This time around, Pew did not ask teens about their use of Discord or social gaming spaces such as Fortnite.

Pew surveyed 1,316 teens aged 13 to 17 (as well as one of their parents) in April and May. It found that boys were more likely to use YouTube, Twitch and Reddit and girls were more likely to say they access TikTok, Instagram and Snapchat. More Black and Hispanic teens said they used TikTok, Instagram, Twitter and WhatsApp than white teens.

Even though over half (54 percent) of teens said they'd find it hard to give up social media, 36 percent admitted they spent too much time on the platforms. Around 55 percent said their usage levels were "about right." Meanwhile, 97 percent of teens now use the internet every day, with 46 percent saying they're online almost all the time.

The poll found that 95 percent of teens have access to a smartphone (up from 73 percent in 2014-15), while 90 percent can access a desktop or laptop computer, up from 87 percent in the previous survey. Curiously, the percentage of teens who say they have access to a gaming console has fallen slightly, from 81 percent to 80 percent.
https://www.engadget.com/social-medi...164456016.html





FCC Cancels Starlink’s $886 Million Grant from Ajit Pai’s Mismanaged Auction

FCC: "Nascent" Starlink tech has capacity limits, may not deliver required speed.
Jon Brodkin

The Federal Communications Commission (FCC) has rejected Starlink's application to receive $885.51 million in broadband funding, essentially canceling a grant awarded by the FCC during then-Chairman Ajit Pai's tenure.

Starlink was tentatively awarded the Rural Digital Opportunity Fund (RDOF) grant in December 2020. But the satellite provider still needed FCC approval of a long-form application to receive the money, which is intended for areas with little or no high-speed broadband access.

We wrote about potential problems with the SpaceX grant a week after the FCC's reverse auction, in which ISPs bid on grants organized by census blocks. Consumer advocacy group Free Press accused Pai of "subsidiz[ing] broadband for the rich," pointing out that Starlink was awarded money in urban areas including locations at or adjacent to major airports.

Today, Chairwoman Jessica Rosenworcel's FCC announced that it rejected the long-form applications from both Starlink and LTD Broadband. The FCC said that both Starlink and LTD "failed to meet program requirements," submitted "risky proposals," and that their "applications failed to demonstrate that the providers could deliver the promised service."

FCC cites $600 dish cost

The Starlink grants were supposed to fund broadband to 642,925 homes and businesses in 35 states. Losing the grants may not impact the actual availability of Starlink much because the satellite service isn't geographically restricted in the same way as wireline networks.

"After careful legal, technical, and policy review, we are rejecting these applications. Consumers deserve reliable and affordable high-speed broadband," Rosenworcel said. "We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements."

The grants were meant for specific census blocks even though Starlink doesn't have to build the typical infrastructure needed when ISPs expand into new geographic areas. Starlink relies on its own satellites in low Earth orbits, the user terminals that each customer buys, and ground stations scattered around each country in which it operates. (SpaceX has said that laser links on Starlink satellites reduce the need for those ground stations.)

Rosenworcel cited concerns about the Starlink technology and the $600 price each customer must pay in up-front hardware costs. "Starlink's technology has real promise," Rosenworcel said. "But the question before us was whether to publicly subsidize its still-developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032."

Starlink called “nascent” tech with “capacity constraints”

In a public notice that provided more detail, the FCC called Starlink a "nascent LEO satellite technology" with "recognized capacity constraints." The FCC questioned Starlink's ability to consistently provide low-latency service with the required download speeds of 100 Mbps and upload speeds of 20 Mbps. The FCC also cited Ookla speed test data showing declining Starlink speeds in the second quarter of 2022, "including upload speeds that are falling well below 20 Mbps."

The FCC Wireline Competition Bureau said it received "inadequate responses" to follow-up questions from both Starlink and LTD. As a result of the ruling, both ISPs are now "in default on all winning bids not already announced as defaulted," the FCC said.

LTD was slated to get even more money than Starlink—over $1.3 billion. The FCC's rejection of LTD was less surprising, as the company had failed to meet filing deadlines. LTD's failures were detailed in a recent Wall Street Journal article.

"Although LTD was a relatively small fixed wireless provider before the auction, it was the largest winning bidder in the auction, submitting winning bids in 15 states," the FCC said. "Subsequently, it failed to timely receive eligible telecommunications carrier status in seven states, rendering it ineligible in those states for support. Ultimately, the FCC review concluded that LTD was not reasonably capable of deploying a network of the scope, scale, and size required by LTD's extensive winning bids."

FCC started auction “cleanup” over a year ago

Rosenworcel made it clear over a year ago that she believes the auction was mismanaged, announcing in July 2021 that the agency must "clean up issues with the program's design originating from its adoption in 2020." The FCC cited "complaints that the program was poised to fund broadband to parking lots and well-served urban areas."

At the time, Rosenworcel's FCC asked Starlink to voluntarily give up funding in about 6 percent of the 113,900 census blocks where it tentatively won FCC grants. Now SpaceX isn't getting anything out of the auction. We contacted SpaceX and LTD Broadband today and will update this article if we get any response.

The auction originally awarded $9.2 billion to 180 broadband providers. Rosenworcel has doled money out on a rolling basis as providers secure final approvals. "To date, the RDOF program has authorized more than $5 billion in funding to bring primarily fiber gigabit broadband service to over 3,000,000 locations in 47 states," the FCC said today. "With support from this program, hundreds of carriers have already begun deploying these future-proof networks to connect unserved areas."

Update at 8:15pm ET: LTD Broadband CEO Corey Hauer provided a statement. "We are extremely disappointed in the FCC staff decision. I don't believe the FCC fully appreciated the benefits LTD Broadband would bring to hundreds of thousands of rural Americans. We are continuing to review the letter and are evaluating our next steps," Hauer said.
https://arstechnica.com/tech-policy/...sal-too-risky/





Federal Program Helps Alaska Villages get Broadband Access
Mark Thiessen

Alaska will receive at least $100 million through a new federal program to expand high-speed internet to underserved rural areas and promote workforce development, officials said Tuesday.

U.S. Sen. Dan Sullivan, an Alaska Republican, coordinated a summit with state, federal and tribal officials in Anchorage, in an effort to ensure parties were on the same page moving forward. Alaska Gov. Mike Dunleavy signed a bill at the summit establishing a broadband office to help coordinate between all entities.

Sullivan said it is important to seize “this incredible opportunity that we have before us, which is to connect every part of Alaska, every village, every community to broadband and other internet activity.”

The federal infrastructure package included $65 billion to help ensure all Americans have affordable, reliable and high-speed internet through the Internet for All program. Sullivan said that through this program and others, Alaska could ultimate receive more than $2 billion.

Alan Davidson, the assistance secretary of the U.S. Department of Commerce and administrator of the National Telecommunications and Information Administration, saw and heard about the needs while taking part in a round-table discussion in Fairbanks on Monday and then visiting the village of Tanana.
https://apnews.com/article/technolog...a67f9d13709b50





Man Who Built ISP Instead of Paying Comcast $50K Expands to Hundreds of Homes

Jared Mauch gets $2.6 million from gov't to expand fiber ISP in rural Michigan.
Jon Brodkin

Jared Mauch, the Michigan man who built a fiber-to-the-home Internet provider because he couldn't get good broadband service from AT&T or Comcast, is expanding with the help of $2.6 million in government money.

When we wrote about Mauch in January 2021, he was providing service to about 30 rural homes including his own with his ISP, Washtenaw Fiber Properties LLC. Mauch now has about 70 customers and will extend his network to nearly 600 more properties with money from the American Rescue Plan's Coronavirus State and Local Fiscal Recovery Funds, he told Ars in a phone interview in mid-July.

The US government allocated Washtenaw County $71 million for a variety of infrastructure projects, and the county devoted a portion to broadband. The county conducted a broadband study before the pandemic to identify unserved locations, Mauch said. When the federal government money became available, the county issued a request for proposals (RFP) seeking contractors to wire up addresses "that were known to be unserved or underserved based on the existing survey," he said.

"They had this gap-filling RFP, and in my own wild stupidity or brilliance, I'm not sure which yet, I bid on the whole project [in my area] and managed to win through that competitive bidding process," he said. Mauch's ISP is one of four selected by Washtenaw County to wire up different areas.

Mauch's network currently has about 14 miles of fiber, and he'll build another 38 miles to complete the government-funded project, he said. In this sparsely populated rural area, "I have at least two homes where I have to build a half-mile to get to one house," Mauch said, noting that it will cost "over $30,000 for each of those homes to get served."

$55 a month for 100Mbps with unlimited data

The contract between Mauch and the county was signed in May 2022 and requires him to extend his network to an estimated 417 addresses in Freedom, Lima, Lodi, and Scio townships. Mauch lives in Scio, which is next to Ann Arbor.

Although the contract just requires service to those 417 locations, Mauch explained that his new fiber routes would pass 596 potential customers. "I'm building past some addresses that are covered by other [grant] programs, but I'll very likely be the first mover in building in those areas," he said.

Under the contract terms, Mauch will provide 100Mbps symmetrical Internet with unlimited data for $55 a month and 1Gbps with unlimited data for $79 a month. Mauch said his installation fees are typically $199. Unlike many larger ISPs, Mauch provides simple bills that contain a single line item for Internet service and no extra fees.

Mauch also committed to participate in the Federal Communications Commission's Affordable Connectivity Program, which provides subsidies of $30 a month for households that meet income eligibility requirements.

The contract requires all project expenses to be incurred by the end of 2024, and for the project to be completed by the end of 2026. But Mauch aims for a much quicker timeline, telling Ars that his "goal is to build about half of it by the end of this year and the other half by the end of 2023." The exact funding amount is $2,618,958.03.

Comcast wanted $50K, AT&T offers just 1.5Mbps

Operating an ISP isn't Mauch's primary job, as he is still a network architect at Akamai. He started planning to build his own network about five years ago after being unable to get modern service from any of the major ISPs.

As we wrote last year, AT&T only offers DSL with download speeds up to 1.5Mbps at his home. He said Comcast once told him it would charge $50,000 to extend its cable network to his house—and that he would have gone with Comcast if they only wanted $10,000. Comcast demands those up-front fees for line extensions when customers are outside its network area, even if the rest of the neighborhood already has Comcast service.

Mauch was using a 50Mbps fixed wireless service before switching over to his own fiber network. In addition to his home Internet customers, Mauch told us he provides free 250Mbps service to a church that was previously having trouble with its Comcast service. Mauch said he also provides fiber backhaul to a couple of cell towers for a major mobile carrier.

County touts “historic” broadband investment

Mauch has already hooked up some of the homes on the list of required addresses. Washtenaw County issued a press release after the first home was connected in June, touting a "historic broadband infrastructure investment" to "create a path for every household to access high-speed broadband Internet."

The county said it is investing $15 million in broadband projects by combining the federal funds with money from the county's general fund. Between Washtenaw Fiber Properties and the other three ISPs selected by local government officials, "over 3,000 Washtenaw County households will be connected as a result of this investment in the next few years," the press release said.

One of the areas covered by Mauch's funding is around a lake in Freedom Township, where he plans to begin construction on August 22, he said. "Generally speaking, it's a lower income area as well as an area that has been without service for a very long time, aside from cellular or wireless," he said.

"The goal is to close the gap on them very quickly."

As for the other three ISPs, the county was reportedly negotiating with cable giants Comcast and Charter, and Midwest Energy and Communications. Those three companies ended up getting the deals with the county, a contractor working on the overall project confirmed to Ars.

Under state law, "Municipalities in Michigan are not simply able to decide to build and operate their own networks, they must first issue an RFP for a private provider to come in and build," the Institute for Local Self-Reliance's Community Broadband Networks Initiative wrote. "Only if the RFP receives less than three viable offers can a municipality move forward with building and owning the network. There are also additional requirements that municipalities have to follow, such as holding public forums and submitting cost-benefit analysis and feasibility studies."

The county's RFP set 25Mbps download and 3Mbps upload speeds as the minimum acceptable tier but stated a strong preference for "at least 100Mbps download speeds, ideally with symmetrical upload speeds, from wireline technology to accommodate present and future bandwidth-hungry applications."

Mauch faces increasing equipment costs

Mauch has made some upgrades to his operation. In our previous story, we described how Mauch was renting an air compressor to blow fiber through his conduits. He recently bought an industrial air compressor at a government liquidation auction, spending under $4,000 for equipment that often costs about $20,000, he said. He had previously spent $8,000 on a directional drill machine that installs cables or conduits under driveways and roads without digging giant holes.

Increasing prices have been a problem. Mauch said he used to buy fiber conduit for 32 cents a foot but that he's paying more than double that now. The handholes that are buried underground at various points throughout Mauch's network used to cost $300 and are now about $700, he said.

While Mauch built the network using his own money, he said one wealthy family last year wrote a nearly six-figure check to fund a network expansion that let "them and all of their neighbors get Internet access."

When we first wrote about Mauch, he was using a contractor to install most of the fiber conduits and installing the actual fiber cable into the conduits himself. He said he's using a few contractors now but he's still doing some fiber-laying work.

One time last year, Mauch was using the rented air compressor to blow out conduits because they accumulate water. On the other end, over a mile away, "people thought it was smoke coming up from the ground and they called the fire department, and the fire department came out on two successive days because there was a water mist in the air," he said. "One day they couldn't figure out where it was coming from. The next day I saw them, and I turned around and I talked to them about it."

“I’m saved in people’s cell phones as ‘fiber cable guy’”

Mauch said network management has been smooth without any major problems over the past 18 months or so. His network generally uses about 500Mbps of traffic, and he can ramp up to 4Gbps as needed, he said.

Mauch said he has people lined up to handle emergencies "so I can go on vacation," and took a trip to Europe in March. During his Europe trip, there was an outage at one of the power substations in his area while he was away. Some of his customers lost Internet service due to that power outage, but Mauch's network kept running because of the generator at his house.

"There was no power for about 24 hours, so my house ran on generator for 24 hours, and I could see which customers were out of service," he said.

Life has changed a bit for Mauch since he became an Internet provider. "I'm definitely a lot more well-known by all my neighbors... I'm saved in people's cell phones as 'fiber cable guy,'" he said. "The world around me has gotten a lot smaller, I've gotten to know a lot more people."
https://arstechnica.com/tech-policy/...reds-of-homes/





VLC Media Player Banned in India, Website and VLC Download Link Blocked

VLC Media Player has been blocked in India nearly 2 months ago. Neither the company nor the Indian government has revealed any details about the ban.
India Today Tech

HIGHLIGHTS

• VLC media player, developed by VideoLAN project, is no longer working in India
• VLC Media Player has been blocked in India nearly 2 months ago.
• Neither the company nor the Indian government has revealed any details about the ban.

One of the most popular media player software and streaming media server VLC media player, developed by VideoLAN project, is no longer working in India. As per a report by MediaNama, VLC Media Player has been blocked in India nearly 2 months ago. Neither the company nor the Indian government has revealed any details about the ban.

Some reports suggest that VLC Media Player has been blocked in the country because the platform was China-backed hacking group Cicada was using it for cyber attacks. Just a few months ago, security experts discovered that Cicada was using VLC Media Player to deploy a malicious malware loader as part of a long-running cyber attack campaign.

Since it was a soft ban, neither the company, nor the Indian government officially announced the banning of the media platform. Some users on Twitter are still discovering the restrictions of the platform. One of the Twitter users by the name Gagandeep Sapra tweeted a screenshot of the VLC website that shows “the website has been blocked as per order Ministry of Electronics and Information Technology under IT Act, 2000.”

Currently, the VLC Media Player website and download link are blocked in the country. In simple words, this means that no one in the country can access the platform for any work. This is seemingly the case for users who have the software installed on their device. It is said that VLC Media Player is blocked on all major ISPs including ACTFibernet, Jio, Vodafone-idea and others.

#blocked
Videolan project’s website “https://t.co/rPDNPH4QeB” cannot be accessed due to an order issued by @GoI_MeitY. It is inaccessible for all the major ISPs in India including #ACT, #Airtel and V!. #WebsiteBlocking pic.twitter.com/LBKgycuTUo
— sflc.in (@SFLCin) June 2, 2022

Recently, the Indian government has blocked hundreds of Chinese apps, including PUBG Mobile, TikTok, Camscanner and more. In fact, the PUBG Mobile Indian version dubbed BGMI has also been blocked in India and removed from the Google Play store and Apple App store. The reason behind blocking these apps is that the government feared these platforms were sending user data to China. Notably, VLC Media Player is not backed by a Chinese company. It is developed by VideoLAN, a Paris-based firm.
https://www.indiatoday.in/technology...361-2022-08-12





New Intel Chips Won't Play Blu-Ray Disks Due to SGX Deprecation
Bill Toulas

Intel has removed support for SGX (software guard extension) in 12th Generation Intel Core 11000 and 12000 processors, rendering modern PCs unable to playback Blu-ray disks in 4K resolution.

This technical problem arises from the fact that Blu-ray disks require Digital Rights Management (DRM), which needs the presence of SGX to work.

This is a feature that Intel introduced in the Skylake generation back in 2016, enabling PCs to play protected Blu-ray disks for the first time.

As seen in Intel's current datasheets for the 11th and 12th generation of its Core desktop processors, the SGX is listed as a deprecated technology, so it's no longer available.

Why did Intel abandon SGX?

As a secure enclave technology, SGX was commonly targeted by security researchers who discovered numerous vulnerabilities and attack methods.

Examples of attacks targeting Intel SGX include:

• the Prime+Probe attack discovered in 2017,
• a Spectre-like attack disclosed in 2018,
• an Enclave attack discovered by researchers in 2019,
• a MicroScope replay attack,
• the so-called "Plundervolt" injection attack,
• a Load Value Injection (LVI), and
• the SGAxe attack on the CPU cache resulting in the leak of the enclave's content.

In summary, Intel had more to gain from SGX's deprecation from the perspective of security.

Considering that most users don't care about Blu-ray playback on the PC, taking that decision must have been straightforward.

Impact and solutions

The issue impacts Ultra HD Blu-ray discs that use DRM, so if the Blu-ray Disc Association ever decides to lift the strict protections, the playback will return to nominal resolutions (3840 x 2160).

Also, since SGX was removed in recent chip generations, users who would like to avoid problems can stick to using 7000, 8000, 9000, or 10000-series CPUs.

Skylake (6000 series) has SGX but misses HDCP 2.2, and that would cause hurdles with HDMI 2.0 transmission.

CyberLink, the company behind the "PowerDVD" software product, has updated its FAQ to reflect the problem with newer gen Intel processors, claiming inability to resolve it in any way.

"The removal of the SGX feature, and its compatibility with the latest Windows OS and drivers, has caused a substantial challenge for CyberLink to continue supporting Ultra HD Blu-ray movie playback in our player software." - details the FAQ page.

"So much so, that it has been determined that it is no longer feasible for CyberLink to support the Ultra HD Blu-ray playback on newer CPUs and the latest Windows platforms."

In addition to using an older Intel CPU, CyberLink also advises people not to upgrade to Windows 11 to avoid having the needful drivers replaced.

Blu-ray disks in 2022

Blu-ray disks may sound like something from the distant past that has been phased out, but it's not obsolete yet.

People are still buying them because they have collectible value and they enjoy having something physical and tangible, giving a sense of ownership and possibly even attachment.

Moreover, Blu-ray disks can offer 4K content entertainment without an internet connection, and the quality is stable and guaranteed, contrary to streaming.

No matter if a movie leaves a streaming service or if the digital rights change in the future, a physical disk makes the content permanently available.

And finally, some people are just nostalgic or enjoy following the "ritual" of putting the disk on the drive.

For all the above reasons and many more, Ultra HD Blu-ray isn't dead yet, and Intel's decision to deprecate the SGX will impact a substantial number of users.
https://www.bleepingcomputer.com/new...x-deprecation/





How a Phoenix Record Store Owner Set the Audiophile World on Fire

MoFi claimed its expensive reissues were purely analog reproductions. It had been deceiving its customer base for years.
Geoff Edgers

Mike Esposito still won’t say who gave him the tip about the records. But on July 14, he went public with an explosive claim.

In a sometimes halting video posted to the YouTube channel of his Phoenix record shop, the ‘In’ Groove, Esposito said that “pretty reliable sources” told him that MoFi (Mobile Fidelity), the Sebastopol, Calif., company that has prided itself on using original master tapes for its pricey reissues, had actually been using digital files in its production chain. In the world of audiophiles — where provenance is everything and the quest is to get as close to the sound of an album’s original recording as possible — digital is considered almost unholy. And using digital while claiming not to is the gravest sin a manufacturer can commit.

There was immediate pushback to Esposito’s video, including from some of the bigger names in the passionate audio community.

Shane Buettner, owner of Intervention Records, another company in the reissue business, defended MoFi on the popular message board moderated by mastering engineer Steve Hoffman. He remembered running into one of the company’s engineers at a recording studio working with a master tape. “I know their process and it’s legit,” he wrote. Michael Fremer, the dean of audiophile writing, was less measured. He slammed Esposito for irresponsibly spreading rumors and said his own unnamed source told him the record store owner was wrong. “Will speculative click bait YouTube videos claiming otherwise be taken down after reading this?” he tweeted.

But at MoFi’s headquarters in Sebastopol, John Wood knew the truth. The company’s executive vice president of product development felt crushed as he watched Esposito’s video. He has worked at the company for more than 26 years and, like most of his colleagues, championed its much lauded direct-from-master chain. Wood could hear the disappointment as Esposito, while delivering his report, also said that some of MoFi’s albums were among his favorites. So Wood picked up the phone, called Esposito and suggested he fly to California for a tour. It’s an invite he would later regret.

That visit resulted in a second video, published July 20, in which MoFi’s engineers confirmed, with a kind of awkward casualness, that Esposito was correct with his claims. The company that made its name on authenticity had been deceptive about its practices. The episode is part of a crisis MoFi now concedes was mishandled.

“It’s the biggest debacle I’ve ever seen in the vinyl realm,” says Kevin Gray, a mastering engineer who has not worked with MoFi but has produced reissues of musicians such as John Coltrane and Marvin Gaye.

“They were completely deceitful,” says Richard Drutman, 50, a New York City filmmaker who has purchased more than 50 of MoFi’s albums over the years. “I never would have ordered a single Mobile Fidelity product if I had known it was sourced from a digital master.”

Record labels use digital files to make albums all the time: It’s been the industry norm for more than a decade. But a few specialty houses — the Kansas-based Analogue Productions, London’s Electric Recording Co. and MoFi among them — have long advocated for the warmth of analog.

“Not that you can’t make good records with digital, but it just isn’t as natural as when you use the original tape,” says Bernie Grundman, 78, the mastering engineer who worked on the original recordings of Steely Dan’s “Aja,” Michael Jackson’s “Thriller” and Dr. Dre’s “The Chronic.”

Mobile Fidelity and its parent company, Music Direct, were slow to respond to the revelation. But last week, the company began updating the sourcing information on its website and also agreed to its first interview, with The Washington Post. The company says it first used DSD, or Direct Stream Digital technology, on a 2011 reissue of Tony Bennett’s “I Left My Heart in San Francisco.” By the end of 2011, 60 percent of its vinyl releases incorporated DSD. All but one of the reissues as part of its One-Step series, which include $125 box-set editions of Santana, Carole King and the Eagles, have used that technology. Going forward, all MoFi cutting will incorporate DSD.

Syd Schwartz, Mobile Fidelity’s chief marketing officer, made an apology.

“Mobile Fidelity makes great records, the best-sounding records that you can buy,” he said. “There had been choices made over the years and choices in marketing that have led to confusion and anger and a lot of questions, and there were narratives that had been propagating for a while that were untrue or false or myths. We were wrong not to have addressed this sooner.”

Mastering engineer Brad Miller founded MoFi in 1977 to cater largely to audiophiles. The company boomed during the 1980s, but by 1999, with vinyl sales plummeting, the company declared bankruptcy. Jim Davis, owner of the Chicago-based Music Direct, a company that specializes in audio equipment, purchased the label and revived MoFi. During the recent vinyl resurgence (vinyl sales in 2021 hit their highest mark in 30 years), MoFi’s specialty releases sell out quickly and can be found on secondary markets at much higher prices.

Marketing has been a key element of the MoFi model. Most releases include a banner on the album cover proclaiming it the “Original Master Recording.” And every One-Step, which cut out parts of the production process to supposedly get closer to the original tape, includes a thick explainer sheet in which the company outlines in exacting detail how it creates its records. But there has been one very important item missing: any mention of a digital step.

The company has obscured the truth in other ways. MoFi employees have done interviews for years without mentioning digital. In 2020, Grant McLean, a Canadian customer, got into a debate with a friend about MoFi’s sourcing. McLean believed in the company and wrote to confirm that he was right. In a response he provided to The Post, a customer service representative wrote McLean that “there is no analog to digital conversion in our vinyl cutting process.”

Earlier this year, MoFi announced an upcoming reissue of Jackson’s 1982 smash “Thriller” as a One-Step. The news release said the original master tape would be used for the repressing, which would have a run of 40,000 copies. That’s a substantially bigger number than the usual for a One-Step, which is typically limited to between 3,500 and 7,500 copies.

Michael Ludwigs, a German record enthusiast with a YouTube channel, 45 RPM Audiophile, questioned how this could be possible. Because of the One-Step process, an original master tape would need to be run dozens of times to make that many records. Why would Sony Music Entertainment allow that?

“That’s the kind of thing that deteriorates tape,” Grundman says.

“That’s the one where I think everyone started going, ‘Huh?’ ” says Ryan K. Smith, a mastering engineer at Sterling Sound in Nashville.

The MoFi controversy has not just exposed tensions between rival record makers, but it has also heightened a rift between Fremer and Esposito.

For decades, as LPs were replaced by CDs and iPods, Fremer, now 75, was a lonely voice pushing to keep them alive.

“Michael’s considered the guy, like the guru, so to speak,” says Dale Clark, 54, a photographer and longtime record collector in Ohio.

But Fremer, now a writer for the online magazine the Tracking Angle, has been bickering with Esposito for months. He was furious that MoFi invited Esposito to Sebastopol and wrote an email to Davis on July 17 to protest.

“You have lost your minds,” Fremer wrote. “Mistakes happen that can be corrected. In this case you have chosen to elevate [an inexperienced non-journalist] to work your way out of a predicament instead of a seasoned journalist and I’m not referring necessarily to me. I could name a half dozen others.”

Esposito never claimed to be a journalist.

He’s a record geek who grew up in foster homes after his father was murdered when he was 11. (His mother, he says, has had drug and alcohol problems.) Over the years, Esposito, who didn’t finish high school, has sold sports collectibles and started a chain of mattress stores. In 2015, he opened the ‘In’ Groove in Phoenix. His regular videos, in which he unboxes reissues and ranks different pressings, have made him a popular YouTube presence, with about 40,000 subscribers. He says he felt he owed it to his customers to pursue the MoFi tip.

“I sell to the people I sell to because they trust me,” Esposito, 38, told The Post. “And if they don’t trust me, they can go anywhere else and buy those records.”

Esposito wants record companies to do a better job labeling recording sources. Some already do. Intervention and Analogue Productions provide details on records or their websites; so does Neil Young.

“The problem is ‘analog’ has become a hype word, and most people don’t know how records are made,” Esposito says. “And you can very factually say this record was sourced from the original analog master tape, and you’re not lying. But that doesn’t disclose to the consumer what’s going on between the beginning of it and the final product.”

There were no ground rules laid out for Esposito’s July 19 visit. He paid his airfare, and Wood met him at the airport. In the car, Wood confirmed what Esposito had reported in his video.

“They didn’t come off to me as if they were trying to hide anything,” Esposito says.

At MoFi’s headquarters, Esposito looked at tapes and machinery the company uses to master its records. He also saw vintage packaging and advertising materials for past releases, including mock-ups for Beatles reissues. Then he took out his Panasonic camcorder and asked Wood if it was okay for him to set up and do an interview with the three mastering engineers he had met. No problem, they said.

The result is about an hour-long conversation that is equally fascinating and confusing. Esposito is not a trained interviewer, and engineers Shawn Britton, Krieg Wunderlich and Rob LoVerde are not trained interviewees. At times, the conversation is stilted and meandering. There are also occasional moments of charm as they connect about their shared passion for music.

Whatever Esposito’s approach, there is no doubt that without him, MoFi’s process would have remained a secret. The engineers, who had stressed the use of tape and working “all analog” in the past, didn’t hesitate to reference the company’s embrace of Direct Stream Digital technology.

Davis, the owner, not only didn’t invite Esposito but also didn’t learn about the visit until after Wood had extended the invitation. He tried to get to Sebastopol for the tour but said that a long line at a rental car check-in left him arriving at MoFi headquarters only after Esposito was finished.

By then, the damage was done. Last week, Wood was asked whether he regretted the interview with the engineers. He broke down.

“I regret everything, man,” he said.

Davis also did not appreciate the interview. Music Direct’s stereo equipment business brings in revenue of more than $40 million a year, and MoFi earned about $9 million last year. But the record company has just a handful of full-time staffers and no crisis-management plan. He doesn’t blame the engineers for what happened

“I mean, it was not a well-thought-out plan,” Davis says. “Let’s put it that way.”

The fallout of the MoFi revelation has thrown the audiophile community into something of an existential crisis. The quality of digitized music has long been criticized because of how much data was stripped out of files so MP3s could fit on mobile devices. But these days, with the right equipment, digital recordings can be so good that they can fool even the best of ears. Many of MoFi’s now-exposed records were on Fremer’s and Esposito’s own lists of the best-sounding analog albums.

Jamie Howarth, whose Plangent Processes uses digital technology to restore sound and whose work has earned praise for Neil Young and Bruce Springsteen reissues, wishes MoFi had come clean years ago and proudly told its customers that their prized records sounded best because of the digital step. He understands why it didn’t. It was terrified of being attacked by analog-or-bust audiophiles.

“One of the reasons they want to excoriate MoFi is for lying,” Howarth says. “The other part that bothers them is that they’ve been listening to digital all along and they’re highly invested in believing that any digital step will destroy their experience. And they’re wrong.”

Wood says that MoFi decided to add DSD not for convenience but because its engineers felt they could help improve their records. He remembers hearing MoFi’s reissue of Santana’s “Abraxas” in 2016. “My mind was blown when we got the test pressings back,” he said.

Wood says MoFi takes great care in capturing the digital file. It won’t simply accept a link from a record company. If a master tape can’t be couriered to Sebastopol, MoFi will send engineers with their equipment to capture it. Having a file allows them to tinker with the recordings if they’re not pleased with a test pressing and make another. He says he is disappointed in himself for not being upfront but that, from here on out, MoFi will properly label its recordings. A revised One-Step card has already been crafted for upcoming releases featuring Van Halen, Cannonball Adderley and the Eagles.

And Randy Braun, a music lover, Hoffman message board member and lawyer in New York, hopes that, in the end, the MoFi revelation will prove what he’s been saying for years: that the anti-digital crowd has been lying to itself. “These people who claim they have golden ears and can hear the difference between analog and digital, well, it turns out you couldn’t.”

Alice Crites contributed to this report.
https://www.washingtonpost.com/music...gital-scandal/

















Until next week,

- js.



















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