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17-03-05, 09:36 PM
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Join Date: May 2001
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Peer-To-Peer News - The Week In Review - March 19th, '05
Quotes Of The Week
"There are a handful of executives out there who are the gatekeepers of what gets made and seen -- or not. I've pitched so many ideas and come away frustrated. So we just decided to do it ourselves." – Daniel Myrick "After 66338 given votes the poll result was overwhelming: 98 % of viewers thought that downloading should be legal, and only 2 % had the opposite view." – Tank Girl "If you can accept a few problems and want to learn computer security, meet hackers and federal agents, and party till the early morning... Defcon is for you.." – Humphrey Cheung "Thank God for computers, because mine tells me I began writing the first draft of Spamalot on Monday December 31st 2001. I downloaded the text of the [Monty Python and the Holy] Grail [movie] from one of the many illicit websites, which thankfully saved me all the bother of typing out the script and I could paste and cut and rewrite as necessary." – Eric Idle "This page is best view without Internet Explorer." – Geoff Johnson iPod Design "Honored" In China – Apple Fans See Red Yet another Chinese Electronics Firm has come out with yet another solid state MP3 player. They’re calling theirs the “Super Shuffle”. Available in half and full gig sizes the USB player/recorder/receiver will ship soon according to the maker LuxPro. Problem is the new unit, which boasts features like FM radio, voice and broadcast recording, bears more than a little resemblance to an Apple iPod Shuffle, itself a riff on previous flash players. This clone of a clone has led some of the more committed of the Apple faithful to sniff at the sheer crassness of it all. The Applesquad are fairly predicting Steve Jobs will sue the Asians out of existence and deservedly so as far as they’re concerned. Perhaps he’ll try, and if Apple had actually invented USB thumb-drive players, brought them up from birth to this great new market they might at least have a moral point, but like the mouse and GUIs - things once associated almost exclusively with the company - Apple did not conceive them. In fact, they were late to the flash player game. However even Sony, which actually did invent the personal player and with it an entirely new industry, dealt with the scores of copycats and competitors by aggressively staying ahead of them technically and aesthetically, producing some 1200 individual models and grabbing decades of record profits for their efforts. So much so they were able buy a movie studio and the world’s largest record company outright. It’s no coincidence then that when Sony allowed those Columbia content guys to hobble their engineers things went badly for them fast. They still haven’t recovered. Just last week the once proud Japanese giant went outside the company - and the country - and for the first time in their corporate history placed a foreigner at the top. It remains to be seen what if anything he can do to save the tottering titan. I’ve Fallen Into An Escher And I Can’t Get Out Personally I find the tension over copying little copy machines that are themselves copies of previous little copy machines ironic in the extreme and so overwhelmingly recursive that anything more than a passing mention might get me arrested by the redundancy squad. To get wound up about these particular new design clones, which it should be noted offer the consumer far more in the way of usable features than the plain vanilla Apple products they supposedly rip off is not merely an exercise in futility but a public admission of one’s peculiar brand of neurosis, like spending one’s days ranting that Bearshare is a copy of Limewire, when neither of them are original. As it happens both file-sharing programs were built on the work of others and like the iPod and the Super Shuffle both were created to support an entire social network built on the recapturing of performances that are themselves derivative, not that most of us seem to mind. Except for the ranting it seems the people have spoken and they’re saying there’s nothing wrong with it. Ultimately anything that drives the content capos bananas is probably A Good Thing for the world at large. Certainly it’s good for consumers. It’ll be a while obviously before the IP obsessive come around to reality – if indeed they ever do – and in the meantime they’ll be a wailin’ and a suein’ and as a result a watchin’ their profits plunge – but there is a better way. They can fight it out with features or choose a future filled with lawyers, at the end of the day it’s their call, but - and this is something that in spite of the obvious does bear mentioning, often - we don’t have to play by their rules and we don’t have to live by their decisions. So careful what you wish for Apple-istas. Getting your favorite technocrats to do anything by judicial fiat instead of customer choice could clone you a quick ticket to erehwon. Enjoy, Jack Say Bone! Movies Downloading Judged Legal In France Par Audionautes On Thursday, the French Court of Appeal of Montpellier released a 22 year old Internet user free of charges after he was sued for copying nearly 500 movies on Internet, burning them on CDs and sharing them with friends. The Court based its decision on the article L-122-5 of the French Intellectual Property Code stating that « authors can’t forbid copies or reproductions that are only intented for the private use of the copyist. » In a similar case in January however, the Discrict Court of Pontoise found another Internet user guilty and condemned him to pay more than 15 000 euros. On the contrary, the French Association of Audionautes helped another defendant who was able to win his case in December in front of the District Court of Chateauroux. There are still more than 50 criminal procedures pending in France. More than 20 of them are being helped by the French Association of Audionautes. The french press release of the Association of Audionautes : http://www.audionautes.net/blog/inde...sateur-de-p2p- relaxe-par-la-cour-dappel-de-montpellier The website of the Association of Audionautes (in french) : http://www.audionautes.net More on the article L-122-5 of the French Intellectual Property (in french) : http://soufron.free.fr/soufron-spip/...?id_article=22 http://www.audionautes.net/blog/inde...egal-in-france ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Anti-P2P Lawmaker Gets Top Senate Spot Declan McCullagh Orrin Hatch, the senator who once said the recording industry should be able to destroy music pirates' PCs, will be in charge of a new Senate panel responsible for writing copyright laws. Hatch, a Utah Republican, on Thursday was formally named chairman of the Senate Intellectual Property subcommittee. It's responsible for overseeing the U.S. Copyright Office and drafting legislation and treaties relating to copyright and patent laws. A few years ago, Hatch was one of the more vocal Washington critics of the Recording Industry Association of America. He urged the RIAA to be more flexible in licensing music to online distributors and even called a federal appeals court decision against Napster "shortsighted from a policy perspective." But when Napster's progeny arose in the form of peer-to-peer networks, Hatch's political views seemed to flip-flop. Instead of defending novel--and disruptive--technologies, Hatch became one of their most vocal political antagonists. Last year, he and Sen. Patrick Leahy of Vermont introduced the "Induce Act," an anti- file-swapping bill that foes said could target products like Apple Computer's iPod. Leahy is the senior Democrat on Hatch's new subcommittee. The Induce Act drew stiff opposition from Internet service providers, the electronics industry, and even some conservative groups that had typically been Hatch's allies. As a result, it was not enacted last year. "They had this on the fast track," said Gigi Sohn, president of advocacy group Public Knowledge. "Then they said, 'OK, let's sit down and try to negotiate.' My sense is that they've learned their lesson: If you try to pass legislation that gives Hollywood control over technology, it's going to fall flat on its face." (Neither Hatch nor Leahy has reintroduced the Induce Act in the new congressional session that began this year.) Hatch had been chairman of the Senate Judiciary panel but could not retain his seat because of term limits. Sen. Arlen Specter, R-Penn., became the current chairman and created the new subcommittee for Hatch to run. In 2003, Hatch gained some unwanted notoriety when he suggested during a hearing that copyright holders should be allowed to remotely destroy the computers of music pirates. "I'm interested in doing that," Hatch said. "That may be the only way you can teach someone about copyright...That would be the ultimate way of making sure" no more copyright is infringed. A day later, Hatch slightly backpedaled from that statement in a brief press release saying: "I do not favor extreme remedies--unless no moderate remedies can be found." Hatch is also an amateur songwriter of music with titles like "Our Gracious Lord" and "Climb Inside His Loving Arms." http://news.zdnet.com/2100-9588_22-5623975.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ U.K. Gets Tough On Music Swappers Graeme Wearden The U.K. music industry has compared the fight against illegal online file sharing with curbing drunk driving. The British Phonographic Industry (BPI) is likely to bring further legal action against U.K. citizens accused of sharing copyright-protected files over the Internet. Late last week the BPI won a court ruling that will force six ISPs to name 31 subscribers suspected of illegally sharing music. Speaking on Monday, a BPI spokesman suggested that last Friday's legal success--which followed a similar court action in October 2004--will prove to be just one part of a long-term process of changing people's behavior online through legal action. "In terms of behavioral change, the U.K. government has broadcast the dangers of drunk driving, but people still drunk drive," said the BPI spokesman. The ISPs involved in the case now have 14 days to provide the names sought by the BPI. The individuals named will then be invited to settle the charges, probably by paying a fine of around $3,820 (2,000 pounds). The BPI hopes that the amount of publicity generated by last week's court success will deter Internet users from uploading copyright material to file-swapping networks. But despite the group's tough stance, the spokesman recognized that the BPI is still facing an uphill struggle to convince file- swappers that they are in the wrong. "We're reluctant to say, 'OK, the job's done. Let's spend money on making records,'" the BPI spokesman said. "I suspect that the problem won't go away just because we've launched two rounds of litigation." http://news.com.com/U.K.+gets+tough+...3-5615896.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dutch Internet Cracks Down on File-Sharing Toby Sterling Five major Dutch Internet providers agreed Monday to cooperate in a crackdown on illegal file sharing, saying they will send warnings to clients suspected of swapping copyrighted music, film and software files. The providers said they will forward letters from the Brain Institute, which represents the entertainment industry in the Netherlands, warning clients that sharing copyrighted material is against the law. The decision was a compromise, because the providers refused to reveal customers' names or addresses directly to the Brain Institute. "This is a service, a warning to clients that they are doing things that are against the law," said Maaike Scholten, spokeswoman for providers HetNet and Planet Internet, two of the five Internet providers. Scholten said the companies hope the warnings will dampen illegal file sharing and prevent their customers from ending up in court. In December 2003, the Dutch Supreme Court set an international precedent by ruling that software used to share files was legal. But it didn't rule out that individuals could be prosecuted for using such software to share copyrighted works. The decision left the Brain Institute in a similar position as the American recording industry, which has sued song-swappers for tens of thousands of dollars in damages. The Brain Institute — a popular target of Dutch hackers — was founded in 1998 to fight what the entertainment industry sees as piracy and copyright infringement. It can trace the Internet addresses of computers that are being used to trade files but has no way of finding out who owns them without a court order. Director Tim Kuik said it will use the letters to demand that downloaders pay for songs and other material they have downloaded in the past. "We'll see what happens to them if they don't pay," Kuik said, adding that he expected the institute to eventually sue some users. He declined to say how much money the institute would demand as compensation for illegal downloads. At least one major Dutch provider, XS4ALL, said it would not cooperate with the Brain Institute. "They never even asked us," said spokeswoman Judith van Erven. "I guess they know where we stand." She said XS4ALL, pronounced "Access for All," was "not an enforcement arm of the entertainment industry." http://news.yahoo.com/news?tmpl=stor...rnet&printer=1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Hollywood Applauds Swedish ISP Raid Steve Gorman THE US film industry has hailed a raid by Swedish police against an internet service provider as a major blow to European piracy of movies and music on the web. The raid was carried out on Thursday at the Stockholm offices of Bahnhof, Sweden's oldest and largest ISP, which US copyright protection experts have considered a haven for high-level internet piracy for years. "This was a very big raid," said John Malcolm, worldwide anti-piracy operations director at the Motion Picture Association of America (MPAA), which represents Hollywood's major studios. "The material that was seized contained not only evidence of a piracy organisation operating in Sweden but of online piracy organisations operating throughout all of Europe," he said. Bahnhof, the first major ISP raided by the Swedes without advance notice, was home to some of the biggest and fastest servers in Europe, the MPAA said in a statement. Authorities in Sweden seized four computer servers - one reputed to be the biggest pirate server in Europe - containing enough digital film and music content for up to three and a half years of uninterrupted play, the organisation said. Mr Malcolm said authorities in Scandinavian countries had been reluctant to take such action in the past but recently had been cracking down on piracy. About 20 individuals suspected of internet piracy have been the targets of smaller raids by Swedish authorities during the past month. The servers seized during the operation contained a total of 1,800 digital movie files, 5,000 software application files and 450,000 digital audio files - amounting to 23 terabytes of data. The MPAA says the film industry loses $US3.5 billion ($4.4 billion) a year to videotapes and DVDs sold on the black market, but it has no estimate for how much internet piracy costs the industry. http://australianit.news.com.au/arti...-15319,00.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Overwhelming Victory For 'Pirates' In Swedish TV Debate TankGirl Swedish TV organized 15th March a well-advertised and anticipated debate with representatives from both sides of the piracy fence. There was Henrik Pontén, lawyer from the Swedish anti-piracy bureau, movie director Anders Nilsson, artist + small music label executive (in same person) Ayesha Quraishi, Julien Nebbout from the 'Pirate Bureau' (Piratbyrån, the organization that runs the big torrent site Pirate Bay) plus a couple of other keen pirates with some sort of national fame. The debate Here is a brief summary of the debate: The host of the show was in no way a specialist on the field but he remained reasonably neutral and kept the discussion going quite well. The anti-piracy lawyer was much what you would expect from a hired corporate gun: he tried to put weight into legality issues, hide his position as a corporate puppet and create an image that they are not after ‘common Swedes’ but hardcore pirates. He was somewhat on the defense due to the dubious methods used by his organization (using paid infiltrators, filming police raids for propaganda purposes etc.), and when asked had he personally ever made any illegal copies he swallowed a couple of times before claiming full innocence… which didn’t really sound too convincing at all...  Movie director Nilsson wasn’t the best representative for the movie industry: his emotions ran high most of the time, and the only serious item in his agenda seemed to be to force the Swedes to see all new movies in theatres with current ticket prices into indefinite future. Anything else would effectively destroy the Swedish movie industry if we are to believe him. He didn’t put any weight into the money coming from DVD sales – an obvious misrepresentation of facts, which was quickly pointed out in the various online discussions following the debate. Ayesha Quraishi, the artist and label boss, showed open mind regarding different business and distribution models. She wanted to see new possibilities in the evolving technology and overall made a sensible and positive impression. She admitted that as an artist she likes her works to spread to the largest possible audiences - even if she also needs to figure out ways to make money to her label. Piratbyrån’s Julien Nebbout was clearly the most intelligent and sympathetic person in the table. Unfortunately he didn’t get too much time to speak, but he used the available time to make some good points like asking what sense is there to criminalize something that hundreds of thousands of citizens are already doing and that they don't perceive as being criminal. One of the pirates appeared to be somewhat spaced out but the other one (having a reputation under the nickname Jens of Sweden) did a good job at challenging relentlessly the anti-piracy lawyer and his views. After the recent police raids Henrik Pontén has become a well-known and widely hated character in Sweden, and many viewers were probably pleased to see him having to sweat under the perky verbal fire of Jens of Sweden. Besides the usual pro-p2p points the pirate side emphasized the sense of freedom that the younger generation has associated with Internet communications. When young people learn to use Internet as their primary source of music and movies, it becomes a way of life for them, and criminalization can do little to change any of that. They will simply never be similar consumers as what the content industries had before Internet. Poll results and press reactions The viewers had a chance to cast their votes to the following question: "Do you think that downloading films and music from Internet should be legal?" After 66338 given votes the poll result was overwhelming: 98 % of viewers thought that downloading should be legal, and only 2 % had the opposite view. The viewers were also offered a possibility to send SMS message comments to the program but the flow of messages was so intense that the computer handling the messages crashed and no messages got through to the show. Obviously a hot topic enjoying wide public interest in Sweden. The debate was hot enough to cause further waves in the news media. Interestingly the newspapers took if not a clear pro-p2p stance at least a rather critical attitude towards the methods and motives of the anti-piracy organization and the new stricter legislation under works in Sweden. Here’s a freely translated quote from Svenska Dagbladet, one of Sweden’s main newspapers: Quote:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Skittish Aussies P2P Sites Shutdown Amid Raid Rumours Brad Peczka Australian P2P hubs are closing their doors following the music industry's raid on West Australian ISP People Telecom (formerly Swiftel). Both Music Industry Piracy Investigations (MIPI) and People Telecom have been ordered to appear before the Federal Court this Wednesday, in a case that could decide the future of online file sharing in Australia. Though MIPI has repeatedly stated that it is not interested in individual users, there is no doubt that the court case will be closely watched by file sharers, concerned that their activities might bring them to the attention of the law. MIPI chief Michael Speck says that "MIPI has already laid down several targets for future raids", and already, several West Australian hubs have decided to pull the plug. A popular internet radio station and a BitTorrent community both ceased operations last night. The entry page has been removed and now hosts a sombre notice, which says "Due to the increasing number of raids on P2P sites which seem to be getting closer and closer to home, we've decided to call it a day. This is to protect ourselves, as well as you users." Interestingly, other WA-based P2P communities will continue to operate, albeit behind increased security and scrutiny of members. Both services made use of the WAIX peering network, which provides ISPs based in WA the means to transfer data between each other at reduced cost. Many ISPs added the WAIX network to their free traffic lists, providing users with a way to share large files without impacting upon their quota limits. A similar network called PIPE exists in much of Eastern Australia. Both networks do not support the use of their services for illegal purposes, and have taken steps to prevent such use, but crafty file sharers constantly manage to evade these measures. The raid has had a ripple effect around Australia, with Victorian Torrent site VIXBit stating that "We decided it was time for Vixbit to call it a day." A similar story was heard in Adelaide, where PeeringSA was shutdown when PIPE staff terminated their accounts and removed their servers from hosting facilities at a PIPE data centre. Not everyone is rolling over to MIPI, however. The administrator of one site has vowed to seek legal advice as a result of MIPI's enquiries into the legality of his operations. The voluntary take down of the sites shows how successful MIPI's approach has been. Torrent swappers have long believed that it would be difficult to prosecute them because of the highly distributed nature of the BitTorrent protocol (anyone can put up a tracker and there is no central organisation or network to target.) However, MIPI has shown that it might win its war on piracy through publicity alone: by doing high profile raids on well known businesses, then making audacious claims to the press about what it has found, it is sending shockwaves throughout the internet community. One user suggested that "Australia's isolation, which has protected it in the past, may no longer be a deterrent to law-enforcement authorities." http://whirlpool.net.au/article.cfm/1459 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Whose Patent Is It, Anyway? Howard French UIYANG, China - Each shift, 200 workers, most of them women in smocks and bibs, labor in a factory tucked away in hilly farmland outside this city assembling a single product, one-inch hard drives. As China's emerging industrial centers go, Guiyang is an obscure outpost, bearing little resemblance to the booming factory towns of the east coast. And yet, as much as any other place in China this hard drive assembly may be at the front line of an intense global struggle to dominate high-tech manufacturing. The tiny storage device this factory churns out is the heart of one of the world's hottest consumer electronics items, the mini version of Apple Computer's iPod. Sales to Apple represent a huge triumph for GS Magic Stor, an offshoot of a struggling state-owned carmaker that is so obscure that even in China few are familiar with the name. The problem with this ringing success story, according to a better-established rival, Hitachi Global Storage Technologies, which has factories in China and also supplies miniaturized drives to Apple, is that the Chinese company stole crucial elements of the design. GS Magic Stor denies this charge, which Hitachi has made in a suit filed in Federal District Court in Northern California. In a recent online forum the company's president ridiculed Hitachi's claim, likening it to someone's asking carmakers to pay design rights to the inventors of the horse and buggy. A Hitachi official, who refused to comment further, said that GS Magic Stor could characterize the Hitachi patents however it wished, "but the plain and simple matter is they haven't expired." Hitachi's highly technical complaint specifies several areas where it says its designs were infringed by Magic Stor. Apple, which was not named in Hitachi's suit, would not comment. Even if Hitachi wins the suit, that would do nothing to stop Magic Stor from continuing to produce its miniature hard drives in China, although some analysts say that Apple would be forced for image reasons, if nothing else, to drop Magic Stor as a supplier. For Western companies competing with China as well as those doing business here, the issue goes well beyond the fate of one obscure company or of a single technology, however valuable. In one sector after another, companies warn that China's swift industrial rise is being greased by brazen and increasingly sophisticated theft of intellectual property. The issue of intellectual property theft has been a fixture on the trade agenda between the United States and China for years, with visiting American officials routinely stopping at the famous Silk Market in Beijing to highlight the sale there, like all over China, of cheap knockoffs of toys, clothing, software and DVD's. The Chinese government has recently razed the market, but the counterfeit activity has been moving relentlessly upscale, with General Motors, Cisco, Sony and Pfizer, just to name the most high-profile companies, complaining that their designs or formulas for everything from cars and PlayStations to routers and Viagra, have been violated. "Until recently, when China began putting intellectual property laws in place, for the past 40 years, all patents were owned by the government, and could be shared by any company that was willing to use them," said Paul Gao, a Shanghai-based expert on consumer electronics and automotives at McKinsey & Company. "The Chinese government actually encouraged this, and that has left a deep impression on companies that intellectual property is there for anyone to use it." Experts say the practice of copycat production is also fueled by the fierce competition among Chinese companies and provinces to join the global economy. "With the extreme fragmentation of industry, you see a lot of subscale players that are trying to survive in the market on their own," Mr. Gao added. "They don't have the budget for research and development or the scale to compete. If they pay a licensing fee, they consider they are essentially imposing a death penalty on themselves." Like many people on the receiving end of accusations of intellectual property theft here, GS Magic Stor's president, Zhu Baolin, fiercely denies his company has done anything wrong, and goes so far as to say that the lawsuit is an act of desperation by a foreign enterprise unable to compete with his Chinese company. "We don't blame Hitachi for what they are doing," said Mr. Zhu, a 25-year electronics industry veteran. "We just want Chinese people to know we created our own product, and that we face a lot of pressure. This will happen a lot in the future in the knowledge industry, but we will still work hard to grow." Beyond the case of Hitachi versus Magic Stor, many Chinese legal experts simply deny there is any special problem with theft of intellectual property in China. "It may look like it's a China problem, but it's a worldwide problem, just like piracy on the Internet, and it exists in America as well," said Zhang Ping, a law professor at Beijing University, and one of China's leading experts on intellectual property rights. "There are many problems with fake products, with low levels of technology. These can't be counted as intellectual property violations. They are just cheap fakes." Like many people professionally involved with this issue here, Ms. Zhang denied that China was a leading violator of intellectual property rights, which she acknowledged was still a relatively new concept in China. She also said that the country's efforts at improving enforcement, though steady, would require more time to reach the standards of intellectual property rights in many advanced industrialized countries. Lawyers who represent Western companies embroiled in intellectual property disputes in China, however, point to major loopholes in Chinese law and in the country's trademark and patent system as parts of the problem. Many Chinese patents, for example, are granted without any examination of their originality, making it easy for local companies to claim others' innovations as their own. While foreign experts also point to progress in the country's courts and especially in the richer provinces along the country's east coast, they say that local and provincial governments, eager to bolster their economies, sometimes subsidize patent filings for local companies and provide pointers to them on how to beat foreign claims of infringement. Even the Shanghai government speaks of building a "great wall of patents" to protect local companies. "Once upon a time, the counterfeiters in China ran away when you came after them," said Xiang Wang, a lawyer specializing in intellectual property rights at White & Case in Shanghai. "Today, they don't run away. Indeed, they stay put and they sue us. More and more Chinese companies are taking a so-called legal approach, taking advantage of serious weakness in the Chinese legal system." One of the most problematic areas, experts say, are joint ventures between foreign and Chinese companies, which are legion. When the joint venture dissolves, or sometimes even while it remains active, the Chinese party makes use of the technology or manufacturing processes illegally. A perennially told war story in business circles here involves the foreign factory owner who makes a wrong turn while driving to his plant only to discover an exact copy of his factory on the other side of the mountain. Although this story might be apocryphal, Mr. Wang said he saw cases all the time that are not so different in their details. "We have a client in the power business who found that one of his key employees had quit and joined a competitor, revealing confidential information to him straight away, and filing patents of these materials which were literal copies of the original technology," he said. "When our client warned he would sue over patent infringement, the Chinese company said it was also planning to sue. 'And by the way,' they asked, 'what patent are you talking about? This is our patent now.' " http://www.nytimes.com/2005/03/05/bu...05copycat.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Search Giants Hear Voices Jim Hu As the Net phone business starts to take off, can Web portals such as Yahoo be far behind? That's one of the big questions that will be on the minds of Internet and telecom luminaries as they gather Monday in San Jose, Calif., for Voice on the Net, a conference dedicated to promoting and exploring VoIP, the fast-growing technology for delivering voice calls over Internet Protocol. Signs of activity in the space are growing, with America Online planning to enter the crowded VoIP arena later this month with its own phone service. That move has heightened speculation that on the horizon are similar announcements from AOL's biggest Web rivals--Yahoo, Microsoft's MSN and Google. "We are definitely looking at the space closely," Yahoo spokeswoman Terrell Karlsten said. "We're figuring out how to enhance and expand into the voice space by leveraging those properties." Yahoo and MSN have long offered rudimentary phone service using their instant-messaging software and a PC. Now there are signs that all of the major Web portals are exploring whether it makes sense to expand those offerings further. Yahoo has already launched a PC-based voice service in the United Kingdom. Microsoft plans to embed voice calling into its enterprise instant-messaging software. And rumors continue to swirl about whether Google is building the foundation for its own VoIP project, starting in the United Kingdom. Google has not announced plans to offer VoIP service, and declined to comment for this story. While none of the three has yet outlined a VoIP strategy, the technology is proving hard for them to ignore. Millions of people are signing up for cut- rate and free plans that route voice calls over a broadband connection. Dozens of competitors have jumped into the market, offering VoIP plans for as little as $14.95 a month, putting new pressure on traditional phone providers. While that's great for consumers, it remains to be seen whether a VoIP play makes sense for Yahoo, MSN or Google. Yahoo and Microsoft could jeopardize important partnerships with telecom companies if they invest too heavily in voice services. Despite potential risks, all of the portals have begun tentatively checking out VoIP providers to test possibilities, according to sources familiar with the talks. Our first lovely contestant... One company that has attracted attention among the Web giants is Skype, a peer-to-peer VoIP provider based in Europe that lets people make free international calls from their PCs. The appeal in Skype lies in its rapidly growing user base, although the company has not figured out how turn those users into a more powerful and profitable business. Skype's Web site boasts more than 80 million downloads, 5.6 billion minutes served and more than 1 million people using the service at one time. Numbers like that could tempt someone looking for a VoIP foothold to look at partnering with--or purchasing--the company. Skype declined to comment for this story. Kicking the tires of Skype or any other VoIP start-up wouldn't necessarily amount to anything. Companies meet to discuss their options all the time. Few of those talks develop into serious negotiations, and fewer still culminate in a deal. While the portals' interest in VoIP has been piqued, an acquisition or partnership with an existing VoIP company is not imminent, sources said. Still, the portals are looking at VoIP with particular emphasis, believing there's a wealth of untapped potential in these businesses, sources added. Not everyone believes that VoIP would pay off big for the portals. Yahoo and MSN count some of the Baby Bell local phone companies as partners, discouraging big investments in the space. Yahoo recently extended its deal to bundle its services into SBC Communications' DSL customers, and it takes a cut of revenue from customers who sign up. SBC is also testing Microsoft's Internet television technology for possible use in a new broadband TV service slated for limited launch later this year. "I don't see any real serious effort to do it from any of those guys, except possibly as a feature or an application, but not really as a standalone service," said Rob Sanderson, an analyst at American Technology Research. Everyone's doing it VoIP is evolving into a bigger business outside of just chatting over PCs. In the purest sense, the technology lets people talk by converting voice into digital "packets" of information that are then piped through the Internet. Anything sent though the Internet travels as packets of data that eventually become music files, e-mail messages, Web pages and video clips. The hype behind VoIP lies in its savings both to consumers and companies offering it. Customers of Vonage, for example, can pay only $25 a month to make unlimited local and long distance phone calls within the United States and Canada. Cable companies in particular are investing heavily in VoIP, with many of them swapping out traditional circuit-switched voice calls to IP-based services. Last year, Time Warner Cable, which never warmed up to the circuit-switched business, began trialing a VoIP service and has since introduced it to all of its markets. At the end of 2004, Digital Phone, as it's called, had 220,000 customers, while Cablevision reported 273,000. Comcast also plans to join the VoIP fray. Even Baby Bell local phone companies, which are arguably losing customers to VoIP, plan to embrace the trend. The Bells are pouring money into beefing up bandwidth throughout their copper networks in hopes of using the Internet to deliver video into homes. With a broadband connection that can carry more data, the Bells will package their TV services with VoIP. Some Bell executives privately say the transition to IP-based networks could one day make voice a free add-on for people who buy video and broadband Internet access packages. Building blocks Yahoo and MSN already have some form of VoIP in their services. For years the companies have offered voice chatting as a feature in their respective instant-messaging services. IM users click on a button on the chat window that initiates a voice exchange between two people. Both services require people to use a PC microphone and headset. Yahoo and MSN also let people make calls from their PCs to standard phones, although a third-party company provides the software and usually charges a fee for international calls. Yahoo has also launched ways to improve its voice chatting features with British telecom giant BT. The companies last March unveiled a voice service that's similar to its existing IM-based product, but geared toward BT customers. The service uses Yahoo Messenger to place calls from a PC to any traditional phone. Analysts such as America Technology Research's Sanderson think the portals will likely use VoIP as a complement rather than a standalone business. While acquisitions cannot be ruled out, the eventual home for VoIP may not look too different than what's out there today. "When we think about VoIP, most people think about traditional phone and I think it can mean a whole lot more than that," Sanderson said. "They can still get huge leverage and do great services by doing VoIP and not being a telco." http://news.com.com/Search+giants+he...3-5600513.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SanDisk Flashes Biometric Storage Gizmo Dinesh C. Sharma SanDisk on Thursday unveiled a tiny flash memory storage drive that deploys fingerprint identification for security. The portable USB 2.0 device, dubbed Cruzer Profile, is about the size of a pack of gum and will be sold in 512MB and 1GB capacities. It has two LEDs--one for data transfer and the other for authentication of the biometric fingerprint, the company said. The drive gets activated after an embedded sensor reads and authenticates a finger swiped across the device, it said. Fingerprint images will be stored on the drive itself. A version of the drive with 512MB capacity will cost $99.99, while the 1GB version will sell for $199.99. Both models begin shipping next month, the company said. The drives come bundled with software for data file encryption and file backup, and are compatible with Windows XP, Windows 2000, Windows ME, Mac OS 10.1.2+ and Mac OS 9.2.1+. A driver can be downloaded for Windows 98SE support. SanDisk also announced Thursday a 2GB Cruzer Titanium USB 2.0 flash storage drive designed to physically protect data. It is made of titanium alloy for extra sturdiness and resistance to wear and corrosion, the company said. The 2GB Cruzer Titanium is expected to ship next month for $249.99. The 512MB and 1GB versions are already available for $84.99 and $169.99, respectively. Separately, SanDisk introduced an upgrade of xD-Picture Card with 1GB capacity, compatible with Fuji and Olympus cameras. When used with a 5-megapixel digital camera, the card can capture and store about 800 images, the company said. SanDisk said it will start selling the M Series, 1GB card in April for about $139.99. http://news.com.com/SanDisk+flashes+...3-5608589.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The Last Song You'll Never Hear.... Robbie Williams has topped the UK funeral music chart, leaving Mozart trailing in his wake, according to a survey Thursday. Williams' "Angels" was the record most Britons would like played at their funeral, with Mozart's "Requiem" coming in at five in digital broadcaster Music Choice's poll of top 10 British funeral songs. Frank Sinatra's "My Way" was second, just ahead of Monty Python's "Always Look on the Bright Side of Life." The rest of Europe favored a more soft rock approach. Queen's "The Show Must Go On" topped the European chart, with Led Zeppelin's "Stairway to Heaven" and AC/DC's "Highway to Hell" in second and third place. Over 45,000 music fans from across Europe were polled, with 20,000 Britons taking part. http://www.reuters.com/newsArticle.j...toryID=7867390 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ As File Sharing Nears High Court, Net Specialists Worry John Markoff As the bitter debate over computer file sharing heads toward the Supreme Court, the pro-technology camp is growing increasingly anxious. Some technologists warn that if the court decides in favor of the music and recording industries after hearing arguments in the MGM v. Grokster case on March 29, the ruling could also stifle a proliferating set of new Internet-based services that have nothing to do with the sharing of copyrighted music and movies at issue in the court case. Some of those innovations were on display here at the Emerging Technologies Conference, attended by about 750 hardware and software designers. The demonstrations included Flickr, a Canadian service that has made it possible for Web loggers and surfers to easily share and catalog millions of digital photographs. And Jeff Bezos, the founder and chief of executive of Amazon.com, demonstrated a set of new features in the company's A9 search engine designed to make it extremely simple for Web users to share searches specially tailored to mine everything from newspapers to yellow pages to catalogs of electronics parts. Software designers from iFabricate, a small company in Emeryville, Calif., displayed a new Web service intended to make it simple for home inventors to share instructions for complex do-it-yourself garage construction projects. Projects can be documented and shared with a mixture of images, text, ingredient lists, computer- animated design files and digital videos. There was also a demonstration of Wikipedia, a volunteer-run online encyclopedia effort that now has generated 1.5 million entries in 200 languages. Innovative online services of those types could be harder to create in the future, if the court rules that technology creators are liable for any misuse of their systems, according to technology proponents here. "It could be a disaster," said the conference's sponsor, Tim O'Reilly, owner of the world's largest independent computer book publishing company, O'Reilly & Associates. In briefs filed before the Supreme Court, the recording and motion picture agencies have argued that the Ninth Circuit Federal Court, in San Francisco, erred last August in finding that the operators of the Grokster and Streamcast file-sharing services were not legally responsible for copyright infringements committed by users of their services. Lawyers for the music and movie industries are attempting to persuade the Supreme Court to modify its decision in the 1984 Sony Betamax decision, which held that the video recorders should not be outlawed, because they could be used for many legitimate purposes besides illegally copying movies. Mr. O'Reilly started the conference four years ago to explore a set of so-called peer-to-peer Internet technologies - which include file sharing. It has since evolved into a meeting place for software and hardware designers interested in harnessing the Internet for various new collaborative services. The court case could hinge in part on the entertainment industry's argument that advanced computing technology now makes it possible for consumer electronics designers to create technology that can distinguish between legal and illegal file copying. The Internet technologists worry that, if the court accepts that reasoning, Hollywood could end up dictating the technical specifications for digital technology in a way that would choke off future innovation. In fact, they point out that peer-to-peer applications are now branching out in all directions from more basic file-sharing origins. "This conference shows that it's no longer about sharing movies and music," said Mitchell D. Kapor, the founder of the Open Source Applications Foundation, a San Francisco-based nonprofit organization that is now developing an electronic mail program and a related set of information-sharing software programs. "The momentum of the technology has moved away from the lawsuit." http://news.com.com/As+file+sharing+...l?tag=nefd.top ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Microsoft Acquires PC Pioneer's Company John Markoff Ray Ozzie, whose popular Lotus Notes software helped demonstrate the power of office PC networks in the early 1990's, has gone to work for the PC software king, Bill Gates of Microsoft. Mr. Ozzie's company, Groove Networks, develops software intended to permit simple collaboration by workers using desktop or portable computers, whether they are in the same office or connected via the Internet. Microsoft said on Thursday that it would acquire Groove and its 200 employees and that Mr. Ozzie would become one of three chief technical officers at Microsoft. Groove, which is privately held and based in Beverly, Mass., was founded in October 1997 by Mr. Ozzie, who previously was the designer of Lotus Notes. Financial terms were not disclosed. Microsoft was already a major investor, along with Intel Capital, a unit of Intel. In 2001, Groove was valued at about $250 million. Mr. Ozzie, who began his career developing minicomputer operating systems, was a pioneer at early software companies including Software Arts, the developer of the first software spreadsheet, VisiCalc. He also helped the Lotus Development Corporation pursue Symphony, a less successful companion to the Lotus 1-2-3 spreadsheet. Later, from a small design company he founded, Iris Associates, Mr. Ozzie led the development of Lotus Notes, a pioneering program intended to permit groups of office workers to share information and tasks easily. Lotus was acquired by I.B.M. in 1995. While other Lotus executives, like Mitchell D. Kapor and Jim Manzi, had sometimes bitter and confrontational relationships with Mr. Gates, Mr. Ozzie had a more collegial relationship with Microsoft, the software company that came to dominate the PC industry in the 1980's. "We all had mixed feelings," said Bob Frankston, who founded Software Arts with Dan Bricklin in 1979, and who later worked at Lotus and Microsoft. "Mitch took it more personally, but Ray was immersed in making things work on Windows." Mr. Frankston said that early on, Mr. Ozzie won the respect of Microsoft executives with his technical achievements. "He impressed Microsoft by pushing the technology farther than what any other mortal could do," Mr. Frankston said. Mr. Ozzie has frequently traced his technology ideas about workgroup computing back to the mid-70's, when he was involved in a pioneering online educational community known as Plato at the University of Illinois. Mr. Ozzie, 49, and Mr. Gates, also 49, define a generation of software developers who exploited the power of the I.B.M. personal computer and saw immense business growth based on the industry that the machine fostered. Mr. Ozzie said he remembered the first time he and Mr. Gates met, when he visited Microsoft in 1981 while Microsoft was preparing its MS-DOS operating system for the soon-to-be-announced I.B.M. PC. The two men discussed how to take advantage of the specific features in the I.B.M. computer, Mr. Ozzie said. On Thursday, during a telephone news conference and in a later interview, neither software executive would give details about how the two companies plan to integrate their products. Groove's product, Virtual Office, overlaps in several ways with Microsoft's SharePoint software collaboration program. Microsoft executives, however, suggested that the Groove software would have an impact on both the next version of Microsoft Office and the next version of the Windows operating system, called Longhorn. "A big part of Longhorn," Mr. Gates said, "will be its peer-to-peer capability, and having Groove help us will be a big part of that." Mr. Ozzie will join Microsoft's two other chief technical officers, David Vaskevitch and Craig Mundie. Separately, on Thursday in Washington, Microsoft's chief counsel, Bradford L. Smith, outlined the corporation's view on patent reform. Microsoft, Mr. Smith noted during a telephone interview, is a leader in patents awarded and faces more patent litigation than almost any other United States company. He said Microsoft was working with other technology firms to push for legislation and changes in international patent and trademark law. "Our patent system is being flooded with new patent applications and an explosion of sometimes abusive litigation," he told the American Enterprise Institute. "Although the roots of our patent system are strong, its long-term health is threatened unless we take this opportunity to reform it. Now is the time to act." http://www.nytimes.com/2005/03/11/te...gy/11soft.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Five Years After the Bubble, Have Its Lessons Been Forgotten? Floyd Norris FIVE years later, the great bubble of 2000 does not look so bad. The conventional wisdom now is that it was not all that important, certainly nothing like the great bubbles of 20th-century stock market history, those of the United States in 1929 and Japan in 1989. But there are similarities indicating that it could be a very long time before technology stocks as a group become good long-term investments again. First, look at the differences. In 1929, the world economy entered the Great Depression. In 1990, Japan began a long period of poor economic performance. It was not a depression, but there has yet to be a period of sustained growth there since the end of the bubble. The United States bubble in 2000 was different both in breadth and in economic impact. That bubble did not infect the entire stock market, but instead was concentrated in technology stocks, with a lesser bubble in the largest stocks, the ones that dominated the Standard & Poor's index of 500 stocks. The economic aftermath included only a mild recession and a slow recovery. When the bubble was at its peak, the Federal Reserve chairman, Alan Greenspan, turned aside advice, some of it from this column, that he should do something to restrain the speculation. He offered a confident forecast that if and when the bubble did burst, he would know what to do to minimize the damage. And he seems to have been right, even if some fear that superlow interest rates simply created another bubble, this one in home prices. The image of a bubble bursting is not a perfect one. Any child knows that soap bubbles blown into the air seem to float along, and then suddenly vanish. They do not shrink, and they do not reinflate. But the history of stock market bubbles is different. Charles P. Kindleberger, the M.I.T. economist whose book "Manias, Panics and Crashes" remains the best work on the subject, notes that the path down from a peak is neither sudden nor straight. Instead, investors come back to be disappointed time and again. When all are dismayed, prices can be low enough to prompt another great bull market. But that can take a very long time. How long? Adjusted for inflation, the Dow Jones industrial average was below its 1929 peak in the early 1990's. (That calculation uses the consumer price index, which is by no means a perfect measure of inflation and is not adjusted to reflect dividend payments. But it provides a rough approximation of the purchasing power of a basket of stocks in different eras.) While many American stocks are higher than they were in 2000, the area where the frenzy was greatest remains low. Adjusted for inflation, the Nasdaq 100 is off about 70 percent from its peak. That performance is quite similar to the one turned in by the Dow industrials in the first five years after 1929, and worse than the performance of the Nikkei 225 after 1989. When the stock market fell to its post-bubble lows in late 2002, there was much talk that the lesson was that even if a technology is revolutionizing the world, the profits are more likely to go to those who use the technology than to those who develop it. Now investors are back buying hot technology stocks, and that lesson appears to be forgotten. That is perfectly consistent with the history of previous bubbles. The second five years after a historic high can produce some big gains, but they can also produce losses that wipe out those gains. Technology investing in the next five years may be more exciting than profitable. http://www.nytimes.com/2005/03/11/bu.../11norris.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TV Networks Trying To Keep Up With Public’s Changing Tastes Brian Saxton Morton Morrison and his wife, Sylvia, like watching the networks’ evening news. “I don’t watch the five o’clock news because it’s all local stuff,” Morrison said Wednesday. “I’m more interested in national and international news so I turn on CBS at 6:30 and then I switch around to ABC and NBC to see what they’re doing.” Morrison, 92, and his wife, 91, have been watching the TV networks’ nightly news for as long as they can remember. “I like to know what’s happening in the world and the nightly news wraps everything up after the Middle East and Europe have closed down,” said Morton Morrison. Still, as veteran CBS Evening News newsman Dan Rather signed off Wednesday night after 24 years in the anchor chair, some industry observers say all three nightly network newscasts have reached a critical crossroads. In December, Brian Williams, 45, succeeded 65-year-old Tom Brokaw as anchor of the NBC Nightly News. Faced with increasing competition from cable news channels, such as CNN, as well as the availability of news on the Internet, the three network news shows reportedly have been losing revenues as well as viewers. According to media research figures produced by the New York-based Nielsen group, the CBS Evening News, for example, is watched by an average of 7.48 million viewers each night, compared with 7.55 million at the same time last year. CBS advertising receipts are reportedly 13 percent less than NBC’s. “I think they may have even gone beyond the crossroads,” said Karen Raftery, associate professor of communications at Western Connecticut State University. “We now have several 24-hour news channels as well as the Internet where people can get the news immediately. It’s been a physically losing battle for the evening news programs.” Rather, 73, became the CBS Evening News anchor on March 9, 1981, after veteran CBS news anchor Walter Cronkite retired. Rather decided to quit a year sooner than planned in a bittersweet goodbye clouded by his role in a flawed CBS News report about President Bush’s service in the National Guard. As CBS executives regroup to find a permanent successor, industry watchers say all three networks will have to devise new ways of retrieving viewers and advertisers. Raftery believes networks may have to start bringing in “celebrity hosts,” for example, instead of professional journalists to anchor the news. Amy Mitchell, associate director of the Washington-based Project for Excellence in Journalism, said networks certainly will have to decide whether to continue their present formats and accept smaller profits or make changes. “The fixed time slot (6:30 pm) is a big problem,” said Mitchell. “We live in an era where people want their information according to their own schedule and most people aren’t home at that time.” WestConn English professor John Briggs agreed more people are going to the Internet for their news. “People are naturally curious and are turning to the Internet,” said Briggs. “It’s not just more convenient but I think some people think they’re getting the real story instead of accepting some corporate or government spin that is presented on the nightly news, both locally and nationally.” Briggs said networks will have to start “re-thinking” what represents news reclaim viewers and move away from programs that are “largely empty.” Networks may have a tougher job recruiting younger adults and college students who increasingly turn to cable news and the Internet. For Leah Manz, a 19-year-old WestConn freshman, catching up with the news on the Internet is much easier than turning on the television. “I don’t have the time to watch news on TV,” Manz said. “I’d have to spend watching other stories I don’t care about.” Thomson Babykutty, a 28-year-old computer science major, tries to do both but finds TV networks more constraining. “I like watching the networks when I can because they usually have new ideas and stories,” said Babykutty, “but I also use the Internet because I can do it any time. Television (programming) is more fixed.” http://news.newstimeslive.com/story.php?id=69731 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TV tunes New Milford Composer Creates Music For Popular Shows Nanci G. Hutson At first glance, the raven perched on the barn's wood beam in Mark Snow's loft studio seems eerily real, its glassy-eyed stare causing visitors to catch their breath. The 58-year-old composer's ethereal music for the science-fiction television classic, "The X-Files,'' has the same startling effect. A gag gift, the bird came with Snow from California when he and his wife Glynn — sister of actress Tyne Daly of TV's "Judging Amy'' and Tim Daly of "Wings" — moved last summer to the Merryall farm property they bought as an East Coast getaway. He perched the stuffed, black crow in his studio, a solitary space separated from the main farmhouse with wide windows that overlook a picturesque expanse. "California turned into a great place to visit, but not a great place to live,'' said Snow, composer for the WB series "Smallville.'' He also is working on music for a new pilot of the 1970s TV series "Kolchak, The Night Stalker.'' He said he plans to write the music for the second "X-Files" film, having written the music for 1998's"Fight the Future." "In the dead of winter, visiting for 10 days is just fine. This is home," he said. Though this isn't the studio where Snow invented the theme "X-Files" fans, called Philes, can instantly hum, or whistle, it has all he needs to create whatever sounds, music or effects he requires for whatever project is on his deadline schedule. He then e-mails the composition to the studio. In the center of the cozy space is a semicircle of electronic keyboards, synthesizers, recorders, mixers and other computerized music gadgetry that would delight any techno-geek. On a stand in front of the equipment is a large screen plasma television where he watches the episodes for which he is writing music. His aim is to always complement the mystery behind the unfolding plots with sounds and instrumentation that underscore and enhance the on-screen action. He met his goal with the famously moody theme for "The X-Files." The haunting melody with its distinctive, whistling background was created with a mix of electronic sound and a recording of Snow's wife Glynn, "an excellent whistler.'' It was a winning combination. "You have to have an instinct for it,'' Snow said of finding the sounds and instrumentation that make music work for a particular television show or film. "It's not something that can be taught.'' On a day-to-day basis, Snow is content to compose new music for television and movies. Some three decades into an industry that can be described as quirky, with artists coming and going, Snow has managed to stay on top. Last week he was awarded the "Golden Note'' from the American Society of Composers, Authors and Publishers, an achievement bestowed on top composers in film and television. "It's an award for longevity, consistency, for having worked in the industry for 30 years,'' said the trim, goateed composer. "It's a recognition of that body of work, and that's terrific.'' The walls of his studio are filled with accolades attesting to achievements from his childhood in Brooklyn, N.Y. when he chose to learn the oboe. To date, Snow's affinity for avant garde compositions has earned him 16 Emmy nominations. "If I ever win, it's over for me,'' Snow said with a grin. His fans admire his work, with or without awards. New Milford resident Valorie Kolitz, a dedicated Phile, said Snow's music made the show "believable.'' "The music set the tone, and now that music to me means science fiction,'' Kolitz said. "I can actually hum the whole thing. It's completely recognizable. You hear the first couple of notes, and you know what it is.'' The quirky, whistling sound she always attributed to some sort of slide whistle is integral to the effect the music makes on the listener, she said. "It was a very different sound, very extraterrestrial,'' she said. Kolitz and others suggest the music was an integral ingredient to the show's unexpected, nine-year run. Such praise is music to Snow's ears. "I had no idea this would catch on,'' Snow said. The first surprise, though, was when executive producer Chris Carter selected him to be the show's composer. Something about the show's intriguing notion that "the truth is out there,'' had great audience appeal, Snow said. Certainly, it appealed to him as he thought about music that would build anticipation for the show's exploration of the paranormal. Snow remembers with clarity the day actress Gillian Anderson — who played Special Agent Dana Scully to David Duchovny's Special Agent Fox Mulder — and who was known as someone quite particular in her likes and dislikes, was invited to hear the music he first proposed for the show. "I felt an immediate tension because I feared she wouldn't like it,'' Snow remembered. Pleasantly surprised, Anderson liked the dissonant sounds and the way it worked with the story lines. "It's my most popular score," Snow said. "When people think of me, they think of 'The X-Files.'" Born Martin Fulterman, to a professional percussionist and a kindergarten teacher who loved to play the piano, Snow's musical talents were choreographed at an early age. "It was DNA, I suppose,'' said Snow who changed his name when he and his wife moved to California in the early 1970s. Before that, at The Juilliard School of Music, he and four roommates created a band, "The New York Rock 'n' Roll Ensemble," a classic rock group that enjoyed some success touring with the likes of Janis Joplin, Sly and the Family Stone, The Turtles and Led Zeppelin. After a five-year run with the band, Snow said his wife, with her family's Hollywood connections, encouraged him to move to California to see what might materialize. "We had no money, and two kids at the time,'' Snow recalled. "We moved in with my father-in-law (the late actor James Daly) for two weeks, then he gave us $1,000 and said go rent a place. Six months later, I got my first job for a TV series called 'The Rookies.' And then it started to happen, slowly but surely.'' One job led to another, including TV movies and episodes. In the early days, he was writing music for everything from "The Love Boat'' to "Starsky and Hutch.'' He won his first Emmy nomination for a 1984 TV movie about incest called "Something About Amelia." Then in 1993, a producer he once worked with introduced him to Chris Carter for a 20th Century Fox television pilot. "He came to my studio in Santa Monica. He looked around, was very quiet, and said he'd be back in touch," Snow said. He came for a second visit. He invited Snow to try his best. Initially, Snow said, he wrote four different themes, none of which really gelled. There was a musical formula he was trying to emulate, but it didn't seem to work. He asked Carter for some artistic license. Carter agreed, asking only that it be kept simple. "He let me try something completely different,'' Snow said of the mix that included muted voices, saxophone, trumpets, harpsichords and sound effects. The sound worked. "After four episodes, there was such a great response to the show and the music, and everyone took credit for it, and that's fine by me,'' Snow said. In New Milford, Snow is settling into a nice mix between the demands of a thriving music career and a little time to relax. With three adult daughters and four grandsons, Snow likes the days he can turn off the music and spend time frog hunting with his grandchildren, who know nothing of "The X-Files.'' He looks ahead to what's next. "I would really love to do some original, quirky-type thing that's not a war story or a flat out romance," Snow said. "Something on the lines of 'American Beauty,' something off the beaten track, and not an action adventure that just has to be fast and loud. Something where you don't have to be predictable.'' http://news.newstimeslive.com/story.php?id=69617 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TiVo 4th-Qtr Loss Widens, Subscribers Rise TiVo Inc., a maker of digital video recorders, on Thursday posted a wider fourth-quarter loss on higher costs, although subscriptions to its television recording service grew sharply. The Alviso, California-based company, whose leading position in the DVR market is threatened as cable TV providers offer cheaper boxes, said it expects revenue to grow by more than 35 percent this year and that it plans to trim spending on wooing news customers. TiVo, whose systems let users customize TV viewing by recording shows on a built-in computer hard drive for playback later, said its net loss rose to $33.7 million, or 42 cents a share, from $12.4 million, or 18 cents a share. Analysts expected a loss of 43 cents a share, according to Reuters Estimates, for the period ending Jan. 31. TiVo added some 700,000 subscribers in the quarter, bringing its total to over 3 million. TiVo said revenue derived from its DVR service rose 73 percent to $33.0 million from $19.1 million. Total revenue rose to $59.4 compared with $42.6 million, a year earlier. TiVo which has been the subject of speculation over whether it might be up for sale, said it ended the year with $106.3 million in cash and short-term investments. The company said it expects to add 265,000 to 300,000 subscribers in the fiscal 2006 year, which ends next January, including 200,000 to 225,000 new users via its relationship with satellite provider Directv Group Inc. http://www.reuters.com/newsArticle.j...toryID=7870045 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Cable Giant to Offer TiVo Video Recording Saul Hansell Comcast, the nation's largest cable company, said yesterday that it would offer its customers a video recorder service from TiVo, news that helped send TiVo's shares up nearly 75 percent. Investors had soured on TiVo lately, on fears that its pioneering service for digitally recording and playing back television programs was being eclipsed by house brands offered by satellite and cable companies. Negotiations with Comcast broke down last summer, and DirecTV, which has been TiVo's largest source of new customers, has said it is building its own video recorder system. But the Comcast negotiations recently resumed, after a management shake-up at TiVo. Michael Ramsay, the chief executive who had opposed the deal with Comcast, is no longer chief but will stay on as chairman. And Martin Yudkovitz, the president, has resigned, although he remains a consultant to the company. The Comcast deal, completed late Monday, was spearheaded by Tom Rogers, a former executive of NBC Cable, who is now vice chairman of TiVo's board. In an interview yesterday, Mr. Rogers said that the economics of the current deal were better for TiVo than the one it had walked away from last year. "Each side gained a greater appreciation of how working together would be a benefit," he said. At the same time TiVo has to accept being only a software and monthly service provider to Comcast and only one of several video recording options offered by Comcast. Until now, TiVo's service has been available only to customers who purchase its own hardware, which sells for $100 and up. The proposed deal last year would have put TiVo software into Comcast's main video recorder. When that fell apart, Comcast offered its own brand of recorder, based on technology from Motorola, which makes most of its set-top boxes. Comcast is also set to test video recorders from Microsoft and from Digeo, a company controlled by Paul Allen. The new deal calls for TiVo to create software that can be downloaded and run on the Motorola video recording set-top boxes. It would be offered for a higher monthly fee than the generic Comcast version, which would still be available. Currently, Comcast charges about $10 a month for the video recording service. TiVo currently sells a stand-alone service for $13 a month. The TiVo service will not be available to Comcast customers until the second half of next year. All digital video recorders, or DVR's, use a hard drive to let users record programs, even as they watch them, if they choose, so they can pause viewing of a live show. TiVo has some highly regarded software that adds additional sizzle, like automatically recording any programs that feature the viewer's favorite actor. It is also developing software that lets users move recorded programs to laptop computers or hand-held video players for later viewing. Stephen Burke, Comcast's president, said that those extra features would appeal to some of the cable company's customers. "We have been selling DVR's as fast as we can install them, and on a scale of 1 to 10, our customers think they are a 10," Mr. Burke said. "Some customers may think TiVo is an 11." The deal calls for Comcast to pay TiVo an upfront fee to develop the software and a monthly fee for each user. A person involved in the deal said the monthly fee would be somewhat less than the approximately $1 a month that Direct TV now pays for each TiVo subscription. Mr. Rogers and Mr. Burke declined to discuss the terms of the deal. Both said, however, that the total value to TiVo depended heavily on how many Comcast subscribers decided it was worth paying extra for the additional features of TiVo. The deal also calls for Comcast to use interactive advertising technology developed by TiVo for all of its digital customers, whether they use the TiVo software or not. TiVo's technology superimposes an image over commercials that enables viewers to push a button on the remote to request more data on the product. The deal with Comcast, Mr. Rogers said, may also help pave the way for TiVo to strike similar deals with other cable companies. TiVo's shares, which had fallen from $10.30 a year ago to $3.45 last month, jumped yesterday to $6.70, up $2.87. http://www.nytimes.com/2005/03/16/te...gy/16tivo.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Netflix Downplays On-Line Movie Delivery Gina Keating Netflix Inc. Chief Executive Reed Hastings on Wednesday downplayed prospects for online delivery of movies, saying licensing snarls with movie studios would hold up consumer adoption long after the technology becomes widely available. Hastings said Netflix, the online DVD rental leader, expects the DVD format to dominate movie distribution for years to come as studios work out business plans for online distribution. "Media formats are led by not what people want but format profitability," he said. As long as movie studios are reaping huge profits -- as much as $15 per DVD -- from DVD sales that totaled more than $14 billion last year, studios have little incentive to adopt online or on demand delivery models that will pay them far less, Hastings said. "We recognized that DVD would dominate for ... 10 to 15 to 20 years," he said. "That won't last forever. Eventually piracy will rise and the movie industry will allow more downloading to people like us." Netflix plans to set aside 1 percent to 2 percent of revenues in the next five years to make way for online delivery on "several platforms," including a pact already signed with TiVo, Hastings said. The company, based in Los Gatos, California, plans to roll out limited online delivery later this year. "We will launch something this year and it will be totally underwhelming," he said. "Our view is that we don't want to end up with the AOL irony," in which the Internet service provider failed to recognize the importance of broadband before it became mainstream. Hastings said Netflix is betting that online delivery of films won't take off "for a couple of years, and that allows us to grow very large on the DVD side." With a target subscriber base of 20 million, Netflix could fend off competition for online download services by what will likely be a wide range of competitors, from Comcast Corp. to Walt Disney Co., while negotiating licensing agreements, he said. Netflix is betting that online download capability will penetrate the market relatively slowly, making it necessary for online rental companies to bridge the technology gap. "Consumers would choose a service that gave them downloading on the movies that were enabled for that and DVDs on the movies that were not," he said. "That would be the differentiator during the transition period." Among the possible projects the company may consider during the transition to online delivery was adding original content, he said. (News from the Reuters Technology Summit will be delivered throughout the day Monday through Wednesday to Reuters terminals and to the Reuters.com Web site, http://reuters.com) http://www.reuters.com/newsArticle.j...toryID=7798071 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Clearing Up The HDTV Picture Richard Shim The sharp picture quality that wows you on that expensive HDTV in the electronics store isn't necessarily what you'll see once you get the set into your living room. In some cases, retailers run video into the sets from closed circuit networks. They do that for various reasons, including wanting to demonstrate the sets' capabilities and keep pranksters from turning to racy programming. But the practice may be distorting consumer expectations, leading to disappointing experiences--and product returns. "There is no doubt there are higher return rates on HD sets than analog televisions," said Mike Vitelli, senior vice president of consumer electronics at retail giant Best Buy. The discrepancy in picture quality, however, isn't the only reason customers bring their high-definition TVs back. Some haul their expensive sets home only to get hit by a case of buyers' remorse, Vitelli said. Then there's the issue of video source. "It should almost be illegal to buy an HD set unless you can prove you have HD service," he said. With shipments of flat-panel televisions expected to more than double in North American markets this year compared to last (and similarly rapid growth expected in coming years), Vitelli and other retail and television service executives don't want to kill the golden goose. Still, creating the ideal HD viewing experience for consumers has posed its difficulties. Early on, customer support lines for television set makers, retailers and service operators often shuttled complaining customers back and forth, leaving many wondering if the industry could get its act together to sell to and support HDTV consumers. More recently, retailers and cable companies have been working in tandem to sell HD products to consumers. Comcast, for example, has been working on partnerships with Best Buy and Circuit City to improve training of their salespeople. Best Buy has been running rebates for cable services with the purchase of new televisions. The result has been higher subscription rates for HD service. The 800,000 Comcast subscribers who signed up for HD service started when Comcast began working with retail chains to better educate their salespeople. Still, after spending thousands of dollars on fancy new high-definition televisions, owners commonly don't even watch shows in HD programming, according to Bruce Leichtman, principal analyst at research firm Leichtman Research Group. "Call it cognitive dissonance or ignorance is bliss, but most households, about two-thirds, aren't watching shows in HD even though they think they are," Leichtman said. Vitelli isn't surprised. "I would agree with that guestimate without even seeing (the data behind) it," he said. Ignorant bliss or not, HD television shipments have been soaring. In 2003, 3.7 million digital sets were shipped in North America. That number will more than triple to 14.9 million units by 2005, according to research firm iSuppli. Halfway to high-def Fueling the surging demand is consumers' desire for sharp images that only HD sets can display, as well as immense screen sizes that don't degrade picture quality. Access to high-definition programming and broadcasts is a major selling point for HD sets--without it, consumers aren't really getting the high-definition television they paid for. The high-definition television experience is comprised of an HD set and a service that can display high-definition programming. But consumers can easily confuse either end of that equation--by purchasing a television that can't play HD content or by not using an HD signal. Manufacturers sell enhanced digital televisions, or EDTVs, which are cheaper than HDTVs and represent a growing sector of the television market. Additionally, HD content is not as abundantly available as digital broadcasts. The true high-definition experience includes a television with a built-in HD tuner and HD service from a cable or satellite provider or beamed over- the-air in areas where broadcast stations are making it available. (Web sites such as HDTVpub.com have directories showing which markets or cities have over-the-air broadcasts and rating their quality.) The disconnect between having an HD set and not watching shows in HD, experts say, must be bridged by making it clear that consumers need HD programming--and can conveniently get it. Dave Watson, an executive vice president at cable giant Comcast, said consumers have access to between 9 and 15 HD channels, depending on the market. While that might not seem like many compared to the more than 250 digital cable channels Comcast offers, consumers seem to think it's enough for now. "Consumers have expressed the need for more content but most have said they are satisfied with what is available," Watson said. Consumer confusion Watson added that while they're pleased with the rapid clip of subscriptions--more than 800,000 of Comcast's 1 million HD subscribers signed up in the last 18 months--he knows the market offers plenty more opportunity. While 93 percent of Comcast's 8.6 million digital-cable subscribers have access to HD service, only 12 percent subscribe. Confusion is slowing the adoption. When Comcast asked its customers if you get access by plugging in a cable, "40 percent said they didn't know," Watson said. For cable providers in particular, HD is a main weapon against satellite television companies. "We've been a bit of a follower (to satellite) when it comes to new technologies...such as digital-video recorders and services through set-top boxes," Watson said. "Now we're able to lead in innovation." However, if enough viewers aren't tuning in to that innovation, it won't get too far. Comcast's Watson also attributes the increase in subscriptions to the cable company's effort to increase the availability of its HD service. "We widen our deployment based on the belief that this is a service consumers want," Watson said, "and we accomplished that." http://news.com.com/Clearing+up+the+...3-5609311.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Apple Sides With Blu-Ray Disc In Format War Richard Shim Officially entering the debate over which specification will become the next-generation DVD format, Apple Computer has sided with the Blu-ray Disc Association. The association, which includes the likes of Sony, Dell and Hewlett-Packard, on Thursday announced Apple as its latest member following a bimonthly meeting in South Korea hosted by electronics maker Samsung. Apple will lend it expertise in high-definition and DVD authoring to the development of the Blu-ray Disc specification, which is backward-compatible with DVDs and allows for the storage of up to 50GB of data. Current DVDs can hold up to about 8.5GB of information. Blu-ray Disc's ability to store such large amounts of data is one of its key advantages over the HD DVD specification. HD DVD discs hold up to 30GB of data and are also backward-compatible with current DVDs. Proponents of HD DVD say players and discs will be cheaper to make than products based on the Blu-ray Disc spec. The two incompatible formats are the main technologies being considered by electronics and PC makers, as well as entertainment studios, to succeed the highly popular and profitable DVD disc. DVDs spawned a billion dollar industry, and executives are wary of tampering with a hit. However, all signs are pointing to the growing high-definition video market--and high-definition content requires more storage capacity than DVDs can sufficiently support. "Consumers are already creating stunning HD content," Apple's chief executive Steve Jobs said in a release, adding that users are "anxiously awaiting" a way to burn content to high-definition DVDs. Apple will also participate in the promotion and marketing of the Blu-ray Disc format, according to Josh Peterson, director of optical storage at Hewlett-Packard. "We're hoping to tap their marketing and creative genius when it comes to that area," Peterson said. Peterson added that Blu-ray Disc products are still scheduled to come out as early as the end of 2005 and as late as the beginning of next year. The "gating factor" is copy protection, and on that front, a number of proposals are being mulled, including the use of Advanced Access Content System, or AACS, one protection technology that HD DVD is also considering. The Blu-ray Disc Association is also finalizing the list of interactive features it plans to support in the first Blu-ray Disc products. Manufacturers are expected to come out with devices that read and write to DVD, Blu-ray Disc and CD. http://news.com.com/Apple+sides+with...3-5608776.html ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Disney to Release Films for Sony PSP Game Device The home video arm of the Walt Disney Co. on Wednesday said it would release movies in the newly-developed UMD format for Sony Corp.'s PlayStation Portable handheld video game and media device. Buena Vista Home Entertainment said it would release five movies this spring: "National Treasure," "Pirates of the Caribbean: The Curse of the Black Pearl," "Reign of Fire," "Kill Bill Vol. 1" and "Hero." More titles will be announced during the year, it said. The UMD, or Universal Media Disc, holds about three times the capacity of a regular CD. It was developed specifically for Sony's PSP, to be released in North America on March 24. Disney is the first major Hollywood studio other than Sony's own Sony Pictures division to announce UMD support. Lions Gate Entertainment Corp., a smaller independent film studio, is also backing UMD. Disney did not announce pricing for the UMD movies. Sony has said it would charge $20 and up for UMD films. http://www.reuters.com/newsArticle.j...toryID=7925628 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Samsung Introduces New MP3 Players Samsung said on Thursday it would use its handset and chip making dominance to win market share in the MP3 music player business and unveiled six new models aimed at helping it triple sales this year. Samsung Electronics Co. Ltd., Asia's most valuable technology company and the world's third-largest mobile phone maker, already has a eight models in the fast growing and profitable MP3 market. The six new players from Samsung, also the world's biggest memory chip maker, should be available in the first half of the year. They range from a 256 megabyte flash memory type to a 30 gigabyte hard disk drive model capable of holding about 7,500 songs. Samsung and big Asian brands Sony Corp. and Creative Technology Ltd., as well as PC heavyweights Dell Inc. and Gateway Inc., have their sights set on Apple's juicy market position. Its popular iPod music player and iTunes music store have a 70 percent share of the global digital music player and music download markets. In the U.S., Apple's market share is 80 percent. "We aim to sell more than 5 million MP3 players this year versus 1.7 million sold last year and will seek various strategic alliances with content providers such as Microsoft to boost sales," said Samsung Electronics vice president Kim Suh-kyum at a press conference. Samsung's new pocket-sized models have color screens and radio tuners. Some have features allowing users to watch music videos or take digital photographs. Sales of MP3 players are set to grow 57 percent this year after more than doubling in 2004, according to market research group iSuppli, which predicts sales will more than double by 2009. Samsung said it was looking to grab a 10 percent share in the United States this year, Kim said. He wouldn't say how much it accounted for in 2004. Shares in Samsung closed down 1.4 percent at 496,000 won on Thursday, versus a 1.3 percent drop in the broader market. http://www.reuters.com/newsArticle.j...toryID=7929103 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Amaze your friends Stuff a PC Into A Mac Mini! Jack Why? Why not? How-to ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Apple Faces the Music as IPod Competitors Emerge Sue Zeidler Apple Computer Inc. has a winner despite increasing attacks by iPod wannabes. As Sony Corp., which introduced a new music player this week, and software maker Napster, with a new portable subscription service, crowd into the market, many analysts are nervous an 'iPod killer' will ravage Apple's ability to grow. But others see an exploding market where Apple can win without maintaining the breadth of its lead -- it now has about 70 percent of the digital music player and music download markets. "Less than one percent of the world's population has a digital music player. Apple will have more competition but the overall category will grow fast enough and there should not be any slowdown for Apple," said Rick Doherty, analyst with market research firm Envisioneering Inc. After a bull run that's pushed Apple's stock up nearly sixfold since early 2003, shares of the wildly popular iPod maker have been falling in the past month as competition from other music services like Napster has heated up. Apple's shares are down more than 7 percent this week after Sony Corp. unveiled a new Walkman MP3 player, while in January, Lehman Brothers analyst Harry Blount wrote in a research note that he was "increasingly wary of valuation." Sony, whose Walkman player dominated personal audio for two decades, could give Apple a run for its money and climb into the No. 2 position, but its entry also could further fuel demand across-the-board. "If these new entrants come in and accelerate the growth of the market, there will be no adverse consequence to Apple, even if its market share slips," said Phil Leigh, analyst with Inside Digital Media, who forecasts 100 percent growth rates up to the next four years in digital music sales and in digital music players. "If the market's 10 times the current size and Apple's market share slips to 50 percent, they're still off to a good start," said Leigh. Apple commands between 60 percent and 70 percent of the digital music player market, having sold about 10 million iPods to date. Piper Jaffray forecasts Apple will sell nearly 22 million iPods in 2005, and about 27 million in 2006. Wall Street expects Apple profits to grow 24.8 percent annually over the long-term, according to Reuters Estimates. "The point where we start to get concerned is when the absolute number of iPods starts to slow down, but we're probably a couple of years away," said Gene Munster, senior research analyst with Piper Jaffray. "Two years from now, we're still going to be talking about Apple as the dominator. Yes, there's risk at that point, but its such a green field market for the next few years, they'll have a lot of space to run with it," he said. Munster and others also believe Apple will benefit as consumers get acquainted with its other products once they are hooked on the popular iPods, what some analysts have dubbed the "halo effect." While Apple has sold iPods at healthy profit margins, its download model runs at about break-even, even though Apple has sold more than 300 million downloads to date. Down the road, Leigh expects downloads will be more important to Apple. "Ten years from now, Apple will be making more money out of iTunes than from iPods," said Leigh. "The record labels will be willing to sell at lower prices because the volumes will be so high and the inherent profitability will be higher," he said. http://www.reuters.com/newsArticle.j...toryID=7877538 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ How The iPod Ran Circles Around The Walkman Randall Stross "Synergy and Other Lies" would be a good first reading assignment for Sir Howard Stringer, Sony's new chief executive, to be followed by "The Synergy Myth." Then Sir Howard should recognize that the Sony he inherits is constitutionally incapable of making one (electronics) plus one (entertainment) equal three. Both books were written by Harold Geneen, the number cruncher who directed International Telephone and Telegraph during its heyday in the 1960s. He engineered 350 mergers and acquisitions, which brought such names as Hartford, Avis, Sheraton and Madison Square Garden under one roof. Geneen, however, harbored no illusions that ITT's individual components could be coordinated in mutually beneficial ways. Each had to make its numbers wholly on its own. Sir Howard now presides over a company that appears--superficially--to be the polar opposite of an ITT-like conglomeration of unrelated businesses. Sony is accustomed to thinking of itself as consisting of two well-matched halves: electronics and entertainment. At the Consumer Electronics Show earlier this year, Sir Howard observed, "A device without content is nothing but scrap metal," a platitude beneath mention-- unless, perhaps, one were a mite defensive about owning both a widget factory and an entertainment factory. Sir Howard is expected to gently coax the consumer electronics half to stop sulking and to walk over to shake hands with the Hollywood half. And then, step back, everyone, for alchemical magic, convergence, synergy! At first glance, digital music is the field in which Sony's considerable assets seem best suited, with a little rearrangement, for a comeback. On one side, Sony has 50 years of experience in producing portable music players, beginning with transistor radios in the 1950s and extended by its Walkman franchise that has sold more than 340 million players. On the other, it owns one of the world's largest music labels to supply content. Yet in the iPod era, Sony's headstart counts for nothing. It's as if the company were the Sony Graphophone and Wax Record Company. The cassette-playing Walkman, even though it was outrageously successful, did not help Sony prepare for the digital player. The Walkman was nothing but hardware, and surprisingly simple. The first one was built in 1979, when a Sony executive sent a request to the company's tape recorder unit to rig up a portable cassette player that could provide stereo sound but still be light enough for him to take along on international flights. A small team pulled out the recording mechanism and speaker of the company's monaural Pressman, a cassette recorder used by journalists, installed stereo circuitry and added earphones. It was ready in four days. The predigital Walkman evolved over the years into more than an astounding 1,120 models. But its essential nature remained unchanged: It was dumb hardware. When Apple Computer introduced the iPod in November 2001, Steve Jobs described his new player as "the 21st-century Walkman." With 98 years remaining in the century, that was an early call. But he was correct. The iPod in 2001 was a Walkman successor, but smarter, its hard drive easily navigated with well-designed software. In April 2003, however, when the iTunes Music Store opened, the iPod became something else again: part of an ingeniously conceived blend of hardware, software and content that made buying and playing music ridiculously easy. Apple accomplished this feat by relying on its own expertise in the twin fields of hardware and software, but without going into the music business itself. Much earlier than this, Sony had gone Hollywood. Flush with profits generated in no small measure by the Walkman, and taking advantage of the strong Japanese yen, Sony acquired CBS Records for $2 billion in 1988 and Columbia Pictures for $3.4 billion the next year. Neither transaction could be said to have been the outcome of thoughtful internal discussions about strategy. The possibility of marrying hardware and entertainment was a consideration, but a fuzzy one. However dubious the original rationale, the music and movie acquisitions have turned into Sony's brightest, most profitable spot at the moment. It's the portfolio effect you would expect in a classic conglomerate: parts of the business that are doing well cover for those that are not. Of course, the theory assumes that a given unit's difficulties are merely cyclical. But Sir Howard's consumer electronics business, whose DNA only supports premium pricing and lacks the software gene, may not bounce back, ever. Last week, Sony announced a bunch of new Walkmans positioned against the ultralight iPod Shuffle. They reflect the same insular hardware culture that learned the wrong lessons from the earlier success of the Walkman. The game today, however, is not necessarily about spec sheets and weight in grams. At Sony, having both digital players and music in the same corporate family has actually been detrimental to its hardware interests. The music label directed the hardware group to make copying impossible, to the extent that until recently, customers could not enjoy on their Walkmans the music from their own legally bought CDs that they had encoded in MP3 format. Sony Connect, the late-arriving, woefully designed answer to the iTunes Music Store, still lamely insists on using Sony's proprietary compression standard. Apple got away with holding to its own standard only because it got everything else right, and was early to boot. Sony Connect must lag somewhere around 300 million song sales behind Apple, but pretends otherwise. Arguably, Walkman product managers are even more blind to market reality than those at Connect. Today, they are selling the 20GB Network Walkman for $50 more than the comparable iPod, even though it cannot use any music sold on Apple's site or on those of the many competitors that use Microsoft's widely licensed compression standard. A company thrives when it has all that it needs to make a compelling product and is undistracted by fractiousness among divisions that resent being told to make decisions based upon family obligations, not market considerations. Jobs appreciates the advantages of keeping content separate from distribution. At Pixar, he's in the digital movie business, which uses many skill sets that are used over at Apple, too. Yet he has elected to let the two live happy separate existences, without falling for the synergy myth. The reach of a company with the optimal mix of assets can extend in all directions--and right through the front door of its competitors. Last month, Wired magazine reported that 80 percent of Microsoft employees who owned a digital player owned an iPod. Coming as he does from the entertainment side of Sony, a healthy distance from the home of the Walkman, Sir Howard appreciates, no doubt, more than other Sony executives how far behind his company is. http://news.com.com/How+the+iPod+ran...3-5617613.html |
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