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Peer-To-Peer News - The Week In Review - January 16th, '10
"It's not Google leaving China, it's China leaving the world." – Anonymous
"It’s mostly through the chat rooms — that’s how we’re fighting these days." – Col. Daniel R. Johnson
"Skype [video] breaks the century-old social contract of the phone: we pay close attention while we're talking and zone out while you are." – Joel Stein
"It’s the epitaph for U.S. online involvement here. Media is always a losing proposition in China." – Anne Stevenson Yang
"I think what they are realizing is that disconnecting users doesn’t put any money into anyone’s pocket, other than the lawyers." – Gerd Leonhard
"You know that 3D television is just an optical illusion, right? If there's a 3D porn star facing you on the 3D television, you can't go behind the TV and see her ass." – Keith NG
"This is the other voice of film, and if this dies, all we’re left with is the monopoly." – Jon Reiss
January 16th, 2010
Free Music Site Cleared of Fraud
A man who ran a music-sharing website with almost 200,000 members has been found not guilty of conspiracy to defraud at Teesside Crown Court.
Alan Ellis, 26, was the first person in the UK to be prosecuted for illegal file-sharing.
He operated the site, called Oink, from his flat in Middlesbrough from 2004 until it was closed down in a police raid in October 2007.
In that time Oink facilitated the download of 21 million music files.
The site allowed active members to find other people on the web who were prepared to share files - enabling users to get hold of music for free.
Users were asked to make a donation, although it was not necessary for them to do so to invite friends to join the site.
The jury was told that police found almost US $300,000 in Mr Ellis's Paypal account and that he received $18,000 (£11,000) a month in donations from people using his website.
Mr Ellis told the court there was no intention to defraud copyright holders.
He said the donations were to pay for the server's rental and any "surplus" would eventually be used to buy a server.
He agreed he had about 10 bank accounts with some £20,000 in savings when police raided the house he shared.
Moved to Amsterdam
Giving evidence, Mr Ellis explained why he set up the website.
"It was to further my skills. To better my skills for employability."
Mr Ellis said the website was developed from a free template, which had a torrent file-sharing facility included in it.
Oink did not host any music itself, it indexed the files users had available on their computers for others to download.
Originally the site was hosted on his home computer, but by 2007 it had moved to a commercial server in Amsterdam because of the amount of internet traffic it was attracting.
Mr Ellis, who had a full-time job as a software engineer, was born in Leeds and grew up in south Manchester, studying A-levels in Cheadle.
He declined to speak as he left the court.
Google Could be Granted Copyright Immunity in UK Law
Proposed amendment to the Digital Economy Bill exempts search engines from copyright infringement claims from third parties – Rupert Murdoch presumably included
Time for Rupert Murdoch to mobilise the lobbyists? Search engines would be exempted in UK law from any liability for copyright infringement, under a remarkable amendment (292) proposed to the Digital Economy Bill.
Conservative Lord Lucas is proposing a specific new clause so that…
This could throw the cat amongst the pigeons on practices like aggregating MP3 deep links (for which Yahoo has been penalised even in China) - but would have the most profound impact on the ongoing issue of search engines' ability to crawl news publishers articles...
Indeed, it would, for example, give Google legal immunity with which to index News Corp content, settling that thorny topic once and for all. But all would not be lost for publishers who want to retain control. Lucas's amendment does make provision…
The wide-ranging Digital Economy Bill, whose glitziest clauses ask ISPs to warn subscribers accused of illegal downloading before throttling their bandwidth or kicking them offline, is currently going through House Of Lords committee stage.
During its passage, individual representatives are trying to pin their specific interests on to the bill. But there are opportunities for Lucas' amendment to fail. If it fails to win peers' backing, Lucas may yet withdraw it before the Lords decide on a version to pass to House Of Commons MPs, who may themselves remove it if Lucas does not.
It's one of 299 proposed amendments which are being heard in the Lords, with the next such session on Tuesday.
French 3 Strikes Group Unveils Copyright Infringing Logo
Hadopi, the French agency charged with handling file-sharers’ copyright digressions, has just made a huge infringement faux pas of its own. Last week the group unveiled the logo which is set to represent this bastion of copyright righteousness, but embarrassingly it was designed with unlicensed fonts.
Starting in the spring, French file-sharers are set to be tracked and firmly dealt with by the country’s controversial Hadopi agency.
Late last week at a ceremony in Paris, Frédéric Mitterrand, French Minister of Culture and Communication, unveiled Hadopi’s new logo, the emblem which will help – at least as far as the government and copyright holders are concerned – strike fear into online pirates and force them to change their ways.
It soon became clear, however, that there was a fundamental problem with the design. The logo, already officially registered for 2 months with the National Institute of Industrial Property, had been created with an unlicensed font called “Bienvenue.”
This font was originally created by an employee of France Telecom in 2000, designer Jean-François Porchez. Writer Julien L from French news site Numerama told TorrentFreak that the problem goes even deeper.
“The problem is, this font was an ‘exclusive corporate typeface’. It couldn’t be used for other purposes than France Telecom/Orange products,” he told us.
The creator of the font confirmed that the ‘d’ and ‘p’ had been slightly modified and the rest of the font stretched slightly, but this wasn’t enough to class it as a new design.
Numerama contacted Plan Créatif, the agency which created the Hadopi logo, and they confirmed that ‘their’ font indeed violated the rights for the Bienvenue font, but that it was a mere “error of manipulation.”
Yesterday there was panic, as Hadopi tried to repair the damage by sourcing new matching fonts they could license legally.
Their design agency approached two British companies, Fontsmith and Jeremy Tankard Typography, to buy the ‘FS Lola’ and ‘Bliss’ fonts, and proceeded to hurriedly recreate the logo.
Hadopi has issued an apology through gritted teeth, but while France Telecom-Orange has confirmed it won’t be taking legal action over the infringement of its rights, the same cannot yet be said of Jean-François Porchez. He has contacted his lawyer to see what can be done.
That’s one huge embarrassing first strike for you, Hadopi.
Federal Court Slaps Satellite Signal Pirate With $51 Million Judgment
Dish Network says service to pay for abetting signal theft
A federal court in Florida has slapped Robert Ward with a $51 million summary judgment for distributing software that aided in the theft of DISH Network signals.
In the process, it left no doubt that it believes the Communications Act prohibition on "any electronic, mechanical, or other device or equipment" that aids in the unauthorized decryption of a satellite programming" includes software.
According to DISH, the court held that posting software on the Internet that allows people to receive DISH signals for free violates the Communications Act and the Digital Millennium Copyright Act (DMCA) and that damages could be calculated according to the number of people who downloaded the software (rather than how many people actually used it to steal signals.
Divvying up that $52 million will be DISH Network, co-owned equipment/services company EchoStar Technologies and NagraStar, the EchoStar co-venture with Kudelski Group that supplies the conditional access security technology to protect satellite signals from theft.
The decision, rendered by the U.S. District Court for the Middle District of Florida, took aim at piracy software marketed as "Thedssguy and Veracity" that allowed viewers to bypass NagraStar's conditional access security and receive premium as well as regular channels that meant lost potential revenue of over $70 per month per viewer that did not have to pay to get its programming.
The court said DISH had provided "significant independent admissible evidence of Ward's violations of the Digital Millennium Copyright Act and the Communications Act."
The DMCA prohibits the dissemination of technology "designed or produced for circumventing a measure that controls access to a copyrighted work," is marketed for that function, and has limited commercial use beyond that function. DISH argued for summary judgment, saying there was irrefutable evidence that that was exactly what Ward was doing. The court agreed.
The court said the DMCA was the relevant statute under which to award damages. It actually levied the minimum fine of $200 per act of circumvention (it could have dunned Ward up to $2,500 per). But with a documented 255,741 files provided, it added up quickly to $51,148,200, plus a permanent injunction.
Motion Picture Industry is Not a 'Cartel,' Judge Rules in RealDVD Case
Scott M. Fulton, III
For years, RealNetworks has wanted to produce and sell a product called RealDVD that would enable the legal owners of DVD movies to copy their content onto a hard disk drive, in order that the original discs may stay protected like archival copies. Movie studios responded in September 2008 by suing Real, alleging that its technology intentionally circumvented their copy control system -- a circumvention that violated the US Digital Millennium Copyright Act. That led to an injunction barring any sale of RealDVD, which is still in force today.
Real then responded with a countersuit, blasting the movie studios with an allegation that they were leveraging the DMCA as a platform on which to build a kind of content cartel -- a mechanism that disables viewers and the companies that sell to viewers from using DVDs in any other way besides direct viewing, that doesn't involve a licensing agreement. Last Friday, the judge in that ongoing suit ruled that Real had not proven the basis of its argument, noting that at any time, Real was free to enter into its own individual licenses for copying DVDs, and that there's nothing to stop it from doing so.
As Real stated in its defense at the time, "RealNetworks believed then, as it does now, that a consumer who had purchased, for example, an Iron Man DVD, does not need further permission from Paramount to copy that DVD onto her hard drive so as to get the benefit of additional features that can only be provided by the saving to a hard drive."
But Judge Marilyn Hall Patel ruled Friday that just because Real believed there was no need to purchase a license, did not prevent it from negotiating to purchase a license. Thus the movie studios could not have collectively prevented Real from making a copying mechanism possible, since the alternative of negotiation was there and has always been there.
"The Studios argue that any injury to Real has been caused by Real's own illegal behavior and the court's resulting injunction, rather than any anticompetitive behavior," wrote Judge Patel. "The only harm alleged by Real is the delay of its product launch... Real decided to delay the launch of the product until September 30, 2008, 'while it attempted to address the Studio Defendants' concerns regarding the product.' The product was launched on September 30, but the sale and distribution of RealDVD was enjoined days later by the court's [temporary restraining order]. The ongoing delay in marketing RealDVD results from the TRO and preliminary injunction entered by this court. Any assertion by Real that the Studios' refusal to license the copying of DVDs caused an antitrust injury apart from the delay resulting from the injunctive relief is contradicted by Real's assertions that it believed no license was necessary."
Later, Judge Patel summarizes Real's argument in an effort to demonstrate its circularity: "The court understands Real's argument, stated in its most coherent form, to run as follows: (1) there is a "cartel" agreement that is illegal under the antitrust laws and should be held unenforceable; (2) in the absence of the agreement, RealDVD's copying of CSS-encrypted DVDs would not violate the DMCA; (3) if RealDVD did not appear to violate the DMCA, it would not be subject to a preliminary injunction; (4) the illegal agreement therefore caused injury to Real by making Real's activities subject to a preliminary injunction under the DMCA; and (5) accordingly, Real has antitrust standing to challenge the 'cartel' agreement under the antitrust laws.
"Apart from the circularity of the argument, there are at least two fatal problems with Real's position," the Judge continued. "Firstly, Real's argument makes sense only if the relevant market for purposes of the antitrust analysis is restricted specifically to technologies that copy content from CSS-encrypted disks, because the alleged anticompetitive agreement does not compel any studio to distribute its content exclusively on CSS-protected DVDs. Real's product saves and manages digital copies of movies, and Real has made no allegation that individual Studios have refused to negotiate individual licenses for digital copies of their movies. Nor does Real dispute that companies such as Apple and Amazon have negotiated arrangements with various motion picture studios to distribute copyrighted content through their services. The 'cartel' alleged by Real has purportedly denied Real and consumers access to an encryption system, CSS, that protects DVDs from copying, but this has nothing to do with Real's opportunity to license the Studios' content. Real attempts to overcome this flaw in its theory by asserting that its target market is specifically the market for copying CSS-encrypted DVDs already owned by consumers. Yet this is not what Real's complaint alleges. According to the complaint, 'The relevant product market is the provision of technology that enables consumers to (a) create or otherwise obtain digital copies of movies and TV shows that they own on DVDs and (b) store and manage those copies electronically (e.g., on a hard drive) for subsequent playback.' (emphasis added). This market definition is not restricted to the market for copying CSS-encrypted DVDs."
Real had alleged that one of the purposes of the alleged cartel was to corner the market for unprotected content -- specifically, the "digital copies" included with many deluxe DVD and Blu-ray packages today. But Judge Patel concluded that the very existence of such digital copies implies that the studios were not using CSS copy protection to form a blockade through which only certain licensees may pass, as Real had also earlier alleged.
As a result, the court has dismissed RealNetworks' claims of antitrust violations on the part of the motion picture industry. The basis of the case, however -- whether Real or anyone will be able to market a product like RealDVD -- continues.
On Second Thought, Maybe the RIAA Did Conspire to Fix Prices, Appeals Court Finds
Scott M. Fulton, III
Did the United States' major record labels, as early as 2001, conspire to establish a system for the distribution and sale of digital music that would have seen subscribers paying up to $240 per year for the right to download up to two songs per artist per month, even then at a retail price indexed at the wholesale cost of $0.70 per song, with restrictive and unwanted DRM schemes attached? That was the assertion of a group of former customers of two music services that launched in 2001. Now, a US appeals court has ruled that the dismissal of their case in 2007 was in error, and that the entire recording industry can indeed be brought to court on antitrust charges.
The original case involved two of the music industry's first "legal download" services, created just months after the founding of iTunes. One was called MusicNet, the original music publishing service from RealNetworks, years before it first started Rhapsody. MusicNet was the culmination of a joint agreement between Real and three of the nation's five major music publishers: EMI Group, Warner Music (then part of AOL Time Warner), and Bertelsmann (now Sony Music). The other was Pressplay, formed by the other two publishers: Universal Music Group (formerly MCA) and the original Sony Music Entertainment.
The plaintiffs in a class action suit against the music industry, filed in 2005, alleged that the various partners in these two services conspired to fix the prices of legally downloadable digital music, indexed on their prices when distributed on conventional CDs, and failed to pass on cost reductions to customers when the costs of indexing and serving those files plummeted. What's more, they alleged the industry created an illegal retailing scheme where digital music was only legally obtainable through their services (MusicNet and Pressplay), and any other online music outlet could only become "legal" if they purchased licenses through the publishers first -- at essentially the same prices consumers were paying.
But in the spring of 2007, that class action case was dismissed by New York District Court Judge Loretta Preska, on legal grounds whose technical term isn't some Latin phrase that requires translation into English and a page on Wikipedia. It was dismissed on grounds of futility.
In terms of antitrust, a "futile" case would be one where the alleged conspirers were shown to be engaged in parallel actions, customers were shown to be hurt, but no effort was made to demonstrate that those parallel actions were in concert with one another. Sure, wholesale costs were fixed at $0.70 per song, and certainly everyone who wanted to sell those songs had to buy them from Pressplay or MusicNet first. But that wasn't proof enough that the record labels were acting together, the district court found.
The US Second Circuit Court of Appeals this morning had its own unambiguous word for Judge Preska's conclusion: error.
Specifically, the evidence plaintiffs would need to prove their case could come, the three-judge panel found, from the source itself. In a November 8, 2001 hearing before the House Judiciary Committee, Rep. Chris Cannon (R - Utah) cited a passage, possibly from an analysts' meeting transcript, of a statement from Edgar Bronfman, Jr., then the Executive Vice Chairman of Vivendi (parent company of Universal at the time; today, Bronfman heads Warner Music). In an era when the music industry conducted itself with more of a swagger of invincibility, Bronfman not only presented Pressplay's business model as determined by the industry at large, but displayed pride in its having done so.
The three-judge panel cited a portion of Bronfman's testimony; we found a larger excerpt: "PressPlay has what we call an affiliate model, where we determine the price and we offer a percentage of that price to the retailing partner, in this case, either Microsoft or Yahoo or MP3. The reason we have chosen that, frankly, is because we are concerned that the continuing devaluation of music will proceed unabated unless we do something about it. If you allow an AOL or a RealNetworks or a Microsoft or others who have very different business models to use music to promote their own business model, and simply pay the artists and the record companies the minimums, they can advantage themselves on the back of the music industry in a way which continues to devalue music. We don't want to see that happen."
The availability of public evidence of a music industry executive admitting to a motive for the creation of a business model designed to eliminate the possibility of a competitive model's coming into existence, is enough for the three-judge panel to conclude that the plaintiffs in the class action suit could make their case without futility. In fact, the judges went so far as to connect the dots for the plaintiffs, in lieu of the case they never got the chance to make for themselves.
"The complaint alleges specific facts sufficient to plausibly suggest that the parallel conduct alleged was the result of an agreement among the defendants," the judges wrote. "The complaint contains the following non-conclusory factual allegations of parallel conduct: First, defendants agreed to launch MusicNet and pressplay, both of which charged unreasonably high prices and contained similar DRMs. Second, none of the defendants dramatically reduced their prices for Internet Music (as compared to CDs), despite the fact that all defendants experienced dramatic cost reductions in producing Internet Music. Third, when defendants began to sell Internet Music through entities they did not own or control, they maintained the same unreasonably high prices and DRMs as MusicNet itself. Fourth, defendants used MFNs ["most-favored nation" trading terms] in their licenses that had the effect of guaranteeing that the licensor who signed the MFN received terms no less favorable than terms offered to other licensors. For example, both EMI and UMG used MFN clauses in their licensing agreements with MusicNet. Fifth, defendants used the MFNs to enforce a wholesale price floor of about 70 cents per song. Sixth, all defendants refuse to do business with eMusic, the #2 Internet Music retailer. Seventh, in or about May 2005, all defendants raised wholesale prices from about $0.65 per song to $0.70 per song. This price increase was enforced by MFNs. More importantly, the following allegations, taken together, place the parallel conduct [citing the US Supreme Court] 'in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.'"
In other words, there's no reason to believe that the defendants, acting on their own individual initiative, could have accomplished all of the above. In fact, one could argue the theory that no single music publisher would have wanted to attempt such a licensing scheme, were all the other publishers not acting in concert with it. Thus the antitrust action against the music industry has effectively been un-dismissed, and remanded back to District Court for further proceedings.
The Appeals Court's decision comes on the very day that Rob Glaser, the Chairman and CEO of RealNetworks and one of the originators of the MusicNow service, resigned his CEO post, though he will remain Chairman.
Grooveshark Sued by Another Record Company
My favorite free online music site, Grooveshark, relies on users to post their own recordings, then makes them available to anybody else who visits the site. This gives Grooveshark the broadest and most diverse selection of any service out there--I've found recordings on Grooveshark that are lacking even on paid services such as MOG and Rhapsody--but it puts the company in a legal gray area. Grooveshark has told me that it pays appropriate copyright fees, but content owners don't always seem to agree.
Universal Music claims that Grooveshark is offering these songs by The Who illegally.
In October, Grooveshark settled a lawsuit filed by record company EMI, but now it faces its second lawsuit from a major label. On Friday, Universal Music Group filed suit in a New York state court, alleging that Grooveshark maintains on its servers illegal copies of Universal's pre-1972 catalog, including songs by The Jackson Five, Buddy Holly, and The Who. In the filing, posted as a PDF file by Digital Music News, Universal alleges Grooveshark "paid nothing" to use these songs without permission, and claims that Grooveshark refuses to provide copyright filtering software because its "business plan is based on copyright infringement." Universal also notes that it legally licenses these for streaming by MySpace and Rhapsody, drawing a clear contrast between Grooveshark and these services. Ouch.
I love the service, but I've always wondered if it was a little too good to be true. Here's hoping that Grooveshark can reach a licensing agreement with Universal as it did with EMI.
UMG To Offer Free Downloads With FreeAllMusic.com
Universal Music Group has partnered with ad-sponsored digital music download service FreeAllMusic.com (www.freeallmusic.com) to offer consumers free, legal downloads from UMG's digital catalog.
Through this agreement, thousands of tracks from UMG artists are being made available now in FAM’s current private beta period, where users will be offered up to 20 free downloads per month, five per week, starting every New Music Tuesday.
FreeAllMusic.com is a new music service that provides consumers with high-quality MP3s of popular songs that are advertiser-paid, free, legal, and DRM-free. In exchange for watching one brief video commercial per download on the FreeAllMusic.com site, users receive a permanent, high-quality download which they can enjoy anytime, anywhere with no further advertising or restrictions. To download a free track, registered users select a participating brand they prefer, and watch a brief video from that brand. After each download, FreeAllMusic.com serves additional advertisements for that brand across targeted websites. Users can also email information about their download to friends, who can also download it legally for free if they also watch the ad. Sharing of download activity can also be posted on popular social networking sites.
"For the first time, a legitimate free music download service is making ‘doing the right thing’ easier than piracy. Our site is fast, easy and fun for consumers," noted FreeAllMusic.com CEO Richard Nailling. "The addition of UMG’s artists from Lady Gaga and Rihanna to Taylor Swift and Jay Sean means people can count on FAM to offer an excellent selection of DRM-free music for just about every taste."
"Free All Music has created a new advertising model that connects fans, artists and brands," stated David Ring, EVP of Business Development and Business Affairs for UMG’s eLabs. "It provides an opportunity for fans to support the artists that they love, and brands to build loyalty with existing and new consumers. Universal Music is committed to enabling and supporting services that provide engaging alternatives for fans looking to legally download music"
Music Companies Want Pirate Bay Founders to Pay Fine
The Stockholm District Court should decide that two of Pirate Bay's founders have to pay 500,000 Swedish kronor since the file-sharing site is still open.
The Stockholm District Court should decide that two of The Pirate Bay's founders have to pay a fine since the file-sharing site is still open and they are still involved, according to a recent filing from the music industry.
In October last year the court decided that file-sharing site should be closed, and if it wasn't, Fredrik Neij and Gottfrid Svartholm Warg would each have to pay a fine of 500,000 Swedish kronor (US$71,000). Now the Swedish divisions of Universal Music, EMI Music, Sony Music and Warner Music want the court to make that threat a reality, according to a motion registered by the court on Dec. 28.
This part of the battle between the founders of The Pirate Bay and the entertainment industry started last May. The entertainment industry filed a motion with the Stockholm District Court to fine the people behind The Pirate Bay as long as the site's users can access copyright-protected material.
The district court has stated that the site will have to remain closed unless Neij and Warg are exonerated on another, similar case they're involved in, which is now on appeal. In that case both men were found guilty of being accessories to crimes against copyright law. The appeal was postponed in October, and will be heard later this year.
Neij defends himself by saying that the original case has not yet been decided and that he isn't involved with the running of the site. Warg has stayed quiet throughout this process, according to court documents.
Courts to Rule on Fan-Created Music Videos
More than a decade after the launch of Napster, the recording industry's complicated legal relationship with Web-savvy music fans seems no closer to resolution. But a number of cases winding their way through the courts may bring a bit of clarity in 2010 to one particularly fuzzy area of the law: fan-created online videos that contain music.
The major labels have all worked out deals with YouTube to split ad revenue with the site after a user uploads a music video. But considering that labels don't issue explicit licenses to users and YouTube continues to warn against uploading copyrighted material, it isn't clear whether the labels actually want fans to upload their music in the first place. Meanwhile, other copyright owners who don't have deals with YouTube, such as Viacom and music publisher Bourne, are still pursuing copyright infringement suits against the video-sharing giant.
The latest action taken by a major label against a video-sharing site -- and a key case to watch in the new year -- were suits filed in December by EMI Music imprints Capitol, Caroline and Virgin and EMI Music Publishing against Vimeo.com, a division of online media conglomerate IAC. EMI charges that the site infringes on its copyrights by allegedly encouraging users to upload videos containing professionally produced music. The EMI suit also focuses on "lip dubs" (a phrase EMI says was coined by Vimeo), homemade videos that feature fans lip-synching to professional recordings, including many from the major labels.
EMI's suit will likely revolve around two legal issues. First, are video-sharing sites -- which organize, categorize and profit from user-uploaded copyrighted content -- liable for copyright infringement? While the Digital Millennium Copyright Act includes "safe harbor" provisions for sites that promptly remove videos upon receipt of takedown notices from content owners, copyright owners claim that the DMCA, enacted years before video-sharing sites even existed, was never intended to protect sites that built businesses around rampant, unlicensed use of others' intellectual property, especially when they encourage users to upload copyrighted content. (EMI also alleges that Vimeo itself uploaded videos containing its music, activity that isn't covered by DMCA safe harbors.)
There is surprisingly little case law on this topic. In September, a federal judge in Los Angeles ruled against Universal Music Group in its infringement suit against Veoh.com, saying the video-sharing site was protected by the DMCA. But that case isn't binding on a New York federal court, and UMG is appealing. And in a case involving peer-to-peer site isoHunt, a U.S. District Court judge ruled in December that safe harbors are simply unavailable to sites that "induce" infringement.
The other major legal question in the EMI suit is whether lip dubs and similar mash-ups of amateur and professional content are infringing. Copyright reform activists argue that they're examples of fair use tolerated under copyright law as an accommodation to noncommercial, transformative creativity. Of course EMI will point out that, whatever the motivation of the amateur lib-dubber, Vimeo is anything but "noncommercial."
Sources familiar with the labels' thinking on the issue acknowledge these videos' promotional value, but they also note that other video-sharing sites like YouTube have struck deals with the labels and dismiss the notion that copyright owners should forgo a revenue stream simply because it also promotes their artists.
Elsewhere, Stephanie Lenz is still battling UMG over its takedown of a video she had uploaded to YouTube of her toddler son dancing to Prince's "Let's Go Crazy." Lenz wants damages for the removal of a video she considers an obvious fair use; UMG maintains it acted in good faith to protect its copyright. And Don Henley's suit against U.S. Senate candidate Chuck DeVore (R-Calif.) over the use of "The Boys of Summer" and "All She Wants to Do Is Dance" in "parody" political videos is moving forward in federal court in Santa Ana, Calif.
U.S. courts have yet to provide clear guidance regarding the legality of pairing copyrighted music with amateur video and then broadcasting it to the world. That may finally change in 2010.
Proposed Web Video Restrictions Cause Outrage in Italy
New rules to be introduced by government decree will require people who upload videos onto the Internet to obtain authorization from the Communications Ministry similar to that required by television broadcasters, drastically reducing freedom to communicate over the Web, opposition lawmakers have warned.
The decree is ostensibly an enactment of a European Union (EU) directive on product placement and is due to go into effect at the end of January after being subjected to a nonbinding appraisal by parliament.
On Thursday opposition lawmakers held a press conference in parliament to denounce the new rules -- which require government authorization for the uploading of videos, give individuals who claim to have been defamed a right of reply and prevent the replay of copyright material -- as a threat to freedom of expression.
"The decree subjects the transmission of images on the Web to rules typical of television and requires prior ministerial authorization, with an incredible limitation on the way the Internet currently functions," opposition Democratic Party lawmaker Paolo Gentiloni told the press conference.
Article 4 of the decree specifies that the dissemination over the Internet "of moving pictures, whether or not accompanied by sound," requires ministerial authorization. Critics say it will therefore apply to the Web sites of newspapers, to IPTV and to mobile TV, obliging them to take on the same status as television broadcasters.
"Italy joins the club of the censors, together with China, Iran and North Korea," said Gentiloni's party colleague Vincenzo Vita.
The decree was also condemned by Articolo 21, an organization dedicated to the defense of freedom of speech as enshrined in article 21 of the Italian constitution. The group said the measures resembled an earlier government attempt to crack down on bloggers by imposing on them the same obligations and responsibilities as newspapers.
The group launched an appeal Friday entitled "Hands Off the Net," saying the restrictive measures would mark "the end of freedom of expression on the Web." The restrictions would prevent the recounting of the life of the Italians in moving pictures on the Internet, it said.
The decree was also criticized by Nicola D'Angelo, a commissioner in the Communications Authority, which would be likely to play a role in policing copyright violations under the new rules. The decree ran contrary to the spirit of the EU directive by extending the rules of television to online video material, D'Angelo said in a radio interview.
He also expressed concern at the requirement for government authorization for the uploading of videos to Internet. "Italy will be the only Western country in which it is necessary to have prior government permission to operate this kind of service," he said. "This aspect reveals a democratic risk, regardless of who happens to be in power."
Other critics described the decree as an expression of the conflict of interests of Silvio Berlusconi, who exercises political control over the state broadcaster RAI in his role as prime minister and is also the owner of Italy's largest private broadcaster, Mediaset.
They said the new copyright regulations would prevent Internet users from sharing snippets of popular TV shows or goals from the Italian soccer league, currently viewed online by millions of people.
Mediaset has successfully sued YouTube to obtain the removal of its copyright material, in particular video from the reality show "Big Brother," from the online video-sharing platform. A judge in a Rome civil court ordered the removal of the material last month, and the new decree is seen as providing further protection for Mediaset's online commercial interests.
Alessandro Gilioli, who writes a blog on the Web site of the weekly magazine L'Espresso, said the decree was intended to squelch future competition for Mediaset, which was planning to move into IPTV and therefore had an interest in reducing the number of independent videos circulating on the Web.
"It's the Berlusconi method: Kill your potential enemies while they are small. That's why anyone doing Web TV -- even from their attic at home -- must get ministerial approval and fulfill a host of other bureaucratic obligations," Gilioli wrote. He said the government was also keen to restrict the uncontrollable circulation of information over the Internet to preserve its monopoly over television news.
Paolo Romani, the deputy minister responsible for drafting the decree, insisted the text simply adopted the recommendations of the EU directive but said the government was prepared to discuss modifications. The decree did not intend to restrict freedom of information "or the possibility of expressing one's ideas and opinions through blogs and social networks," Romani told the ANSA news agency.
Nielsen: Music Sales Up, Album Sales Down in '09
Nielsen SoundScan, Nielsen BDS and Nielsen RingScan rolled out a wealth of data on 2009 year-end music sales and radio airplay, showing a growth in music sales but a decline in overall album sales. For the 52-week period from January 5, 2009 through January 3, 2010, overall music sales rose 2.1 percent over 2008. However, overall album sales were down 8.5 percent. Digital sales continued to show big improvements, as digital track sales went up 8.3 percent over 2008, and digital album sales shot up 16.1 percent. The trend of buying vinyl also continued to grow, as consumers snatched up 2.5 million vinyl LPs for a 33 percent jump over 2008. That number is higher than any other year in the history of Nielsen SoundScan.
The top three selling artists of 2009 were Michael Jackson, Taylor Swift and The Beatles, while the top three selling albums were Swift's Fearless, Susan Boyle's I Dreamed A Dream and Jackson's Number Ones. Fearless ended the year as the biggest selling album with just over 3.2 million in sales, while I Dreamed A Dream sold 3.1 million. However, I Dreamed A Dream is still the best selling album that was released in 2009, as Fearless came out in '08. Michael Jackson earned his spot as the biggest selling artist for '09 by moving more than 8.2 million albums for the year. The Black Eyed Peas dominated digital track sales, as "Boom Boom Pow" and "I Gotta Feeling" were the most downloaded songs of the year, followed at #3 by Lady Gaga's "Poker Face."
When looking at market share by record company, Universal Music Group continues to lead the pack by dominating 30.20 percent of the sales market. Sony Music owned 28.58 percent of sales, while Warner Music Group held down 20.55 percent and EMI accounted for 9.2 percent. Other labels accounted for 11.47 percent of sales. Every specific genre of music measured by Nielsen experienced a hit in sales numbers, with Latin, Metal and Rap seeing losses of more than 20 percent. Alternative dipped by 15.7 percent and Rock dropped 11.1 percent.
Nielsen noted that music purchases in 2009 reached the 1.5 billion mark, making it the fifth consecutive year music sales have exceeded 1 billion. Digital music accounted for 40 percent of all music purchases in 2009, which is up from 32 percent in 2008. Digital track sales broke the one billion sales mark for the second straight year, and Flo Rida’s "Right Round" set a new one-week sales record with 636,000 downloads during the week ending 2/15/09, marking the first time a song broke the 500,000 sales mark. Digital album sales reached an all-time high with more than 76 million units, up from 65 million in 2008.
As for radio airplay, Taylor Swift's "You Belong To Me" was the most played song of '09 with 465,100 BDS detections. Swift's "Love Story" was the #2 most-played song, followed by The Fray's "You Found Me," Kings Of Leon's "Use Somebody" and Black Eyed Peas' "Boom Boom Pow." As for overall artist airplay, Swift was again #1, followed by Beyoncé, Black Eyed Peas, Toby Keith and Nickelback. Furthermore, the Nickelback song “How You Remind Me” is the most played song at radio for the decade with more than 1.2 million spins, according to Nielsen BDS.
2010 Could be Busy Year for Digital Music Mergers
Think last year's acquisitions of iLike, imeem and Lala marked the end of consolidation for digital music services? Think again.
Gradually thawing credit markets and an increasingly competitive digital music landscape could make 2010 a banner year for mergers and acquisitions.
Apple's purchase of Lala in December lends a greater degree of legitimacy to the "cloud-based" access model for music distribution. And that deal, along with MySpace's purchase of iLike and imeem, will consolidate innovative features into a single, well-financed service -- which is surely better for the recording industry than watching them die on the vine individually.
"I see it as a positive sign," says David Ring, executive vice president of business development and business affairs for Universal Music Group's eLabs. "If they cannot or choose not to go it alone, that's OK. Maybe they need more economic backing in order to make something into an enterprise of great worth. I'm encouraged by the interest in the acquisition of various music services."
Who's In The Market
Expect to see Apple and MySpace continue their respective buying sprees. MySpace Music wants to expand quickly into areas like merchandise sales and concert ticketing and has more cash than it has developers. And Apple, for all its dominance in the a la carte download space, is playing catch-up in areas like social media, discovery and recommendations.
Meanwhile, Google is said to be eyeing a stronger digital music presence not only to beef up its music search results features but potentially to expand into additional music services for devices based on its smart-phone operating system, Android. In fact, Google reportedly considered buying Lala before Apple snatched it away.
Microsoft is not only relaunching elements of its MSN portal to improve its search and social networking features, but may also be seeking ways to jump-start its struggling Zune service with an acquisition in perhaps the mobile or Internet radio space.
Amazon's MP3 store is emerging as a strong, if still distant, second to iTunes in the digital download market, but it doesn't have streaming or social networking capabilities. And Facebook remains curiously absent from digital music outside of a partnership with Lala for virtual gifting.
Other potential buyers include device makers like Nokia, which may want to replace its Comes With Music subscription service with an on-demand streaming option, and Sony, which may want a music access solution to add to the range of media services it plans to launch on the PlayStation Network this year.
Even big-box retailer Best Buy may aim to add to the stable of entertainment services it's seeking to bundle into devices sold at its stores beyond Napster -- which it acquired in 2008 -- with an Internet radio or music recommendation technology.
Search And Recommendation Functions
Likely acquisition targets include technologies and services that address specific areas of the digital music business that a would-be contender would otherwise have to build on its own to be successful.
At the top of this list? Search and recommendation features.
"In the world of on-demand, all-you-can-eat streaming services, what to listen to is even more meaningful than getting access to the music," says Tim Chang, a principal at Norwest Venture Partners in Palo Alto, Calif.
A particularly tempting takeover target for companies seeking this kind of functionality is Pandora, the customizable Internet radio service that built its own music recommendation engine called the Music Genome. Having finally sorted out a years-long royalty dispute with SoundExchange, the company has clarity on music expenses through 2014 and expects to turn a profit this year through audio ads and premium subscription options.
Other companies mentioned in the search-and-discovery space include the Echo Next and Blip.fm. Kleiner Perkins' iFund, meanwhile, invested an undisclosed amount in music ID service Shazam in hopes of building it into a mobile music powerhouse, which makes it both a potential acquirer and acquiree.
Portability is another area of great interest, mostly driven by accessing music through mobile phones. MySpace Music, for example, cited imeem's mobile app as one of the reasons it wanted to acquire the company.
But today's collection of iPhone app developers aren't seen as likely acquisition targets. Not many make more than a few million dollars per year in revenue, and their technology isn't seen as particularly compelling, providing little incentive to buy them out except to acquire personnel and executive expertise.
However, such mobile streaming music services as Slacker -- which last year shifted from offering its own portable device to focusing fully on mobile phones as its core strategy -- and the highly praised Spotify are another story. As smart phones become more advanced and wireless networks more reliable, the concept of streaming music to a phone rather than downloading and transferring it is becoming an area of great interest and likely one that will result in several acquisitions this year, although Spotify's estimated $250 million valuation may be too pricey for potential buyers.
Another company to watch is Melodeo, which offers the nuTsie service that lets users stream their PC-based music library to their cell phones. Currently, users can access only a random stream of their library, in order to comply with webcaster licensing rules, but an on-demand version is in the works. Sources say Melodeo is in negotiations with at least two companies that lost the bidding war over Lala, along with other potential suitors.
As for social music services, there's no shortage of speculation about MOG, a relatively newer entrant that launched a $5-per-month streaming service in December. MOG would give a potential buyer not only a well-received on-demand streaming music service but also an established music-focused social network and advertising network integrated into more than 300 other music-related blogs.
Aside from these big-bucket needs, there's a host of additional functionality that digital music services are looking for that they could easily get through buying existing companies. There's lyrics information and interactivity through Tunewiki, ticketing and event services from the likes of Eventful or Jambase, playlisting technology from Project Playlist, guitar tabs, karaoke, music videos and more.
"They are more likely to be ingredients rather than stand-alone businesses," says Mike McGuire, research vice president with technology research/advisory company Gartner in San Jose, Calif. "The things that add to the experience are where we are going to see more roll-ups and acquisitions."
Massive Online Piracy Doesn't Stop Avatar from Raking In $1.3 Billion
The movie is a box-office and file-sharing hit
Content creators are happy to argue the same rhetoric over and over again on how online piracy is raging havoc in the established industries and continue to ask for ever-increasing penalties for users guilty or just accused of illegal sharing. At the same time, the industry is happy to ignore actual hard numbers that indicate that piracy may not be that detrimental to revenues and in some cases it may actually help.
A perfect example is Hollywood's latest blockbuster, and likely its biggest to date, Avatar, which has seen a massive box-office success. Expectantly, the movie is a huge hit on file-sharing networks as well; yet, this doesn't seem to be affecting theater ticket sales in the least bit. James Cameron's latest flick enjoyed its fourth weekend of record box-office revenue bringing total international gross at over $1.3 billion. This makes it the second biggest selling movie of all time, only after Cameron's previous movie, 1997's Titanic.
The movie is doing great in the US, where it now holds the record for the highest fourth weekend sales at over $48 million, but also internationally where it made a further $143 million. Yet, the movie has been available on BitTorrent file-sharing networks even before it hit the theaters in the US. Since then, it has constantly held the number one or number two spots in the TorrentFreak, a popular blog dedicated to all things BitTorrent, weekly charts of the most downloaded movies on the file-sharing networks.
This week, it is at number 1 again. TorrentFreak doesn't release the actual number of downloads, but it is likely to be in the millions, likely even in the tens of millions right now, after it managed to get 500,000 downloads in the first two days it was available.
By the movie industry's regular arguments, this just shouldn't be happening. But not only piracy hasn't affected ticket sales, Fox Studios is remarkably calm about the whole situation. The reason for this is actually a solid one, the movie was created with a 3D cinema experience in mind and watching a copy on your laptop doesn't even come close to going to the actual theater. While it's unlikely that future releases will benefit from the same attitude towards piracy from the movie studios, it could be that they are finally realizing that they'll have to offer movie goers compelling reasons to go to the cinema rather than watch a movie at home, from the only source they can get it, online file-sharing.
COLUMN: You Can't Stop the Internet Baby! Why the UFC Should Embrace MMA Pirates
Bjorn Hansen, MMATorch columnist
The pink elephant in the shape of file-sharing piracy is starting to get called out by the UFC brass.
Of course, Dana White is resorting to the only method of conflict resolution he's familiar with: intense head-on combat. Instead of trying to surf this extremely powerful and useful wave of web profitably, he's trying to build a great wall of legal intimidation.
File-sharing has been a thorn on the entertainment industry side for quite some time now, and only those who have rolled with the punches and reinvented themselves have succeeded. MMA is actually one industry that used file-sharing as life-support respirators while the UFC was in the dark ages. Every hardcore MMA fan knows his way around the internet.
Instead of using brute strength to punch his way out of a Lesnar-style G'NP, Dana should use his creativity and discover a business submission using the internet-savvy fan-base he has at his disposal. Rather than financially and legally attacking fans for wanting to watch MMA so badly they put the time and bandwidth to download it, he should provide the fans with what they want: digital availability of all the fights at affordable prices and with a user-friendly interface.
You hear people say "don't forget to factor DVR replays" when calculating viewership. If you gave fans, as Luke Thomas from Bloody Elbow suggested, an "Itunes for the UFC," then not only would you be successfully countering piracy, but it would give Zuffa all sorts of metrics that can be used for marketing, finance, advertising, and fighter contract-negotiations.
Joe Rogan, a man known for his, em, high IQ, shall we say, regularly mocks Zuffa's counter-piracy efforts by saying, "You can't stop the internet, baby!" Well, in this case, I'm suggesting, if you can't beat 'em, join 'em. Grab the bull by the horns and start providing user-friendly, low-cost online library of Zuffa fights (one low monthly rate offered to PPV purchasers makes sense to me).
Think about it. Every time a pirated UFC event is played, it's not like the advertisements are blurred out from the Octagon, or like Buffer/Goldberg's voice gets distorted when they pitch a company's message. The business' advertising in the Octagon still receive eyes on their products, yet the UFC doesn't get the credit.
So if I recorded UFC 107, to be partially aired free on Spike as part of their counter-programming efforts, and then later as much as I pleased, lent the tape to as many friends as possible, I've already circled the system without paying, with 1980s technology. Think about today's technology. The file-sharing toothpaste is out of the bottle, and it's not going back in, it's actually evolving.
All we want is to be able to play a fight, digitally, whenever we want to. I know many, who download the events, after paying for the PPV, just so that they have a digital copy for playbacks (after paying fifty bucks we should get a digital copy for at least a week, right?)
These are UFC fans, who only want the sport to grow and don't actually enjoy navigating through those legally murky waters, but do so because feel they've earned a digital copy after purchasing a PPV. File-sharing is deeply rooted in our history, and it's going to take an even better alternative for that to change.
Don't fight the fans Dana. We all love MMA, we just don't feel like waiting forever to purchase a scratchable, losable, tangible disc. Create an affordable, easy to use, online library fights. Help us, help you.
Entertainment Industry Calls for EU Internet Piracy Crackdown
A new coalition group has been formed by representatives from the film, TV and radio industries to lobby the European Union to toughen up its actions against online pirates.
The European Audiovisual Social Dialogue Committee, whose members include the International Federation of Film Producers Associations and the Association of Commercial Television in Europe, want improvements to the EU’s legal framework which could see the introduction of specific legislation to protect copyright holders.
The group also wants increased pressure on Internet Service Providers to help participate in the fight against illegal filesharing across their networks.
Furthermore the group is calling from more research focussed on the financial impact of unlawful filesharing and how that can then be linked to job losses.
The formation of the group follows on from the publishing of the Digital Economy Bill in November 2009, which had a strong focus on the measures the UK Government plan on imposing to curb illegal filesharing.
The bill, which aimed to realise most of the commitments set out in the Digital Britain White Paper published in June 2009, said that the first step towards reducing online piracy by 70 per cent will be ensuring Internet Service Providers (ISPs), such as Sky or Virgin, send out warning letters to those caught file-sharing on their networks.
The rights holder, who has had material pirated, such as a music label like Universal Music, will pay a fixed fee, set by media regulator Ofcom, to cover the ISP’s costs of sending the letter. Stephen Timms, the Minister for Digital Britain, expressed his confidence at the time that this method would be successful in ending the majority of the problem.
However, if Ofcom discovers that at least 70 per cent of illegal filesharing has not stopped, Lord Mandelson, the Secretary of State, has the power to apply to Parliament for secondary legislation to force the ISPs to impose technical measures such as the suspension of internet connections. Ofcom has been measuring the levels of illegal downloading since November 2009 but has not given a date by which the government would expect to have achieved a 70 per cent reduction in online piracy. The government stopped short of making it a criminal offence.
Mr Timms has stressed that such technical measures were “very much the last resort” and placed hope that ISPs, and other content owners, could create more appealing legal services. Other technical measures include: bandwidth capping and imposing a daily download limit.
"The unauthorised filesharing of protected works and performances – as well as the need for all right holders to derive tangible benefits from the exploitation of their work – are important issues that need to be better recognised by the European commission and other EU institutions," said the European Audiovisual Social Dialogue Committee in a joint statement.
Adding Up the Explanations for ACTA's "Shameful Secret"
Why is an intellectual property treaty being negotiated in the name of the US public kept quiet as a matter of national security and treated as "some shameful secret"?
Solid information on the Anti-Counterfeiting Trade Agreement (ACTA) has been hard to come by, but Google on Monday hosted a panel discussion on ACTA at its DC offices. Much of the discussion focused on transparency, and why there's so little of it on ACTA, even from an administration that has made transparency one of its key goals.
The reason for that was obvious: there's little of substance that's known about the treaty, and those lawyers in the room and on the panel who had seen one small part of it were under a nondisclosure agreement.
In most contexts, the lack of any hard information might lead to a discussion of mindnumbing generality and irrelevance, but this transparency talk was quite fascinating—in large part because one of the most influential copyright lobbyists in Washington was on the panel attempting to make his case.
Steven Metalitz represents clients like the MPAA and RIAA, and he's quite good at what he does. If there's a copyright-related issue being discussed in DC, he has a hand in it. Over the last year, he has used his position to argue that consumers should have no ability to strip DRM from music or video tracks even if an online store takes down its authentication servers.
He has also argued against the Obama administration's stance at the World Intellectual Property Organization, where he opposes a treaty on copyright exemptions for the blind. The reason: international copyright laws should only force copyright protections and enforcement on signers, but exemptions to copyright must never be anything more than "permitted."
Metalitz took on three other panelists and a moderator, all of whom were less than sympathetic to his positions, and he made the lengthiest case for both ACTA and its secrecy that we have ever heard. It was also surprisingly unconvincing.
Parsing the unknown
ACTA is currently being hashed out by 40 countries apart from any existing international process such as WIPO or the WTO. No government will show draft texts of the treaty, though the public looks likely to be offered a draft once negotiations are complete (when it's too late to make substantive changes).
Far from covering "counterfeiting," ACTA covers a host of issues that include Internet infringement of copyrighted works. That's key, said Metalitz, because one in ten US jobs depends on copyright protection.
A legislative aide for Rep. Zoe Lofgren (D-CA) retorted that the same stats show just how many companies rely on fair use, copyright exceptions, DMCA safe harbors, and Communications Decency Act safe harbors. ACTA "can't just be about going to the max for enforcement," he said.
But because it's hard to argue specifics when it comes to ACTA, the talk turned to the question of why we can't see the text. Jamie Love of Knowledge Ecology International, a group which has obtained many of the leaked documents about ACTA, noted that all 40 countries involved could see the text, "every lobbyist in K Street who has the phone number of USTR can get access to what's available in the proposal, any one of the thousand members of the [USTR] advisory boards that are cleared advisors has the right to ask for access to these documents," but voters do not.
If the whole future of our economy depends on protecting the creative industries, why is an intellectual treaty being done "as some shameful secret?"
Metalitz said that ACTA so far has been more transparent than numerous other trade agreements, but Love pointed out that the major international agreements on these issues (TRIPS and the WIPO treaties) have been far more open. And, under pressure to open up, WIPO and the WTO have both allowed nonprofit civil society groups access to debates and negotiations over the last decade—and, suddenly, the agreements coming out of those bodies became more pro-consumer. WIPO also regularly posts drafts, working papers, and proposals online.
Past free trade agreements have been handled in a similar fashion.
"Steve's embarrassed by the content of the negotiation or he would be more supportive of transparency," said Love, not one to hold back in his rhetoric. Keeping negotiations secret is how "you get big fees to be a lobbyist," since only the "insiders" have access to the process.
Metalitz never provided a cogent case for why it might be acceptable to negotiate such an agreement in secret when so much of the public clearly wants to be involved. When pressed most directly on the issue, he punted, criticizing those who oppose protecting intellectual property.
But he also made the fair point that he's not the one doing the negotiating. The US Trade Representative, which handles ACTA, is ultimately responsible. Though it has repeatedly pledged transparency, none has been forthcoming. Canadian law professor Michael Geist, going back through the few documents that we do have, believes that the US is one of the primary obstacles to such transparency.
Even the MPAA, one of Metalitz's top clients, has publicly called for transparency on ACTA to remove the "distraction" that the issue has become. Such transparency would require the assent of all the governments involved in the negotiations. As the head of USTR has indicated, the ACTA talks might break down completely without secrecy, and it's clear that many governments don't actually want their own people to see the proposals being made and to shape their outcome.
This isn't surprising, of course, since international groups like WIPO and WTO already exist to tackle these kinds of issues. But those groups would be more open than the ACTA process, and they would force countries like US, Canada, Japan, and the EU to involve more countries. Much easier to form a "coalition of the willing" instead.
The USTR has claimed that it needs the privacy to have a "frank exchange of views," though WIPO has managed to work on major international IP legislation without such total secrecy. No one argues that every moment of the negotiating sessions needs to go on YouTube, or that there is never a place for an off-the-record exchange of views; but members of Congress like Mike Doyle (D-PA), Sherrod Brown (D-OH), Bernie Sanders (I-VT), and Ron Wyden (D-OR) have all blasted USTR in recent weeks for not taking basic steps, such as offering drafts to the public.
Several of the panelists agreed that this might well be because the public wouldn't support what's being done in its name, but all of them, including Metalitz, believe that the transparency issue will eventually put real pressure on the USTR to open up further. When that might happen, however, remains a mystery.
Comcast vs. FCC: Implications in Throttling BitTorrent
Comcast is appealing a ruling before a three-judge appeals court panel concerning the FCC’s sanctions in 2008 of the operator, and whether it has jurisdiction under current Net Neutrality rules to do so, for what has become known throughout the media as past throttling of BitTorrent. (See FCC formally rules Comcast’s throttling of BitTorrent was illegal). This could be an important decision for ISP industry operators, who have many (irons-in-the-fire) when it comes to a business model that depends on both residential Internet and business customers, in helping it pay for a broadband pipeline created with private investment.
It also has implications for consumers who are increasingly using more file sharing applications to watch video content from their Internet Service Provider connections, and Internet giants like Google (Nasdaq: GOOG)who depend on free access to its information sharing business model. While Comcast (Nasdaq: CMCSA,CMCSK) has indicated their Internet management practices have since been changed, as a result of the issue, and it no longer throttles customers, what remains is a court challenge this past week in which the court grilled the FCC on its authority to regulate ISP’s under current Net Neutrality rules without a legislative mandate. (See Comcast Scores Against FCC in Court Battle over Net Neutrality).
The wider ramifications is whether the ruling will apply to business applications, which require special and unique service agreements for much larger file sharing and speeds in offering these programs. In essence, ISP’s need the flexibility to charge differing rates depending on the requirements of certain applications, which in-turn allow for infrastructure investments to accommodate these needs. This is their (Bread and Butter) of profitability.
One the one hand the FCC is under a mandate by the current administration to have a free flowing Internet with consumers and file sharing applications having unfettered access, and on the other, private investors which have created the pipeline are mandated by economics to make a profit depending on differing needs, from both consumer and business. If the FCC loses this current battle in court, then future challenges will likely occur concerning any new Net Neutrality rules that are adopted.
It seems from opening arguments before the courts that the FCC may have overstepped its boundaries in taking Comcast to task over BitTorrent, and may have to back up and ask Congress for a legislative mandate in regulating broadband as an information service.
Comcast Launching Broadband Meter: Watch Your Limit!
Comcast is introducing a "data meter" to broadband customers in Washington state on Tuesday to help custemers keep track of broadband consumption -- and avoid hitting the company's controversial data usage cap.
In October 2008, the company began limiting residential broadband customers to 250 gigabytes of data usage per month. Before that, the company had periodically cut off service to people using too much broadband, but hadn't specified an amount, drawing complaints that it was throttling users.
After the limit was specified, customers asked Comcast for some kind of meter so they could keep track of their usage, spokesman Steve Kipp said in announcing the meter.
"Our hope is that this meter will help give our customers a better picture of their overall bandwidth consumption. We believe many will be surprised by how little data they actually consume,'' he said in the release.
Comcast will send broadband customers an e-mail Tuesday about the meter, shown here:
Thumbnail image for comcastmeter.JPG
Kipp said most customers don't consume enough data to be concerned; customer consume at the median from 2 to 4 gigabytes per month and 99 percent use less than 250 gigs per month.
"For the fraction of less than 1 percent of our customers who are concerned about exceeding our excessive use threshold, we believe this meter will help them monitor and calibrate their usage," Kipp said. "It may also help them identify potential problems such as the presence of a bot or virus or excessive use of their bandwidth via an unsecured wireless router."
Comcast imposed the "excessive use program in order to provide a high-quality online service for all of our customers because extremely high-data users can negatively impact the experience for other customers,'' he said.
Washington is the company's second market to receive the meter, which was introduced earlier in Portland.
A few details Kipp called out:
-- The meter will measure all data usage over a cable modem, including data used by all computers, consoles and devices in a home that go online via that modem.
-- The meter will display usage on a calendar month, not the monthly billing cycle, which may be different. it will udpate about every three hours.
-- The meter will "display usage conservatively in favor of customers" by rounding usage down to the nearest gigabyte, rather than up, the release said.
-- Comcast hired a consultant, NetForecast, to analyze the accuracy of the meter during a test period last summer.
Here's how to find the meter on your Comcast account, according to the release:
"Customers can access the meter by logging into Comcast Central at http://customer.comcast.com and clicking on the 'Users and Settings' tab. There, they will see a link to 'View details' in the 'My devices' section (located toward the upper right hand of the screen) that will take them to their data usage details page. The meter will first show usage in the current month. Over time, it will show the most recent three months of usage (including the current month)."
So what happens if you go over the 250 GB limit?
You may get a call from Comcast, and put on a sort of probation. If you cross the limit again within six months, Comcast will cut off your service for a year.
Kipp said the callers from the "Customer Security Assurance team" will say how much data was used and "try to help you identify the source of excessive use and ask you to moderate your usage, which the vast majority of our customers do voluntarily ... We know from experience that most customers curb their usage after our first call."
"Our practice for the past several years has been to call only our heaviest data users, and this practice remains the same now that the 250GB data usage threshold is in effect," Kipp wrote. "We may change our practice but will, of course, provide notice to the customer of any change."
Want Fast Broadband? Move to Utah
Sean Michael Kerner
Though New York City, Los Angeles and Chicago are often thought of as fast-moving cities, none of them are among the top ten fastest cities in America when it comes to broadband.
Instead, if you want to live in the city with the fastest average broadband connection speed, you'll have to move to the state of Utah.
The latest quarterly State of the Internet Report from content delivery giant Akamai puts Sandy, Utah, at the top of the list for U.S. cities with the fastest average broadband speeds, with an average connection speed of 33,464 Kbps (33.5 Mbps).
Coming in second place in Akamai's third-quarter 2009 report: Iowa City, Iowa, at 27.4 Mbps; followed by Norman, Oklahoma, in third with 26.8 Mbps. Utah also claimed two more spots in the top-ten list, at No. 4 with the city of Logan and its 23.6 Mbps speed; and with Spanish Fork, Utah, in seventh place at approximately 18 Mbps.
Breaking down U.S. cities by their average broadband speeds is a first for Akamai, which has been producing its quarterly State of the Internet since the beginning of 2008. Akamai's data comes from its global network of content delivery servers.
Ever since its first report, Akamai has been detailing only which U.S. states had the highest average broadband connection speeds. For the past year, the top U.S. state has remained the tiny state of Delaware. For the third quarter of 2009, the average connection speed in Delaware was 7.2 Mbps, which was actually a 1.3 percent decline over the third quarter of 2008.
Overall in the U.S., the average broadband connection speed in the third quarter of 2009 came in at 3.9 Mbps, down by 2.4 percent on a year-over-year basis.
The reported noted that the average mobile connection speeds were between 700 Kbps to 800 Kbps in the United States, which could have brought down the average when aggregated with higher-speed wired connections.
"The overall year-over-year decline in the U.S. average connection speed was relatively minor," David Belson, director of market intelligence at Akamai Technologies, told InternetNews.com. "The larger year-over-year sample base may have contributed to the decline, especially as mobile usage grows."
On a global basis during the third quarter of 2009, Akamai saw 444 million unique IP addresses from 226 countries, which represented a 17 percent increase in addresses compared to a year earlier. The increase comes during a year in which most the world was gripped in an economic recession.
"Overall, we think that the growth in Internet usage (as represented by an increasing number of Unique IPs connecting to Akamai) is trending in the right direction, as we would have expected," Belson said. "It is not clear overall what impact the global recession has had -- while there were some published reports of broadband consumers switching to lower-speed subscriptions, that action, as well as other factors may have contributed to the fluctuations in average connection speeds and overall broadband penetration."
RIAA: Net Neutrality Shouldn't Inhibit Antipiracy
The lobbying group for the top four recording companies wants to make sure that when regulations on Net neutrality are adopted, they don't impede antipiracy efforts.
That's why the Recording Industry Association of America on Thursday asked the Federal Communications Commission to "adopt flexible rules" that free Internet service providers to fight copyright theft.
This week is the deadline for submitting comments to the FCC as it considers proposed regulations for Net neutrality, the term coined by those who want the Web to be open to all forms of content, Web sites, and platforms and also want to prevent ISPs from charging users higher rates to access different sites or content.
According to a copy of comments submitted by the RIAA to the FCC, others, including two U.S. congressmen have already argued that the "Open Internet" principles should not protect unlawful content such as pirated songs.
"In these comments," the RIAA wrote, "we encourage the FCC to stay its course and explicitly support, encourage, and endorse ISP efforts to fight piracy."
The music industry has a plan to convince ISPs to adopt a "graduated response" when dealing with illegal file sharing. They want ISPs to gradually step up pressure on those who infringe copyright works. If the RIAA had its way, chronic offenders could lose Internet access for a period.
But the RIAA has struggled to convince the major ISPs to cooperate. A year ago, the music industry announced that it had reached an agreement in principle with a group of big ISPs. Since then, not one ISP has publicly acknowledged participating.
All of this could be moot. The courts have yet to determine whether the FCC has the authority to set rules for Net neutrality.
Don’t Let Hollywood Hijack the Internet
Last fall, the Federal Communications Commission proposed rules for “Net Neutrality” — a set of regulations intended to help innovation and free speech continue to thrive on the Internet.
But is the FCC’s version of Net Neutrality the real deal? Or is it a fake?
Buried in the FCC’s rules is a deeply problematic loophole. Open Internet principles, the FCC writes, “do not… apply to activities such as the unlawful distribution of copyrighted works.”
For years, the entertainment industry has used that innocent-sounding phrase — "unlawful distribution of copyrighted works" — to pressure Internet service providers around the world to act as copyright cops — to surveil the Internet for supposed copyright violations, and then censor or punish the accused users.
From the beginning, a central goal of the Net Neutrality movement has been to prevent corporations from interfering with the Internet in this way — so why does the FCC’s version of Net Neutrality specifically allow them to do so?
Tell the FCC that if it wants to police the Internet, it first needs to demonstrate that it can protect Internet users and innovators by standing up to powerful industry lobbyists. Sign your name here to demand that the copyright-enforcement loophole be removed.
Ares is a free open source file sharing program that enables users to share any digital file including images, audio, video, software, documents, etc.
You may now easily publish your files through the Ares decentralized network. As a member of the virtual community, you can search and download just about any file shared by other users. Latest versions support BitTorrent protocol and Shoutcast radio stations.
With Ares you can also join chat rooms or host your channel and meet new friends.
Fast multisource downloads
Ares automatically finds more sources and downloads files from many users at once. This can increase remarkably the speed of your downloads.
Powerful library organizer
Your shared files are organized into categories in a library section. You can sort your files by type, category and easily change your share settings. An handy quick-search feature locates your files by typing a keyword.
You can preview files while their download is in progress and organize a playlist made of your favourites. Ares" player supports internet radio.
You can host your chat room and join other available channels. Creating a chat channel has never been easier, now you can chat and meet new friends while you download files.
The Madness of Crowds and an Internet Delusion
When does the wisdom of crowds give way to the meanness of mobs?
In the 1990s, Jaron Lanier was one of the digital pioneers hailing the wonderful possibilities that would be realized once the Internet allowed musicians, artists, scientists and engineers around the world to instantly share their work. Now, like a lot of us, he is having second thoughts.
Mr. Lanier, a musician and avant-garde computer scientist — he popularized the term “virtual reality” — wonders if the Web’s structure and ideology are fostering nasty group dynamics and mediocre collaborations. His new book, “You Are Not a Gadget,” is a manifesto against “hive thinking” and “digital Maoism,” by which he means the glorification of open-source software, free information and collective work at the expense of individual creativity.
He blames the Web’s tradition of “drive-by anonymity” for fostering vicious pack behavior on blogs, forums and social networks. He acknowledges the examples of generous collaboration, like Wikipedia, but argues that the mantras of “open culture” and “information wants to be free” have produced a destructive new social contract.
“The basic idea of this contract,” he writes, “is that authors, journalists, musicians and artists are encouraged to treat the fruits of their intellects and imaginations as fragments to be given without pay to the hive mind. Reciprocity takes the form of self-promotion. Culture is to become precisely nothing but advertising.”
I find his critique intriguing, partly because Mr. Lanier isn’t your ordinary Luddite crank, and partly because I’ve felt the same kind of disappointment with the Web. In the 1990s, when I was writing paeans to the dawning spirit of digital collaboration, it didn’t occur to me that the Web’s “gift culture,” as anthropologists called it, could turn into a mandatory potlatch for so many professions — including my own.
So I have selfish reasons for appreciating Mr. Lanier’s complaints about masses of “digital peasants” being forced to provide free material to a few “lords of the clouds” like Google and YouTube. But I’m not sure Mr. Lanier has correctly diagnosed the causes of our discontent, particularly when he blames software design for leading to what he calls exploitative monopolies on the Web like Google.
He argues that old — and bad — digital systems tend to get locked in place because it’s too difficult and expensive for everyone to switch to a new one. That basic problem, known to economists as lock-in, has long been blamed for stifling the rise of superior technologies like the Dvorak typewriter keyboard and Betamax videotapes, and for perpetuating duds like the Windows operating system.
It can sound plausible enough in theory — particularly if your Windows computer has just crashed. In practice, though, better products win out, according to the economists Stan Liebowitz and Stephen Margolis. After reviewing battles like Dvorak-qwerty and Betamax-VHS, they concluded that consumers had good reasons for preferring qwerty keyboards and VHS tapes, and that sellers of superior technologies generally don’t get locked out. “Although software is often brought up as locking in people,” Dr. Liebowitz told me, “we have made a careful examination of that issue and find that the winning products are almost always the ones thought to be better by reviewers.” When a better new product appears, he said, the challenger can take over the software market relatively quickly by comparison with other industries.
Dr. Liebowitz, a professor at the University of Texas at Dallas, said the problem on the Web today has less to do with monopolies or software design than with intellectual piracy, which he has also studied extensively. In fact, Dr. Liebowitz used to be a favorite of the “information-wants-to-be-free” faction.
In the 1980s he asserted that photocopying actually helped copyright owners by exposing more people to their work, and he later reported that audio and video taping technologies offered large benefits to consumers without causing much harm to copyright owners in Hollywood and the music and television industries.
But when Napster and other music-sharing Web sites started becoming popular, Dr. Liebowitz correctly predicted that the music industry would be seriously hurt because it was so cheap and easy to make perfect copies and distribute them. Today he sees similar harm to other industries like publishing and television (and he is serving as a paid adviser to Viacom in its lawsuit seeking damages from Google for allowing Viacom’s videos to be posted on YouTube).
Trying to charge for songs and other digital content is sometimes dismissed as a losing cause because hackers can crack any copy-protection technology. But as Mr. Lanier notes in his book, any lock on a car or a home can be broken, yet few people do so — or condone break-ins.
“An intelligent person feels guilty for downloading music without paying the musician, but they use this free-open-culture ideology to cover it,” Mr. Lanier told me. In the book he disputes the assertion that there’s no harm in copying a digital music file because you haven’t damaged the original file.
“The same thing could be said if you hacked into a bank and just added money to your online account,” he writes. “The problem in each case is not that you stole from a specific person but that you undermined the artificial scarcities that allow the economy to function.”
Mr. Lanier was once an advocate himself for piracy, arguing that his fellow musicians would make up for the lost revenue in other ways. Sure enough, some musicians have done well selling T-shirts and concert tickets, but it is striking how many of the top-grossing acts began in the predigital era, and how much of today’s music is a mash-up of the old.
“It’s as if culture froze just before it became digitally open, and all we can do now is mine the past like salvagers picking over a garbage dump,” Mr. Lanier writes. Or, to use another of his grim metaphors: “Creative people — the new peasants — come to resemble animals converging on shrinking oases of old media in a depleted desert.”
To save those endangered species, Mr. Lanier proposes rethinking the Web’s ideology, revising its software structure and introducing innovations like a universal system of micropayments. (To debate reforms, go to Tierney Lab at nytimes.com/tierneylab.
Dr. Liebowitz suggests a more traditional reform for cyberspace: punishing thieves. The big difference between Web piracy and house burglary, he says, is that the penalties for piracy are tiny and rarely enforced. He expects people to keep pilfering (and rationalizing their thefts) as long as the benefits of piracy greatly exceed the costs.
In theory, public officials could deter piracy by stiffening the penalties, but they’re aware of another crucial distinction between online piracy and house burglary: There are a lot more homeowners than burglars, but there are a lot more consumers of digital content than producers of it.
The result is a problem a bit like trying to stop a mob of looters. When the majority of people feel entitled to someone’s property, who’s going to stand in their way?
A Rebel in Cyberspace, Fighting Collectivism
YOU ARE NOT A GADGET
By Jaron Lanier
209 pages. Alfred A. Knopf. $24.95.
In 2006, the artist and computer scientist Jaron Lanier published an incisive, groundbreaking and highly controversial essay about “digital Maoism” — about the downside of online collectivism, and the enshrinement by Web 2.0 enthusiasts of the “wisdom of the crowd.” In that manifesto Mr. Lanier argued that design (or ratification) by committee often does not result in the best product, and that the new collectivist ethos — embodied by everything from Wikipedia to “American Idol” to Google searches — diminishes the importance and uniqueness of the individual voice, and that the “hive mind” can easily lead to mob rule.
Now, in his impassioned new book “You Are Not a Gadget,” Mr. Lanier expands this thesis further, looking at the implications that digital Maoism or “cybernetic totalism” have for our society at large. Although some of his suggestions for addressing these problems wander into technical thickets the lay reader will find difficult to follow, the bulk of the book is lucid, powerful and persuasive. It is necessary reading for anyone interested in how the Web and the software we use every day are reshaping culture and the marketplace.
Mr. Lanier, a pioneer in the development of virtual reality and a Silicon Valley veteran, is hardly a Luddite, as some of his critics have suggested. Rather he is a digital-world insider who wants to make the case for “a new digital humanism” before software engineers’ design decisions, which he says fundamentally shape users’ behavior, become “frozen into place by a process known as lock-in.” Just as decisions about the dimensions of railroad tracks determined the size and velocity of trains for decades to come, he argues, so choices made about software design now may yield “defining, unchangeable rules” for generations to come.
Decisions made in the formative years of computer networking, for instance, promoted online anonymity, and over the years, as millions upon millions of people began using the Web, Mr. Lanier says, anonymity has helped enable the dark side of human nature. Nasty, anonymous attacks on individuals and institutions have flourished, and what Mr. Lanier calls a “culture of sadism” has gone mainstream. In some countries anonymity and mob behavior have resulted in actual witch hunts. “In 2007,” Mr. Lanier reports, “a series of ‘Scarlet Letter’ postings in China incited online throngs to hunt down accused adulterers. In 2008, the focus shifted to Tibet sympathizers.”
Mr. Lanier sensibly notes that the “wisdom of crowds” is a tool that should be used selectively, not glorified for its own sake. Of Wikipedia he writes that “it’s great that we now enjoy a cooperative pop culture concordance” but argues that the site’s ethos ratifies the notion that the individual voice — even the voice of an expert — is eminently dispensable, and “the idea that the collective is closer to the truth.” He complains that Wikipedia suppresses the sound of individual voices, and similarly contends that the rigid format of Facebook turns individuals into “multiple-choice identities.”
Like Andrew Keen in “The Cult of the Amateur,” Mr. Lanier is most eloquent on how intellectual property is threatened by the economics of free Internet content, crowd dynamics and the popularity of aggregator sites. “An impenetrable tone deafness rules Silicon Valley when it comes to the idea of authorship,” he writes, recalling the Wired editor Kevin Kelly’s 2006 prediction that the mass scanning of books would one day create a universal library in which no book would be an island — in effect, one humongous text, made searchable and remixable on the Web.
“It might start to happen in the next decade or so,” Mr. Lanier writes. “Google and other companies are scanning library books into the cloud in a massive Manhattan Project of cultural digitization. What happens next is what’s important. If the books in the cloud are accessed via user interfaces that encourage mashups of fragments that obscure the context and authorship of each fragment, there will be only one book. This is what happens today with a lot of content; often you don’t know where a quoted fragment from a news story came from, who wrote a comment, or who shot a video.”
While this development might sound like a good thing for consumers — so much free stuff! — it makes it difficult for people to discern the source, point of view and spin factor of any particular fragment they happen across on the Web, while at the same time encouraging content producers, in Mr. Lanier’s words, “to treat the fruits of their intellects and imaginations as fragments to be given without pay to the hive mind.” A few lucky people, he notes, can benefit from the configuration of the new system, spinning their lives into “still-novel marketing” narratives, as in the case, say, of Diablo Cody, “who worked as a stripper, can blog and receive enough attention to get a book contract, and then have the opportunity to have her script made into a movie — in this case, the widely acclaimed ‘Juno.’ ” He fears, however, that “the vast majority of journalists, musicians, artists and filmmakers” are “staring into career oblivion because of our failed digital idealism.”
Paradoxically enough, the same old media that is being destroyed by the Net drives an astonishing amount of online chatter. “Comments about TV shows, major movies, commercial music releases, and video games must be responsible for almost as much bit traffic as porn,” Mr. Lanier observes. “There is certainly nothing wrong with that, but since the Web is killing the old media, we face a situation in which culture is effectively eating its own seed stock.”
In other passages in this provocative and sure-to-be-controversial book he goes even further, suggesting that “pop culture has entered into a nostalgic malaise,” that “online culture is dominated by trivial mashups of the culture that existed before the onset of mashups, and by fandom responding to the dwindling outposts of centralized mass media.”
Online culture, he goes on, “is a culture of reaction without action” and rationalizations that “we were entering a transitional lull before a creative storm” are just that — rationalizations. “The sad truth,” he concludes, “is that we were not passing through a momentary lull before a storm. We had instead entered a persistent somnolence, and I have come to believe that we will only escape it when we kill the hive.”
Burst of Mobile Giving Adds Millions in Relief Funds
Old-fashioned television telethons can stretch on for hours. But the latest charity appeal is short enough for Twitter: “Text HAITI to 90999 to donate $10 to @RedCross relief.”
In the aftermath of the earthquake in Haiti, many Americans are reaching for their cellphones to make a donation via text message. And plenty of them are then spreading the word to others on sites like Twitter and Facebook.
The American Red Cross, which is working with a mobile donations firm called mGive, said Thursday that it had raised more than $5 million this way.
“There is an enormous outpouring for this effort,” said Wendy Harman, social media manager at the Red Cross. “It’s such an easy way to give and pass around through social sites on the Web.”
The mobile donations are part of a larger surge of money flowing to the relief effort. The Red Cross said it had collected nearly $35 million as of Thursday night, surpassing the amounts it received in the same time period after Hurricane Katrina and the Indian Ocean tsunami.
Companies also lent a hand: Google pledged $1 million to Unicef and other charitable organizations, while Microsoft promised $1.25 million in cash and donations as well as technical support for relief groups in Haiti.
“When something like this happens, it’s incredibly frustrating because there isn’t much that we can do,” said Laura Fitton, a media consultant who has raised money for charity on Twitter. “It helps to be able to at least make a gesture, and that is what is catching on.”
The Red Cross expects that donations made through more established channels — writing a check or on the Web — will still far outweigh text-message giving. But the cellphone campaign may be reaching people who might not otherwise have made the effort to get involved.
The Red Cross solicited text-message donations as part of other relief efforts, with the biggest amount, $190,000, raised after Hurricane Ike in 2008. None of those caught on like the efforts for Haiti.
Convenience is one factor in the campaign’s success. People simply send a designated word to a five- or six-digit number and then confirm that they want to give, and the donation is charged to their wireless bill. At the end of the month, the carriers transfer the contributions to a service provider like mGive, which passes them on to the charity.
Some of the major wireless carriers, including AT&T and T-Mobile, are encouraging donations by waiving the cost of the text messages. And mGive says it will not charge its usual fees, so all of the money will go to the Red Cross.
Similarly, MasterCard, Visa and American Express said on Thursday that they would waive transaction fees for some charitable donations to the relief efforts.
While it takes just a minute to donate via text message, the actual money transfers can take awhile.
“What people may not realize is that it could take up to 90 days before the money actually reaches the charity,” said Art Taylor, president of the Better Business Bureau Wise Giving Alliance. “We’re advising people to follow up that $10 donation by going to the Web sites and donating directly.”
The cellphone carriers and mGive said they were working to accelerate the flow of funds. “We’ve been looking since yesterday at how to speed up the process for this particular situation,” said Jeffrey Nelson, a spokesman for Verizon Wireless. He said the company was working on a system that would advance the contributions.
Mr. Taylor cautioned that the urge to give could provide opportunities for scammers. “Even with Web sites, people should be careful to ensure they’re giving to the charity they intend to,” he said. The Better Business Bureau has posted tips on its Web site, bbb.org, about ways to vet Web sites and text-message solicitations.
Many other charities have rushed to promote their cellphone campaigns. One that has spread widely was started by the Haitian-born musician Wyclef Jean, who took to Twitter urging his 1.4 million followers to donate to his foundation by texting the word “Yele” to the number 501501. As of Thursday, he had raised more than $1 million for relief efforts.
The Red Cross campaign was helped by endorsements from Secretary of State Hillary Rodham Clinton and the White House’s blog, giving legitimacy to an unfamiliar mode of giving. And word of the campaigns was all over Facebook and Twitter.
Sysomos, an analytics firm in Toronto, estimated that nearly 150,000 posts containing both “Haiti” and “Red Cross” were sent through Twitter since the quake.
Chase Turner, a 26-year-old media analyst in Minneapolis, said he had been bombarded with messages about Haiti “across all the social networking sites I am on.” He donated via text message after hearing about the Red Cross campaign on Twitter.
Being able to post a message about contributing helps reinforce the trend, Mr. Turner said. “It’s really nice to be able to say and show that you’ve done something,” he said.
Philanthropy experts say the text-messaging approach could have a lasting impact on the charity world.
“This may be a new way for people to give and give robustly,” Mr. Taylor said. “If it continues after the disaster, then maybe we’ve discovered a new habit for giving to charities.”
Matt Richtel contributed reporting.
Top 5 Reasons Porn-for-Profit Is Dying
Why is the adult film business in dire straits? Sasha Grey and other stars answered The Daily Beast’s question this weekend at the porn industry’s annual convention in Las Vegas.
Every January, the Adult Entertainment Expo in Las Vegas is the biggest annual gathering of the adult film industry. But the biggest is suddenly a lot smaller. The 2010 AEE convention, which ran Thursday through Sunday, had shrunk from packing two floors of the Venetian’s Sands Expo Center last year down to one floor (and that one with lots of empty space).
“The AEE show is an example of what the business faces. There are fewer fans, less foot traffic, and less companies exhibiting,” said Steve Javors, editor in chief of industry trade publication XBIZ. “During the 2000s, porn kept expanding outward. We thought there was an insatiable appetite for porn, and there would keep being more companies and more porn stars. Now, we are finding out that is not true.”
“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Pete Housley, who aggregates porn on Twitter.
As for the concurrent, AVN Awards—AVN being another adult industry trade publication—which the porn world bills as their Oscars, it moved from the arena-size Mandalay Bay Events Center to the few-thousand-seats theater at The Palms. AVN head Paul Fishbein sounded like he was echoing the words of Spinal Tap’s manager when he described the venue switch as not so much to a smaller space, but one more “selective and intimate.”
So, what happened to the porn business, which had been magnificently profitable since the arrival of the VCR? The attendees at this year’s Adult Entertainment Expo gave a number of reasons for its problems.
Here are the Top 5 reasons why it is harder than ever before to make a living selling porn:
According to porn star Dana DeArmond: “If people don’t realize it is stealing and start paying for their porn then performers are going to stop performing.”
Among the acts DeArmond performs (solo or in group sex with men and/or women) are anal sex and double penetration. “I don’t think people are just going to do what porn stars do for free and put it on the Internet,” she said.
“It is stealing, and unfortunately it is hitting the adult industry hard right now,” said Sasha Grey, the current porn It Girl.
According to XBIZ’s Javors, thanks to illegal downloading and “Tube” sites like YouPorn, sales of porn’s most profitable product, DVDs, have taken a huge hit this past year. Javors said: “Piracy is the biggest single factor contributing to the economic malaise we are in. How can you compete with free?”
Dan O’Connell, president of Girlfriends Films, explained how his company has been among the few to claim an increase in DVD sales from 2009. “We’ve been able to grow our DVD sales, because we have been aggressive going after piracy. In the past eight months, we have taken down 17,000 pirated videos of ours by just sending out letters warning them that we will sue.”
But Girlfriends Films is just one company that averages about five movies a month. And even Grey does not see DVDs sticking around much longer. “I think DVDs are going to be a collectors’ medium like vinyl,” she said.
2. Video on Demand Meets the Masturbating Fan
Paying online hasn’t worked out so well for porn. Unlike conventional movies, the other Hollywood has a serious Achilles’ heel. “People look at VOD as the salvation that is going to be this huge revenue generator. But it is expensive to shoot a feature,” said Pete Housley of Candid Tweet. His company sits between fans and the industry by aggregating porn stars on Twitter. His perspective: “If you think about the costs of making a movie, and then selling it for 6 or 7 cents a minute, well, that is great for Hollywood. The problem for porn is that a guy watches 4 or 5 minutes, jerks off and is done. So, residual payouts are becoming less and less.”
AVN’s Fishbein said: “A lot of the studios that depended on DVDs are trying to make it up through video-on-demand. That is where you have people struggling, because they haven’t figured out how to fully monetize that content.”
John Stagliano, owner of Evil Angel, one of the largest DVD distribution companies in porn said: “We make money on VOD, just not nearly as much as comes from DVD sales. But we are making money on VOD. It isn’t the newspaper business yet.”
3. The Taboo Is Gone
“People used to be ashamed to say their girlfriends did porn. That is gone. Anyone can afford a Web site now,” said Housley.
So, Housley has developed criteria for his various feeds. For example, PornStarTweet requires that the performer has appeared in at least one DVD. Still, there are close to 500 qualified porn stars on this feed.
Mark Spiegler has been an adult talent agent for almost 20 years. His clients include some of the biggest names in the industry, like Dana DeArmond and Belladonna. But he no longer has to look for his talent: Aspiring porn stars email him in droves: “I send away at least two girls a week who think they can do porn,” he said.
Not everyone gets sent away. Spiegler likes to tell of the email he got in 2006 from the then recently turned 18 Sasha Grey. He immediately put Grey in her debut, a John Stagliano film.
Though Spiegler no longer reps her, he nostalgically keeps Grey’s first email on his phone. This weekend, reporters on the red carpet at AVN Awards asked to see this initial email. It appeared that it wasn’t the first time he had performed this ritual. He read the email aloud like a proud father, omitting only her real name, and ended by turning the phone around to display the long, long list of all the sex acts Grey was willing to perform on camera. The reporters turned totally silent as Spiegler scrolled down the list.
“Very few people are cut out for this business. Almost all of the girls who contact me, I send away. In my entire time doing this, there has only been one person who was perfect in every way for the porn business and that is Sasha Grey.”
At that point Grey, walking the carpet, came up behind Spiegler and the two warmly greeted each other.
4. Online Gaming
One of the strangest challenges porn faces is competition from online games like World of Warcraft, though the connection may at first seem random. “It is all entertainment that you are getting involved in the same way as porn is entertainment,” said Aiden. “I won’t say everyone, but a lot of people in the industry play videogames. The games are competition for porn. Fans jerk off to porn and are done, but you can keep playing a game.”
Aiden (no last name, this is porn!) should know, as he is also Webmaster for his wife Belladonna’s successful site EnterBelladonna.com. As for his online gaming, his wife wants him to cut back. “Yeah, my wife and I occasionally argue about the amount of time I spend playing.”
5. Porn Star Hookers
Why fight for the diminishing supply of work in the porn business, doing those double penetrations, when you have fans who will pay you more for basic missionary-style sex with them? It is a logic that is increasingly making sense to some porn stars as fans are able to connect ever more directly with them via Facebook and Twitter.
Few will talk about this, but one well-known veteran put it this way: “A lot of hookers make a few movies just so they can put ‘porn star’ on their escort Web site. That did not used to happen and still doesn't with the top girls. But a lot has changed in the past few years. It used to be girls in porn were unattainable fantasies. But they also used to be able to work five days a week if they wanted to. Now, very few of the younger girls can get that much work.”
Perhaps the clearest sign of this efficiency was the booth at AEE occupied by the legal brothel Mustang Ranch, located over 400 miles from Vegas. The brothel is starting a porn production company using their hookers as stars. They hope to have their first release, One Night at the Mustang Ranch, out by spring. But don’t look for it on DVD. It will be Internet only.
The Children of Cyberspace: Old Fogies by Their 20s
My 2-year-old daughter surprised me recently with two words: “Daddy’s book.” She was holding my Kindle electronic reader.
Here is a child only beginning to talk, revealing that the seeds of the next generation gap have already been planted. She has identified the Kindle as a substitute for words printed on physical pages. I own the device and am still not completely sold on the idea.
My daughter’s worldview and life will be shaped in very deliberate ways by technologies like the Kindle and the new magical high-tech gadgets coming out this year — Google’s Nexus One phone and Apple’s impending tablet among them. She’ll know nothing other than a world with digital books, Skype video chats with faraway relatives, and toddler-friendly video games on the iPhone. She’ll see the world a lot differently from her parents.
But these are also technology tools that children even 10 years older did not grow up with, and I’ve begun to think that my daughter’s generation will also be utterly unlike those that preceded it.
Researchers are exploring this notion too. They theorize that the ever-accelerating pace of technological change may be minting a series of mini-generation gaps, with each group of children uniquely influenced by the tech tools available in their formative stages of development.
“People two, three or four years apart are having completely different experiences with technology,” said Lee Rainie, director of the Pew Research Center’s Internet and American Life Project. “College students scratch their heads at what their high school siblings are doing, and they scratch their heads at their younger siblings. It has sped up generational differences.”
One obvious result is that younger generations are going to have some very peculiar and unique expectations about the world. My friend’s 3-year-old, for example, has become so accustomed to her father’s multitouch iPhone screen that she approaches laptops by swiping her fingers across the screen, expecting a reaction.
And after my 4-year-old niece received the very hot Zhou-Zhou pet hamster for Christmas, I pointed out that the toy was essentially a robot, with some basic obstacle avoidance skills. She replied matter-of-factly: “It’s not a robot. It’s a pet.”
These mini-generation gaps are most visible in the communication and entertainment choices made by different age groups. According to a survey last year by Pew, teenagers are more likely to send instant messages than slightly older 20-somethings (68 percent versus 59 percent) and to play online games (78 percent versus 50 percent).
Larry Rosen, a professor of psychology at California State University, Dominguez Hills, and the author of the coming “Rewired: Understanding the iGeneration and the Way They Learn,” has also drawn this distinction between what he calls the Net Generation, born in the 1980s, and the iGeneration, born in the ’90s and this decade.
Now in their 20s, those in the Net Generation, according to Dr. Rosen, spend two hours a day talking on the phone and still use e-mail frequently. The iGeneration — conceivably their younger siblings — spends considerably more time texting than talking on the phone, pays less attention to television than the older group and tends to communicate more over instant-messenger networks.
Dr. Rosen said that the newest generations, unlike their older peers, will expect an instant response from everyone they communicate with, and won’t have the patience for anything less.
“They’ll want their teachers and professors to respond to them immediately, and they will expect instantaneous access to everyone, because after all, that is the experience they have growing up,” he said. “They should be just like their older brothers and sisters, but they are not.”
The boom of kid-focused virtual worlds and online games like Club Penguin and Moshi Monsters especially intrigues Mizuko Ito, a cultural anthropologist and associate researcher at the University of California Humanities Research Institute.
Dr. Ito said that children who play these games would see less of a distinction between their online friends and real friends; virtually socializing might be just as fulfilling as a Friday night party. And they would be more likely to participate actively in their own entertainment, clicking at the keyboard instead of leaning back on the couch.
That could give them the potential to be more creative than older generations — and perhaps make them a more challenging target for corporate marketers. “It’s certainly no longer true that kids are just blindly consuming what commercial culture has to offer,” Dr. Ito said.
Another bubbling intra-generational gap, as any modern parent knows, is that younger children tend to be ever more artful multitaskers. Studies performed by Dr. Rosen at Cal State show that 16- to 18-year-olds perform seven tasks, on average, in their free time — like texting on the phone, sending instant messages and checking Facebook while sitting in front of the television.
People in their early 20s can handle only six, Dr. Rosen found, and those in their 30s perform about five and a half.
That versatility is great when they’re killing time, but will a younger generation be as focused at school and work as their forebears?
“I worry that young people won’t be able to summon the capacity to focus and concentrate when they need to,” said Vicky Rideout, a vice president at the Kaiser Family Foundation, which will release a sweeping survey on the technology and media habits of children and teenagers this month.
Children my daughter’s age are also more likely to have some relaxed notions about privacy. The idea of a phone or any other device that is persistently aware of its location and screams out its geographic coordinates, even if only to friends, might seem spooky to older age groups.
But the newest batch of Internet users and cellphone owners will find these geo-intelligent tools to be entirely second nature, and may even come to expect all software and hardware to operate in this way.
Here is where corporations can start licking their chops. My daughter and her peers will never be “off the grid.” And they may come to expect that stores will emanate discounts as they walk by them, and that friends can be tracked down anywhere.
“If it’s something you grow up with, you have a completely different comfort with it than someone who has had to unlearn something about the world,” said Mr. Rainie, of the Pew project.
It’s not yet clear whether these disparities between adjacent groups of children and teenagers will simply fade away, as the older groups come to embrace the new technology tools, or whether they will deepen into more serious rifts between various generations.
But the children, teenagers and young adults who are passing through this cauldron of technological change will also have a lot in common. They’ll think nothing of sharing the minutia of their lives online, staying connected to their friends at all times, buying virtual goods, and owning one über-device that does it all.
They will believe the Kindle is the same as a book. And they will all think their parents are hopelessly out of touch.
Why Ford Could Be the Next Media Company
With Sync system's new tweeting, maps and apps, ad sales can't be far behind
A decade ago, I was debating with my auto friends: What is the future of the console? Could automakers be technology companies? Or what's more, media companies? Today, I think we're starting to get our answer.
The biggest news from the Consumer Electronics Show seems to be the rise of the automobile from a stereo on wheels to a ubiquitous entertainment productivity machine.
There are as many as 380 in-vehicle electronics exhibitors showing off their products, and the opening morning keynote was not delivered with Bill Gates, Steve Jobs or some other distinguished Silicon Valley technophile, but by Ford CEO Alan Mulally in his red sweater vest, who introduced an updated version of the in-dash, in-car technology game changer, Ford Sync.
The 2010 edition of Sync comes with a number of useful extensions, including the ability to keep up with Twitter, stream internet radio and download turn-by-turn web maps at no cost. It takes a page from companies such as Facebook and Apple by supporting third-party applications. That means you could soon be controlling many of the handy applications you use on your iPhone via the voice recognition on your car's console.
Sync has been so successful that Ford attributes it to the company's turnaround. The Los Angeles Times reported that Sync-enabled vehicles sell twice as fast as non-Sync-enabled ones.
Other car manufacturers have observed the success Ford has had in pushing consumer electronics and have begun a rollout of their own. General Motors Corp.'s extended-battery vehicle, the Chevy Volt, will give customers the option of controlling various car settings via their smartphones.
Consider the signs this traditionally hardware-driven industry is starting to think in terms of software and interactive experiences: Chrysler has announced WiFi-enabled vehicles; GM has hired former Microsoft Chief Financial Officer Chris Liddell and was rumored to be speaking with Apple's Chief Operating Officer Tim Cook for the CEO position. Cars aren't cars anymore, they're productivity hubs with entertainment extensions on four wheels.
And why shouldn't they be? We spend an inordinate amount of time in our vehicles. By today's standards, some experts believe that number exceeds three hours per day. So as provoking as a thought this may be, is it difficult to imagine a time when the auto manufacturers subsidize in-vehicle technology through advertising? What brand wouldn't want to be pervasively integrated into a vehicle's GPS unit?
Even today, is it really not feasible to think that GM's OnStar service couldn't provide pay-per-click (or even pay-per-visit) smart results based on customer inquiries? Think about the following scenario:
Driver: Hi, I'm looking for the closest gas station.
OnStar: You are 0.5 miles away from a Shell but 0.6 miles from a BP, where you can use a discount code to save 15%.
A day will come when the Big Three will need to decide how far they want to take this and whether they want to turn into media and advertising companies. I assure you, as someone who worked on their business, those debates have been actively taking place among their agencies for years. The allure of monetizing their online sites through sponsorship/advertising opportunities has been tempting, yet no backlash could potentially be greater than the nightmare scenario of opening the floodgates to invasive advertising in vehicles themselves. How far the car companies take it will directly correlate to the success of such a venture.
Regardless, as a marketer, knowing that cars today are rolling off assembly lines with wireless access, location-based services, and iPhone-application plug-ins, it seems like the opportunities that reside for marketers are becoming closer every day.
A Fox Chief at the Pinnacle of Media and Politics
David Carr and Tim Arango
In the fall of 2008, Roger Ailes, the head of Fox News, went to his boss, Rupert Murdoch, with two complaints: he had heard that Mr. Murdoch was considering endorsing Barack Obama for president in The New York Post, and he had read a book excerpt in Vanity Fair suggesting that Mr. Murdoch was sometimes embarrassed by the right-leaning Fox News.
Mr. Ailes threatened to quit, a person familiar with the conversation said. Instead, Mr. Murdoch soon rewarded him with a new, more lucrative contract — he made $23 million last year in salary, bonuses and other compensation, more than Mr. Murdoch — and The New York Post endorsed John McCain.
In an interview in late December in his office at News Corporation headquarters in Midtown Manhattan, Mr. Ailes conceded that he had opposed an Obama endorsement. (“I didn’t think he had the experience,” he said, adding, “I don’t tell Rupert Murdoch who to endorse.”) He was outraged by the Vanity Fair article but said he “demanded nothing” and did not threaten to quit. He said he did not have to.
“If you’re making money and you’ve hit your targets for five years, you don’t need to demand a new contract,” he said.
Mr. Ailes is certainly making money. At a time when the broadcast networks are struggling with diminishing audiences and profits in news, he has built Fox News into the profit engine of the News Corporation. Fox News is believed to make more money than CNN, MSNBC and the evening newscasts of NBC, ABC and CBS combined. The division is on track to achieve $700 million in operating profit this year, according to analyst estimates that Mr. Ailes does not dispute.
This outsize success has placed Mr. Ailes, an aggressive former Republican political strategist, at the pinnacle of power in three corridors of American life: business, media and politics. In addition to being the best-paid person in the News Corporation last year, he is the most successful news executive of the last 10 years, and his network exerts a strong influence on the fractured conservative movement.
Mr. Obama told The New York Times Magazine in October 2008 that the “Fox effect” had cost him two to three points in the polls. Since that election, Mr. Ailes and his cohort of conservative anchors like Glenn Beck, Bill O’Reilly and Sean Hannity have been riding a wave of discontent that sometimes puts them at odds with the Republican Party’s establishment, most recently with Fox News’s advocacy of an independent candidate in the 23rd Congressional District in upstate New York. The Republican candidate eventually withdrew.
“When you think about that, it’s the equivalent of the endorsement major newspapers used to provide,” said David Gergen, an analyst on CNN who has been an aide in Democratic and Republican administrations.
He went on: “Regardless of whether you like what he is doing, Roger Ailes is one of the most creative talents of his generation. He has built a media empire that is capable of driving the conversation, and, at times, the political process.”
Mr. Murdoch, in a statement relayed by a spokesman, said: “I’m proud of Fox News and what it is accomplishing, and I am grateful to Roger and his team for creating such a great asset for News Corporation.”
Mr. Ailes’s approach has put him at odds not just with the Democrats but also with the more liberal members of his boss’s family.
He played a well-chronicled role in the decision in 2004 by Lachlan Murdoch, Mr. Murdoch’s eldest son, to leave the company; he thought Mr. Ailes was intruding on his corporate turf. Two other Murdoch children, Elisabeth, a television producer in London, and James, the only Murdoch scion employed at the company, are sympathetic to Democratic causes and frequently voiced concerns to their father during last year’s presidential campaign about Fox News’s coverage of Mr. Obama.
And those concerns have only grown.
“I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’s horrendous and sustained disregard of the journalistic standards that News Corporation, its founder and every other global media business aspires to,” said Matthew Freud, who is married to Ms. Murdoch and whom PR Week magazine says is the most influential public relations executive in London.
In the interview, Mr. Ailes said that both Mr. Murdoch and the News Corporation had been consistently supportive of Fox News and its approach.
Mr. Ailes, the son of a foreman at the Packard Electric plant in Warren, Ohio, described his upbringing with three words: “God, country, family” and said that credo was responsible for the success of Fox News.
“I built this channel from my life experience,” Mr. Ailes, 69, said. “My first qualification is I didn’t go to Columbia Journalism School. There are no parties in this town that I want to go to.”
Mr. Ailes majored in radio and television at Ohio University and worked for “The Mike Douglas Show,” where at age 27 he met then-presidential candidate Richard M. Nixon in 1968.
“The camera doesn’t like you,” he told Mr. Nixon, according to “Crazy Like a Fox,” a book by Scott Collins about Fox News.
“It’s a shame a man has to use gimmicks like this to get elected,” Mr. Nixon said.
“Television is not a gimmick, and if you think it is, you’ll lose again,” Mr. Ailes said. The Nixon campaign hired him a few days later.
The night in 1969 when Neil Armstrong walked on the moon, Mr. Ailes was inside the Oval Office setting up a screen on the president’s desk. The next year, Mr. Ailes was sent to Hawaii in advance of the attempt by the troubled Apollo 13 mission to return to earth. He prepared for two events in adjacent hangars: a funeral and a welcome home ceremony. Apollo 13 made it home safely.
Joe McGinniss, who wrote about Mr. Ailes in his 1969 book, “The Selling of the President 1968,” keeps in touch with him. “Success never made that chip on his shoulder go away,” Mr. McGinniss said. “He holds onto what he envisions to be the values of the heartland and is suspicious of people on either coast.”
After serving as a communications consultant for politicians and executives, Mr. Ailes ran CNBC, the business network, in the early 1990s under Bob Wright, then the chief of NBC.
“He’s got a very good sense of simplicity on air,” Mr. Wright said. “Because he had that background of being involved in political campaigns, he could develop a message and deliver it, and test it quickly to see if it’s effective.”
Mr. Ailes started Fox News in 1996 and faced skepticism that it ever could be a rival to CNN, much less the ratings and profits leader it is today. As recently as 2002, the network made very little money, said Michael Nathanson, an analyst at Sanford C. Bernstein & Company. Today, its vast profits secured by ever-rising fees from cable companies make it “probably the single most important asset at News Corporation,” he said.
“I built this business to throw off a billion dollars in profit,” Mr. Ailes said. “That was the goal from Day 1. In my own mind.”
Rick Perlstein, author of “Nixonland,” sees a strong resemblance between Mr. Ailes’s political experience and his approach to television.
“Like Richard Nixon, like Spiro Agnew, Fox News can never see itself as the attacker,” he said. “They are always playing defense because they believe they are always under attack, which attracts people that have the same personality formation. By bringing that mind-set, plus the high energy seamless stream of the aggression of talk radio, he has found an audience.”
Not all of Mr. Ailes’s political interests are national in scope. In 2002, after buying a weekend home in Putnam County, N.Y., an area rich in American history (a passion of Mr. Ailes’s) about 60 miles north of Manhattan, he became keenly interested in local issues. In 2008, he bought two local newspapers and installed his wife, Elizabeth, as publisher of both. He also has a young son.
There, he has engaged in a more direct version of politics. He is extremely concerned about zoning, among other local issues.
At a town hall forum on Oct. 26 sponsored by one of his newspapers, he had a heated exchange with Richard Shea, a Democratic councilman who was running for town supervisor. “I turn around, and there he is,” said Mr. Shea, who won the election. “He starts right in on the zoning. He says, ‘What are you trying to hide from me in the zoning?’ He said, ‘I own the newspaper.’ ”
Mr. Shea continued, “My takeaway was that this guy is pretty much threatening me.”
Mr. Ailes said he simply asked for Mr. Shea’s phone number and complained about “environmental zealots” in the town. “I am a conservationist,” he said. “I try to put the bottle in the right can.”
As powerful as he is within the News Corporation, Mr. Ailes remains a spectral presence outside the Fox News offices. National security had long been a preoccupation of Fox News, and it was clear in the interview that the 9/11 attacks had a profound effect on Mr. Ailes. They convinced him that he and his network could be terrorist targets.
On the day of the attacks, Mr. Ailes asked his chief engineer the minimum number of workers needed to keep the channel on the air. The answer: 42. “I am one of them,” he said. “I’ve got a bad leg, I’m a little overweight, so I can’t run fast, but I will fight.
“We had 3,000 dead people a couple miles from here. I knew that any communications company could be a target.”
His movements now are shadowed by a phalanx of corporate-provided security. He travels to and from work in a miniature convoy of two sport utility vehicles. A camera on his desk displays the comings and goings outside his office, where he usually keeps the blinds drawn.
Mr. Ailes said he received frequent threats over the years, but his concerns for the safety of his family were heightened by an incident at his New Jersey home after the 9/11 attacks. There was an intruder on his property, but no arrest was made. In Putnam County, he has bought several properties surrounding his home. A sign outside his house shows an illustration of a gun and advises visitors that it is under video surveillance.
After 9/11, Mr. Ailes sent a memo to President George W. Bush urging harsh action. Despite the influence Fox News has over many Republicans — the megaphone of Fox News is a valuable one for Republican politicians — he is generally not eager to be seen as having any relationship with the party. His influence in politics is once-removed, expressed through the talent he chooses and the tone he sets.
In a sense, trading intelligence with party officials would be a step down for Mr. Ailes. “He understands the news media, politics and the American people as well as anyone in the modern age,” said Newt Gingrich, the former speaker of the House.
Even Mr. Ailes’s political foes understand the influence of what he has built at Fox News.
“If he were a Democrat, I think there would be 67 Democratic senators right now,” said the political consultant James Carville, a former Clinton aide and a frequent guest on CNN. “In terms of the news business, the cable television business, and the political business, there is him and then there is everybody else.”
Is Ailes Finished at Fox?
Several News Corp. veterans tell Lloyd Grove that Roger Ailes may soon be out as Fox News chief—and that Rupert Murdoch can’t have been pleased with a story depicting his employee as the savior of a struggling empire.
In a plot twist worthy of a Shakespearian tragedy, with intrigue supplied by Machiavelli, Roger Ailes’ days at News Corporation may be numbered.
That, at least, is the conspiratorial view of several highly placed News Corp. veterans who believe Chairman and CEO Rupert Murdoch isn’t likely to be happy with Sunday’s celebratory front-page New York Times profile of the Fox News chief.
Ailes didn’t return my phone call, and a Fox News insider scoffed that this interpretation of events is foolish. “It’s just not true,” this insider said, noting that Ailes and Murdoch “have a great relationship” and that Murdoch’s corporate spokesman quickly issued a statement of support Saturday after the Times story was posted online with an eye-popping condemnation of Ailes from Murdoch son-in-law Matthew Freud.
“Nobody can fly too close to the Sun King. It doesn’t matter if you’re making a ton of money for the company—you will soon be out.”
“I am by no means alone within the family or the company in being ashamed and sickened by Roger Ailes’ horrendous and sustained disregard of… journalistic standards,” Freud said, apparently speaking for Murdoch’s 41-year-old daughter Elisabeth, a former News Corp. executive who owns a television production company, and 37-year-old James Murdoch, chairman and chief executive of News Corp.’s European and Asian operations and his father’s heir apparent. “Matthew Freud’s opinions are his own, and in no way reflect the views of Rupert Murdoch, who is proud of Roger Ailes and Fox News,” the News Corp. spokesman retorted.
• Lloyd Grove: The Fox-Murdoch Feud Yet the elder Murdoch, my sources tell me, can’t have been pleased with the Times story’s implication that Ailes is single-handedly saving the struggling empire, whose earnings have been suffering in recent months because of substantial holdings in the financially besieged newspaper and broadcast television businesses.
“Rupert picked up his Times at the breakfast table, saw the story above the fold with the big photo of Roger, and probably choked on his coffee,” one insider told me today, noting that the 78-year-old media mogul reflexively bridles when the hired help outshines him. In (literally) the money shot, the Times reported that Fox News earns $700 million in annual profit, the brightest star in the News Corp. firmament, and that Ailes is paid even more than the boss.
Media entrepreneur Andrew Neil, who was a top Murdoch executive at the Sunday Times of London and News Corp.’s Sky TV before they parted on bad terms, put it this way: “Nobody can fly too close to the Sun King. It doesn’t matter if you’re making a ton of money for the company—you will soon be out.”
A third well-connected News Corp. veteran agreed, theorizing that the 69-year-old Ailes—a workaholic who almost never grants press interviews but burnishes the Fox News image through his aggressive public-relations department—gave an interview to the Times in order to cement his legacy and repackage himself for his next job or make clear that any departure from News Corp. would entail a fabulously rich severance payout.
“Now his legacy is secure and he will be known as Mr. Moneybags, so he can step up to the next job and blame ‘those liberal-commie kids,’” the insider told me.
Poll: Most Won't Pay to Read Newspapers Online
Would you pay to read your favorite newspaper online? Most say no, at least according to a new Harris poll.
With traditional print newspapers struggling to turn a profit, many have turned to the Web as a means to stay afloat. While some offer their online content free of charge, other papers have played around with subscriptions by charging readers a monthly fee. But that strategy may backfire, says a Harris poll released Wednesday.
Among more than 2,000 online adults surveyed, 77 percent said they wouldn't pay anything to read a newspaper's stories on the Web. And among those willing to pay, 19 percent would cough up between $1 and $10 a month; only 5 percent would shell out more than $10 each month.
The poll also revealed what many newspapers have already experienced--that readership of traditional news is steadily dropping. Just 43 percent of the people surveyed said they read a newspaper each day, either in print or online. Around 72 percent read a paper once a week, while 81 percent read only once a month. And 10 percent said they never read a newspaper.
One factor in the decline of the daily newspaper is age. The younger you are, the less interested you seem to be in reading the daily news. Among folks 55 and older, 64 percent still read a daily paper. Among those 45 to 54, 44 percent catch a daily paper, while 36 percent of adults 35 to 44 do. But of those 18 to 24, only 23 percent said they read a paper each day, while 17 percent said they never do.
Following last year's trend, more newspapers are likely to either shut down this year or change to a new business model, notes Harris. But if people won't pay to read news online, the challenge remains for news outlets to find another way to survive.
Conducted with Adweek Media, the Harris poll surveyed 2,136 adults online on December 14 and 16 of last year.
France Offers Google Its Books in Exchange for Tax
As France drags its cultural past and present into the digital future, it is coming around to the idea that the job will require support from a company often viewed with deep suspicion here: Google.
To try to secure the company’s contribution, the government in recent days has proposed a new carrot and stick. On the one hand, it has suggested that Google pick up part of the tab to aid the beleaguered music industry. On the other, it has proposed a partnership with Google to accelerate the development of a viable French digital library.
The proposals amount to a tacit acknowledgment that France, like other European countries, has failed to develop Internet ventures with the scale needed to support a vibrant digital economy. That is a sensitive admission in France, where thriving homegrown media are often seen as an essential feature of a healthy culture.
Last year, unconfirmed reports that the National Library of France was considering working with Google on scanning millions of books caused an outcry among some members of the French cultural elite. In response, President Nicolas Sarkozy pledged €750 million, or $1.1 billion, to bolster the digitization of France’s libraries and other cultural archives.
As an expert panel published its recommendations on how to go about that, Culture Minister Frédéric Mitterrand said this week that he hoped to move beyond the “passionate reflexes” that have sometimes inflamed French attitudes toward Google and other American Internet companies.
“I did not want this debate to add to the long series of ‘Franco-French wars,’ or Franco-American disputes, even if these are sometimes imbued with the old-fashioned charm of Saint-Germain-des-Prés,” he said, referring to the neighborhood on the Left Bank in Paris that is the spiritual home of anti-Americanism in France.
The panel proposed a partnership in which taxpayer money would be used to scan books from the national library and other public institutions; those would form the backbone of an upgraded version of the government’s existing digital book project, called Gallica. To add other works, the report recommended working with private companies like Google, whose digital book archive is by far the most comprehensive. Works could then be made available via both sites.
Mr. Mitterrand said he planned to visit Google headquarters in California to negotiate on several sticking points. To participate, Mr. Mitterrand said, Google would have to depart from its practice of striking exclusive arrangements with institutions that participate in its book program, which include a municipal library in Lyon. He also insisted on greater respect for French copyright traditions, which can sometimes be more restrictive than American practices.
Indeed, French publishers, like their counterparts in Germany and some other European countries, continue to battle the company over copyright issues related to Google’s digitization program. In December, French publishers won a court ruling that blocks Google from scanning works that are under copyright; Google has appealed the decision.
The government report lamented the shortcomings of Gallica, which has been archiving works that are no longer under copyright. While Google has scanned more than 10 million books, the study says, Gallica has only 145,000 in its database. Even some French classics are apparently unavailable on Gallica; according to the report, the only copy of Stendhal’s “Le Rouge et le Noir” (“The Red and the Black”) turned up by a Web search was from a University of California library, via Google Books.
Scope is apparently only one of Gallica’s problems. Mr. Mitterrand also endorsed the panel’s recommendation that the service should be rebranded, saying its “Gallo-Roman village name evokes our ancestors, rather than a cutting-edge technology.”
Google welcomed the proposal for a partnership, saying it was “in line with the spirit of cooperation we’ve always tried to promote.”
But the company balked at one of the ideas in the report last week, a proposed tax on online advertising — much of which would be borne by Google — saying it would stifle innovation. Funds raised by the levy would be used, among other things, to help finance special cards that would enable young people to buy digital music at a discount.
“The better way to support content creation is to find new business models that help consumers find great content and reward artists and publishers for their work,” Olivier Esper, policy manager for Google France, said in a separate statement.
In what may have been an effort to encourage Google to accept the tax, lest something worse be imposed, the commission recommended that French antitrust authorities investigate the company’s dominance in Internet advertising. Google has about 80 percent of the market for Internet searches and search-linked advertising in France, a higher share than in the United States, and it also owns DoubleClick, the biggest server of ads to other Web sites.
Mr. Esper insisted that “plenty of competition exists in the advertising world.”
The idea of a tax on advertising revenue, with the proceeds used to support producers of media content, is not without precedent in France. Mr. Sarkozy’s government recently started taxing television advertising on commercial channels to pay for a phase-out of advertising on public TV, for example.
The latest proposal to bolster the beleaguered music industry, which blames unauthorized digital file-sharing for billions of euros in lost sales, follows the passage last year of one of the world’s toughest anti-piracy laws, under which persistent copyright cheats could lose their Internet access.
Enforcement of the law, under which the first warnings to file-sharers were to have been sent out at the start of the year, has yet to begin, though Mr. Mitterrand insisted that a few remaining snags would be worked out within months. Meanwhile, music companies are pushing for further action.
“I think what they are realizing is that disconnecting users doesn’t put any money into anyone’s pocket, other than the lawyers,” said Gerd Leonhard, a music industry consultant in Basel, Switzerland.
In the debate over what to do about piracy, France’s powerful, intricately connected cultural lobby has generally prevailed over Internet companies like Google. Universal Music Group, the world’s largest music company, is owned by Vivendi of France, for example, and France houses the biggest movie industry in Europe, much of it financed by the pay-television channel Canal Plus.
David El Sayegh, director general of SNEP, the French record industry trade organization, said Mr. Sarkozy “has always been on our side.”
“He is on the side of content, rather than the conduit, and that is a good thing,” Mr. El Sayegh said.
I had a revelation recently: a woman’s place is not in the home; it’s from the home! The good old home, with its dishes and dust, is, history has shown, not quite satisfying in itself. But maybe it’s a headquarters! In fact, turn your attention away from the kitchen and the bedrooms to the laptops, the cable, the e-readers, the smartphones, the high-speed triple-play tangle. Tricked out with telecommunications that could have serviced all of I.B.M. in 1950, the bourgeois home has become a woman’s base of operations. Try it: “Hi, boss. Today I’m staying home. Staying from home. I’m working from home.”
That phrase! Timothy Ferriss, in “The 4-Hour Workweek,” the best-selling manual of truancy and shirking, argues that the first step to living the dream is persuading your boss that face time is pointless. No matter what the open-plan evangelists say, no shareholder value has ever been generated by colleague collisions at the copier or the CPR poster. The way to bring glory to yourself and your company, as we all know, is to put your head down and do your work — at home, ideally.
Telecommuting is a familiar story, but I must sing its praises again — this time in a feminist key. For a century and a half, Mary Wollstonecraft types have tried to empower women to leave the home to work, shop, teach, learn, lead. Instead, without even marking the moment, we superempowered the home. Now if a woman stays home she’s not unambitious or antifeminist; she is — in the acronym of mothering message boards — a WAHM, a work-at-home mom, the most treasured of all the mom options (stay at home = bored; work outside the home = exhausted). This is good news. With technology that allows the WAHM to be simultaneously inside and outside, at home and at work, public and private, she no longer has to forfeit the manly rewards of grasping careerism.
For real. The dishwasher, the washing machine and the pill were supposed to liberate us from something, but the superduper Internet, alone among the great 20th-century technologies, has really nailed it. A woman of any ideological disposition or domestic arrangement must answer her e-mail. Therefore, a strategically arranged notebook computer, positioned like a dad’s broadsheet in the Eisenhower era, has become a force field against domestic distractions. While you beetle-brow it through your “work” — searching for your airline-rewards password, finding out who Justin Bieber is, obsessing about freckles on my-skincheck.com — you become, by magic, uninterruptable.
And then there’s what you’re missing by skipping the office: the trafficky commute, the petroleum-based slacks by Theory or Banana Republic, the noli-me-tangere demeanor that women were supposed to cultivate to ensure boardroom authority. All of these duties vanish when workplace and homeplace become one.
And who doesn’t like being at home? Taking uncontested showers at noon. Creating sardine-driven lunches forbidden in cubicle zones. Making nice with clients where no one can overhear your fakeness. And all the while — thanks to the untraceable nature of cellphones and e-mail — you get to pretend that you’re anywhere but on your mangy floor wearing “yoga” pants with “Judge Judy” on mute.
Thanks to the Internet, women who prefer never, ever to leave the house to enter the unpredictable world of vice presidents and printer hubs get to pursue fame and fortune as greedily as anyone. (The phrase, for your records, is “work independently.”) Our vaunted verbal skills come through just fine in instant messaging, and we get to skip the stuff that requires broad shoulders, a baritone and understanding of wolf packs: the dread face-to-face interactions. Sure, all those deals that were supposed to go down on the golf course or at the urinal — they probably still happen there. But now, if we so choose, we have the means to text-pester the golfers all the livelong day. Show them which colleague will not be ignored!
I submit, in all seriousness, that women have benefitted more (even) than men by telecommuting technology. Downloading school forms, pumping breast milk, tending to a sick kid, loading up the crockpot, straightening the kitchen — all this can be done with a BlackBerry in hand. None of this can be done — done well, anyway — at the office.
Women, of course, have the same complaints about wired culture that men do: anxiety, insomnia, no escape. But working from home does mean avoiding the “second shift,” that ’90s horror, in which the workday was said to be followed by a day of housework and child care, somehow all in 24 hours. With the Internet, work and life have become one long shift. But isn’t that what middle-class life is meant to be?
I figured that when 2010 finally arrived, I'd be here in Los Angeles on my videophone looking at my new editor in her formfitting silver bodysuit as she yelled at me from New York for sexually harassing her in the first sentence of the first column we worked on together. But even though we both have Skype, we haven't used it once. In fact, even though Skype is the only one of all the cool gadgets that cartoons promised me would exist by 2010, people don't seem nearly as excited as they should be. Only 34% of Skype calls even use video. And when Skype announced on Jan. 5 at the Consumer Electronics Show that we'll soon have videophones on our televisions, everyone went right back to talking about which booths gave out the best key-chain lights. (Get the latest tech news at Techland.com.)
I've used Skype twice: to be a guest expert on Who Wants to Be a Millionaire? and to let my mother see her grandson. Both involved a lot of help from tech people and drool. Yes, I find Meredith Vieira that attractive. But I haven't used it since. That's because Skype breaks the century-old social contract of the phone: we pay close attention while we're talking and zone out while you are.
As soon as you begin to talk, I feel trapped and desperately scan the room for tasks I can do to justify the enormous waste of time that is your talking. I wash dishes, I file receipts, I read news sites, I make little fake suicide faces to my wife Cassandra about how much I want to hang up that cause her to yell "Joel, I need you now" in a really unconvincing way that I've asked her not to do, but I still can't stop making the suicide faces. In desperate times, when I am on my cell phone in the middle of nowhere, I will pace. The only other time I pace is when I stub a toe or burn myself. But when I start talking, I assume that you are sitting perfectly still, rapt. And while that is actually true when I'm talking, people aren't listening to those of you who haven't been on E!. (See pictures of the cell phone's history.)
But Skype requires me to look at you while you're talking, which is totally ridiculous. The only sci-fi show that understood this was Star Trek. Bones and Jim would use their flip phones to talk quickly about beaming or health issues. The only time they'd fire up the videophone was when a Klingon was sitting in a spaceship 20 yards away with guns pointed at them. Even then I think Sulu was checking out GoFugYourself.com (See the top 10 gadgets of 2009.)
Interested in talking more about my theory, I used my landline to call Sherry Turkle, an MIT professor of the social studies of science and technology. She told me people are not only uninterested in Skype, we're also not interested in talking on the regular phone. We want to TiVo our lives, avoiding real time by texting or e-mailing people when we feel like it. "Skype, which was the fantasy of our childhood, gets you back to sitting there and being available in that old-fashioned way. Our model of what it was to be present to each other, we thought we liked that," she said. "But it turns out that time shifting is our most valued product. This new technology is about control. Emotional control and time control." You'd be shocked by how many times two people talking on the phone about people not wanting to talk on the phone have to tell each other they're enjoying their conversation. I've had phone sex where I expressed less appreciation of another person.
If we miss anything about the regular phone, I think it's the psychoanalyst's trick it employed: you're lying on a couch facing the wall, imagining nonjudgmental empathy from someone you can't see. In her book Alone Together, which comes out next year, Turkle writes about a study in which she found that people really like to talk to robots. As soon as you ask people to interact with a computer with artificial intelligence, they start unloading secrets. Robots, it seems, are less likely to take over the earth than they are daytime-television hosting jobs. (See the best travel gadgets of 2009.)
As far as the full-contact listening that Skype requires, I don't think we want that all that often from people who aren't already in our house. The fact is, we don't really want to see other people that badly. That's why it's so difficult to make plans with them. That, plus texting times and places back and forth takes forever.
Maybe all the stuff we thought we wanted in the future sucks. Flying cars would block our light, food pills would make Gordon Ramsey's screaming even more preposterous, and those moving sidewalks just give me another reason to hate fat people at airports. Far better is to have control over our most valuable commodity: time. Sure, we complain about being busy, but that's pretty great as long as we get to choose when we do things. The truth is, my editor will never even call me. She'll just e-mail. Which is actually fine with me. There's plenty of video online of women in silver bodysuits.
Is Best Buy About To Ditch Optimization To Sell Crapware?
Best Buy is apparently dropping some of its "optimization" services, and will instead provide the "Best Buy Software Installer," a new tool that the company says will "radically simplify how you set up and customize your new PC or upgrade an existing one." Translation: Instead of you paying Best Buy to delete trialware from your new PC, Best Buy will get paid by software makers to try to get you to install it.
A page on the Best Buy web site states that the new installation tool will be available January 17th, and "gives you choices and options to configure your computer, and saves you time by making it easy to discover new software, then download and install with a single click."
According to an alleged internal Best Buy document obtained by a technology blog, Best Buy stands to make an extra $5 per PC just by including BBSI.
The document also states that, because these computers will have less trialware installed by manufacturers, and Windows 7 actually works, selling optimization is suddenly much harder. "Corporate teams are working on a replacement for this service," the document says.
For now, according to the alleged internal document, the company is "repositioning the optimization service rather than replacing it at this point."
Thanks, Best Buy! Just when we thought we'd seen it all, you've given us something new to investigate. We just can't wait for January 17th!
AOL to Lay Off at Least 1,000
AOL plans to lay off at least 1,000 employees and close many European offices after it didn't get enough people to leave voluntarily, reports All Things Digital.
CEO Tim Armstrong was asking for volunteers to reduce the troubled company's payroll by 2,500, in an attempt to save $300 million a year. But only 1,100 people agreed to give up their jobs. This post says the ax is expected to fall Wednesday for the remaining layoffs.
But all aspects of the company's operations will be hit, including the company's editorial/content production staff, the area that has been its priority of late.s
According to The Guardian, AOL will "significantly" reduce staff in the UK, offices in Spain and Sweden are expected to be closed along with four in Germany, and possibly the Paris office.
How the AOL-Time Warner Merger Went So Wrong
A decade ago, America Online merged with Time Warner in a deal valued at a stunning $350 billion. It was then, and is now, the largest merger in American business history.
The Internet, it was believed, was soon to vaporize mainstream media business models on the spot. America Online’s frothy stock price made it worth twice as much as Time Warner’s with less than half the cash flow.
When the deal was announced on Jan. 10, 2000, Stephen M. Case, a co-founder of AOL, said, “This is a historic moment in which new media has truly come of age.” His counterpart at Time Warner, the philosopher chief executive Gerald M. Levin, who was fond of quoting the Bible and Camus, said the Internet had begun to “create unprecedented and instantaneous access to every form of media and to unleash immense possibilities for economic growth, human understanding and creative expression.”
The trail of despair in subsequent years included countless job losses, the decimation of retirement accounts, investigations by the Securities and Exchange Commission and the Justice Department, and countless executive upheavals. Today, the combined values of the companies, which have been separated, is about one-seventh of their worth on the day of the merger.
To call the transaction the worst in history, as it is now taught in business schools, does not begin to tell the story of how some of the brightest minds in technology and media collaborated to produce a deal now regarded by many as a colossal mistake.
How did it happen?
The romance between Mr. Case and Mr. Levin, they said in interviews with The New York Times, began in the fall of 1999 at a celebration of the 50th anniversary of the People’s Republic of China at Tiananmen Square.
MR. LEVIN I was seated for some reason in front of Steve Case and his wife and so we had a little chitchat. It was a stunning evening to be a part of that history. But this next thing that registered on me was that they seem to have a very sweet relationship and I liked that, and we had some fun, joked around, and so from a personality point of view we talked.
MR. CASE There was all kinds of hoopla and parades in Tiananmen Square and a state dinner at the Hall of the People, and I remember Jerry had decided to have the Time Warner board meet in China that week and they were on a trip but they also attended some of these functions, so at these different functions I talked to various Time Warner board members, but I don’t think I had any direct conversations with Jerry about the merger until probably a month later.
MR. LEVIN We’re now back in the United States and I think Steve Case called me on the phone and in that conversation more than alluded to putting the companies together. I had my traditional script and quasi-legal background that when someone calls you on the phone, make sure they understand you’re not for sale, which we certainly weren’t, and decline any overture, which I did over the phone.
In fact, Mr. Case and his team, including Robert W. Pittman, the company’s president, had been plotting for months about how to use its high-priced stock to make a big acquisition. The company hired the investment bank Salomon Smith Barney, and its top media banker Eduardo Mestre, to consider various targets.
MR. MESTRE It was one of the highlights of my career because I remember vividly sitting down with the AOL executives and going through with them their vision of how to combine AOL with a more traditional company in creating what at that time was going to be perceived as a company of the future.
MR. PITTMAN It was a very heady time because 1999 was the first year the thesis that everybody was going to be on the Internet and every business was going to be on the Internet and it was going to be a primary means of communication finally was accepted; 1999 was the year it sort of kicked in, and I think when it kicked in people started saying, “O.K., what’s the big dream, what’s the big idea, what do we need to do now?”
We were actually deep in discussions with eBay to buy eBay and add them, had a little bit of discussion with Larry Probst over at Electronic Arts, and Steve had an idea that we should merge with Time Warner and me and a couple other people said there’s no chance that’s ever going to happen and I sort of paid no attention to it.
Meanwhile, Mr. Levin was thinking deeply about how to transform Time Warner for the digital age.
MR. LEVIN We were emerging from not just old media but from an analog world into a digital world, and philosophically people were beginning to understand that the digital world was a transformational universe.
Before AOL, Mr. Levin, prodded by Gordon Crawford, senior vice president at Capital Research Global Investors in Los Angeles, then the largest institutional shareholder of Time Warner, discussed a merger with Yahoo’s founder, Jerry Yang.
MR. CRAWFORD I was involved in putting the two of them together and kind of following the course of those discussions over the year, and over the course of 1999 those discussions morphed from the discussion of a partial stake to a full merger, and then in the late fall Jerry Yang decided he did not want to pursue it any further and I think terminated the discussions.
Shortly after Mr. Case’s initial phone call to Mr. Levin, the pair met for dinner and wine at the Rihga Royal, a hotel in Midtown Manhattan.
MR. LEVIN Steve and I met at a hotel for several hours. The idea was not to talk about any transactional detail but to talk about philosophy and values, and it was several hours. I took away the fact that he had good values, which was important to me — that his company was a real company.
MR. CASE Initially, he was a little reluctant, just thinking it through, but did agree that it made sense for us to meet. So a week or two later we met and had dinner at a hotel in New York, and we were talking about what this company might be together and some of the benefits that could accrue strategically as well as how the company together might have a broader impact on society, and that kind of led to a series of discussions.
Both sides assembled negotiating teams, and alerted a handful of top executives and bankers. At Time Warner, Mr. Levin kept only a small circle of people in the loop, including Richard D. Parsons, the company’s president.
MR. PARSONS Jerry came into my office and said that he had been talking with Steve, who he had gotten to know on a trip that he had taken abroad to China. And Jerry and Steve had gone and met, had a few dinners after that, and he said we have been talking to Steve about this and that he thought this was something we ought to do and him and Steve were sort of going down the road to see how it could work and he wanted to get my views.
Fundamentally I thought it was a good idea.
Making the Deal
The deal was sealed at a dinner in early January at Mr. Case’s house in McLean, Va. The transaction was spun to the world as a merger of equals, but in reality AOL, with its more valuable stock, was acquiring Time Warner. AOL would own 55 percent of the new company and Time Warner, 45 percent. But the new board would have an equal number of AOL and Time Warner directors. Mr. Levin would be chief executive, and Mr. Case would be chairman.
Over a weekend, the two sides conducted due diligence, with teams of lawyers camped out in two law offices in Manhattan.
Miraculously, news of the deal did not leak during the talks, and word trickled out only hours before the announcement on Jan. 10, 2000.
Over that weekend, Mr. Levin and Mr. Case began notifying more of the executives. Among these were Don Logan, then head of Time Inc., and Ted Leonsis, a division president at AOL. Many executives, including Timothy A. Boggs, then head of government relations at Time Warner, found out about the deal the day of the announcement in an 8 a.m. conference call. (Mr. Boggs is now associate rector at St. Albans Parish in Washington. Mr. Logan owns a minor-league baseball team in Birmingham, Ala., and Mr. Leonsis is an owner of the Washington Capitals and the Washington Wizards.)
None were pleased with the news.
MR. LOGAN Dumbest idea I had ever heard in my life.
MR. LEONSIS I was one of the loudest advocates for not doing the deal.
MR. BOGGS Just real regret and dread. My job was to make the case for this deal to governments around the world and to get all the regulatory clearances that were needed and to work with our antitrust lawyers to get those clearances to make the case to Congress and the media, to some extent, about this merger, and I was just frankly stunned and a bit knocked back on my heels by the prospect of securing all of those approvals.
I knew and I loved Time Warner. I saw it as a company with a vision and a set of values, and I saw AOL in a much less favorable light, much more opportunistic, made up of folks who were really trying to merely exploit the market they were in as opposed to developing something that was enduring, and I was very leery about this deal.
The announcement was hailed as a momentous coming of age for the Internet and the triumph of the New Economy.
MR. MESTRE If you go back and read what was written in The Journal and what was written in The Times about this transaction, you would have thought that it was the second coming of the Messiah. I’m sure that if one were to read those today one would find it amusing, maybe dated, but it was, for financial reporting, it was as soaring and this is the great epiphany-of-life kind of journalism and you read it and it brought tears to your eyes.
Nina Munk, of Vanity Fair, wrote the book “Fools Rush In: Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner.”
MS. MUNK I had one of my sources who told me he was listening to the radio on his way into work that morning when the deal was announced and he practically drove off the road. The Wall Street Journal, I think, had 19 or 20 separate articles on the intricacies of the deal and what it meant. The word “transformative” was used again and again, and we really believed with the rare exception of a very small number of skeptics, we really believed that this deal captured a transformation and that it spoke to a new direction that the world was taking.
But some wanted to talk fashion: Mr. Levin showed up to the press conference without a tie, while Mr. Case dressed up.
MR. LEVIN What most people don’t recall is that I had stopped wearing a tie and jacket for quite some time. Once we had a music company in our building, I thought it was a constraint to wear a tie and jacket, so it wasn’t planned but it was kind of a refreshing symbol. I was extremely happy — “high,” I was going to say — on an emotional high because I think when you actually announce something, it’s the reflection of the news coming back at you. It makes it real. It puts it out on the stage. It validates what was internal before.
MR. CASE The day of the announcement was bittersweet, frankly. On the one hand, obviously, it was an exciting time in bringing together the leading Internet company and the leading media company to create a new company that really had the potential to lead in this new century. At the same time, I recognized that my role was going to change.
It was a moment of achievement after a decade or in some cases, in our case two decades, of trying to prove that this concept had real merit, suddenly the Internet had arrived and we’re beginning this new century with a combination of these two great companies.
On the steps of a church on the Upper West Side of Manhattan, Tim Armstrong, then an executive at an upstart called Google and now AOL’s chief executive, read about the deal.
MR. ARMSTRONG I couldn’t believe it. I just remember reading the deal and thinking the world had changed.
The deal took a year to be approved by regulators. Robert Pitofsky, then the head of the Federal Trade Commission, allowed the deal to go forward, even as the F.T.C.’s own economists warned the deal did not make financial sense. It was the most significant media case to come before the commission, according to Mr. Pitofsky, since 1964, when CBS bought a big league baseball team.
MR. PITOFSKY Now we have large communications cases, but at the time it was probably the biggest. There was CBS-New York Yankees; that would be the closest you could come to something like this.
Our economists at the time said this deal doesn’t make economic sense. I didn’t see it that way, and I don’t think the other commissioners did, but the economists immediately saw it didn’t make financial sense.
First Signs of a Clash
The optimism surrounding the deal was brief. In May of 2000, the dot-com bubble began to burst and online advertising began to slow, making it difficult for AOL to meet the financial forecasts on which the deal was based. The world began moving quickly to high-speed Internet access, putting AOL’s ubiquitous dial-up service in jeopardy.
The companies had another problem: both sides seemed to hate one another.
MR. PARSONS I remember saying at a vital board meeting where we approved this, that life was going to be different going forward because they’re very different cultures, but I have to tell you, I underestimated how different.
MR. LEONSIS The news release that they showed us and the positioning was that AOL would be the crown jewel, and I’d say, “Well if we’re the crown jewel, why are all our best and most important people leaving here and going to New York?” In fact, if we were the crown jewel, you would go and take all of the best, most talented people at Time Warner and bring them here.
In the summer of 2001, Alec Klein, then a reporter at The Washington Post, received an anonymous phone call.
MR. KLEIN He tells me that someone had been suspended at AOL, a midlevel executive, and he tells me very little more than that and then hangs up on me.
So I’d call so-and-so, and that person would say, “I don’t know anything, but why don’t you try these three other people?” and I kept doing this. Eventually I called the guy and I said: “Hi, this is Alec Klein of The Washington Post.” And the first thing out of his mouth was, “How did you find me?” I realized, here is the anonymous tipster who had first called me.
I persuaded him to meet me, and when we met he started to tell me more about what was going on and I started to meet other people through him and it started to grow into this network of different sources, all of whom had these secret documents from AOL.
Mr. Klein’s work uncovered that AOL had been improperly inflating its advertising revenue, and his stories that were published in 2002 prompted investigations by the S.E.C. and the Department of Justice. Eventually the company paid hefty fines and was forced to restate past earnings.
The accounting scandal became a rallying cry for the Time Warner side. In 2003, Mr. Case stepped down as chairman. Today he runs his own private investment firm.
MR. CASE For whatever reason, right or wrong, I had become kind of a magnet for a lot of anger and frustration, particularly with the Time Warner employees and also with shareholders and if we really were going to get the company on the right track and really capitalize on the promise of the merger, probably the best thing I could do was step aside and get out of the way.
Mr. Levin, whose son Jonathan was murdered in 1997, had announced his retirement in December 2001. Today, he runs a holistic healing center in Santa Monica, Calif.
MR. LEVIN When 9/11 occurred, it was obviously an emotional experience for everyone. For me, it was more personal because of the death of my son and probably never having really achieved any resolution.
We had a board meeting scheduled for the 3rd of October, which was right after 9/11, and I said we can’t have a board meeting, we’re supposed to be in New York. And most people, particularly the AOL people, said business has to go forward and I was just emotional and got very upset. I then went to some Wall Street presentation — and I made quite a few of them — and when I was making my normal presentation, someone raised their hand and asked, can you give us the margin deterioration that will occur from all the extra spending on account of 9/11. I thought the question was out of line; I not only said it was out of line, I really emotionally went after the person asking the question, got up and walked out.
The Deal Unwinds
Many investors and employees lost millions of dollars, but no one lost more than Ted Turner, who at the time was the largest individual shareholder in the combined company.
MR. TURNER I’d like to forget it. That’s what goes through my mind. I almost didn’t do this interview because I didn’t want to dig it up again. Let it pass into history.
The Time Warner-AOL merger should pass into history like the Vietnam War and the Iraq and Afghanistan wars. It’s one of the biggest disasters that have occurred to our country.
I lost 80 percent of my worth and subsequently lost my job. We looked it up to see if I was the biggest loser of all time because I lost about $8 billion. But I don’t think I was the biggest loser of all time. I think at one point Microsoft stock went down more than that for Bill Gates. I think he’s the biggest winner and the biggest loser. I was in the top three or four of all time.
Jeffrey L. Bewkes, the current chief of Time Warner, once dressed down Mr. Case in a meeting, saying, according to Mr. Klein’s reporting: “The only division that’s not performing is yours. Every one of us is growing, making the numbers. The only problem in this construct is AOL.”
MR. BEWKES I really have a strong point of view that it has never been an issue of culture at Time Warner. I know you’re going to have people, for various reasons that they have individually, say there was the issue of culture at Time Warner. I think that in fact the employees at AOL and Time Warner worked together quite well to try to make the most of the merger, but they didn’t solve the business fundamental challenges at AOL anymore than was solved at Yahoo, MSN, Lycos or I.A.C.
The enduring debate is whether the deal collapsed because the concept was flawed at the start, or because the cultures were too different and the execution of the merger was a failure.
MR. CASE It was a good idea, but the execution of it wasn’t what it needed to be, and I accept responsibility for that. Everybody involved, I think, needs to accept responsibility for that, but that doesn’t take away from the core strategic value of the idea.
MR. LEVIN I used to think at the time it was a clash of cultures and a misreading of the dot-com bubble, but I now upon reflection believe that the transaction was undone by the Internet itself.
I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content? And the consumer has access to everything and now it’s going to be on a handheld device, so what I call the rolling thunder of the Internet started actually to eat its own, which was AOL. AOL was the Google of its time. It was how you got to the Internet, but it was using some old media business ideas that were undone by the Internet itself, and that’s why Google came along.
MR. PARSONS The business model sort of collapsed under us, and then finally this cultural matter. As I said, it was beyond certainly my abilities to figure out how to blend the old media and the new media culture. They were like different species, and in fact, they were species that were inherently at war.
From Print to Phone to Web. And a Sale?
Print may be a flat medium, but that has not stopped magazine publishers from trying to add dimension to their pages. For at least a decade, they have been experimenting with bar codes and icons that could take readers to Web sites, trying to add a bit of Internetlike interactivity to their pages.
But the average consumer did not own a bar-code reader — until now. With the sudden ubiquity of smartphones, which have apps that can read bar codes, and cameraphones, which can easily snap pictures of icons, magazines like Esquire and InStyle are adding interactive graphics to their articles, while Entertainment Weekly and Star are including them in ads.
Meanwhile, publishers using text-messaging programs to try to enliven their pages are packing information into the messages and using reader responses to calibrate their coverage.
The idea is not new. Back in 2000, a company called Digital:Convergence introduced a product called the :CueCat. The premise was advanced, but simple. Pages could be printed with bar codes, which readers could scan, and then be connected to specific Internet sites. That would help them find the shirt being advertised, or specs on the Ford truck they liked.
But the technology was clunky. Publications using the :CueCat, including Forbes and Wired, had to mail a hand-held scanner and a CD-Rom with :CueCat software to their subscribers. The subscribers had to install the software, then attach the device to their computer and wave it over the printed bar codes. It wasn’t portable or easy, and, in most cases, it was more trouble than doing a search or typing in a lengthy Web address. That’s a major reason the :CueCat disappeared.
Today, though, consumers don’t need a :CueCat — they have a cellphone.
“This idea is basically the same — it’s just everyone has a scanner in their pocket,” said Jonathan B. Bulkeley, the chief executive of Scanbuy, which is working on a mobile program with Esquire, among other publications.
Of course, 10 years later, some concerns remain. Publishers can print bar codes to their hearts’ content, but getting consumers to understand and use them is another matter. While bar codes are integrated into everyday life in countries like Japan — people get nutrition information from bar codes on McDonald’s hamburger wrappers — American consumers have never quite picked up the habit. And now that search engines are fast and accurate, advertisers and publishers will most likely need to offer something spectacular, not just a plain Web page, to get people to bother scanning anything.
In its March issue, Esquire will print Scanbuy codes in a spread on “The Esquire Collection” — “the 30 items a man would need to get through life,” said David Granger, editor in chief. Printed near each item will be a small code that looks like a group of black and white squares. Readers scan the code into an Internet-enabled phone, and the code takes them to a mobile menu that provides Esquire’s styling advice for the item and information on where to buy it.
An application called ScanLife, widely available online as a free download, turns a phone into a bar-code reader. Versions exist for the iPhone and BlackBerry as well as Android-based handsets, and the app comes preloaded on many Sprint phones in the United States. ScanLife can also read many standard bar codes on many phones, so it can perform price comparisons, for example.
“We kept hearing about different technologies that enabled people to close the gap between the inspiration of seeing something in a magazine and then going to do something about it,” Mr. Granger said.
Though Esquire will be giving readers information about stores where they can buy items, Mr. Granger said, for now the magazine would not be seeking a percentage of sales resulting from use of the technology.
“I’m not sure we have a smooth way of getting a cut yet,” he said, “but it would be nice if this takes off.” Mr. Granger added, however, that Esquire would need to carefully consider questions about editorial integrity raised by such technology.
Mr. Bulkeley said that Esquire’s choice to introduce Scanbuy with its editorial pages, rather than with ads, made sense. “I think advertisers will see that and say, ‘Hey, can we do that too?’ But it is important for editorial to lead, to show advertisers they are supporting it, because there is an educational component necessary,” he said.
Levi’s Dockers khaki pants are among the items featured in the Esquire spread. Jennifer Sey, vice president for global marketing for Dockers, said the company was interested to see how readers respond, adding that running ads containing a code “is a really interesting idea — it’s certainly something that we would consider.”
Rather than running a printed code on its pages, InStyle is using photographs of clothes as the key that links print and online.
In its March issue, InStyle will run a “clothes we love” article, and will direct readers to hold up the pages featuring each of six items, like a miniskirt and a safari jacket, to their Web cameras. The browser will then open related three-dimensional videos.
“We’re going to show you how to pull outfits together, how to take it from day to night, how to take it from work to weekend,” said InStyle’s managing editor, Ariel Foxman. In the InStyle project, the clothing image itself connects the printed page with the Web. It “doesn’t have a big honking marker that you then have to explain, a big black box or some sort of weird graphic,” he said. “Nothing would be worse than turning a page and seeing cute merchandise surrounded by a big black box.”
While Scanbuy requires software to work, and InStyle’s project requires a Web camera, other companies are using standard cameraphone technologies to make print more interactive.
SpyderLynk surrounds client logos with a coded ring, and asks consumers to snap photos of the images, then text or e-mail them to a certain address. Their technology allows consumers with even basic phones to interact with the printed page. “You really reduce a person’s ability to engage if you force them to go to a Web site or download an app,” said Nicole Skogg, chief executive of SpyderLynk, which is based in Denver.
The ringed logos, which are called SnapTags, have appeared in ads in recent issues of Everyday Food, Entertainment Weekly and Star Magazine. Clients can choose what consumers receive in a text or e-mail message reply: ring tones, videos or more information, for example.
Jane McPherson, chief marketing officer for SpyderLynk, said the company’s average response rate from magazines was about 0.2 percent, similar to that of online display ads.
Magazines including People StyleWatch and ESPN The Magazine have been accompanying products and ads with text-messaging codes from a company called Snipp. Readers transmit the code to S-N-I-P-P, along with their e-mail address, and receive an e-mail reply providing more information or special offers. The magazines can use the codes to see what is popular with readers.
At StyleWatch, for instance, many readers have used Snipp for inexpensive items like a $14 sundress, and for popular name brands like Coach, a spokeswoman, Amy Galleazzi, said in an e-mail message. Some advertisers are avoiding the middleman and just printing standard bar codes, which are known as QR codes, for quick-response codes. They can be read by many applications, though a consumer first needs to download one of those mobile apps.
Last year, the financial services company TIAA-CREF ran print ads for its retirement planning services that contained a QR code. When scanned, the QR code took readers to a Web site offering a click-to-speak link that would connect them by phone with an investment adviser.
“This was convenient and easy to produce,” said Jeff Fleischman, chief digital officer for TIAA-CREF. “It really doesn’t cost anything other than making the code.”
Still, Mr. Fleischman said, a lot of explanation was necessary to get consumers to interact with the code.
“It is something that I think we were pretty early to the game with,” he said. “We had dozens and dozens of people who ended up calling us, which was better than we thought we would get.”
A Smaller Player Mounts Must-See Events
Ever wonder why electronics stores try so hard to sell audio and video cables made by Monster Cable?
At the company’s private suite at the Paris hotel here on Thursday evening during the Consumer Electronics Show, it was clear. Noel Lee, the chief executive of Monster, the electronics accessories company, knows how to put on a good show.
Heaping plates of shrimp and other finger foods were sitting in one room; cocktails and glasses of Champagne were being handed out in another. Mr. Lee, wearing gold aviator glasses and standing on a Segway trimmed with racing flames, was flanked by Diddy and Dr. Dre.
Earlier that day, the singer Lady Gaga made an appearance during the company’s news conference to promote her new line of headphones with the company, Heartbeats by Lady Gaga. (Monster, based in Brisbane, Calif., also announced several new products, including slimmer HDMI cables, shorter U.S.B. cables and an iPod charger.)
To top it all off, Monster hosted an invitation-only concert at the Paris hotel for 5,000 retailers and other tech industry executives. The concert on Friday featured John Legend, and he was joined onstage by Stevie Wonder.
Monster Cable is known for holding extravagant star-studded events at the show, which it says help cement the loyalty of retailers that prominently display and promote its merchandise. In past years, concerts have featured Mary J. Blige, Rod Stewart and Ray Charles, and it has been throwing them since 1981.
“Monster is a medium-sized consumer electronics company, and it is really important for us to make our presence felt in a big way at a show like C.E.S. by hosting a number of impactful events,” Mr. Lee said. “A totally packed midnight press conference during C.E.S. was a watershed moment for me.”
Showing appreciation for the buyers at that show who decide what merchandise goes into electronics stores — and the show is mostly about them — is a vital part of the company’s strategy. It spends a huge chunk of its annual marketing budget on the show each year.
Of course, the appreciation is mutual. Monster is also known for the price tags of some of its products, like a 50-foot length of hyperspeed HDMI cable with gold-plated connectors for $1,000 or copper in-ear headphones for $400. When profit margins for retailers on PCs and TVs are slim, accessories with margins of 40 percent or more play an increasingly important role for companies struggling to stave off red ink.
The appearance of big stars is not unusual at the show. Sprint hired the comedian Frank Caliendo to introduce the Overdrive, a mobile broadband hot spot. Qualcomm, a cellphone chip maker, hired the singer Kid Rock to perform at an after-hours party as part of its announcement of a new service that allows consumers to make payments with their cellphones, called Swagg.
Last week, the singer Taylor Swift took the stage during Sony’s news conference to outline plans to document her coming tour using the company’s new 3-D technology.
Hiring those stars is not cheap, and the fact that more companies would bring in celebrities reflects the industry’s confidence that good times are here again. “A year ago, no one had the money to book people like Kid Rock and Lady Gaga,” said Sal Wise, a marketing manager and party promoter who has worked in Las Vegas for the last four years. “This year, everything looks at least 10 times bigger.”
Jason Oxman, senior vice president for industry affairs at the Consumer Electronics Association, the group that produces the show, said, “Exhibitors would not be investing in these kinds of marketing dollars in the absence of a pervasive sense of optimism about the industry.”
Mr. Oxman also said that this was a record year for the number of first-time companies — 330 of them — buying booths to promote their products at the convention. Attendance, though, was about the same as last year.
Keith Nowak, a public relations manager for the Taiwanese handset manufacturer HTC who has been to 15 of these shows, said, “It wasn’t wild as it was in the late ’90s, where you had 10 party invites each night.”
Monster, which in April dropped the price on its cheapest HDMI cable 25 percent, to $29, toned down its own events from previous years. But even at that reduced scale, such an outlay, said Mr. Lee, “makes a lot of industry noise and is a way to say thank you.”
Drone Flights Leave Military Awash in Data
As the military rushes to place more spy drones over Afghanistan, the remote-controlled planes are producing so much video intelligence that analysts are finding it more and more difficult to keep up.
Air Force drones collected nearly three times as much video over Afghanistan and Iraq last year as in 2007 — about 24 years’ worth if watched continuously. That volume is expected to multiply in the coming years as drones are added to the fleet and as some start using multiple cameras to shoot in many directions.
A group of young analysts already watches every second of the footage live as it is streamed to Langley Air Force Base here and to other intelligence centers, and they quickly pass warnings about insurgents and roadside bombs to troops in the field.
But military officials also see much potential in using the archives of video collected by the drones for later analysis, like searching for patterns of insurgent activity over time. To date, only a small fraction of the stored video has been retrieved for such intelligence purposes.
Government agencies are still having trouble making sense of the flood of data they collect for intelligence purposes, a point underscored by the 9/11 Commission and, more recently, by President Obama after the attempted bombing of a Detroit-bound passenger flight on Christmas Day.
Mindful of those lapses, the Air Force and other military units are trying to prevent an overload of video collected by the drones, and they are turning to the television industry to learn how to quickly share video clips and display a mix of data in ways that make analysis faster and easier.
They are even testing some of the splashier techniques used by broadcasters, like the telestrator that John Madden popularized for scrawling football plays. It could be used to warn troops about a threatening vehicle or to circle a compound that a drone should attack.
“Imagine you are tuning in to a football game without all the graphics,” said Lucius Stone, an executive at Harris Broadcast Communications, a provider of commercial technology that is working with the military. “You don’t know what the score is. You don’t know what the down is. It’s just raw video. And that’s how the guys in the military have been using it.”
The demand for the Predator and Reaper drones has surged since the terror attacks in 2001, and they have become among the most critical weapons for hunting insurgent leaders and protecting allied forces.
The military relies on the video feeds to catch insurgents burying roadside bombs and to find their houses or weapons caches. Most commanders are now reluctant to send a convoy down a road without an armed drone watching over it.
The Army, the Marines and the special forces are also deploying hundreds of smaller surveillance drones. And the C.I.A. uses drones to mount missile strikes against Al Qaeda leaders in Pakistan.
Air Force officials, who take the lead in analyzing the video from Iraq and Afghanistan, say they have managed to keep up with the most urgent assignments. And it was clear, on a visit to the analysis center in an old hangar here, that they were often able to correlate the video data with clues in still images and intercepted phone conversations to build a fuller picture of the biggest threats.
But as the Obama administration sends more troops to Afghanistan, the task of monitoring the video will become more challenging.
Instead of carrying just one camera, the Reaper drones, which are newer and larger than the Predators, will soon be able to record video in 10 directions at once. By 2011, that will increase to 30 directions with plans for as many as 65 after that. Even the Air Force’s top intelligence official, Lt. Gen. David A. Deptula, says it could soon be “swimming in sensors and drowning in data.”
He said the Air Force would have to funnel many of those feeds directly to ground troops to keep from overwhelming its intelligence centers. He said the Air Force was working more closely with field commanders to identify the most important targets, and it was adding 2,500 analysts to help handle the growing volume of data.
With a new $500 million computer system that is being installed now, the Air Force will be able to start using some of the television techniques and to send out automatic alerts when important information comes in, complete with highlight clips and even text and graphics.
“If automation can provide a cue for our people that would make better use of their time, that would help us significantly,” said Gen. Norton A. Schwartz, the Air Force’s chief of staff.
Officials acknowledge that in many ways, the military is just catching up to features that have long been familiar to users of YouTube and Google.
John R. Peele, a chief in the counterterrorism office at the National Geospatial-Intelligence Agency, which helps the Air Force analyze videos, said the drones “proliferated so quickly, and we didn’t have very much experience using them.
“So we’re kind of learning as we go along which tools would be helpful,” he said.
But Mark A. Bigham, an executive at Raytheon, which designed the new computer system, said the Air Force had actually moved more quickly than most intelligence agencies to create Weblike networks where data could be shared easily among analysts.
In fact, it has relayed drone video to the United States and Europe for analysis for more than a decade. The operations, which now include 4,000 airmen, are headquartered at the base here, where three analysts watch the live feed from a drone.
One never takes his eyes off the monitor, calling out possible threats to his partners, who immediately pass alerts to the field via computer chat rooms and snap screenshots of the most valuable images.
“It’s mostly through the chat rooms — that’s how we’re fighting these days,” said Col. Daniel R. Johnson, who runs the intelligence centers.
He said other analysts, mostly enlisted men and women in their early 20s, studied the hundreds of still images and phone calls captured each day by U-2s and other planes and sent out follow-up reports melding all the data.
Mr. Bigham, the Raytheon executive, said the new system would help speed that process. He said it would also tag basic data, like the geographic coordinates and the chat room discussions, and alert officials throughout the military who might want to call up the videos for further study.
But while the biggest timesaver would be to automatically scan the video for trucks and armed men, that software is not yet reliable. And the military has run into the same problem that the broadcast industry has in trying to pick out football players swarming on a tackle.
So Cmdr. Joseph A. Smith, a Navy officer assigned to the National Geospatial-Intelligence Agency, which sets standards for video intelligence, said he and other officials had climbed into broadcast trucks outside football stadiums to learn how the networks tagged and retrieved highlight film.
“There are these three guys who sit in the back of an ESPN or Fox Sports van, and every time Tom Brady comes on the screen, they tap a button so that Tom Brady is marked,” Commander Smith said, referring to the New England Patriots quarterback. Then, to call up the highlights later, he said, “they just type in: ‘Tom Brady, touchdown pass.’ ”
Lt. Col. Brendan M. Harris, who is in charge of an intelligence squadron here, said his analysts could do that. He said the Air Force had just installed telestrators on its latest hand-held video receiver, and harried officers in the field would soon be able to simply circle the images of trucks or individuals they wanted the drones to follow.
But Colonel Harris also said that the drones often shot gray-toned video with infrared cameras that was harder to decipher than color shots. And when force is potentially involved, he said, there will be limits on what automated systems are allowed to do.
“You need somebody who’s trained and is accountable in recognizing that that is a woman, that is a child and that is someone who’s carrying a weapon,” he said. “And the best tools for that are still the eyeball and the human brain.”
Like all consumers, you want to avoid being a victim of some "scam." That’s why we have a whole team working hard to uncover the latest frauds and scams before members like you become victims. If at any time you have questions or know of a scam that should be added to this site, please contact our Account Management Department at 503.672.3878.
12.22.09 Rogue Android Smartphone app created
We recently learned that a fraudster developed a rogue Android Smartphone app. It creates a shell of mobile banking apps that tries to gain access to a consumer’s financial information.
Droid09 launched this phishing attack from the Android Marketplace and it’s since been removed. It’s called phishing because scammers go fishing for information about you or your financial account that may be used for identity theft.
Please note that this attack didn’t target First Tech accounts. Accessing your First Tech account from your phone’s web browser is completely secure.
If you did download the Droid09 app, please remove it from your phone and take it to your mobile provider to ensure it’s completely removed.
As a reminder, we don’t currently have an app for the Android phone.
11.12.09 Fraudulent NACHA email
We recently learned of a fraudulent email with a “Rejected ACH Transaction” subject line. The email appears to be from NACHA, the Electronic Payments Association, and tells the recipient that there’s a problem with an ACH transaction they originated.
If you happen to receive an email with “Rejected ACH Transaction” or something similar in the subject line, avoid the temptation to click on the link. Clicking on the link may download a virus to your computer.
Please give us a call at 800.637.0852 if you have a question about one of your First Tech transactions.
Groups Seek to Challenge US Gov't on Seized Laptops
Laptop searches at borders violate fundamental citizen rights, two groups say
The policy of random laptop searches and seizures by U.S. government agents at border crossings is under attack again, with a pair of civil rights groups seeking potential plaintiffs for a lawsuit that challenges the practice.
The American Civil Liberties Union is working with the National Association of Criminal Defense Lawyers to find lawyers whose laptops or other electronic devices were searched at U.S. points of entry and exit. The groups argue that the practice of suspicionless laptop searches violates fundamental rights of freedom of speech and protection against unreasonable seizures and searches.
The groups have the support of Electronic Frontier Foundation, which has argued in court that laptop searches are invasive because devices like laptops contain personal data, which people should be able to keep private. EFF has also argued that some searches have been conducted without suspicion.
"This lawsuit will not seek monetary damages for individuals who have been searched; instead, it will focus exclusively on fixing the unconstitutional policy," wrote Jennifer Granick, civil liberties director and lawyer with the Electronic Frontier Foundation, in a blog entry on Wednesday.
NACDL believes the policy "erodes fundamental privacy rights generally," the group said on its Web site. It "has a particularly chilling impact on lawyers who travel abroad with legal documents that are subject to the attorney-client or work-product privileges," NACDL wrote.
Last year, a document surfaced on the U.S. Department of Homeland Security's Web site that authorized U.S. agents to seize and retain laptops indefinitely. Government agents belonging to the U.S. Customs and Border Protection, which is a part of DHS, were also authorized to seize electronic devices including portable media players and cell phones and inspect documents in them.
The DHS has defended the policy of searching electronic devices, stating that its ability to "inspect what is coming into the United States is central to keeping dangerous people and things from entering the country and harming the American people," according to the agency's Web site.
The ACLU is already challenging DHS in court over the issue. In August last year, the group filed a suit against the DHS after it was denied access to documents to learn about the policy. The EFF and the Asian Law Caucus (ALC) also filed a case last year against the DHS after they were denied access to records on questioning and searches of travelers at U.S. borders.
Fines of £500,000 for Data Losses
The Information Commissioner's Office will be able to issue fines of up to £500,000 for serious data security breaches.
The new rule is expected to come into force in the UK on 6 April 2010. It has been approved by Jack Straw MP, Secretary of State for Justice.
The size of the fine will be determined after an investigation to assess the gravity of the breach.
Other factors will include the size and finances of the organisation at fault.
Individual cases will also be assessed on whether the breach was accidental or deliberate, and how much distress the leak of information caused.
There have been several high profile data losses in recent years from large organisations including the Ministry of Defence and the DVLA (Driver and Vehicle Licensing Agency).
In an official press statement, Information Commissioner, Christopher Graham said he hoped the penalty would encourage companies to comply more closely with the Data Protection Act.
"These penalties are designed to act as a deterrent," he said in a press statement.
"I remain committed to working with voluntary, public and private bodies to help them stick to the rules and comply with the Act. But I will not hesitate to use these tough new sanctions for the most serious cases where organisations disregard the law."
The original Act came into force in 1984 but today enormous amounts of personal data are stored and processed online.
"When things go wrong, a security breach can cause real harm and great distress to thousands of people," added Mr Graham.
Under the most recent Act of 1998, data can only be used for the purposes for which it is collected and cannot be given to others without the consent of the individual.
Everybody has the right to see information that is held about them, with the exception of crime-related data.
Only 27% of Organizations Use Encryption
According to a Check Point survey of 224 IT and security administrators, over 40% of businesses in the last year have more remote users connecting to the corporate network from home or when traveling, compared to 2008. The clear majority (77%) of businesses have up to a quarter of their total workforce consisting of regular remote users.
Yet, regardless of the growth in remote users, just 27% of respondents say their companies currently use hard disk encryption to protect sensitive data on corporate endpoints.
In addition, only 9% of businesses surveyed use encryption for removable storage devices, such as USB flash drives. A more mobile workforce carrying large amounts of data on portable devices leaves confidential corporate data vulnerable to loss, theft and interception.
Check Point’s survey revealed approximately 47% of respondents plan to purchase an endpoint security solution in the next year with disk encryption (24%), NAC (22%) and media encryption (13%) being the most popular endpoint applications.
Desktop antivirus (90%), antispyware (56%), personal firewalls (49%) and VPN clients (49%) remain the leading endpoint applications already deployed within the organizations surveyed.
IT staff surveyed at companies with less than 5,000 employees also report they currently use endpoint products from an average of three different vendors in their organizations, causing security management issues. Larger enterprises use on average endpoint products from five different vendors and also feel the complexity is difficult to manage effectively.
The survey covered a range of business sectors. 18% of respondents were from the finance sector, 14% from manufacturing and 11% from local or national government. 44% were from North and South America, 42% from EMEA and 11% from Asia Pacific region. In terms of organization size, 23% had up to 99 employees, 25% had 100 to 499 employees, 13% had 500 to 999, 24% had between 1,000 and 4,999 employees and 15% had more than 5,000 employees.
AP Exclusive: Network Flaw Causes Scary Web Error
A Georgia mother and her two daughters logged onto Facebook from mobile phones last weekend and wound up in a startling place: strangers' accounts with full access to troves of private information.
The glitch — the result of a routing problem at the family's wireless carrier, AT&T — revealed a little known security flaw with far reaching implications for everyone on the Internet, not just Facebook users.
In each case, the Internet lost track of who was who, putting the women into the wrong accounts. It doesn't appear the users could have done anything to stop it. The problem adds a dimension to researchers' warnings that there are many ways online information — from mundane data to dark secrets — can go awry.
Several security experts said they had not heard of a case like this, in which the wrong person was shown a Web page whose user name and password had been entered by someone else. It's not clear whether such episodes are rare or simply not reported. But experts said such flaws could occur on e-mail services, for instance, and that something similar could happen on a PC, not just a phone.
"The fact that it did happen is proof that it could potentially happen again and with something a lot more important than Facebook," said Nathan Hamiel, founder of the Hexagon Security Group, a research organization.
Candace Sawyer, 26, says she immediately suspected something was wrong when she tried to visit her Facebook page Saturday morning.
After typing Facebook.com into her Nokia smart phone, she was taken into the site without being asked for her user name or password. She was in an account that didn't look like hers. She had fewer friend requests than she remembered. Then she found a picture of the page's owner.
"He's white — I'm not," she said with a laugh.
Sawyer logged off and asked her sister, Mari, 31, her partner in a dessert catering company, and their mother, Fran, 57, to see whether they had the same problem on their phones.
Mari landed inside another woman's page.
Fran's phone — which had never been used to access Facebook before — took her inside yet another stranger's page, one belonging to a young woman from Indiana. They sent an e-mail to one of their own accounts to prove it.
They were dumbfounded.
"I thought it was the phone — 'Maybe this phone is just weird and does magical, horrible things and I have to get rid of it,'" said Candace Sawyer.
The women, who live together in East Point, Ga., outside Atlanta, had recently upgraded to the same model of phone and all used the same carrier, AT&T.
Sawyer contacted The Associated Press after reporting the problem to Facebook and AT&T.
The problem wasn't in the phones. It was a flaw in the infrastructure connecting the phones to the Internet.
That illuminates a grave problem.
Generally Web sites and computers are compromised from within. A hacker can get a Web page or computers to run programming code that they shouldn't. But in this case, it was a security gap between the phone and the Web site that exposed strangers' Facebook pages to the Sawyers. Misconfigured equipment, poorly written network software or other technical errors could have caused AT&T to fumble the information flowing from the Sawyers' phones to Facebook and back.
Fortunately, Hamiel said, the vulnerability would be of limited use to a hacker interested in pulling off widespread mayhem, because this hole would let him access only one account at a time. To do more damage the criminal would have to pull off the unlikely feat of gaining full control of the piece of equipment that routes Internet traffic to individual users.
AT&T spokesman Michael Coe said its wireless customers have landed in the wrong Facebook pages in "a limited number of instances" and that a network problem behind those episodes is being fixed.
The Sawyers experienced a different glitch. Coe said an investigation points to a "misdirected cookie." A cookie is a file some Web sites place on computers to store identifying information — including the user name that Facebook members would enter to access their pages. Coe said technicians couldn't figure out how the cookie had been routed to the wrong phone, leading it into the wrong Facebook account.
He also said AT&T could confirm only that the problem occurred on one of the Sawyers' phones, possibly because they had logged off Facebook on the other two before reporting the incident.
Facebook declined to comment and referred questions to AT&T.
Some Web sites would be immune from this kind of mix-up, particularly those that use encryption. A Web browser would have trouble deciphering the encryption on a page that a computer user didn't actually seek, said Chris Wysopal, co-founder of Veracode Inc., a security company.
Sensitive sites and those used for banking and e-commerce generally use encryption. But most other sites, including some Web-based e-mail services, don't use it. One way of checking: The Web addresses of encrypted sites begin with "https" rather than "http." Facebook uses encryption when user names and passwords are entered, to cloak the sign-on from snoops, but after the credentials are entered the encryption is dropped.
It's unclear how many people were affected by the problem the Sawyers discovered, and whether it was limited to Facebook.
The reason all three women experienced the glitch is a function of the way cellular networks are designed. In some cases, all the mobile Internet traffic for a particular area is routed through the same piece of networking equipment. If that piece of equipment is misbehaving or set up incorrectly, strange things happen when computers down the line receive the data.
Usually that means a Web site simply won't load, said Alberto Solino, director of security consulting services for Core Security Technologies. In the Sawyers' case, "somehow they got the wrong user but they could keep using that account for a long period of time. That's what's strange," he said.
The AP tried to contact two of the people whose Facebook pages were exposed to the Sawyers, but the calls and e-mails were not returned. It's unclear whether they are also AT&T customers, though security experts said that's likely the case.
Indeed, it was the case in a similar incident in November.
Stephen Simburg, 25, who works in marketing, was home for Thanksgiving in Vancouver, Wash., when he logged onto Facebook from his cell phone. He didn't recognize the people who had written him messages.
"I thought I had gotten really popular all of a sudden, or something was wrong," he said. Then he saw the picture of the account owner: A young woman.
He got her e-mail address from the site, logged off and wrote the woman a message. He asked whether he had met her at some point and she had borrowed his phone to check her Facebook account.
"No," she wrote back, "but I was just telling my family that I ended up in your profile!"
Simburg and the woman figured out they were both using AT&T to access Facebook on their phones. (AT&T had no comment because the incident wasn't reported to the company.)
"I felt like I had been let down by the phone company and by Facebook," he said.
He says he has put the incident behind him. But one piece of it remains: He and the young woman are now Facebook friends.
Zuckerberg: I Know That People Don't Want Privacy
I am sure that Facebook will endure until well beyond our being twinned with the Planet Tush.
Facebook employees will, as the years go by, leave the company to enter politics more frequently. They will be elected with landslide majorities and they will be extremely popular as they will anticipate people's needs far quicker than the conventional gray-haired folks who buy ill-fitting clothes at expensive retailers and currently sit in the Senate.
How can I be so sure? Well, I just watched this video of Facebook founder Mark Zuckerberg being interviewed by a very nice man in a suit.
And in it, around the three-minute mark, he says: "People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time."
Perhaps you weren't aware that people's comfort with sharing had become a new social norm. Perhaps you were naive enough to think that people used laptops and social-networking sites to connect very specifically with certain other people in order to share certain things. You know, in a relatively private way. Like letters that fly at the speed of light. You were mistaken.
Hark the Facebook herald: "We view it as our role in the system to constantly be innovating and be updating what our system is to reflect what the current social norms are," he said.
You were, you see, mistaken to a stunning degree. In order to understand what really makes society go from a tick to a tock, you should use Facebook's policy changes as a guide. If Facebook decrees that your information ought to be frightfully public, then that merely reflects your lassitude in realizing that pretty much everyone out there wants their information to be public. Please keep up with the social norms. Society demands it.
Talking of social norms, perhaps I gave the impression that it was you, the users, who expressed to Facebook what these social norms actually are. Well, not exactly. You see Facebook simply decides what the social norms are and goes for it. How dare I say this, publicly no less, with such confidence?
Merely because Zuckerberg said it first. He declared that it was important for his company to "always keep a beginner's mind and what would we do if we were starting the company now and we decided that these would be the social norms now and we just went for it."
Gosh, it's hard to keep up with these pesky social norms. They change so very, very quickly. Two years ago, Zuckerberg told ReadWriteWeb that privacy controls were "the vector around which Facebook operates."
I know you'll be wanting evidence for this massive recent social shift that has happened before your very lazy eyes, beneath your nose, and inside your online entrails. Zuckerberg pointed to the "rise of blogging" and "all these different services that have people sharing all this information."
You, too, can tomorrow blog or create a service and look forward to changing a social norm. Aim high. You might be able to change the social norm for, say, war or typing while walking.
But in order to change a social norm from, say, a tendency to cherish privacy to an embrace of indiscriminately public displays of information, what you'll need is 350 million users, a nice large number that might be very attractive to advertisers, as long as those advertisers can discover as much about your members as immediately as possible.
Then tell your members that you are changing the privacy rules not because you can see a golden brick road ahead of you, laden with untold lashings of lucre, but because this is quite clearly what they want. They just don't know it yet. But you do, because you have the unique ability to see to the other side of rainbows. And demand curves.
The mark of a great company lies in anticipating the needs of its customers. Facebook has clearly shown its talent in doing just that. Now, if only it could make a little more money from that talent, we'd all be happy. Wouldn't we?
A Facebook Movement, Against Mom and Dad
They feel her pain. At the Spence School and Greenwich High and Fullerton Union High and Nyack High and Narragansett High, teenagers and near-teenagers, 806 as of Friday morning, are waving a virtual flag for Tess Chapin, a 15-year-old from Sunnyside, Queens, who has been grounded for five weeks. By the time you are reading this, Tess’s Facebook group — “1000 to get tess ungrounded” — may well have reached its stated membership goal.
This is teenage rebellion, electronic style — peaceful, organized and, apparently, contagious.
So basically, Tess explains on her group page, she made an honest late-night mistake. Her parents flipped, and they grounded her for five weeks — “thats my childhood right there,” she wrote. “please join so I can convice them to unground me. please please please.”
On Monday, the official start of what Tess calls her “groundation,” she circulated a petition during sixth period and after school at Millennium High School in Lower Manhattan, where she is a sophomore. At a friend’s suggestion, once she got home, Tess basically put the petition online by starting the Facebook group, which she categorized under Organizations: Advocacy. The group promptly took off, proving that no adolescent experience, in the age of social networking, is too small to start a movement.
Tess was grounded for what all parties confirmed was a first offense of drinking at a party and missing her 11:30 curfew by an hour. Why five weeks? “Her dad wanted to give her three months,” said her mother, Jennifer Iselin Chapin, a fund-raiser for the Natural Resources Defense Council, an environmental group. “I wanted a month. This was a compromise.” For the duration, there will be no parties for Tess, no sleepovers, no Sweet 16’s, no hanging-out-at-a friend’s, and certainly no hanging out at a party where there is no parent present and possibly alcohol served, like the one that landed her in this situation in the first place.
Tess originally invited around 1,000 people to join her group, and by Tuesday, 500 of them or their friends had signed up. By Friday morning, the number had surpassed 800, and Tess said that she recognized only about 35 percent of the names. “Have never met u but I pledge to make a statement so I hope this works,” wrote a young New Yorker named Ethan Bloom, in a typical sentiment of support displayed on the Facebook group’s wall, a public space for messages.
There are, of course, dissenters. A range of parenting philosophies have emerged on the wall, turning it into a mini-forum on childrearing, 2010.
“If your parents didn’t care,” pointed out a sophomore at Ithaca College, “they would have just let you rot.” Someone agreed with Tess that “parents can be stupid.” A friend of a friend expressed hope that she and her parents would take something “grand” away from the experience. A close pal chimed in, “I love you, but your parents are not gonna unground you for convincing 1,000 people to join a group.”
It is to this last theory that Ms. Iselin Chapin subscribes.
“What’s your fallback strategy?” she asked her daughter Thursday night, sitting across from her in the living room of their two-bedroom apartment in Sunnyside.
“O.K., one: drive you so crazy that you’re going to unground me,” Tess replied.
Her mother shook her head. “That’s not going to do it, sweetheart.”
Tess, who is active in her school’s environmental group and struggles a bit with math, was full of fast-flying, impassioned arguments: how much genuine remorse she had already expressed, her inalienable right to the pursuit of happiness, other parents’ more lax standards, the injustice of so heavy a punishment for a first-time offense. Has Tess been like this since groundation started? “She’s been like this since she was 18 months old,” her mother said.
It was tempting to go home and start another Facebook group on behalf of Ms. Iselin Chapin and her ex-husband, Miles Chapin, an associate broker at Warburg Realty Partnership: “1000 to Support Parents Who Believe in Consequences for Serious Lapses in Judgment and Care Enough About Their Kids to Enforce the Rules.” Even parents who might have come up with a milder sentence could at least express their support for those who make them look like reasonable creatures, comparatively, to their own children.
One of Tess’s friends suggested, on her wall, that she “jst leave!” But Tess, so far, seems to have accepted her fate, albeit with grumbling and the same charming sass that she displays on Facebook. She does not seem to have any plans, it seems, to skirt the punishment, at least none evident from her Facebook group’s page. Click on events, and up pops this boilerplate: “1000 to get tess ungrounded does not have any upcoming events.”
Facebook Groups Prone to New Sabotage Trend
Facebook users in Sweden are being plagued by a new trend sweeping the popular social networking site where names of groups are being changed to titles with vulgar sexual connotations.
Two female Facebook users were left in shock after joining a group which allowed them to see who had visited their profile.
Without warning the group’s title was change to, ”Those of us who have sexual fantasies about our kids.”
Photos of their children from their own pages were also uploaded to the group’s picture gallery complete with vulgar comments.
Swedish police say this new wave of hacking is on the increase.
”It’s a big game on the internet at the moment,” said Anders Ahlqvist from the National Police Board’s (Rikspolisstyrelsen) IT-crime department to newspaper Aftonbladet.
Names of established groups are being changed to new titles, predominantly of a sexual nature. In addition, new groups are being set up to trick users by later reinventing themselves.
In December, it was reported that a group had emerged to encourage organisations to donate three kronor to heart and lung research.
When the group reached over 80,000 members, the title was changed along with the charitable effort, suggesting members supported the abolition of a woman’s right to vote.
”The aim is to provoke,” the group’s 20-year-old male creator told news agency TT.
”We want to show that you shouldn’t put so much trust in the groups you join.”
Further examples cited include a group originally called, ”Girls against guys – first to 100,000 users” which suddenly became, ”Those of us who have sex with our parents.”
According to Anders Ahlqvist it is not a crime to change the name of a group but to manipulate private pictures can be an offence.
Facebook’s representative in Sweden told Aftonbladet that users who have been affected should report the incidents via the website tool.
Malware Threat Reports Fail to Add Up
The December malware threat reports are trickling in from vendors — and they all appear to be different. Fortinet, Sunbelt Software, and Kaspersky all published their lists of the most prevalent malware strains for the last month of 2009, but they didn't match up, leading to an admission that users will inevitably be confused by the results.
For example, in its malware report for last month, Fortinet said that W32/PackBredolab.C!tr topped the charts of malware variants detected in December, accounting for two-thirds of malware activity in December. It was a new entry to the malware table, the company said.
Kaspersky highlighted three versions of the Kido worm, known more popularly as Conficker, in the top three slots of its own malware threat report for December. Sunbelt listed Trojan.Win32.Generic!BT in the top malware slot as part of its own report, with almost 20% of the activity for December. A quick scan of the other top 10 malware entries for each company reveals few if any matches.
"Comparing the monthly statistics from different anti-virus companies is truly comparing apples and oranges," said Tom Kelchner, Sunbelt Research Center manager. "What one company detects and identifies as a specific, named piece of malcode, another may detect generically."
He argued that antivirus companies have tried to use common names for malware that they find, but that the complex nature of antivirus analysis, combined with the speed of the process, has made it almost impossible to work together.
"Naming convention is one thing. But I think the main problem these days is the way in which detection techniques have shifted," said Roel Schouwenberg, senior antivirus researcher, Kaspersky Lab.
"The shift in detection techniques make naming harder and grouping of malware completely different."
Axelle Apvrille, senior mobile AV analyst and researcher in the Fortinet EMEA threat response team, said that the time window for detections is another reason for the disparity in results. "Even if, globally, Sunbelt, Kaspersky and us encounter the same threats, this may not be true when we consider short time frames (such as a month)," he said.
"It's hard for users, not being able to find information on something under one name," noted Joe Stewart, director of malware research at managed security company SecureWorks. Because anti-malware vendors are also competitors, they have little incentive to work together on normalizing names and detection techniques, he pointed out. "I don't think that there's any solution in sight, because there are so many factors that play into it. Because of the way that the industry works, you can't work around them too well."
In short: is there a problem with the user confusion over threat tables like these? Most definitely. Can we solve it? Apparently not.
Facebook Taps McAfee to Shield Users from Attacks
Facebook, the world's No. 1 social networking site, which has been a target of several high-profile cyber attacks in the past year, is giving away security software from McAfee Inc to protect its users.
Facebook said on Tuesday its 350 million users can download a free six-month trial of McAfee's Internet Security Suite, which protects computer users from viruses and other Internet threats.
Facebook and McAfee, the No. 2 maker of security software, have also co-developed a separate online tool that will scan and clean the computers of Facebook users which show signs of having fallen prey to an online attack.
Facebook said the scanning tool is being offered to its users at no charge. And it will not receive any revenue from McAfee if Facebook users purchase the McAfee Internet Security Suite software following the six-month trial.
Representatives of the two companies said in an interview that McAfee would advertise on Facebook as part of the partnership.
Facebook -- along with other social networking services such as Twitter and News Corp's MySpace -- are among the most popular targets for hackers and cybercriminals. Criminals prey upon a false sense of security among their users who believe that these "walled gardens" of the Internet are immune from attack.
The Koobface virus targets Facebook users, tricking them into clicking on links contained in spam messages and then takes over the victim's PC. Hackers seek to take control of infected PCs for identity theft, spamming and other mischief.
According to Facebook representatives, less than 1 percent of its users have been impacted by any kind of security issue.
"We feel like we've done a great job in protecting our network and accounts on Facebook, but we're always looking at ways we can do better," said Facebook spokesman Barry Schnitt.
The new scanning tool is available immediately for English-language users of Facebook, with versions for other languages coming soon.
Facebook users in the United States, Britain, France and eight other countries have immediately access to the free version of McAfee Internet Security Suite, with additional countries to come through the first three months of the year.
(Additional reporting by Jim Finkle; Editing by Richard Chang)
Adobe Software May Have Been Exploited in Cyber Attack
Melanie Lee and Lucy Hornby
An attack on Google and at least 20 other companies, that originated from China, seems to have exploited a vulnerability in the popular Adobe Acrobat and Adobe Reader software, possibly to steal proprietary codes.
Google <GOOG.O> said on Tuesday that it would review the feasibility of its business operations in China, after a cyber attack originating from China resulted in the loss of intellectual property.
Also on Wednesday, Adobe Systems <ADBE.O> said its computer network systems had been attacked but no sensitive information was stolen.
The attackers may have been trying to exploit security vulnerabilities in Adobe Acrobat and Adobe Reader, which is widely used to create and read documents.
Cyber security firm iDefense released a note on Wednesday about Adobe Acrobat and Adobe Reader's vulnerabilities.
The vulnerability in Adobe's two products could allow an attacker to inject a code into the computer once a PDF file was opened, iDefense said in a "coordinated public" disclosure statement. It did not specifically refer to the Google attacks.
Adobe, which released a critical patch for this problem on Tuesday, was not immediately available for comment.
Anti-virus software maker McAfee said in its "2010 Threat Predictions" report last month that Adobe software would become increasing targeted by cyber criminals, as its products are the most widely used applications globally.
"Based on the current trends, we expect that in 2010 Adobe product exploitation is likely to surpass that of Microsoft Office applications in the number of desktop PCs being attacked," McAfee said in a statement.
Technology-focused website Wired.com quoted iDefense as saying the attack on Google and other corporations intended to steal the companies' source codes.
Journalists, dissidents and other activists in China have often been the target of "phishing attacks," in which an email that appears to be from a known sender contains an attachment with a virus or other malicious software.
In September, a coordinated cyberattack on the Chinese assistants of foreign news agencies contained malware that also exploited an Adobe Acrobat vulnerability.
Google said part of the attack's purpose was to access Gmail accounts of human rights activists, adding that many activists seem to have been separately targeted with attacks designed to gain access to their accounts.
Separately, Microsoft <MSFT.O> said its email service was not hacked.
"We have no indication that any of our mail properties have been compromised," a Microsoft spokesman told Reuters.
Attack Code Used to Hack Google Now Public
The dangerous Internet Explorer attack code used in last month's attack on Google's corporate networks is now public.
The code was submitted for analysis Thursday on the Wepawet malware analysis Web site, making it publicly available. By Friday, it had been included in at least one publicly available hacking tool and could be seen in online attacks, according to Dave Marcus, director of security research and communications at McAfee.
The attack is very reliable on Internet Explorer 6 running on Windows XP, and it could possibly be modified to work on more recent versions of the browser, Marcus said. "The game really changes now that it's hosted publicly," he said.
A hacker could use the code to run unauthorized software on a victim's computer by tricking them into viewing a maliciously crafted Web page.
That's apparently what happened at Google late last year, when hackers were able to get into the company's internal systems. According to people familiar with the incident, 33 other companies were also targeted by the attack, including Adobe Systems.
On Thursday, Symantec and Juniper Networks said they were investigating the incident, and Yahoo, Northrop Grumman and Dow Chemical have also been named as victims in published reports.
Microsoft issued a security advisory on the IE flaw Thursday and has not ruled out the possibility of rushing out an emergency "out-of-cycle" patch to fix it. Microsoft's next set of security patches is due Feb. 9, giving hackers more than three weeks to exploit the flaw.
Security researchers say it would be very hard to exploit the flaw reliably on Windows Vista or Windows 7 systems, however, because of their advanced memory protection technology.
Marcus said that, judging from the amount of concern McAfee is hearing from corporate customers, an out-of-cycle patch is a strong possibility. "My gut tells me that they're going to go with an out-of-cycle," he said. "It's too good of a vulnerability for most of the bad guys to overlook."
The problem is serious enough that on Friday, Germany's federal IT security agency, the Federal Office for Information Security, advised users (in German) to use an alternative browser until Microsoft fixes the issue.
McAfee has more details on the attack here.
Google, Citing Cyber Attack, Threatens to Exit China
Andrew Jacobs and Miguel Helft
This article was reported by Andrew Jacobs, Miguel Helft and John Markoff and written by Mr. Jacobs.
BEIJING — Google said Tuesday that it would stop cooperating with Chinese Internet censorship and consider shutting down its operations in the country altogether, citing assaults from hackers on its computer systems and China’s attempts to “limit free speech on the Web.”
The move, if followed through, would be a highly unusual rebuke of China by one of the largest and most admired technology companies, which had for years coveted China’s 300 million Web users.
Since arriving here in 2006 under an arrangement with the government that purged its Chinese search results of banned topics, Google has come under fire for abetting a system that increasingly restricts what citizens can read online.
Google linked its decision to sophisticated cyberattacks on its computer systems that it suspects originated in China and that were aimed, at least in part, at the Gmail user accounts of Chinese human rights activists.
Those attacks, which Google said took place last week, were directed at some 34 companies or entities, most of them in Silicon Valley, California, according to people with knowledge of Google’s investigation into the matter. The attackers may have succeeded in penetrating elaborate computer security systems and obtaining crucial corporate data and software source codes, though Google said it did not itself suffer losses of that kind.
While the scope of the hacking and the motivations and identities of the hackers remained uncertain, Google’s response amounted an an unambiguous repudiation of its own five-year courtship of the vast China market, which most major multinational companies consider crucial to their growth prospects. It is also likely to enrage the Chinese authorities, who deny that they censor the Internet and are accustomed to having major foreign companies adapt their practices to Chinese norms.
The company said it would try to negotiate a new arrangement to provide uncensored results of on search site, google.cn. But that is a highly unlikely prospect in a country that has the most sweeping Web filtering system in the world. Google said it would otherwise cease to run google.cn and would consider shutting its offices in China, where it employs some 700 people, many of them highly compensated software engineers, and has an estimated $300 million in annual revenue.
Google executives declined to discuss in detail their reasons for overturning their China strategy. But despite a costly investment, the company has a much smaller share of the search market here than it does in other major markets, commanding only about one in three searches by Chinese. The leader in the search field, Baidu, is a Chinese-run company that enjoys a close relationship with the government.
Google executives have privately fretted for years that the company’s decision to censor the search results on its Chinese search engine to filter out topics banned by Chinese censors, was out of sync with the company’s official motto, “Don’t be evil.”
“We have decided we are no longer willing to continue censoring our results on google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all,” David Drummond, a senior vice president for corporate development and the chief legal officer, said in a statement.
Wenqi Gao, a spokesman for the Chinese Consulate in New York, said he did not see any problems with google.cn. “I want to reaffirm that China is committed to protecting the legitimate rights and interests of foreign companies in our country,” he said in a phone interview.
In China, search requests that include words like “Tiananmen Square massacre” or “Dalai Lama” come up blank. In recent months, the government has also blocked youtube, Google’s video-sharing service.
While Google’s business in China remains small for now, analysts say that the country could soon become one of the most lucrative Internet and mobile markets, and a withdrawal would significantly reduce Google’s long-term growth.
“The consequences of not playing the China market could be very big for any company, but particularly for an Internet company that makes its money from advertising,” said David Yoffie, a Harvard Business School professor. Mr. Yoffie said advertising played an even bigger role in the Internet in China than it did in the United States. At the time of its arrival, the company said that it believed that the benefits of its presence in China outweighed the downside of being forced to censor some search results there, as it would provide more information and openness to Chinese citizens. The company, however, has repeatedly said that it will monitor restrictions in China.
Google’s announcement drew praise from free-speech and human rights advocates, many of whom had criticized the company in the past over its decision to enter the Chinese market despite censorship requirements.
“I think it’s both the right move and a brilliant one,” said Jonathan Zittrain, a legal scholar at the Berkman Center for Internet & Society Rebecca MacKinnon, a former CNN reporter and an expert on the Chinese Internet, said Google had endured repeated harassment in recent months and that by having operations in China it potentially put at risk the security of its users in China. “Unless they turn themselves into a Chinese company, Google could not win,” she said. “The company has clearly put its foot down and said enough is enough.”
The cyberattacks last week came from Taiwanese Internet addresses, according to James Mulvenon, an expert on Chinese cyberwarfare capabilities. Mr. Mulvenon said the stolen documents were transmitted electronically to a server controlled by Rackspace, based in San Antonio.
In the past year, Google has been increasingly constricted by the Chinese government. Last June, after briefly blocking access nationwide to its main search engine and other services like Gmail, the government forced the company to disable a function that lets the search engine suggest terms. At the time, the government said it was simply seeking to remove pornographic material from the company’s search engine results.
At the time, some company executives suggested that the campaign was a concerted effort to stain the Google’s image. Since its entry into China, the company has steadily lost market share to Baidu, China’s leading search engine.
Google called the attacks highly sophisticated. In the past, such electronic intrusions have either exploited the practice of “phishing” to persuade unsuspecting users to permit their computers to be compromised, or exploited vulnerabilities in software programs permitting the attacks to gain control of systems remotely. Once they have taken over a target computer, it is possible to search for specific documents.
People familiar with the investigation into the attacks said they were aimed at source code repositories at high-tech companies. Source code is the original programmer’s instructions used to develop software programs and can provide both economic advantages as well as insight into potential security vulnerabilities.
In its public statement Google pointed to a United States government report prepared by the United States-China Economic and Security Review Commission last October and an investigation by Canadian researchers that revealed a vast electronic spying operation last March.
Andrew Jacobs reported from Beijing, and Miguel Helft and John Markoff from San Francisco. David Barboza contributed reporting from Shanghai, and Jonathan Ansfield from Beijing.
Google Exit Threatens Chinese Internet, Analysts Say
If Google leaves China, the country will suddenly become even more dependent on its main homegrown search engine, Baidu.com. And while that is likely to benefit the Chinese company in the near term, analysts say it could bode poorly for the long-term development of the Internet in China.
Baidu is hardly an upstart. The company has 300 million users and a stock valued at more than $13 billion, and it is the market leader in China, by a wide margin, with a commanding 63 percent share to Google’s 33 percent, according to iResearch, a consulting firm.
“It’s a duopoly in China,” says Richard Ji, an analyst at Morgan Stanley. “There’s just Baidu and Google. And Baidu’s way ahead.”
Baidu did not comment Wednesday on Google’s announcement.
One reason for Baidu’s dominance is its close compliance with the nation’s tight Internet regulations and its censorship of Internet content. Baidu played along and Google did not like to, experts say.
“Baidu keeps a great relationship with the government,” says Hong Bo, a consultant at 5G, a Beijing-based consulting firm. “If the government wants something removed it will do it immediately. On the other hand, everything with Google has to go through its headquarters.”
That, and local control, might be why Google never closed the market share gap with Baidu.
Still, analysts say Google had been waging a fierce battle for Web supremacy here, promising to unseat Baidu, a company that Google held a small stake in until June 2006.
Google executives claimed they had the better technology; Baidu executives insisted that they knew what Chinese users wanted.
Rather than just search, Baidu is a supermarket of Web offerings, many of them imitations of other popular Web sites like Wikipedia, MySpace and, soon an online video site Baidu has modeled on Hulu.com.
“It’s a conglomerate,” Mr. Ji said. “But most of the revenue comes from search.”
Google had made some inroads against Baidu last year, under Lee Kai-fu, a former Microsoft executive. But Mr. Lee announced his departure from Google in September, saying he was forming a start-up of his own.
Now, Google is hinting that it may follow Yahoo, Ebay and Amazon and virtually disappear from a country that has the world’s largest Internet population — estimated to be 338 million users.
“It’s the epitaph for U.S. online involvement here,” said Anne Stevenson Yang, a Beijing-based principal at Wedge MKI, an equity research firm. “Media is always a losing proposition in China.”
For its part, two months ago Baidu just moved into a massive, new headquarters in Beijing, and it was rolling out a series of new ventures it hoped would excite consumers and investors.
But many analysts say Baidu may suffer over the long term if Google closes its China operation.
“The whole industry will become worse,” says Yu Yang, chief executive of Analysys International, a Beijing-based research firm. “As for Baidu, without competition with Google, Baidu has no motivation to innovate.”
Baidu has faced increasingly stiff competition in China, not just from Google, but from other popular Internet companies, like Tencent and Taobao, the leader here in online shopping. Google’s move to exit the country would eliminate some of that competition and give Baidu a boost. “This will definitely benefit Baidu,” said Wallace Cheung, an Internet analyst at Credit Suisse.
Baidu was founded by Robin Li, a graduate of one of China’s top schools, Peking University. He later studied computer science at State University of New York at Buffalo, and then began experimenting with search engine technology.
Larry Rafsky, who worked with Mr. Li in the 1990s at a software company, says he was a pioneer, developing some of the first ranking technology.
He invented a “page ranking algorithm virtually identical to what we know about Google’s first attempts,” Mr. Rafsky said in an e-mail interview a few years ago. “He first called it Rankdex.”
While in the United States, Mr. Li also worked at Infoseek, one of the earliest search engine companies, and then, around 1999, he returned to China to found Baidu.
The company went public on the Nasdaq Stock Market in November 2005 at $27 a share. Today, its shares are worth about $386 — which makes Baidu one of China’s richest technology start-ups.
Mr. Li, 41, is one of China’s wealthiest entrepreneurs, worth an estimated $3 billion, according to Forbes.
Chen Xiaoduan and Bao Beibei contributed research.[/i]
Remember about, oh, a decade ago? Before 9/11? After the Battle of Seattle, when everyone was talking about multinational corporations taking over the world, about corporate states and all of that?
Yesterday, we officially tripped over this point in history.
Take a step back and consider the situation: Google is threatening to embargo a superpower, in retaliation for an espionage campaign.
I mean... holy fucking shit.
Unlike, say, the East Indian Company, it doesn't have a navy or an army. It doesn't control the food supply, have significant land holdings, raw resources, or industrial base. It doesn't have vast numbers of employees, it can't hold the financial system hostage.
It doesn't even control the internet.
All our expectations for how these companies would project their power was wrong.
Only a small part of the threat is economic. Sure, Chinese businesses might not do as well if they couldn't deal with Google, but dealing with local search leader Baidu, or Microsoft, or Yahoo, that's hardly going to cripple the economy.
The truth behind Google's threat is best summed up by this line, which was floating around on Twitter:
"It's not Google leaving China, it's China leaving the world."
We've always thought of companies as having to buy their way to power. After all, they are defined by money. But multinational corporations have finally taken their place in the spotlight of world affairs (instead of pulling strings all the time), and it wasn't with money.
Google represents access to the internet. So by proxy, it represents Everything. When China had a full buffet of Google, and Yahoo and MSN and Baidu, it could maintain the illusion that people really had access to Everything.
If Google takes itself off the table, it will become clear that they don't, and that goes to the heart of the social contract between the Chinese government and its people.
It's soft power of the abstract, symbolic kind.
A few quotes from Twitter:
"It's not Google leaving China, it's China leaving the world."
"Illegal flowers, illegal loitering, illegal web surfing. When the word 'illegal' is abused like this, that's the day when the dignity of the law is stepped on."
"Google withdraws from China, signalling the four big international websites' (Google, Facebook, Twitter, Youtube) complete defeat; anti-Chinese forces have met with huge failure in China, once again proving the undefeatable power of the great, glorious and correct Chinese Communist Party."
(Swear to god - that's an honest translation.)
Hackers Take Baidu Offline
The group that took down Twitter.com last month has apparently claimed another victim: China's largest search engine Baidu.com. Baidu.com was offline late Monday, but at one point it displayed an image saying "This site has been hacked by Iranian Cyber Army," according to a report by People's Daily, the official newspaper of the Chinese Communist Party. With more than half of China's Internet search market, Baidu is by far China's most-used search engine. The company could not immediately be reached for comment.
The Stockholm District Court should decide that two of The Pirate Bay's founders have to pay a fine since the file-sharing site is still open and they are still involved, according to a recent filing from the music industry. In October last year the court decided that file-sharing site should be closed, and if it wasn't, Fredrik Neij and Gottfrid Svartholm Warg would each have to pay a fine of 500,000 Swedish kronor (or US$71,000). Now the Swedish divisions of Universal Music, EMI Music, Sony Music and Warner Music want the court to make that threat a reality, according to a motion registered by the court on Dec. 28.
Continuing its quest for more ERP market share, Microsoft on Monday announced a new application aimed at mid-sized speciality retail chains. Dynamics AX for Retail consists of core AX ERP functionality, along with technology Microsoft acquired earlier this year. Redmond's key selling point is tight integration across components, from point of sale to the supply chain and financials. It also integrates with other Microsoft products, such as Office and SharePoint.
Consumers want more retail stores to be more interactive and personalized online, a new survey from IBM has found. The company surveyed 32,000 consumers online to find out how much interactivity they want from the retail outlets they frequent. For the survey, they interviewed participants from the U.S., the United Kingdom, Canada, China, India and Brazil. IBM released the survey results in conjunction with the National Retail Federation conference, being held this week in New York. The survey had found an overwhelming interest in more online customization services.
Microsoft's Ballmer: We're Staying in China
Microsoft CEO Steve Ballmer said his company intends to stay in business inside of China and obey the laws of that country, following Google's announcement that it is considering going home.
"We've been quite clear that we are going to operate in China, (and) we're going to abide by the law," Ballmer told CNBC following a meeting at the White House with President Obama on ways the government can use technology to cut costs. "Cyberattacks are an unfortunate way of life," he said.
Google's declaration that it might exit the Chinese market unless it's allowed to offer an uncensored search engine has rocked the technology and business world this week, putting pressure on its rivals to explain their position toward China. Google's actions came after it revealed that it was the target of a "highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google."
Microsoft had previously said that its e-mail system had not been breached, but had declined to comment on the broader question of its future in China.
Ballmer declined to directly address reports that a new unpatched vulnerability in Internet Explorer was partially to blame for the attacks on Google and other companies.
"If the issue is with us, we'll work through it with all the important parties. We have a whole team of people that responds very real-time to any report that it has something to do with our software, which we don't know yet."
China Begins Monitoring Billions of Text Messages as Censorship Increases
China has started scanning text messages in the latest move in the country’s increasing censorship.
Malcolm Moore in Shanghai and Peter Foster in Beijing
Customers of China’s two largest mobile phone networks, China Mobile and China Unicom, have had their texting service blocked after sending risqué messages, the state media claims.
The disclosure comes as the country is embroiled in a dispute with Google. On Tuesday the internet giant said it could quit China because of concerns over censorship. The Global Times, a government-run newspaper, said: “Everyone seems to be under watch.”
Last year, the government pledged to suppress pornography on the internet and now appears to have extended its campaign to mobile phones.
China Mobile, the world’s biggest mobile phone company, said it was complying with demands from the police to report “illegal” text messages that included pornography, violence, fraud, suggestions of terrorism, instigations to crime and gambling. It said a mobile phone would be blocked if a message breached any of its filters.
It has more than 508 million customers and its network handles 1.7 billion text messages a day.
Even civil servants have expressed reservations about communications censorship. “We have a lot of private things in our mobile phones,” one, named only as Mr Cao, told the Global Times. “If they monitor the messages, a lot of private things would be leaked.”
The Southern Metropolis newspaper said a man from the southern city of Dongguan recently had his phone blocked. China Mobile’s customer service told him their computers had detected lewd words in his messages and that he would have to take his identity card to the police to reactivate the phone. He also had to furnish a letter guaranteeing that he would no longer spread inappropriate messages.
Some of China’s most prominent human rights activists claimed yesterday that their Google email accounts had been hacked.
Microsoft said yesterday it had no plans to pull out of China, dashing hopes that the software giant would support its rival Google.
Google cited Chinese attacks on its network as the final straw since setting up its operations in 2006.
However, Steven Ballmer, the chief executive of Microsoft, whose search engine Bing could benefit if Google surrendered its 30 per cent share of the Chinese market, questioned the significance of the attacks, which were detected last month.
“I don’t think there was anything unusual,” Mr Ballmer said. “We’re attacked every day from all parts of the world and I think everybody else is too.”
The White House has supported Google, demanding an “explanation” for the hacking.
Lawrence Summers, a senior economic adviser to the White House, said: “The principles that Google is trying to uphold are not just important in a moral or rights framework, but are also of considerable economic importance.”
China has so far shown no signs of giving ground over Google’s demand to operate uncensored.
Scaling the Digital Wall in China
Brad Stone and David Barboza
The Great Firewall of China is hardly impregnable.
Just as Mongol invaders could not be stopped by the Great Wall, Chinese citizens have found ways to circumvent the sophisticated Internet censorship systems designed to restrict them.
They are using a variety of tools to evade government filters and to reach the wide-open Web that the Chinese government deems dangerous — sites like YouTube, Facebook and, if Google makes good on its threat to withdraw from China, Google.cn.
It’s difficult to say precisely how many people in China engage in acts of digital disobedience. But college students in China and activists around the world say the number has been growing ever since the government stepped up efforts to “cleanse” the Web during the Beijing Olympics and the Communist regime’s 60th anniversary last year.
As part of that purge, the Chinese government shut down access to pornography sites, blogs, online video sites, Facebook, Twitter and more.
While only a small percentage of Chinese use these tools to sidestep government filters, the ease with which they can do it illustrates the difficulty any government faces in enforcing the type of strict censorship that was possible only a few years ago.
Jason Ng, a Chinese engineering school graduate who will say only that he works in the media business, wakes every day at 8:30 a.m., and then begins his virtual travels through an open, global network by fanqiang, or “scaling the wall.” He connects to an overseas computer with a link, called a proxy server, that he set up himself. It costs 15 renminbi, or around $2, a month to share with about two dozen other friends.
Mr. Ng then works on his blog and checks the news on Google Reader and Twitter to “officially start my day of information.” Chinese citizens engaged in such practices say the government rarely cracks down on them individually, preferring instead to go after prominent dissidents who publish information about forbidden topics online.
As a result, college students, human rights activists, bloggers, journalists and even multinational corporations in China are rushing to use tools that go over or around barriers set up by Chinese regulators, in part because they feel it is the only way to participate in a global online community.
Isaac Mao, a well-known blogger and activist in China, says the number of people seeking access to blocked sites has grown as more and more popular Web sites have been shut down by Beijing.
These digital dissidents have begun to organize small conferences and networks to share information and tricks about how to get access to banned material. “People start to hold a grudge against the government for depriving them of access to the Web sites they regularly visit,” Mr. Mao says.
But as the government has expanded its control over Internet, it has also intensified efforts to close some of the channels being used to evade the online blockade. The result has been a technological game of cat and mouse between the Chinese government and a global contingent fighting for online freedoms.
AnchorFree, a start-up based in Sunnyvale, Calif., has built a profitable business by providing free, advertising-supported software called Hotspot Shield that tunnels about 7.5 million people around the world into the Internet by encrypting Internet users’ data and cloaking their identities.
But last summer, the Chinese government blocked AnchorFree’s Web site so that Chinese citizens could no longer download the software. Almost immediately, its users began e-mailing their own copies of the program to friends and posting links to other sites that hosted it. The program’s use in China has doubled since then, said David Gorodyansky, AnchorFree’s founder.
Other censorship-evading tools have been created by nonprofit companies trying to combat authoritarian governments and by former Chinese citizens who, in many cases, want to help fellow members of persecuted minority groups still in the country.
Several such tools were created by a group called G.I.F., or Global Internet Freedom. It was founded in 1999 by members of the Falun Gong sect living in the United States as a way to get unfettered information about their practice into the country by e-mail. About a million people in China now use the service, which is maintained by about 50 volunteers around the world.
Users must download the G.I.F. programs and then every time they use servers, find the Internet Protocol addresses, or online coordinates, of servers around the world. G.I.F. volunteers try to distribute these coordinates through a multitude of channels, like instant-messaging services.
David Tian, a NASA engineer in Maryland who says he works harder at night on G.I.F. than he does during the day on weather satellites, says that officials from the Chinese government have begun posing as G.I.F. users, so they can intercept those I.P. addresses and block them. In turn, G.I.F. volunteers now work to identify these government officials and track them, so they can keep the information out of their hands.
An even bigger challenge, Mr. Tian said, is keeping up with the rapidly growing demand for the service from countries like China and Iran. “The bottleneck is not their firewall, it’s our capacity,” he said. “We have to limit bandwidth to what we can afford, so when there are a lot of users, some have to wait.”
Many of these organizations are hoping the United States government will help out with money. Since the 2008 budget year, Congress has appropriated nearly $50 million for tools that encourage “Internet freedom,” though only a small portion of that money has yet been handed out.
One problem, says Michael J. Horowitz, a fellow at the Hudson Institute, a conservative policy research group, is that that the federal government appears reluctant to pay for efforts associated with groups that alienate the Chinese government.
“Many of these guys are Falun Gong practitioners and the State Department doesn’t want to aggravate China,” he said. “China goes more nuclear at the mention of Falun Gong than any other two words in the whole dictionary.”
Despite these bureaucratic battles, people on the side of greater Internet freedoms in the continuing fight against Big Brother say the battlefield is inherently tilted in their favor.
“The architecture of the Internet makes our work easier,” said Bill Xia, a programmer based in North Carolina whose software tools, including DynaWeb and FreeGate, are used by hundreds of thousands of people in China every day to access forbidden sites. “The starting point of the Internet is open networks. Everybody can publish and receive data, and unless they want to shut down the whole Internet, we have the advantage.”
Brad Stone reported from San Francisco and David Barboza from Shanghai. Dan Levin contributed reporting from Beijing, and Bao Beibei contributed research from Shanghai.
Software Makers See a Market in Censorship
While China’s censorship policies are prompting Google to consider quitting its operations in the country, some technology companies see the restrictions as a golden business opportunity.
More than a million people in China, including human rights activists and expatriates, are using special software to circumvent the nation’s complex online censorship system, known as the “Great Firewall.” This has created a booming market for software companies, which are capitalizing on the growing desire of China’s Internet users to fanqiang, or scale the wall, to visit Web sites like Facebook, YouTube and Twitter.
“More and more Chinese people know how to use this software now,” said Teng Biao, a lecturer on law at the University of Politics and Law in Beijing, who recently discovered that his Gmail account had been hacked, apparently by someone interested in his involvement in human rights issues. “It’s very convenient and easy to use. The government can’t fully control people browsing the Web.”
Although the technology is not banned outright in China, it is often the focus of censors, who aim to shut down sites that give users access to the software.
The number of people using proxy servers, virtual private networks and other computer tools to skirt barriers to banned information online is not growing just in China. The United Arab Emirates, Iran and even Australia are seeing a surge in customers willing to pay for the freedom they offer.
Companies are cashing in on that desire, selling their products to users on a monthly or yearly basis or offering free software and charging advertisers to reach a captive audience.
Bill Bullock, chief executive of Witopia, a Virginia-based company that sells a VPN popular among expatriates in China for $60 a year, said he had seen annual sales double worldwide since the product was introduced in 2005.
“People want their Facebook and Twitter and they’re not going to tolerate a watered-down Internet,” he said. “They’re far from home, and this is their connection to family and friends. They’ll do anything to make sure it works.”
VPNs were originally developed to give customers and businesses a secure way to log on to corporate computer systems and in public places like coffee shops and airports. VPN software lets users “tunnel” through to a server in a country without Internet restrictions and encrypts information under an anonymous computer address to prevent monitoring. Proxy servers also allow unfiltered Web browser access but are less secure than VPNs because they do not conceal other computer information.
Computer users in places like China are becoming savvy at leveraging the technology to outwit restrictions.
“Once they have a taste of good old capitalism, they just want more,” said Mr. Bullock. “You can’t put that genie back in the bottle.”
New entrants are jumping into the market with an eye on China’s 384 million Internet users. The U.S.-based Open Terrace introduced a VPN, Freedur, last April just as the Chinese government began a censorship campaign that eventually blocked Facebook, YouTube and Twitter.
“That’s when the VPN industry just exploded,” said Chris Matthews, co-owner of the company. At first, Open Terrace offered a free one-month trial membership that was downloaded by 7,000 Web users in China. But when developers noticed that the Chinese government was blocking Web sites for free VPNs, the company ended the trial offer and increased monthly rates to $20 from $6, which actually bolstered sales.
“If you’re offering anything for free, you’ll be blocked in China because locals will flock to your service and use it,” he said. “The Chinese were using and blogging about our free trial, and that’s of course how the Great Firewall team learns who to block.”
The Chinese government’s zeal for censorship has not stopped some entrepreneurial developers from offering free services.
About one million people in China are using the free VPN Hotspot Shield each month, out of a total of 7.5 million worldwide users, according to David Gorodyansky, founder of the U.S.-based AnchorFree, which offers the software.
In exchange for free use, viewers see an ad on every Web page they look at. That’s 50 million page views a month in China alone and a billion worldwide, Mr. Gorodyansky said. Hotspot Shield has created a new type of prime real estate on the Web for advertisers, and a bonanza for AnchorFree. The company has become profitable since its debut in 2005 with $11 million in venture capital and has seen the total number of users grow 500 percent in the past 18 months.
He traces the recent boom in users worldwide to government censorship of the Internet, including Iran’s closing of Twitter after the 2009 presidential election and Georgia’s barring of Russian-language Web sites during the country’s 2008 war with Russia. “It’s amazing how you can look at our traffic and map it to different events happening throughout the world,” he said.
Governments have begun to fight back. Many users in China complain that Hotspot Shield often fails to load and the software's download Web site is now blocked, although users can obtain it on 40 other unrelated sites. Outfoxing governments intent on shutting down any access to banned information is a constant battle, and those repressive efforts are spreading. According to Reporters Without Borders, 60 countries censor the Internet, up from 37 in 2008.
Last month, Australia announced plans to filter offensive Web sites from overseas, like those with child pornography. But a recently leaked blacklist showed that YouTube links, legal pornography and some Wikipedia entries had also been banned. The United Arab Emirates blocks pornographic and anti-government material.
“It will always be a cat-and-mouse game,” said the founder of ConnectionVPN, who asked not to be identified for fear of retaliation by governments opposed to the company’s software. “We always have to keep ahead of the technology so we can be ahead of the censors.”
ConnectionVPN made its debut last fall and says about 30 people, including many in China, are signing up for the service every day, which costs €5, or $7.20, per month. Many in the industry say they are seeing a major change in the use of the technology as censorship becomes more widespread. “We’re at a shifting point,” said ConnectionVPN’s founder. “Until now, this was a niche market in a few countries, and now it’s becoming a global problem.”
Such developments may bode well for developers, especially in China. Google’s possible exit from the country, and the potential loss of its Gmail and other services, will only drive more interest in software that can scale the firewall, said Tian Hou, an Internet and media equities analyst at Pali Capital in New York.
“There has always been a culture in China to help people get around the Communist Party’s restrictions,” she said. “The Internet is no different.”
China Writers Say Google Ready to Settle Book Row
Google Inc. wants to apologize for its poor communication with Chinese authors about scanning their books into its online library and is ready to work out a settlement to allay copyright concerns, a writer's group said Sunday.
The U.S. search giant has been working the past five years on an ambitious plan to scan all the world's books into a digital library accessible to anyone with an Internet connection. Google says the project is an invaluable chance for books to get more exposure, but many authors and publishers argue it is a copyright violation.
The Chinese Writers' Association said it received a letter from Google acknowledging its efforts had upset Chinese authors.
"Following discussions and communications in recent months, we do believe that our communication with Chinese writers has not been good enough," Google said in the scanned letter posted on the association's Web site.
"Google is ready to apologize to Chinese writers about this," said the letter, which bore the signature of Erik Hartmann, Asia-Pacific head of Google Books.
Google confirmed Sunday that the letter was authentic. In a statement, the company said its Google Books project is "fully compliant" with U.S. and Chinese law.
Last month, a Chinese court heard Chinese author Mian Mian's lawsuit against Google for scanning her work into its library. A Beijing judge told the two sides to hold talks on a settlement and report back, according to the writer's lawyer.
The search giant's statement comes after a recent call by the government-affiliated China Written Works Copyright Society to negotiate compensation for Chinese authors.
Google plans to work out a settlement proposal with Chinese writers by March and reach a formal agreement by June, the scanned letter said. It said it would take the "unprecedented move" of making a complete list of Chinese books it has scanned, in response to a request from the writers' group.
Google has scanned more than 10 million books worldwide since 2004, including 2 million with the consent of about 30,000 publishers. Another 2 million books in Google's library no longer are in copyright. Google has been only showing snippets from the remaining books while it tries to iron out copyright disputes.
"In China like everywhere else, if a book is in copyright we don't show more than a few snippets of text without the explicit permission of the rightsholder," Google said in an e-mailed statement. "In addition, we have a long-standing policy of honoring authors' wishes, and authors or publishers who wish to exclude their book may do so at any time."
Sarkozy's 'New Year's Wish': Investigate Google
It's doubtful that they would admit it, but U.S. studio chiefs and music moguls must dream that their country will one day elect a president like Nicolas Sarkozy.
Few of the world's leaders are as aggressive in protecting copyright as the president of France, and he proved it again Thursday during a speech to members of the country's creative community when he endorsed some controversial pro-copyright proposals.
If Sarkozy has his way, France will tax Google and other search engines, Web portals, and Internet service providers and turn that revenue over to the music and publishing industries, according to reports in multiple French newspapers and news services. Under the plan, the government would also partially subsidize "music cards" that the country's youth could use to buy songs online and France would require the music industry to release song files that "play on all platforms." (It wasn't clear exactly what this meant, but presumably Sarkozy was referring to digital music files stripped of anticopying software).
France's head of state made the statements at the Cite de la Musique in Paris, as part of an annual tradition where the president offers his list of New Year's "wishes" for content creators. Sarkozy said high on his list will be to ask the country's "Competition Authority," which guards against antitrust violations, to investigate Google for possible "abuse of its dominant position" in the online ad market.
On Friday, Google said levying more taxes would threaten innovation and pointed out that competition in France's ad market thrives.
"Online advertising accounts for only a little more than 10 percent of total advertising in France," said Olivier Esper, Google France's policy manager, in a statement. "We are only one player out of many that focuses on online advertising...plenty of competition exists in the advertising world."
In the United States, Google can boast partnerships with many companies from the music, film, and TV industries. On the other hand, it also continues to defend itself against a $1 billion copyright suit filed against it by Viacom, parent company of MTV and Paramount Pictures.
Sarkozy's speech was much anticipated as it followed the publishing of a government-funded report that included a recommendation that France adopt 22 proposals, which have now stirred controversy there, and many other areas in the Western world. The document was authored by three men: an executive from auction house Sotheby's France, a former French mister of culture, and music exec Patrick Zelnick, who the report was named after.
To be sure, Sarkozy has close ties to the entertainment community and none is closer than his wife, Carla Bruni-Sarkozy, a popular singer. Then there's the connection that has raised eyebrows in some quarters of the Internet: Zelnick is the first lady's former record producer. Critics of the proposals have argued that a group led by a music exec is going to come to the conclusions it did. Others point out that the French are very proud of their country's creative achievements and it's important to many there to protect artists.
Whatever the reason that France is inclined to strengthen copyright protections, there's no doubt that the film, TV, music, and publishing sectors are seeing nearly unprecedented cooperation there.
Last month, a Paris court ruled that Google's scanning of French books violates the country's copyright laws. The court ordered Google to pay a French publisher the equivalent of $430,000 in damages and set a fine of more than $14,000 each day that Google continued to display snippets from books.
In October, France passed a so-called three-strikes antipiracy law that calls for those accused of illegally downloading content to be warned multiple times to stop. If they refuse they must face a government agency that has the power to shut off their Internet access--once the case is first reviewed by a judge.
Sarkozy and the authors of the Zelnick report say they are trying to give extra support to the music industry, which they say has been badly damaged by online piracy. During Sarkozy's speech, he laid out his "music map for the young," which included the idea for the music card. He told the crowd that he hopes the card to be rolled out sometime this summer and said that it is designed to encourage young people (he did not specify an age range) to acquire music through legal means.
He suggested each card would be worth 50 euros ($71.50 US) and that the government would put up half that money. The rest would be paid by the card owner and music store.
As for the tax on Google and other Internet search engines and portals, Sarkozy said that it isn't fair for Internet advertisers to pay taxes only in the countries where they are based. He said that Google's European headquarters is in Ireland, but the company sees plenty of clicks and money from ads in France, and that people from that country should be compensated.
"Google makes a big investment in France," Google's Esper said. "We make a substantial contribution to local and national taxation. But the fact is that our European headquarters is in Dublin."We comply fully with the tax laws in France and it would be wrong to think of Google's revenues from French advertisers as solely the result of operations carried out locally."
Reader feedback at some of France's top newspapers was overwhelmingly critical of Zelnick's report.
One reader named Philippe called the plan "Kafka-esque" and someone named Aline Maginot said that if she were Google, she would leave the country, shut down Google.fr, and "force the French to access Google in English."
This story was compiled from reports published by Reuters, AFP, Le Monde, Le Figaro and Liberation. Translation provided by CNET employee Virginie Lemay-Alarcon.
France Ponders Right-To-Forget Law
Social networking websites have ensured that everyone who has an opinion can put it out in the public domain.
From Britney Spears's musings to the Tiger Woods scandal, information can take a life of its own once it hits the world wide web.
B-list celebs and brand-names bustling for public attention can be particularly vulnerable to people with a gripe against them.
Alberic Guigou from online reputation management firm Reputation Squad said many people were becoming public figures on the internet.
"They are being on Facebook, on Twitter. They are communicating a lot of information about themselves," he said.
"But the issue is that a lot of people also remain anonymous. They take advantage of that to ruin other people's reputations," he said.
The impact of all those online revelations has made France consider the length of time that personal information should remain available in the public arena.
A proposed law in the country would give net users the option to have old data about themselves deleted.
This right-to-forget would force online and mobile firms to dispose of e-mails and text messages after an agreed length of time or on the request of the individual concerned.
Divina Frau-Meigs, Professor of American Studies and Media Sociology at the Paris Sorbonne University, believes the law would counter against unguarded communications becoming an official record.
"This debate is also connected to the right of presumption of innocence in many ways, so that people are not found guilty even before they start on life," she explained.
"People and young people need to be protected by the State so that there is fairness in the way this protection is established," she added.
A right-to-forget could protect an individual's privacy and stop them from being permanently held to ransom by unguarded actions from their past.
Currently the only way to overcome bad publicity on the net is by countering it with good publicity.
Prof Frau-Meigs believes the manipulation of someone's online presence only benefits the wealthy and people with a vested interest in disguising their real persona.
But when people become targets of malicious rumours on the net, Mr Alberic said action had to be taken to shift away from negative comments.
"Start with defining who is responsible for the bad content. If the people are hiding… we make sure that as much as possible of the content showing up on the first pages of results on the most famous search engines are positive. We either create content from blogs to websites and videos
"Also, if they already have press articles that reflect well on their reputation, we decide to improve the ranking on the research pages of such articles," he explained.
Companies too are coming under attack from competitors pretending to be disgruntled customers leaving damaging feedback on websites such as eBay or Amazon.
Negative buzz sometimes originates from bloggers on specialist sites with a small, but influential following.
In these instances, Didier Frochot from information management company Les Infostrateges approaches the people responsible and threatens them with legal action.
"If they don't instantly remove the litigious items, and there's always a hardcore who refuse to budge, then we have to, shall we say, insist a little harder," he said.
Mr Frochot believes the internet has become an economic and information battleground. But for the average net user, prevention is still better than cure when it comes to protecting yourself from doing something you might later regret.
Carole Gay, from the French internet providers association AFA, said search engines made finding someone's details online very easy.
"So we have to be careful what we put online. Otherwise you risk being followed by something you did in the past. You have to be vigilant, just as you do in the real world," she said.
However, Current.com's video parody of the Google toilet suggests there might also be a fundamental problem with the attitude of online companies.
The cartoon video on the news website suggests that Google's next step will be to produce toilets that can analyse everything we flush.
Santa Fe Wi-Fi Fears Keep Getting Weirder
Man sues neighbor for refusing to turn off wireless
A group of Santa Fe residents recently attempted to get all public Wi-Fi hotspots in the city banned by arguing that the APs irritated their supposed "electromagnetic allergies." More curious perhaps was how the group tried to use the Americans With Disabilities Act to force the city's hand. Now the Santa Fe New Mexican reports that one of the individuals involved in the effort has sued his neighbor for refusing to turn off their cellphone and Wi-Fi hotspot. Arthur Firstenberg claims he was made homeless by the neighbor, who apparently didn't appreciate his unique ailment. Firstenberg's legal argument is a bit of a treat, suggesting he's been forced to live in his car:
Massive Revelation in South African Tower Battle
iBurst plays trump card in the Craigavon tower battle where residents complain about health issues
Staff Writer MyBroadband
Over the past few months a battle between certain concerned Craigavon residents and iBurst reached fever pitch, with residents demanding that iBurst move a tower that was erected in Fourways Memorial Park on 12 August 2009.
A ‘Craigavon Task Force’ was established shortly after the erection of the tower, partly because some residents in the area complained about ailments which they attributed to the tower. They staged a protest a few weeks after the tower went live, handing out flyers with the message: “iBurst subjects a residential community filled with children to uninvited microwaves from their tower”.
In an email one Craigavon Task Force member, Tracey-Lee Dorny, describes the affected community’s symptoms: “several rash cases were presented in person and by photos from people who could not attend [a meeting with iBurst]. Headaches, nausea, tinnitus, dry burning itchy skins, gastric imbalances and totally disrupted sleep patterns, especially with some of the children, were some of the issues presented by the residents.”
Dorny told The Star that she and her son are spending alternate nights at her mother’s house to get some relief. “When I’m off the property, the symptoms subside,” she said.
Another resident, Dave McGregor, is also quoted in The Star as saying that his wife and nine-year-old son suffer bouts of nausea and retching, and have developed skin rashes since the erection of the tower. “We’ve told our son that the tower is only switched on one day a week, so it’s not psychosomatic,” McGregor told The Star.
iBurst disputes the health complaints
iBurst CEO Jannie van Zyl said that no medical proof regarding the ailments was presented by any resident to date, but notwithstanding this absence of medical proof iBurst agreed to meet with the Craigavon residents to address their concerns.
“At this meeting the residents were informed that the radiation levels emitted by the tower were ten thousand times LESS than the international safety standards set for mobile towers and that the radiation at this site was in fact the same level as that already present from cellular phone towers in the area,” said Van Zyl. “In other words the iBurst tower did not increase the radiation in the area significantly above the level already present for a long time.”
Craigavon Task Force members remained unimpressed, and according to Van Zyl the residents reiterated their viewpoint that their ongoing health problems were caused by the tower. “At the meeting on the 16th of November 2009 a number of residents and their staff confirmed that they were still experiencing symptoms such as rashes, headaches and the like and that these symptoms disappear when they leave the vicinity of the tower.”
According to Van Zyl residents quoted periods of hours, or at most, two days to see an improvement in the symptoms experienced. “One lady who showed us a rash claimed that when she goes home for the weekend, the rash disappears. Another said headaches disappear when she goes home at night,” said Van Zyl.
iBurst makes massive revelation
At the meeting Van Zyl agreed to turn off the tower with immediate effect to assess whether the health problems described by some of the residents subsided. What Craigavon residents were unaware of is that the tower had already been switched off in early October – six weeks before the November meeting where residents confirmed the continued ailments they experienced.
MyBroadband was furnished with technical reports which confirmed that the Fourways Memorial Park iBurst tower was turned off in early October and that it did not provide any services over the next few weeks.
Van Zyl argues that this clearly proves that the iBurst tower could not be the cause of the health symptoms described by some of the residents. Van Zyl reiterated that residents said that the symptoms typically subsided in hours or days after leaving the Craigavon area, and since it still prevailed in mid-November it means that it could not have been related to the iBurst tower radiation.
“At the meeting in mid-November residents claimed that full recovery of skin conditions could take as long as 6 weeks. Yet, the tower was switched off for more than 6 weeks by this time,” said Van Zyl. “At this point it became apparent that the tower can, in no way, be the cause of the symptoms, as it was already switched off for many weeks, yet the residents still saw symptoms that come and go according to their proximity to the area.”
Van Zyl added that “whatever caused their symptoms, it was now a fact that it could not be attributed to the iBurst tower and the tower was switched back on in the 2nd week of December.” The iBurst CEO added that residents failed to show up for subsequent meetings scheduled for the 30th of November and the 2nd of December.
While this revelation may seriously dent the argument, from this particular group of Craigavon residents, that the iBurst tower is to blame for the ailments, the case is unlikely to go away soon.
Bismarck Olivier from the legal firm Bezuidenhout, Van Zyl and Associates, who represents the Craigavon residents, previously said that there is no talk of abandoning the action against iBurst and that the recent activity surrounding the issue is ‘only the beginning’.
Olivier added that anyone who thinks that their legal case is based only on health issues is sorely mistaken, adding that their case is not built on health concerns alone, but rather various other aspects related to the mast, including the public participation and environmental approval processes which they are confident are flawed.
Van Zyl however said that iBurst appointed an independent and accredited EIA consultant and that the correct procedures were followed - including notifying the adjacent property owners and publishing notices in the press and on the site itself. He added that he is confident that all processes and procedures were followed to the letter.
According to Olivier residents are now looking at a solution through the Department of Environmental Affairs, and if that fails they will fight the matter in court. iBurst responded saying that it will definitely fight any legal action related to the Craigavon tower.
Long-Dead Inventor Nikola Tesla Is Electrifying Hip Techies
His name is branding magic; Thomas Edison is 'so 20th century'
Decades after he died penniless, Nikola Tesla is elbowing aside his old adversary Thomas Edison in the pantheon of geek gods.
When California engineers wanted to brand their new $100,000 electric sports car, one name stood out: Tesla. When circuit designers at microchip producer Nvidia Corp. in 2007 launched a new line of advanced processors, they called them Tesla. And when videogame writers at Capcom Entertainment in Silicon Valley needed a character who could understand alien spaceships for their new Dark Void saga, they found him in Nikola Tesla.
Tesla was a scientist and inventor who achieved fame and fortune in the 1880s for figuring out how to make alternating current work on a grand scale, electrifying the world. He created the first major hydroelectric dam, at Niagara Falls. He thrilled packed theaters with presentations in which he ran high voltage through his body to illuminate a fluorescent light in his hand. His inventions helped Guglielmo Marconi develop radio.
And his rivalry with Edison—called the Battle of the Currents because Edison had bet on direct current—was legendary. Tesla won the contest, when his AC equipment powered an unprecedented display of electric light at the 1893 Chicago World's Fair.
Fifty years later, the 86-year-old Serbian emigré died in obscurity at a New York hotel, unmarried, childless and bereft of friends. Meanwhile, Edison was lionized for generations as one of America's greatest inventors.
But Tesla has been rediscovered by technophiles, including Google Inc. co-founder Larry Page, who frequently cites him as an early inspiration. And Teslamania is going increasingly mainstream.
An early hint was "Tesla Girls," a 1984 single from the British technopop band Orchestral Manoeuvres in the Dark. Performance artist Laurie Anderson has said she was fascinated by Tesla. David Bowie played a fictionalized version of him in the 2006 film "The Prestige," alongside Christian Bale and Hugh Jackman. Director Terry Gilliam described Tesla in a recent documentary film as "more of an artist than a scientist in some strange way."
Tesla, in short, is cool.
"He was a kind of crazy, interesting dude," says Melody Pfeiffer, spokeswoman for the Dark Void game's distributor, Capcom Entertainment.
Edison, meanwhile, is less au courant than he used to be, says Paul Israel, director of the Thomas Edison Papers, a scholarly project at Rutgers University, in Piscataway, N.J.
Many significant Edison inventions—including the phonograph and the motion-picture camera—are becoming historical curios. The European Union has banned old-fashioned incandescent light bulbs, another Edison innovation. The EU is urging consumers to replace them with more-efficient fluorescent lights descended from those Tesla favored.
"Edison is so 20th century, much like Henry Ford," says Bernie Carlson, a professor of Science, Technology and Society at the University of Virginia.
Once, Edison was revered as the Wizard of Menlo Park, after the New Jersey town—since renamed Edison—where he built a laboratory and movie studio. But Edison biographies have started focusing on his role in establishing monopolies in the electricity and movie industries.
Recent portrayals of Edison have highlighted his darker side. In the 1998 HBO miniseries "From the Earth to the Moon," Tom Hanks plays a French filmmaker who was financially ruined when Edison secretly copied and then released his 1902 epic, "A Trip to the Moon," without paying its creator.
The Tesla-Edison rivalry was intense partly because the highly educated young engineer sailed to America in 1884 to work for Edison. But after less than a year in Edison's labs, Tesla quit in a spat over pay.
Tesla-boosters note that in Edison's effort to discredit alternating current a decade later, his staff deliberately electrocuted a murderous circus elephant and profited from a popular film of the killing. To sully Tesla's ideas, Edison's men also helped orchestrate the first execution by electric chair.
"I can't imagine writing a song about Edison…too boringly rich, entrepreneurial and successful!" said Andy McCluskey, a founder of Orchestral Manoeuvres in the Dark, in an email. He calls Tesla "a romantic 'failure' figure."
In 1895—after selling his AC patents to industrialist George Westinghouse for a mint and harnessing Niagara Falls—Tesla hobnobbed with Mark Twain, J.P. Morgan and French actress Sarah Bernhardt. But troubles soon began.
Tesla's laboratory in New York was destroyed by fire, along with years of work and notes. The secretive experimenter then burned through much of his fortune testing radio transmissions in Colorado Springs, Colo. In 1898, he demonstrated a pair of small radio-controlled boats—decades before guided torpedoes—but was rebuffed by the U.S. military. When Marconi changed the world with a trans-Atlantic radio transmission in 1901, Tesla wasn't mentioned.
Undaunted, the scientist continued to be far ahead of his time. His papers suggest he stumbled upon—but didn't pursue—lasers and X-rays, years before their recognized discoveries. He proposed transmitting electricity through the upper atmosphere. He sketched out robots and a death ray he hoped would end all wars.
"There's a sort of science-fiction aspect to Tesla," says Prof. Israel at Rutgers.
For marketers at chip makers Nvidia, who were targeting the techno-cognoscenti with a new product line, that aura is priceless.
"A mythology has built up around Tesla that catches people's imagination," says Andy Keane, general manager of Tesla Products at Nvidia.
Tesla's more outlandish pronouncements stoked that mythology. He said he could use electricity to cause earthquakes and control weather. He claimed to have detected signals from Mars while he was in Colorado.
Unlike Edison, who died in 1931 with 1,093 patents to his name, Tesla left few completed blueprints. The shortcoming undercut his legacy but added to the air of mystery surrounding him.
"Tesla's work is incomplete, so people can read into it what they want to," says Prof. Carlson at the University of Virginia.
Christopher Priest did just that in writing "The Prestige," his novel and then movie about rival magicians in Victorian London. In it, one of the magicians visits Tesla in Colorado and pays him to create a machine unlike anything the real Tesla ever mentioned.
"I wanted an ambiguous, mysterious genius," says Mr. Priest. "Tesla was the man for the job."
Creators of the Dark Void videogame needed a mentor for their hero, Will, who falls from our world into a parallel realm ruled by sinister aliens bent on annihilating humans.
"We quickly decided that tapping into the conspiracies and geek mystique built up around Nikola Tesla would be awesome," says senior producer Morgan Gray.
"What is cooler than having Tesla reverse-engineer alien technology to build weapons of super science?"
At Tesla Motors, the branding isn't simply an effort to ride the name's nerdy snob appeal, says spokeswoman Rachel Konrad. The Tesla Roadster uses an AC motor descended directly from Tesla's original 1882 design, which he said came to him in a vision.
Still, for all Tesla's cachet, Edison's legacy remains inescapable. Ms. Konrad says customers note with irony that Tesla Motors' main showroom is in Menlo Park, Calif.
To help boost the Tesla name, the automotive start-up has launched a promotional sweepstakes with Capcom around the release of Dark Void. The prize: a Tesla Roadster.
For Nikola Tesla himself, Ms. Konrad says, the prize is overdue recognition.
"You know you've gone into mainstream pop glory when you're in a videogame aimed at 18-year-old boys," she says.
Hollywood No Longer an "Original Idea Town"
Martin A. Grove
One of the myths about moviemaking is that the movie gods prize originality and are wide open to writers with something new to pitch.
"It used to be an original idea town. It's now all about underlying rights," Craig Titley observed when he talked about his screenplay for 20th Century Fox's "Percy Jackson & The Olympians: The Lightning Thief."
"Percy," based on the first book in a series by Rick Riordan, is directed by Chris Columbus ("Harry Potter" 1 and 2). The contemporary fantasy-adventure, opening February 12, is rooted in Greek mythology.
Percy, who learns he's the son of Poseidon, discovers the gods of Mount Olympus and assorted monsters are alive and well and walking among us. Titley, who has a Ph.D. in mythology, was able to put his academic training to good use here.
But the slowdown in selling originals doesn't have him complaining. "I've always pretty much been a gun for hire doing assignments and adaptations so business is booming from where I'm sitting."
For instance, he wrote the screen stories for adaptations like "Cheaper by the Dozen," based on a novel, and "Scooby-Doo," based on Hanna-Barbera's animated TV series. Nonetheless, he's a fan of originals such as "The Hangover," "District 9" and "Up," which he notes were among 2009's top hits.
"It's like the powers-that-be have determined they need underlying graphic novels or games, but certainly I don't think audiences have said that that's what they want," he said. "They want good movies, as always."
That's what Titley hopes he has with both "Percy," whose cast includes Logan Lerman, Uma Thurman and Pierce Brosnan, and with the remake of "20,000 Leagues Under the Sea" that he and producer Sam Raimi are developing. New Line was planning to make the effects-driven underwater picture before it was downsized by its Time Warner parent.
Titley sees an original side to adapting: "I like adaptations where there's a lot of room to wiggle and be creative and bring in new elements as opposed to something where you've got to treat the source material as sacred."
The prospects for "20,000 Leagues" improved last November when a competing Disney remake was scrapped by new studio chief Rich Ross. However, moviegoers still won't be seeing Raimi and Titley's version any time soon.
"First, we have to attach a director and then we have to convince a studio to make a $200 million water movie," he laughed. "It could be many, many years."
It's a pet project for Titley, who loved Jules Verne's novel and Disney's 1954 film. "I'll be hitting the ground running on that in the New Year," he promised.
"That was a book where there was a lot of wiggle room because as Verne wrote it was very much like a travelogue without a real story driving it." To adapt it he asked himself what Verne would do if he were in Hollywood and had to bring his own novel to the screen.
Titley faced different challenges in adapting "Percy."
"When Fox bought these books they had no idea they were going to be as successful as they were, so originally there was a little more of being footloose and fancy free with the source material."
One thing that needed changing was that the novels skewed very young. "They were super-super kid-friendly and a little goofy at times. We didn't want to make a goofy kiddie movie."
What they wanted was something similar in tone to the later "Harry Potter" films with their older teen appeal, elements of romance and hardcore action.
The real challenge was walking the fine line between being true in spirit to the source material while knowing he had to take certain liberties in adapting it to the screen without alienating the books' fans.
Titley came aboard in '07 when Columbus asked him to write the screenplay. He was writing as the Hollywood writers strike loomed.
"It was literally one of those projects where we turned in the first draft at like 11:59 the night before the strike and then had to sit that out. We picked it up again in '08 and started filming the beginning of '09."
When Titley says he and Columbus worked together smoothly he's not just being politically correct.
"In a way, he sort of discovered me," he explained. "My very first spec script went out many moons ago and made it into the hands of his production company. I wrote a movie for them and they gave me an office and a two-picture deal. So I've been in their world for a long time and kind of knew Chris's taste."
Moreover, when Titley was fresh out of USC Film School he worked as an assistant to Joe Dante, who'd directed "Gremlins," which Columbus wrote.
"I had access to every single draft of 'Gremlins' so actually Chris -- although he doesn't realize it -- was one of the writers that taught me how to write. I think I got so inside his head studying his early scripts that when we actually had to work together we were completely in synch."
Taking Aim at the Big Names in Animated Film
GREENWICH, Conn. — Slumbering in a drab-looking office building here, Blue Sky Studios, the animated-movie division of 20th Century Fox, has long been dismissed as much of a threat. Nobody could catch DreamWorks and Pixar, moviedom figured, especially not a quiet studio that got its start with an animated laxative commercial.
So much for that theory.
Blue Sky’s most recent release, “Ice Age: Dawn of the Dinosaurs,” was easily the No. 1 animated film of 2009 at the global box office, selling $888 million in tickets and dwarfing the totals for “Up” from Pixar and “Monsters vs. Aliens” from DreamWorks. Moreover, Blue Sky did it with about half the budget. Pixar and DreamWorks each lavished an estimated $175 million on their entries; Blue Sky spent about $90 million.
Adjusted for inflation, “Ice Age: Dawn of the Dinosaurs” ranks as the third biggest computer-animated movie of all time, behind “Shrek 2” (DreamWorks), which sold $1.1 billion worldwide, and “Finding Nemo” (Pixar), which hit $1 billion.
“Nobody has ever come close to challenging Pixar and DreamWorks at that highest threshold before,” said Jerry Beck, an animation historian and co-operator of the news blog CartoonBrew.com.
The two animation superpowers would probably scoff at the notion that Blue Sky no longer sits at the children’s table. DreamWorks will deliver three features this year. Pixar has delivered 10 hits in a row, racking up four Academy Awards for best animated feature along the way.
In contrast, Blue Sky will not deliver a film at all in 2010, has an up-and-down track record — the “Ice Age” trilogy is huge, but “Robots” was soft — and has never won the animated feature Oscar. “Ice Age: Dawn of the Dinosaurs” was also easier to sell as the third installment of a popular franchise and was also more of an international phenomenon than a domestic one; both “Up” and “Monsters vs. Aliens” outperformed it in North America.
“Over the years, it didn’t seem like Fox even took them seriously,” Mr. Beck said. (In early 2002, Fox contemplated selling the studio.) “And even though Blue Sky has found hits, there are still quality questions.”
Blue Sky’s corporate bosses are crowing nonetheless.
“The quality of the work is up there with anything that is done from any company in the business,” said Tom Rothman, a chairman of Fox Filmed Entertainment. Added Vanessa Morrison, president of Fox Animation Studios, which includes Blue Sky: “Being away from Hollywood really helps to incubate talent. Our films really take people to a place they’ve never been before.”
Blue Sky now has an incredible amount of pressure to keep the hits coming. A fourth “Ice Age” is in the works — the studio is working to nail down agreements with the voice cast — and Chris Wedge, a Blue Sky co-founder and the director of the first “Ice Age,” is working to develop “The Leaf Men,” based on the book by William Joyce.
Next up, however, is an original 3-D feature called “Rio,” planned for release in April 2011. Set in Rio de Janeiro, the movie is billed as a comedy-adventure that centers on Blu, a rare macaw who thinks he is the last of his kind. When he discovers there is another — and that it’s a she — he leaves his small Minnesota town for Rio. Mayhem ensues.
The cast includes Anne Hathaway, Tracy Morgan, George Lopez and Jesse Eisenberg, of “Zombieland” fame. Carlos Saldanha, the Brazilian-born director of “Ice Age: Dawn of the Dinosaurs,” among other Blue Sky films, will also direct “Rio.”
“We’re working really hard to raise the bar here — the realism of the harbor, how the slums look, the way the feathers on our bird characters move,” said Brian Keane, Blue Sky’s chief operating officer.
Computer-animated movies have become anything but child’s play to Hollywood. Aside from their box-office potential, these pictures can deliver enormous merchandising profits and — so far at least — are holding up better in the DVD aisle than their live-action counterparts. Partly that is because of their power as electronic baby sitters.
But the animation gold rush is increasing in intensity as cinematic technology evolves. When Pixar and DreamWorks pioneered the art of concocting entire three-dimensional worlds out of nothing but computer code, at least at the multiplex, the technology was more than others could easily copy.
Not anymore. Upstart studios like Imagi Animation Studios (“Astro Boy”) are now able to take advantage of breakthroughs bankrolled by the animation giants. The likes of Warner Brothers, Sony and Universal Pictures are also racing to mine the genre, spending hundreds of millions on movies like “Cloudy With a Chance of Meatballs” and a sequel to “Happy Feet.”
“Avatar,” which relies on newly developed motion-capture equipment and has sold over $1 billion at the global box office, is to a large extent an animated film.
Blue Sky got its start in 1987, opening above a dentist’s office in Briarcliff Manor, N.Y. Dulcolax was its first customer, but the studio soon made a name for itself in animation circles for taking on quirky, dark projects. “Bunny,” about a tattered rabbit, won the 1998 Oscar for an animated short. Other work included “Joe’s Apartment,” the MTV Films comedy featuring thousands of singing cockroaches, and the talking fish episode from the “The Sopranos.”
At Blue Sky headquarters in Greenwich, about 400 employees toil on the big commercial films required by Fox, which bought the studio in 1997. The work can be draining — each animator delivers only about four or five seconds of footage each week — but there are all of the creature comforts associated with creative enterprises: video games, a big gym, free cereal. Mr. Keane is hiring 40 more employees.
Lately, it has been all “Rio” all the time. Animators working on the film recently took a trip to the Bronx Zoo to sketch birds, and others have learned to samba in the name of their craft. On a recent afternoon, workers headed to Blue Sky’s auditorium — some via scooter — for a demonstration of the Brazilian martial art capoeira. About 100 artists sketched and asked questions about incorporating the moves into “Rio.”
“We might not be very Hollywood out here, but we still know how to have fun,” Mr. Keane said.
Did Prog Rock's Greatest Artist Inspire Avatar? All Signs Point To…
James Cameron spent years creating Avatar's floating islands and crazy dragons, and then an army of concept artists brought them to life. But maybe they had some inspiration from somewhere else? Like classic album-cover artist Roger Dean?
Behold the evidence.
Chances are, if you've looked at a weirdshistic record cover by Yes, Asia or other bands, you've admired Roger Dean's paintings of surreal landscapes. If you've ever seen all good people turn their heads each day, then you're already a Dean fan.
Connor Freff Cochran, founder of Conlan Press (which is busy putting out a bunch of Peter S. Beagle books, hosting Beagle's 52/50 poetry subscription service, and putting out art books) contacted us and suggested that Avatar's lush moon might have gained some inspiration from Dean. And when you look at Dean's artwork and compare it to the concept art we posted the other day, it's hard not to see the resemblance.
All of this makes me want to rent Avatar (when it's released on DVD) and see if I can sync it up with YesSongs.
For All Its Success, Will ‘Avatar’ Change the Industry?
Just five months after Warner Brothers released its talking-picture sensation “The Jazz Singer” in October 1927, the studio was back in theaters with another talkie, the crime drama “Tenderloin.”
In today’s Hollywood, things take a little longer.
Even as James Cameron’s science-fiction epic “Avatar” continues to dazzle the audience with its visual wizardry, filmmakers and studios are struggling to figure out when, if ever, viewers can expect an equally striking on-screen experience. With its combination of immersive 3-D images and a sophisticated performance-capture technology, the movie has, as of Sunday, taken in $1.3 billion in worldwide ticket sales, much of it from 3-D screens.
Asked last week if any similarly ambitious film were in the works, Alec Shapiro, senior vice-president for sales and marketing of Sony Corporation’s content creation group, whose digital cameras were used on “Avatar,” was stumped. “Not to my knowledge,” he said. “I can’t, offhand, see another half-billion-dollar production.”
Mr. Cameron and his producing partner, Jon Landau, have talked of possible sequels to “Avatar.” But 20th Century Fox, which distributed the movie and helped underwrite production and marketing costs of about $460 million, has yet to announce plans for any successor to a film that was at least 15 years in the making.
In a research report published by Barclays Capital on Wednesday, Anthony J. DiClemente and George L. Hawkey called “Avatar” an “outlier”: a unique event that leaves the business environment around it largely intact.
“While ‘Avatar’ is likely a watershed for digital and 3-D technology,” they wrote, “it does not tell us that the underlying economics of the film business have changed.”
Mr. DiClemente and Mr. Hawkey predicted that “Avatar” would be a moneymaker, though they do not expect imitators anytime soon. In a detailed financial model of the film, they estimated that Fox and its partners would see slightly more than $1 billion in pretax profit from their investment in “Avatar.”
As for cinematic technology, the achievement of “Avatar” was not so much a single leap — like the one from silent film to sound — as an integration of complex filmmaking systems that allowed Mr. Cameron to combine live actors and computer animation in a relatively seamless, and believable, blend of fantasy and the real world. Critics and audiences noted a qualitative difference between what they saw on the screen in “Avatar” and what they saw in other recent films that used 3-D or motion-capture technology.
At its core was a 3-D “virtual” camera, developed by Mr. Cameron in partnership with the effects expert Vince Pace. The camera and its rigging systems allow a director to view actors within a computer-generated virtual environment, even as they are working on a “performance-capture” set that may have little apparent relationship to what appears on the screen.
Among the next films to use the same system will be “Tron: Legacy,” a cyberspace adventure due from the director Joseph Kosinski and Walt Disney this December. Another is “The Adventures of Tintin: Secret of the Unicorn,” directed by Steven Spielberg and set for release by Paramount Pictures and Sony Pictures in late 2011.
But it is not clear, for instance, that Mr. Spielberg’s use of the technology — and reliance on Weta Digital, the company made famous by Peter Jackson and that produced the effects for “Avatar” — will strike viewers in the same way as Mr. Cameron’s fantasy moon and blue aliens.
“We can’t talk about what it’s going to look like, because that process goes on for another two years, practically,” said Marvin Levy, Mr. Spielberg’s longtime spokesman.
(“A Christmas Carol” from the filmmaker Robert Zemeckis used motion capture and 3-D technology, but looked wholly different from “Avatar” and took in just $137 million in domestic theaters after Walt Disney released it in early November.)
So far, Guillermo del Toro, who is expected to direct the first of a two-part fantasy series based on “The Hobbit” for release in 2012, has stuck with a plan to film that movie with more conventional, 2-D techniques, even though Mr. Jackson — a powerful force behind both “Avatar” and “Tintin” — is among his producers.
Executives of Warner’s New Line Cinema unit, one of the studios behind the project, have in the past said that they believed that 2-D would be well suited to the sense of intimacy they anticipated from “The Hobbit” and its fantasy universe — and nothing about “Avatar” appears to have changed that plan.
Still, some filmmakers were sufficiently inspired, or jolted, by “Avatar” to shift gears. Shortly after seeing “Avatar” last month, for instance, Bryan Singer, who in the past directed summer blockbusters like “X-Men” and “Superman Returns,” asked New Line to consider using 3-D in filming his planned fantasy “Jack the Giant Killer.” The debate continues, according to people who have been briefed on the matter and spoke on condition of anonymity because of studio policy.
Katie Martin Kelley, a spokeswoman for Paramount, said that studio had made no decision about whether its planned “Transformers” and “Star Trek” sequels would make the leap to 3-D, possibly giving the audience another sampling of the kind of immersive world devised by Mr. Cameron.
Michael Bay, whose third “Transformers” film is set for release in July of next year, declined to be interviewed about his plans.
J. J. Abrams, who is developing another “Star Trek” film to be shot in the next couple of years, also declined to be interviewed about his plans for that franchise. But Paramount executives have already begun debating whether to shoot the next film in 3-D, even if that increases the cost and production difficulty, according to one person who was briefed on the talks but spoke on condition of anonymity because he was not authorized to comment.
Asked whether he would consider making a movie on the scale of “Avatar,” Brad Grey, the chairman of Paramount, said in an interview in early December, “With a lot of sleepless nights, I guess I would.”
But the “Transformers” and “Star Trek” sequels are at least a year and a half away. And a new “Spider-Man” episode is not due until 2012, now that Sony Pictures has canceled a planned fourth installment from the director Sam Raimi and the star Tobey Maguire, choosing instead to focus on a reinvention of the series, with a new director and cast.
That leaves a long stretch during which moviegoers, tantalized by “Avatar,” will be watching fantasy films like “Iron Man 2” from Marvel Entertainment and Paramount or “Jonah Hex” from Warner and Legendary Pictures, neither of which is as technologically ambitious as Mr. Cameron’s recent film.
Speaking by telephone last week, Mr. Landau said the “Avatar” innovations were perfectly suited to prospective projects like “Battle Angel,” a film that is based on a Japanese comic and that has been in development for Mr. Cameron to direct at Fox.
While he and Mr. Cameron have not settled on their next project, Mr. Landau said he believed a new, “Avatar”-like film could now be made in no more than the two years or so it takes to produce many effects-driven films, and for no more expense.
Asked how quickly the next such movie might arrive, Mr. Landau said, “I hope sooner, rather than later, and not just from us.”
Angry Fisk of Rightwing Thinktank for Entertainment Purposes
Dear Dr Oliver Hartwich, research fellow at the Centre for Independent Studies: You, sir, are a grossly ignorant douche.
It's a nice concept for an op-ed, the idea that the pornography industry is a hotbed of innovation. It must have even seemed nicer, when you had the genius idea of attaching "social improvement" to the end of that sentence. It allows you to talk about porn, *and* about how every slither of capitalism is awesome.
Shame that you don't know what you're talking about.
On Monday the [Sydney Morning] Herald reported from the Consumer Electronics Show in Las Vegas where 3D porn was the hot issue for technology geeks this year. A porn actress, who had just starred in one of the industry's first 3D films, was quoted as being ''very excited'' to pioneer this new field. She should be. Once again, the porn industry turns out to be a force for good - unintentionally.
Schools will use new 3D television techniques to teach. Imagine how geography lessons will come alive if classes can virtually wander in faraway places using 3D glasses. Physics and chemistry experiments too dangerous or complicated for classrooms could also be shown on a 3D screen.
You know that 3D television is just an optical illusion, right? If there's a 3D porn star facing you on the 3D television, you can't go behind the TV and see her ass. Likewise, 3D glasses won't allow you wander virtually in a 3D world. An ability to explore in the third dimension requires the information to be stored in 3D. Such technology won't be available until well into the distant future, in a world where America has a black president, and where electricity is as common as running water.
Did you even Google "3D maps"? What decade are you living in that 3D maps have to be "imagined"?
And have you even been to school? What kind of physics or chemistry experiments are better understood with 3D video than with 2D video? Is looking at a beaker in 3D more informative than seeing it in 2D? Are you going to illustrate projectile motion experiments with "OMG – it's coming right at you! (thus making it virtually impossible to see what it's actually doing)"?
If experiments are too dangerous to perform in schools, how can students see them? WITH VIDEOS!! BECAUSE THAT'S WHAT 3D VIDEOS ARE. **VIDEOS**!!
Before you and your thinktank declare 3D television to be porn's gift to children, you ought to have a clue about what it actually is. 3D television adds fake depth perception. So does drawing shadows and shades. It's pretty cool as an experience, but it adds very little information.
Should the parents of the future wish to thank the brains behind these teaching improvements, they would be surprised. Far from being the result of some philanthropic engagement, the new technologies will have been conceived not in an ivory tower but as a byproduct of the sex industry."
You, sir, are just plain making shit up.
Do you have any factual basis to claim that 3D television is somehow there because of the porn industry? That it was even developed by the porn industry?
The porn industry buys 3D equipment. Great. But rather than crediting people who use the technology with its development, perhaps you should credit the people who developed the technology for its development? Maybe? Just a little?
You've given porn credit for a technology that it didn't invent or create, you've claimed that the technology can do things that it can't (while other technologies have been doing those things for a decade), and then you've claimed that because porn brought such miraculous gifts into the world, and because it's greedy, therefore greed is a bringer of gifts into the world.
No, I think you've just made a case for greed being 3D.
And then, you said:
That lazy government officials could be preferable was demonstrated nicely in Hong Kong. When it was still a British crown colony, its financial secretary, Sir John Cowperthwaite could not be bothered collecting extensive statistics; he just kept taxes low and regulation to a minimum. Whether this was genius or just plain laziness, it definitely helped to make Hong Kong one of the most prosperous places on the planet."
Maybe the massive influx of capital, skilled and unskilled labour was significant too? Maybe people didn't move to Hong Kong for the low taxes and the liberal regulatory regime, but for the absence of a civil war and a cultural revolution? Maybe? Just a little?
Dr Oliver Hartwich, research fellow at the Centre for Independent Studies, you and your organisation claim to champion innovation and enterprise, but you show utter indifference to the science, technology and reality on which innovation and enterprises is built.
Or, you're a mole who've just done a fantastic job of discrediting the CIS.
Here We Go Again: Video Standards War 2010
Think of the words "standards war," and unless you're a standards wonk like m...oh, never mind...you're likely to think of the battle between the Betamax and VHS video tape formats. That's because videos are consumer products that just about everyone uses, and therefore the bloodshed in that standards war was not only shed in public view, but the some of the blood that was shed was shed by the public (i.e., those that bought video players supporting Betamax, the losing, but arguably superior, format). Fast forward (pun intended) to the present, and the trademarks "HD DVD and "Blu-ray" may ring a bell - and that's no coincidence.
Why? Because different industries have different business models and strategies that involve standards, and these often perpetuate over time - decades, in this case. In the case of the consumer electronics sector, that culture has too often been one of a patent-based, winner take all effort to cash in big time while your competitors take it on the chin. And it's not just media formats, either. As I noted in a blog entry a few weeks ago, we're seeing the same type of behavior in eBook readers. Since there's only one market, and the market demands one format to win in the end, that means that the camp that owns the bundle of patents underlying the winning format standard wins a bonanza.
Why? because the losers must pay through the nose for the license rights to build the players that implement the format standard that wins. The winners, on the other time win twice: once, by receiving the royalties, and again, because their own players have a lower cost to produce, because they don't have to pay royalties to themselves.
So guess what? Here we go again, but with a bit of a twist this time.
One thing that is different this time around is that it's the content owners, and not the consumer electronics firms that are pushing hard for a solution, so it's not patent royalties and the ability to sell a new generation of electronic devices that is driving the action.
Instead, what's involved are two different approaches intended to help content vendors somehow survive in the face of plummeting revenues and a continuing plague of piracy while allowing legal content owners to watch videos on whatever device they want, wherever and whenever they want, without having to carry around the original media on which they purchased, for example, a movie.
That's a hard problem to solve. If the content vendor wants to protect itself by using "Digital Rights Management" (DRM) technology to prevent you from sharing a single purchase with your 1,000 closest friends, it may also add a feature that may prevent you from transferring the same movie to your laptop as well, and especially if you download the video, rather than buying it on fixed media. Yes, the technology is getting more sophisticated, allowing you to perhaps copy a video or music download (or a copy of Word or an eBook, for that matter) to an approved number of devices, or share it with a certain number of friends, but that still isn't the same as being able to use your purchase as you wish without thinking about it.
That's becoming more of an issue, because as consumers get more and more used to listening and watching content on more types of devices, they become more and more unhappy about having their freedom to make use of their purchase as they wish restricted. As a result, they may be more likely to opt for an illegal copy than a legal one. Meanwhile, broadband Internet services have now become widespread enough that streaming media has become widely feasible, so "cloud" hosting of your purchases has become practical as well, so there are even more reasons why you'd like to be able to watch that video on every device with a screen you own. Finally, with the advent of MP3 downloads, a whole generation of consumers is quite comfortable with never purchasing music or videos on fixed media at all.
In the face of this reality, the industry has come up with a pretty practical solution: pay once for a video, and the seller will track your ownership for you, and make that information available to anyone who hosts the same content anywhere. If you're in a hotel, say, and want to watch a video you've already purchased, the video service provider for that hotel can just check your record to see if you've already purchased it, instantaneously and invisibly. If you have, then you're good to go. Or, of you're sitting in an airport, just log on to the Internet and watch it on line.
Pretty neat solution, if you think about it. But how to make it happen?
That's where the standards war, or in this case, a variation on the theme comes up. In one camp, we see a several years old alliance called the Digital Entertainment Content Ecosystem, or DECE, which includes five out of six of the major movie studies (Warner Brothers, Paramount, NBC Universal, Sony and Fox), together with an impressive array of players in almost all of the affected sectors: software and hardware companies (e.g., Microsoft, Intel and Cisco), consumer electronics vendors (Sony, also a content owner), mobile device vendors (like Motorola and Apple, cable companies (including Comcast, Cox Communications and Liberty Global) and video and player distributors (e.g., Netflix, and Best Buy).
That's a pretty imposing lineup, by any measure, and I can vouch from personal experience that this represents quite an accomplishment. Why? Because each of these companies had to be convinced by the founders that DECE would make money for them, that the project was viable, and that they should support this approach rather than another, or be content to just sit on the sidelines and watch what happened before making a commitment.
This week at the mammoth Consumer Electronics Show in Las Vegas, DECE announced 21 new members, as well as the fact that its members have agreed on the format specification they will use to enable the program (so far, it will support Adobe's Flash Access, CMLA-OMA, Marlin, Microsoft's PlayReady and Widevine). The "digital rights locker" that will hold purchaser data will be hosted by a company called Neustar, which is developing the backend software now.
And in the other camp? Well, to start with, there is the remaining major studio: Disney. And then there's, well, maybe nobody. But everyone's expectation is that Disney's partner in combat is Apple, which has not joined the other group. Apple Stever Jobs, incidentally, remains Disney's largest single shareholder, as a result of the sale of Pixar to Disney (Amazon is also notable by its absence from the DECE member roster). According to one report, the Disney plan may rely on an Apple approach called MobileMe. Disney also made an announcement last week at CES, saying that it would take KeyChest live before the end of the year, and would announce other participating companies shortly.
In principle, the approaches are somewhat similar, but technically each takes a different in approach. The similarity is that each is based upon a "digital rights locker," or central repository of purchaser data. In the case of Disney, that repository is called the "KeyChest."
After that point, however, the two approaches diverge. In the case of the Disney approach, existing standards will be used to make the system work. But in the case of DECE, both content and devices will need to implement a new format standard created by DECE. And while the DECE format will rely on DRM, the KeyChest system will not - or not necessarily, anyway. But it isn't incompatible with DRM, either, so a content vendor can still add DRM features to the content that it sells. And, of course, just like DECE, the Disney approach will only work with download services that decide to particpate in the KeyChest program.
Why have two different approaches at all? I expect that there are multiple reasons, but from what I've read, one is that the DECE approach is intended to make it more likely that consumers will want to buy, rather than merely rent, new videos, while the Disney approach will work well with rentals, which some think will be the wave of the future..
The fact that Disney is pushing a different technology doesn't make this a standards war from a purely technical sense, because Disney stresses that its approach would be compatible with DECE. Unfortunately, it comes out the same way, because for a new standard like DECE to succeed, it almost has to become universally adopted. The fact that Apple, which has soundly thumped the content owners with its iTunes store, isn't in the DECE camp has that group concerned, because if Disney and Apple don't actively implement DECE, then content purchasers may never get on board the DECE bus. After all, if Apple and Disney don't implement DECE, then someone buying DECE compliant content won't be able to fully take advantage of DECE's portability on. And if consumers don't demand DECE, then why bother to implement it at all?
So there we are. With the multiyear HD DVD Blu-ray battle still a recent memory, we have a new standards face off in video, just as we do in eBooks, and just as it looks like we may in on-line print, where a new consortium led by the News Corporation and others is launching a standards-based "digital newsstand." All of these devices, of course, are targeted at you and I, and each has the potential to not only extend the woes of the music/video/print vendors behind these standards battles, but to waste your money and mine as well.
Does that strike you as a shame? Me to.
So if you've still got a Betamax in the back of your closet, you might want to finally throw it out. After all, you may be needing the storage space soon for yet another wave of consumer electronic equipment that has been rendered obsolete by a needless standards war.
12 Hour Battery Life in a High-End Laptop? Asus Says Yes
High-end laptops usually have low battery life, but ASUS showed a new laptop at CES packing a high-end GeForce GPU and a low-power Intel IGP...and choosing on its own which one to use at any given moment. The claimed results are dramatic.
An ASUS laptop quietly on display at CES packed two GPUs, a high-end NVIDIA GeForce 310, and a humble Intel GMA... and intelligently switched, second-by-second, between them. The UL80JT can also re-clock its Intel Core i7 CPU on a second-by-second basis. The result of all this micromanagement: miraculous 12-hour battery life in a high-end laptop, available later this year for just over $1,000.
Laptop design is at least partially a tradeoff between components and battery life; laptops jammed with high-end components last an hour or two, while power-sipping netbooks can last all day. ASUS is trying to close the gap by allowing its laptops to decide how much power is needed and spend their power budgets more intelligently.
Apple's solution for dual GPUs on the Macbook Pro requires the user to change settings under "Energy Saver," which is counterintuitive and makes you log out in order to switch. It wouldn't surprise us if owners never use this feature.
ASUS's solution is different because it's user-transparent; even a novice user will get the fullest possible benefit because the laptop itself is deciding when to switch.
The same principle applies to the dynamic CPU clocking. ASUS includes a desktop widget to track CPU clock speed. While using the UL80JT, I could see it moving up and down with what I did—up with program openings and CPU-intensive processes, and way down at idle. Between the GPU switching, dynamic clocking, and ASUS's other power management features, the UL80JT manages to consume less than half as much power as the unibody Macbook while browsing.
When it needs to, though, the UL80JT can call on all the resources of a dual-core i7 and NVIDIA's latest GPU, holding its own with similarly-specced laptops achieving a fraction of its battery life in casual use. For ASUS, the optimizations involved in battery life planning have really paid off, liberating the user from the choice between performance and battery life in the laptop purchasing decision.
Your Guide to Cutting the Cord to Cable TV
From time to time, I'll give an overview of one broad MediaShift topic, annotated with online resources and plenty of tips. The idea is to help you understand the topic, learn the jargon, and take action. I previously covered Twitter, citizen journalism, and alternative models for newspapers, among other topics. This week I look at cutting the cord to cable (or satellite) TV and watching TV content online.
Anyone who gets cable TV or satellite in the U.S. has noticed a pronounced trend over the years: their monthly bill keeps going up. Sure, you can get lots of channels, plus HD channels and DVR functions, but those usually cost extra. According to research from Centris, the average digital cable bill was nearly $75 last year, and the average monthly satellite TV bill was $69.
What's causing those bills to skyrocket? A lack of competition among cable and satellite providers, and the rising costs of programming. The most recent programming dustup happened when News Corp. demanded carriage fees from Time Warner Cable, and settled before any channels were dropped. Time Warner is planning an upcoming rate hike. Like other traditional media, TV networks (both cable and broadcast) are being squeezed by lower advertising income, and think they can just keep raising the cable bills indefinitely.
Unfortunately for the cable TV industry, they've picked a bad time to raise their rates. Centris found in a separate report that due to the economic meltdown, eight percent of U.S. households were likely to cancel their pay TV in the third quarter of '09, and nearly half of households contacted TV providers for discounts or cheaper packages.
Thanks to the rise of Netflix, Hulu and hardware like the Roku box and Apple TV, cutting the cord to cable TV doesn't mean cutting yourself off from your favorite shows and channels. While past experiments at bringing together the web and TV (such as WebTV) have failed, the recent recession has pushed people to pursue their own convergence projects that enable them to watch web content on their TV. Depending on various living room setups and viewing habits, making the changeover from cable to online TV can be complex and maddening. But you're sure to save a bundle of money.
Hardware and Services
The first thing to do when cutting the cord is list the shows you watch regularly, and your favorite TV channels. Next, do a little online research to find out whether those shows appear on the channel's streaming sites (such as NBC.com, CBS.com, etc.) or on Hulu or YouTube. Many shows on pay channels such as HBO don't appear until much later, and usually must be bought via a service such as iTunes.
In addition to what's available online, you might be surprised at the quality of over-the-air broadcast channels since the digital switch-over last year. Many newer TVs only require an antenna to get local broadcast channels, while older TVs need a converter box, which runs from $40 to $80. Plus, some of the programming includes HD content. To find out which digital channels you can get over the airwaves, input your location at the AntennaWeb site.
(Note: Broadcasters recently announced at CES that they would be offering "mobile DTV" so that people could pick up digital broadcast TV on laptops, smartphones and tablets.)
Below is a rundown of some of the more important elements to enjoying TV content via the web. You won't need to get all of them but you can mix and match those that will get you what you need. Most cable quitters find they can get about 95 percent of the TV content they used to watch on cable via the various services below.
This is the box most cable quitters seem to like. It connects to your TV and your computer network, let's you watch Netflix streaming movies, and offers some free and pay options for additional content. It costs $79.99 for SD and $99.99 for an HD model.
It's basically a front-end device to iTunes, letting you download movies and music and play them through your TV. Problem: No TV tuner or DVR functionality.
Digital converter box
If you want to get the digital over-the-air stations in your area, you'll likely need an antenna for newer TVs or this box for older TVs. Cost: $40 to $80.
This small box connects your TV to an external hard drive, letting you play movies, TV shows, photos or music you have downloaded. The standard WD TV is about $79, while the WD TV Live that lets you watch Net content is $119.
It's a TV tuner for a Mac, letting you watch digital over-the-air channels on your Mac, or even on your iPhone with an extra $4.99 app. Cost: $149.95.
Netflix will let you play movies through your XBox 360 or PlayStation 3. There are also a wide variety of TV tuners and other devices that can turn game consoles into home entertainment systems.
Note: If you prefer simply connecting your computer directly to your TV set without any other hardware, you can do that, too. Here's a great video explaining how:
How To Connect Your Laptop To Your Television on Howcast
Services and Sites
The granddaddy of the DVD-by-mail services, Netflix has also become a huge entryway for people who want to dump cable and get TV shows later when they're available on DVD. Netflix also offers unlimited streaming of some movies and TV shows, which works well with a Roku box or other Netflix-ready devices. Cost: $8.99/month for 1 DVD plus unlimited streaming, with various higher cost plans for more DVDs.
The free U.S.-only TV show service is a joint venture between NBC Universal, Fox, and Disney. You are forced to watch commercials before and during TV shows and movies. While it has been an especially popular service for those dumping cable, there has been chatter that Hulu might charge for content at some point. Cost: Free (for now).
Apple's poorly named digital media buying service started out selling music downloads. Then it added a podcast directory, and now sells TV shows and rents/sells movies. Downloading TV shows at $1.99 per episode can get pricey, though there are discounted "Season Passes" and some limited free TV show offers.
The most popular video site on the web also can be accessed through various devices in order to view its content on your TV. These devices include the Nintendo Wii, PlayStation 3 and TiVo.
Amazon on Demand
Trying to compete with Netflix and iTunes, Amazon offers quick downloads of various TV shows at similar prices to iTunes. They are playable on Macs or PCs, or on devices that connect your computer to your TV.
Free software that helps you organize TV and movie content on your computer. Currently in beta, the Boxee software will soon come on a special Boxee Box from D-Link for under $200.
Windows software that lets you play Netflix, Hulu, YouTube, etc. from your computer on your TV via a PlayStation 3, Wii or XBox 360. Cost: $39.99 after 14-day free trial.
Popular free file-sharing software for people who trade TV show and movie files. You'll need to search your own conscience to decide whether to download copyrighted material from sites that utilize the torrent system.
Here are a few sample setups of people who get TV content without subscribing to cable.
Roku + Netflix and Amazon
Who: CancelCable.com bloggers
Setup: Roku box that plays Netflix and Amazon content; digital TV converter box.
Quote: "Since we need to be more proactive and select shows from Netflix or Hulu, we read a lot more reviews and tend to sit down and watch complete movies rather than just switching around hundreds of channels."
eyeTV + Mac Mini
Who: Dan Milbrath, product manager, San Francisco
Setup: eyeTV hybrid to get broadcast channels on a Mac Mini; projector for movies; Netflix.
Quote: "I'm intrigued by on-demand, online TV options like those being offered by Amazon and iTunes but I think the pricing is still a bit too steep. $1.99 for a one hour episode of 'Mad Men' is about double what I think they should charge."
AppleTV + PlayStation 3
Who: Leo Prieto, founder of online community Betazeta.com, Santiago, Chile
Setup: AppleTV with iTunes and Boxee; PlayStation 3 playing BitTorrent content, podcasts.
Quote: "I spend less than $30 a month on content, and it's all stuff I decided to watch (and not just 'what was on' or 'what I remembered to record on my DVR'). I also have Boxee on the Apple TV installed, which lets me access lots of public and free podcasts or web shows that aren't available on Apple TV (all free and legal)."
Hulu + laptop
Who: Carla King, author and tech editor, Pt. Richmond, Calif.
Setup: Laptop watching Hulu; uses projector for some movies on Netflix or iTunes.
Quote: "The availability of content of all kinds on the Internet is a terrible distraction for me from tasks at hand and health in general. Whereas before I could cancel my magazine subscriptions and choose not to buy cable TV to keep myself on task with personal and professional goals, I find that today I need to develop my willpower to the utmost."
For many people, the biggest barrier to canceling cable is the loss of live sports. While MLB.com has a package of games you can stream online, and CBS has offered a popular March Madness on Demand stream, many other leagues have been slow on the uptake. Plus, there are often restrictions and blackouts with some online season pass deals. For example, the NBA League Pass Broadband does not include nationally or locally televised games. So if you're living in Boston, you won't be able to see Celtics games online if they are also on TV at the same time (whether they are home or away).
The same goes for other live events, such as awards shows. "Mainly, live TV content is impossible," said Leo Prieto, who gave up cable in 2005. "And most of that live TV content isn't available to download on iTunes later. For example, the Oscars or some sports event. In that case I have to go to BitTorrent and get the show afterwards. I would love iTunes or YouTube to offer live content."
Multimedia reporter Sean Mussenden is also living the cable-free life, and says he believes TVs will eventually come with direct Internet capabilities. He had an interesting take on how his discovery of programs changed without cable.
"When you rely on cable, the easy access to thousands of shows tends to limit your willingness to explore further," he said. "But there are far more options for informative and/or entertaining content beyond cable. Not having having cable has made me more willing to explore. For example, at the moment I'm really enjoying watching talks on Ted.com and MIT's OpenCourseWare. I don't think I'd have discovered either of them if I still had cable."
In many cases, people who have canceled cable still get to see their favorite TV shows, but often much later than those with cable. If they can deal with being a bit behind, and don't mind the tech hassle of setting up a Net-to-TV connection with gear, they're often happy to save money and watch what they want.
Look Out, Pixar, Here Comes ‘Fantastic Mr. Fox’
Figuring out which film will win the Academy Award for best animated feature is usually the easiest part of filling out a ballot for your Oscar pool. Go down the list of nominees — often only three, because so few make the cut — and find the one produced by Pixar. Circle it.
But this year, unexpectedly, animation is becoming a hotly contested race.
The biggest reason is “Fantastic Mr. Fox,” Wes Anderson’s quirky adaptation of the Roald Dahl novel. The film, from 20th Century Fox and the producer Scott Rudin, is soaking up a surprising amount of awards attention.
“Up,” Pixar’s 3-D flying-house adventure, dominated the multiplexes last May and seemed to have the animation Oscar sewn up as recently as a few weeks ago. And it’s still the front-runner. The movie industry cooed that “Up,” Pixar’s sophisticated 10th feature, was another artistic triumph. Critics agreed, with review-aggregation Web sites suggesting that the studio’s campaign slogan for the film — “The Best Reviewed Film of the Year” — was only a (very) slight exaggeration.
Then a fox snuck into Pixar’s henhouse.
“Fantastic Mr. Fox,” which features the vocal talents of George Clooney and Meryl Streep in a story about a dapper family man who can’t resist stealing chickens and cider, arrived in wide release on Nov. 25. Despite stratospheric reviews, the holiday rush and a soft box office performance — it cost just under $40 million to produce and sold $20 million in tickets — made an Oscar run seem like a long shot.
But “Up,” which has been estimated to cost $175 million and cruised to a $293 million gross in North America, lost two influential awards to “Fox.”
In a mid-December surprise, both the New York Film Critics Circle and the Los Angeles Film Critics Association named “Fantastic Mr. Fox” the best animated movie of 2009. Similar awards from five other critics’ groups followed. The film is up for a Golden Globe on Sunday, as is “Up.”
“Nobody saw this coming,” said Jerry Beck, the author of 12 books on animation and an operator of the news blog CartoonBrew.com. “The animation in ‘Mr. Fox’ strikes some people as a bit funky, but the film is indisputably a piece of art — something that exhibits a really strong point of view from beginning to end.”
Many critics have been impressed that Mr. Anderson, whose other movies include “The Royal Tenenbaums” (2001) and “Rushmore” (1998) is thriving in a genre entirely new to him. “Fantastic Mr. Fox” was made using stop-motion animation, a painstaking process involving handmade models.
“It’s as if Wes finally found the perfect style through which to channel all of his obsessions,” said Scott Foundas, a former film critic for LA Weekly and now an associate programmer at the Film Society of Lincoln Center. “You can really see the fingerprints.”
The producers of “Fantastic Mr. Fox” say they are just happy that there appears to be room at the awards podium for different styles of animation. “Up” was computer generated, or CG, in industry shorthand. Yet another contender, “The Princess and the Frog,” from Walt Disney Pictures, is a hand-drawn throwback to the heyday of the genre.
“ ‘Up’ is a brilliant movie, but the great thing that this year has shown us is that animation is more than just CG and 3-D,” Mr. Rudin said. With Mr. Anderson’s film, he added, “You feel like you’re being dropped into this perfect, handcrafted dollhouse, except that the dolls are George Clooney and Meryl Streep.”
The Oscar race is just hitting its stride, of course. Nominations will be announced on Feb. 2 and the awards given on March 7. In only the second time since the animated feature category was created in 2001, there will be five nominees. In recent years there have been only three. Rules state that a minimum of 16 films must be submitted to warrant five slots.
And “Up,” directed by Pete Docter, remains very much the lead contender for the best animated feature Oscar, a prize Pixar has won four times. “Up” has so far taken top animated honors from 14 awards groups, including the National Board of Review. It is expected to do well at the Critics’ Choice Movie Awards on Friday.
Many awards strategists consider “Up” a strong candidate for a best picture nomination, especially with that field expanded to 10 nominees this year. No animated movie has ever won in that category, and only one, “Beauty and the Beast,” has been nominated.
Rich Ross, the chairman of Walt Disney Studios, which owns Pixar, said in a statement: “We’re extremely proud that ‘Up’ was the best reviewed film of the year, embraced by audiences all over the world, and elevated the art form by combining great storytelling, animation, and technological achievements.”
Another executive at Disney said there were no concerns about competition from “Fantastic Mr. Fox” in the animation category, partly because the Los Angeles and New York critics’ groups have weakened as indicators. “It’s not even a contest,” said the executive, who spoke on the condition of anonymity because he did not have clearance to speak publicly.
Even so, Disney and Pixar may have their hands full. Aside from the unexpected competition from “Fantastic Mr. Fox,” there is “Ponyo,” an odd but haunting film from Hayao Miyazaki, the Japanese anime master whose “Spirited Away” won in 2002. Other prominent contenders are Universal’s “Coraline” and Sony’s “Cloudy With a Chance of Meatballs.”
There is a history of the academy recognizing the small and arty, awarding the top animation prize in 2005 to the stop-motion “Wallace & Gromit in the Curse of the Were-Rabbit.” And the little-engine-that-could factor is against Pixar. “To an extent ‘Fantastic Mr. Fox’ is benefitting from being the underdog,” Mr. Foundas said. Liccy Dahl, Roald Dahl’s widow, said she was tickled that “Fantastic Mr. Fox” was succeeding on the awards trail. Mr. Anderson spent three weeks at her home in Buckinghamshire, England, working on the script, incorporating details like the kitchen floor and lamp shades into the production design.
“What I love about the film is the sense of humor — it’s so Wes Anderson,” she said.
A demure Mr. Anderson credited his creative team in a telephone interview, saying he was thrilled about the attention but that he never gave much thought to how the animation could serve his style.
“I was always just thinking about Roald Dahl,” he said. “How do we make this movie seem like it’s happening inside his imagination?”
Eric Rohmer, a Leading Filmmaker of the French New Wave, Dies at 89
Eric Rohmer, the French critic and filmmaker who was one of the founding figures of the French New Wave and the director of more than 50 films, including the Oscar-nominated “My Night at Maud’s,” died on Monday in Paris. He was 89.
His producer, Margaret Menegoz, confirmed his death, which took place at a Paris hospital, but provided no other details.
Aesthetically, Mr. Rohmer was perhaps the most conservative member of the New Wave, the internationally influential movement led by a group of aggressive young critics, among them Jean-Luc Godard and François Truffaut, who parlayed their writings for publications like Arts and Les Cahiers du Cinéma into careers as filmmakers beginning in the late 1950s.
A former novelist and teacher of French and German literature, Mr. Rohmer emphasized the spoken and written word in his films at a time when tastes — thanks in no small part to his own pioneering writing on Alfred Hitchcock and Howard Hawks — had begun to shift from literary adaptations to genre films grounded in strong visual styles.
In a statement Monday, President Nicolas Sarkozy of France said of Mr. Rohmer, “Classic and romantic, wise and iconoclastic, light and serious, sentimental and moralistic, he created the ‘Rohmer’ style, which will outlive him.”
Mr. Rohmer’s most famous film in America remains “My Night at Maud’s,” a 1969 black-and-white feature set in the grim industrial city of Clermont-Ferrand. It tells the story of a shy young engineer (Jean-Louis Trintignant) who passes a snowbound evening in the home of his best friend’s lover, an attractive, free-thinking divorcée (Françoise Fabian).
The conversation, filmed by Mr. Rohmer in a series of unobtrusively composed long takes, covers philosophy, religion and morality, and while the flow of words takes on a distinctly seductive subtext at times, the encounter ends without a physical consummation. But the pair form a bond that movingly re-emerges five years later, when they meet again in a brief postscript that closes the film.
“My Night at Maud’s” was the third title in his “Six Moral Tales,” a series of films that Mr. Rohmer began in 1963, though for economic reasons it was the fourth to be filmed. In each of the six films, a man who is married or committed to a woman finds himself tempted to stray but is ultimately able to resist. His films are as much about what does not happen between his characters as what does, a tendency that enchanted critics as often as it drove audience members to distraction.
“I saw a Rohmer movie once,” observes Gene Hackman’s character in Arthur Penn’s “Night Moves” (1975). “It was kind of like watching paint dry.”
On the set, Mr. Rohmer, tall, with piercing blue eyes, was a quiet, intensely absorbed director presiding over a hushed atmosphere, his crews and actors engaging in little of the chatter common on other film projects.
In his private life, Mr. Rohmer was reclusive if not secretive. “Eric Rohmer” was in fact a pseudonym, one of several that he experimented with early in his career. According to Who’s Who in France, he was born Maurice Henri Joseph Schérer in Tulle, a city in southwestern France, on March 21, 1920; other sources give his birth name as Jean-Marie Maurice Schérer and place his origins in the northeastern city of Nancy.
After publishing the novel “Elisabeth” under the name Gilbert Cordier, he moved to Paris in 1950 and began frequenting the ciné-clubs of the Latin Quarter, making the acquaintance of four other young cinephiles with whom his career would remain intertwined: Godard, Truffaut, Claude Chabrol and Jacques Rivette. With Mr. Rivette he founded a short-lived film magazine, La Revue du Cinéma. When that initiative collapsed after five issues, he joined the reviewing staff of Les Cahiers du Cinéma, a publication that acquired a fashionable notoriety for the violently iconoclastic reviews of the young Truffaut.
In 1952 Mr. Rohmer made his first attempt to direct a feature film, to be titled “Les Petites Filles Modèles,” but the project was abandoned when its producer declared bankruptcy. No footage is known to exist. Not until his Cahiers colleagues began to enjoy a measure of success as filmmakers — the term Nouvelle Vague (New Wave) was coined by a journalist for L’Express in 1957 — was Mr. Rohmer able to mount another long-form production. But “Le Signe du Lion” (“The Sign of Leo,” 1959), a moody tale of an American expatriate who finds himself down and out in Paris, did not capture the public imagination the way Truffaut’s “400 Blows” and Godard’s “Breathless” did, and Mr. Rohmer returned to editing Cahiers, a job he held until 1963.
His real breakthrough came in 1962 with the 26-minute short “La Boulangère de Monceau” (“The Bakery Girl of Monceau”). Filmed in 16-millimeter black and white, it was the first of the “Six Moral Tales,” based on fictional sketches he had written, he later said, long before he dreamed of becoming a filmmaker.
After a second short film, “La Carrière de Suzanne“ (“Suzanne’s Career,” 1963), Mr. Rohmer returned to the feature-length format with “La Collectionneuse” (“The Collector,” 1967), the fourth episode of the series but the third to be filmed. The story of a young woman (Haydée Politoff) who systematically collects lovers, the film won the Silver Bear at the Berlin Film Festival and restored Mr. Rohmer’s place in the front rank of the New Wave. The series continued with three more features: “My Night at Maud’s,” “Claire’s Knee” (1970) and “Chloe in the Afternoon” (1972).
After experimenting with two stylized period films, “The Marquise of O... ” (1976) and “Percival le Gallois” (1978), Mr. Rohmer initiated a new series, “Comedies and Proverbs,” in 1981 with “La Femme de l’Aviateur” (“The Aviator’s Wife”). The six films in this group illustrated traditional sayings or quotations from celebrated authors, from La Fontaine to Rimbaud, were largely built around the flirtations and fickle emotions of young people, and incorporated, notably in “Le Rayon Vert” (“Summer,” 1986), a new element of improvisation.
Mr. Rohmer undertook a final series, “Tales of the Four Seasons,” with “Conte de Printemps” (“The Spring Tale”) in 1990, this time providing a philosophical love story for each season of the year. The series ended with the exquisite “Conte d’Automne” in 1998, in which Mr. Rohmer moved beyond his focus on youth to tell a movingly autumnal story of a widow (Béatrice Romand) with a teenage son who finds love in an unexpected place.
Mr. Rohmer’s late career found him moving happily among small projects for television (including “L’Arbre, le Maire et la Médiathèque,” or “The Tree, the Mayor and the Mediathèque,” 1993), an early experiment with digital technology (“The Lady and the Duke,” 2001), and a true-life spy story (“Triple Agent,” 2004). His final theatrical film was the 2007 “Astrée and Céladon,” a retelling of a 17th-century love story with magical overtones, filmed in a self-consciously academic style that suggested the paintings of Poussin and Fragonard.
Among his survivors is a younger brother, the philosopher René Schérer. His producer, Ms. Menegoz, said Mr. Rohmer was also survived by his wife and two sons, but she declined to reveal their names. “You understand he was very intent on keeping his personal and professional life separate from each other,” she said.
In opposition both to the intensely personal, confessional tone of much of the work of Truffaut and to the politically provocative films of Godard, Mr. Rohmer remained true to a restrained, rationalist aesthetic, close to the principles of the 18th-century thinkers whose words he frequently cited in his movies. And yet Mr. Rohmer’s work was warmed by an undercurrent of romanticism and erotic yearning, made perhaps all the more affecting for never quite breaking through the surface of his elegant, orderly films.
Nadim Audi contributed reporting from Paris.
New Jimi Hendrix Album to be Released
Cream and Elmore James covers included in unreleased studio album
A new Jimi Hendrix album featuring a host of unreleased studio material is to be released on March 8.
Tracks featured on 'Valleys Of Neptune', which is produced by Hendrix's stepsister Janie, along with John McDermott and Eddie Kramer, include covers of Cream's 'Sunshine Of Your Love' and Elmore James' 'Bleeding Heart'.
The original version of The Jimi Hendrix Experience rendition of 'Hear My Train A Comin'', along with alternate cuts of 'Ships Passing Through The Night' and 'Lullaby For The Summer' are also included on the album, which was recorded at several studios in London and the US between 1968 and 1970.
Janie Hendrix said that the album offers a "deep insight into [Jimi's] mastery of the recording process and demonstrates the fact that he was as unparalleled a recording innovator as he was a guitarist."
The tracklisting for 'Valleys of Neptune' is:
'Valleys Of Neptune'
'Hear My Train A Comin’'
'Mr. Bad Luck'
'Sunshine Of Your Love'
'Ships Passing Through The Night'
'Lullaby For The Summer'
'Crying Blue Rain'
Susan Boyle Continues To Dominate Sales
2009 was a year that saw huge album sales from Lady Gaga, Kings Of Leon and Taylor Swift, yet Britain's Got Talent star Susan Boyle still managed to score the biggest selling album of the year, even though I Dreamed A Dream did not come out until November 23. This week, Boyle's album continues to hold the #1 spot in the U.S. for the sixth consecutive week with another 136,000 copies sold, bringing the total to 3.1 million copies sold in the U.S. to date, according to Nielsen SoundScan. Internationally, Boyle's album is also #1 again on the charts in Australia, New Zealand and the Netherlands. I Dreamed A Dream and Boyle have broken a number of records worldwide over the past six weeks, including being the first artist in the Billboard 200's 53-year chart history to enter the list at #1 with a debut album and spend six consecutive weeks at the summit; the largest-ever debut for a female artist in the SoundScan era; the fastest selling global female debut; and the only 2009 release to hold the #1 spot consecutively for six weeks.
With no other new releases dropping in the final week of 2009, the rest of the Top 10 consisted of the usual suspects, all of whom experienced a post-Christmas sales drop. Lady Gaga's Fame landed at #2 with 82,000 sold, followed by Alicia Keys' The Element of Freedom, which moved 79,800 copies. At #4 is Mary J. Blige's Stronger, selling 62,000, and #5 is Taylor Swift's Fearless, selling another 60,000. Justin Bieber's My World sits at #6 with 52,000, the soundtrack to Alvin and the Chipmunks: The Squeakquel holds down #7 with 51,000, and the Black Eyed Peas' The E.N.D. is in the #8 spot with 47,000. Lady Gaga appears in the Top 10 again as her Fame Monster EP is at #9 with another 44,200 copies sold, and Owl City's Ocean Eyes is in the #10 slot with 44,100.
Can iTunes.com Continue Its Music Monopoly in 2010?
On January 9th, 2001, Apple Inc. introduced iTunes to the world. In 9 years of existence, Apple's iTunes has sold over 8 billion songs, accounting for 70% of all worldwide music sales - thereby making the site the largest online music retailer.
Despite the outrageous numbers, 2009 was not a good year for music sales in general, and/or for Apple's subsidiary in particular. The iTunes online music sales have dropped steadily, specifically since the company raised prices from $0.99/song to $1.29/song leaving many to speculate that the music site may lose their global monopoly by the end of 2010 to smaller sites offering the same exact music for a fraction of the cost.
As an example of potential competition, TunesPro.com has become an increasingly popular alternative for its unusually low prices - selling individual songs for 19cents while full-albums average around $1.50 - with additional discounts and price incentives for multiple purchases.
TunesPro.com, a buy music online site, has been on a mission to compete with iTunes & Napster by providing consumers an affordable alternative by offering the same exact music for a fraction of the cost. "Why pay $1.29/song when you can download the same exact music for $0.19 cents," asks Peter Richards, a DJ working in the NY party circuit.
According to TunesPro management, "the low prices are what originally what aroused clients - but the DRM-Free content that is 'delivered on demand' allowing consumers to playback their music on all tangible formats (iPod, iPhone, Laptops) is ultimately what keeps clients returning."
Official numbers released last week by Nielsen SoundScan report indicate that the total sales for digital and physical albums in 2009 declined to 373.9 million units, a 14% reduction from the 2008 fiscal year. Overall, the numbers are less than half of what they were in 2000 — when album sales peaked at 785.1 million units.
The media industry's "question of the year" asks if lowering prices in 2010 will ultimately increase both music sales and profits, and if so what does that mean for sites like iTunes who charge $1.29 per song against sites like TunesPro.com who sell the same exact music for $0.19?
Body Scanners Can Store, Send Images, Group Says
Jeanne Meserve and Mike M. Ahlers
A privacy group says the Transportation Security Administration is misleading the public with claims that full-body scanners at airports cannot store or send their graphic images.
The TSA specified in 2008 documents that the machines must have image storage and sending abilities, the Washington-based Electronic Privacy Information Center (EPIC) said.
In the documents, obtained by the privacy group and provided to CNN, the TSA specifies that the body scanners it purchases must have the ability to store and send images when in "test mode."
That requirement leaves open the possibility the machines -- which can see beneath people's clothing -- can be abused by TSA insiders and hacked by outsiders, said EPIC Executive Director Marc Rotenberg.
EPIC, a public-interest group focused on privacy and civil rights, obtained the technical specifications and vendor contracts through a Freedom of Information Act lawsuit.
The written requirements also appear to contradict numerous assurances the TSA has given the public about the machines' privacy protections.
"The machines have zero storage capability," the TSA Web site says.
And the TSA has distributed numerous news releases with similar language as it lobbies for public acceptance of the machines as a less intrusive alternative to pat-downs.
A TSA official who spoke on condition of anonymity because the official is not authorized to speak on the record said all full-body scanners have "strong privacy protections in place" and are delivered to airports "without the capability to store, print or transmit images."
"There is no way for someone in the airport environment to put the machine into the test mode," the official said, adding that test mode can be enabled only in TSA test facilities. But the official declined to say whether activating test mode requires additional hardware, software or simply additional knowledge of how the machines operate.
The controversy arises as the TSA is promoting the machines as a possible way to prevent assaults on U.S. airliners, such as the Christmas attempt on Northwest Flight 253.
About 40 machines are already in use at 19 airports, and the TSA says it will deploy 150 more nationwide this year, while appropriating money for an additional 300 machines for 2011.
"I don't think the TSA has been forthcoming with the American public about the true capability of these devices," EPIC's Rotenberg said. "They've done a bunch of very slick promotions where they show people -- including journalists -- going through the devices. And then they reassure people, based on the images that have been produced, that there's not any privacy concerns.
"But if you look at the actual technical specifications and you read the vendor contracts, you come to understand that these machines are capable of doing far more than the TSA has let on," he said.
The TSA should suspend further deployment of the machines until privacy and security questions are resolved, Rotenberg said.
TSA officials say they have taken sufficient measures to protect privacy.
The TSA officer viewing the image cannot see the actual passenger. No cameras, cell phones or other devices capable of capturing an image are allowed in the room where the image is displayed, according to the TSA. The agency adds that images are deleted from the system after the operator reviews them. And employees who misuse the machines are subject to serious discipline or removal.
Further, the TSA says, the machines are not networked and cannot be hacked.
EPIC said it is pursuing a lawsuit to obtain additional documents about the machines from the TSA.
Pirate Party Protests 'Naked' Scanners in Their Underpants
Scantily clad Pirate Party supporters demonstrated over the weekend at several German airports to show their opposition to controversial “naked” scanners planned for security checks.
Scantily clad Pirate Party supporters demonstrated over the weekend at several German airports to show their opposition to controversial “naked” scanners planned for security checks.
Despite the frigid temperatures outside, the protesters assembled nearly naked groups at airports in Berlin, Frankfurt and Düsseldorf on Sunday afternoon. The participants stripped down to their underpants, marching behinds signs that read: “No need to scan us – we’re already naked.”
A statement on the party's website said they opposed the new security scanners because they threaten the “private sphere and the personal rights of passengers.”
Germany's data protection commissioner, Peter Schaar, warned officials last week not to rush the implementation of the full-body scanners at airport security stations following a failed terrorist attack in the US last month. Critics are concerned that the devices, which allow security personnel to see through clothing, have not been improved enough to protect passengers' personal rights.
Meanwhile Chancellor Angela Merkel’s conservatives said use of the scanners would be fast-tracked for introduction within the year.
The German Pirate Party was inspired by the Swedish Piratpartiet and founded in 2006. In the September 2009 federal election they garnered two percent of the vote.
Court Asked to Allow Prosecution for "Sexting"
A teenage girl who appeared topless in a "sexting" cell phone picture that was distributed among her middle-school classmates should face child-pornography charges, a Pennsylvania prosecutor argued before a U.S. appellate court on Friday.
In the first U.S. case to test the constitutional status of "sexting," the American Civil Liberties Union countered that the incident does not come close to meeting the definition of child pornography which typically depicts graphic sexual acts with minors and is done for commercial gain.
The ACLU also said the Wyoming County prosecutor erred when he threatened 16 teenagers with the felony charges unless they agreed to a participate in a "re-education" course on why sexting was wrong.
A three-judge panel of the U.S. Court of Appeals was considering a March 2009 court ruling that said the pictures, in which teenagers sent sexually suggestive pictures of themselves to their friends by cellphones or the Internet, fall under the U.S. Constitution's free speech protections.
Officials of the Tunkhannock School District in rural northeastern Pennsylvania contacted the county prosecutor's office in January 2008 after finding pictures on the cell phones of the 16 students.
Most of their families agreed to undertake a "re-education" program called for by the prosecutor, but three refused. Prosecutors were seeking to press charges against one of the three girls.
Pictures showed two of the girls wearing white bras and another standing topless outside a shower with a towel wrapped around her waist, the ACLU said. The pictures did not show any sexual activity.
MaryJo Miller said outside the appeals court on Friday that the picture of her daughter, who was wearing a bra, was originally taken in 2006 when she was 12 years old and attending a slumber party.
When she saw the picture, she thought the girls were "goofballs," Miller told reporters. "It was a training bra. You are going to see more provocative photos in a Victoria's Secret catalog."
But the county argued that the pictures were pornographic because they were disseminated for the purposes of sexual stimulation and so would be of great interest to child molesters.
Appellate Judge Thomas Ambro said prosecutors are not entitled to try to "re-educate" minors. "I don't know of anything that allows the district attorney's office to play the role of teacher," he said.
The court is expected to rule within 90 days.
(Reporting by Jon Hurdle; Editing by Daniel Trotta and Vicki Allen)
Leak-o-nomy: The Economy of Wikileaks
Wikileaks is a global platform for Whistleblowers, in which internal documents can be published. The idea is that arcane knowledge becomes common knowledge and the world a better place. The project could play in the same league as success stories like Wikipedia or Indymedia. After a highly acclaimed lecture at the 26th Congress of the Chaos Computer Club in Berlin, I had the opportunity to interview Julian Assange, the most prominent Wikileaks-character on how to finance such a website. The question seems to be pressing.
At the moment Wikileaks.org has an unusual appearance. The website is locked down in order to generate money. How did you decide in favor of this tough step?
In part, this is a desire for us to to enforce self-discipline. It is for us a way to ensure that everyone who is involved stops normal work and actually spends time raising revenue. That’s hard for us, because we promise our sources that we will do something about their situation.
So, you strike?
Yes, it’s similar to what unions do when they go on strike. They remind people that their labour has value by withdrawing supply entirely. We give free and important information to the world every day. But when the supply is infinite in the sense that everyone is able to download what we publish, the perceived value starts to reduce down to zero. So by withdrawing supply and making our supply to zero, people start to once again perceive the value of what we are doing.
Do you urgently need money?
We have lots of very significant upcoming releases, significant in terms of bandwidth, but even more significant in terms of amount of labour they will require to process and in terms of legal attacks we will get. So we need to be in a stronger position before we can publish the material.
In mainstream media as well as in non-commercial media there are two important questions. What does it cost? And how is it financed? Would you please first describe the cost side …
By far the biggest cost is people. That’s also a cost that scales with operations. The more material we go through, the more the management and labour costs are. People need to write summaries of the material and see whether it’s true or not. In the moment everyone is paying himself, but that can’t last forever.
How big is the core team of WikiLeaks?
There are probably five people that do it 24 hours a day. And then there are 800 people who do it occasionally throughout the year. And in between there is a spectrum.
How do you and the other four guys who work full time without salaries finance living costs?
I have made money in the Internet. So I have enough money to do that, but also not forever. And the other four guys, in the moment they are also able to self-finance.
Was Wikileaks your idea as many assumed?
I don’t call myself a founder.
Nobody really knows about the founders, says Wikipedia …
Yes. This is simply because some of the people in the initial founding group are refugees, refugees from China and other places. And they still have family back in their home countries.
So at the moment the labour costs are still hypothetical, but the big costs that you really have to pay bills for are servers, office, etc.?
On the bandwidth side, the backing is costly as well when we get big spikes. Then there are registrations, bureaucracy, dealing with bank accounts and this sort of stuff. Because we are not in one location, it doesn’t make sense for us to have headquarters. People have their own offices across the world.
What about cost for lawsuits?
We don’t have to pay for our lawyer’s time. Hundred of thousands or millions dollars’ worth of lawyer time are being donated. But we still have to pay things like photocopying and court filing. And so far we have never lost a case, there were no penalties or compensations to pay.
So all in all, can you give figures about how much money Wikileaks needs in one year?
Propably 200 000, that’s with everyone paying themselves. But there are people who can’t afford to continue being involved fulltime unless they are paid. For that I would say maybe it’s 600 000 a year.
Julian Assange is an activist and Internet entrepreneur and was a prominent teenage hacker. He is a member of the Wikileaks Advisory Board and their spokesperson. Together with Daniel Schmitt of Wikileaks Germany he presented the work of the website at the 26th Chaos Communication Congress in Berlin. The Australian with the charisma of a Steve Jobs received standing ovation.
Now let’s talk about revenues, your only visible revenue stream is donations …
Private donations. We refuse government and corporate donations. In the moment most of the money comes from the journalists, the lawyers or the technologists who are personally involved. Only about ten percent are from online donations. But that might increase.
At the bottom of the site is a list of your “steadfast supporters”, media organisations and companies like AP, Los Angeles Times or The National Newspaper Association. What do they do for you?
They give their lawyers, not cash.
Why do the they help you? Probably not out of selflessness.
Two things: They see us as an organisation that makes it easier for them to do what they do. But they also see us as the thin end of the wedge. We tackle the hardest publishing cases. And if we are defeated, maybe they will be next in line. In other words: If Wikileaks.org goes down as a result of a legal action, the same precedence can be used to take down nytimes.com the next day or the German Spiegelonline.
If you can bring these costs per word down you can get more words of investigative journalism and publish even in a company that wants to maximize profit.
My explanation was that maybe they do it because they know that what you do is actually their job, but they don’t have the money to do it.
Maybe. The cost per word in investigative journalism is high. We make it a little bit cheaper for them. If you can bring these costs per word down you can get more words of investigative journalism and publish even in a company that wants to maximize profit, because we do some of the expensive sourcing. And there is another really big cost, namely the threat of legal action. We take the most legally difficult part, which is not the story, but usually the backing documents. As a result there is less chance of legal action against the publisher. So we help them to bring their costs per word in investigative journalism down.
You need to motivate two groups of people, in order to make the site run, the whistleblowers and the journalists. What are the motivations for whistleblowers?
Usually they are incenced morally by something. Very rarely actually they want revenge or just to embarrass some organisation. So that’s their incentive, to satisfy this feeling. Actually we would have no problem giving sources cash. We don’t do that, but for me there is no reason why only the lawyers and the journalists should be compensated for their effort. Somebody is taking the risk to do something and this will end up benefiting the public.
But then the legal problem would become much bigger.
Yes, but we’re not concerned about that. We could do these transfer payments to a jurisdiction like Belgium which says, that the authorities are not to use any means to determine the connection between the journalist and their source. And this would include the banking system.
On the other hand, you experiment with incentives for journalists. This sounds weird at first. Why do you have to give them additional incentives so they use material you offer them for free?
It’s not that easy. Information has value, generally in proportion to the supply of this information being restricted. Once everyone has the information, another copy of the information has no value.
Okay, they want to spend their time on 200 pages… the more evidence there is of some scandal and the more inmportant the scandal, the less likely it is that the press will write about it. (listen in to the interview)
But nearly every journalist in the U.S. has daily access to the material of a news agency like AP.
The material of AP is ready to go straight into the newspaper. Our material requires additional investment. So when we release an important leak, it requires an important, intelligent journalist who is politically well connected. Those journalists have significant opportunity costs. Okay, they want to spend their time on 200 pages. In order for that to be profitable they need to make sure that they will come out with an exclusive at the end. But if it is perceived to be something of interest, it is probable that also other people will be working on it at that moment. And when they publish is unpredictable. That produces the counter-intuitive outcome that the more evidence there is of some scandal and the more important the scandal, the less likely it is that the press will write about it. If there is no exclusivity.
In Germany you made an exclusivity deal with two media companies, with Stern and Heise. Are you satisfied with these kind of deals?
We have done this in other countries before. Generally we have been satisfied. The problem is that it takes too much time to manage. To make a contract, and to determine who should have the exclusivity. Someone can say, oh, we will do a good story. We are going to maximize the political impact. And then they won’t do it. How do we measure this?
You want to make sure that if you give them the exclusivity that they really do what they promise to do …
Yes. One thing that can’t be faked is how much money they pay. If you have an auction and a media organisation pays the most, then they are predicitng, that they will benefit the most from publishing the story. That is, they will have the maximum number of readers. So this is a very good way to measure who should have the exclusivity. We tried to do it as an experiment in Venezuela .
Because of the character of the document. We had 7 000 e-mails from Freddy Balzan, he was Hugo Chavez’s former speech writer and also the former ambassador to Argentinia. We knew that this document would have this problem, that it was big and political important, therefore probably no one would write anything about it for the reason I just said.
This auction proved to be a logistical nightmare. Media organisations wanted access to the material before they went to auction. Consequently we would get them to sign non-disclosure agreements, chop up the material and release just every second page or every second sentence.That proved to distracting to all the normal work we were doing, so that we said, forget it, we can’t do that. We just released the material as normal. And that’s precisely what happened: no one wrote anything at all about those 7 000 Emails. Even though 15 stories had appeared about the fact that we were holding the auction.
The experiment failed.
The experiment didn’t fail; the experiment taught us about what the burdens were. We would actually need a team of five or six people whose job was just to arrange these auctions.
You plan to continue the auction idea in the future …
We plan to continue it, but we know it will take more resources. But if we pursue that we will not do that for single documents. We will instead offer a subscription. This would be much simpler. We would only have the overhead of doing the auction stuff every three months or six months, and not for every document.
So the exclusivity of the story will run out after three months?
No, there will be exclusivity in terms of different time windows in access to the material. As an example: there will be an auction for North America. And you will be ranked in the auction. The media organisation which bids most in the auction would get access to it first, the one who bids second will get access to it second and so on. Media organisations would have a subscription to Wikileaks.
They would have timely privileged access to all Wikileaks documents that are relevant for North America …
Yes. Let’s imagine there are only two companies in the auction. And one pays double what the other one pays. And let’s say the source says they want the document to be published in one month’s time. So there is a one month window where the journalists have time to investigate and write about the material. The organisation that pays the most for it gets it immediately, so therefore they would be able to do a more comprehensive story. Then the organisation that pays half as much gets it half the time later, they get the documents two weeks later. And then after one month they both publish.
That sounds promising. Wouldn’t then the financial problem be solved?
It depends on how many resources the auction itself takes. And media themselves don’t have so much money at all. But all in all I think we only would have to have a few bid cases per year, that would be enough to finance it.
German MP3 Inventor Turns to Smartening Up 'Dumb' Devices
A German electrical engineer who helped make MP3 players a reality has turned his attention to making "dumb devices" act smart.
Karlheinz Brandenburg, now a professor at Ilmenau University of Technology in Germany, is backing Perfect Stream technology that lets computing power in the internet "cloud" do the thinking for simple gadgets.
"When I first met these guys it sounded crazy to me," Brandenburg told AFP while courting partners for Perfect Stream at a major Consumer Electronics Show that ended Sunday in Las Vegas. "But I have a fondness for crazy ideas because when we started MP3 it seemed crazy to everyone as well."
MP3 is now a nearly ubiquitous format used for digital content online and in mobile devices such as smartphones and music players.
The idea with Perfect Stream is to have digital video and audio tailored to individual tastes and delivered as a service to essentially any gizmo that can talk to the internet.
Perfect Stream has proven itself in Germany and the company was at CES to license the technology to internet service providers in the United States.
"This technology works and now we are trying to internationalize it," said Nikolas Samios of Perfect Stream.
Services can be programmed with a person's preferred shows, news sources, music, Twitter feeds, or other Internet content and the data can be routed to digital picture frames, in-car navigation systems, feature phones, game consoles and more, according to Brandenburg.
"It bridges the different technologies," Samios said. "These are all walled-garden devices that usually never talk to each other."
Personalized internet streams can flow seamlessly to sophisticated online electronics or to "any kind of stupid phone, a $50 phone with a prepaid plan," according to Samios.
The key is in processing digital content on servers "in the cloud" and then feeding it to gadgets that need only receive and decode the data, Brandenburg said.
Police Fight Cellphone Recordings
Witnesses taking audio of officers arrested, charged with illegal surveillance
Simon Glik, a lawyer, was walking down Tremont Street in Boston when he saw three police officers struggling to extract a plastic bag from a teenager’s mouth. Thinking their force seemed excessive for a drug arrest, Glik pulled out his cellphone and began recording.
Within minutes, Glik said, he was in handcuffs.
“One of the officers asked me whether my phone had audio recording capabilities,’’ Glik, 33, said recently of the incident, which took place in October 2007. Glik acknowledged that it did, and then, he said, “my phone was seized, and I was arrested.’’
The charge? Illegal electronic surveillance.
Jon Surmacz, 34, experienced a similar situation. Thinking that Boston police officers were unnecessarily rough while breaking up a holiday party in Brighton he was attending in December 2008, he took out his cellphone and began recording.
Police confronted Surmacz, a webmaster at Boston University. He was arrested and, like Glik, charged with illegal surveillance.
There are no hard statistics for video recording arrests. But the experiences of Surmacz and Glik highlight what civil libertarians call a troubling misuse of the state’s wiretapping law to stifle the kind of street-level oversight that cellphone and video technology make possible.
“The police apparently do not want witnesses to what they do in public,’’ said Sarah Wunsch, a staff attorney with the American Civil Liberties Union of Massachusetts, who helped to get the criminal charges against Surmacz dismissed.
Boston police spokeswoman Elaine Driscoll rejected the notion that police are abusing the law to block citizen oversight, saying the department trains officers about the wiretap law. “If an individual is inappropriately interfering with an arrest that could cause harm to an officer or another individual, an officer’s primary responsibility is to ensure the safety of the situation,’’ she said.
In 1968, Massachusetts became a “two-party’’ consent state, one of 12 currently in the country. Two-party consent means that all parties to a conversation must agree to be recorded on a telephone or other audio device; otherwise, the recording of conversation is illegal. The law, intended to protect the privacy rights of individuals, appears to have been triggered by a series of high-profile cases involving private detectives who were recording people without their consent.
In arresting people such as Glik and Surmacz, police are saying that they have not consented to being recorded, that their privacy rights have therefore been violated, and that the citizen action was criminal.
“The statute has been misconstrued by Boston police,’’ said June Jensen, the lawyer who represented Glik and succeeded in getting his charges dismissed. The law, she said, does not prohibit public recording of anyone. “You could go to the Boston Common and snap pictures and record if you want; you can do that.’’
Ever since the police beating of Rodney King in Los Angeles in 1991 was videotaped, and with the advent of media-sharing websites like Facebook and YouTube, the practice of openly recording police activity has become commonplace. But in Massachusetts and other states, the arrests of street videographers, whether they use cellphones or other video technology, offers a dramatic illustration of the collision between new technology and policing practices.
“Police are not used to ceding power, and these tools are forcing them to cede power,’’ said David Ardia, director of the Citizen Media Law Project at Harvard’s Berkman Center for Internet and Society.
Ardia said the proliferation of cellphone and other technology has equipped people to record actions in public. “As a society, we should be asking ourselves whether we want to make that into a criminal activity,’’ he said.
In Pennsylvania, another two-party state, individuals using cellphones to record police activities have also ended up in police custody.
But one Pennsylvania jurisdiction has reaffirmed individuals’ right to videotape in public. Police in Spring City and East Vincent Township agreed to adopt a written policy confirming the legality of videotaping police while on duty. The policy was hammered out as part of a settlement between authorities and ACLU attorneys representing a Spring City man who had been arrested several times last year for following police and taping them.
In Massachusetts, Wunsch said Attorney General Martha Coakley and police chiefs should be informing officers not to abuse the law by charging civilians with illegally recording them in public.
The cases are the courts’ concern, said Coakley spokesman Harry Pierre. “At this time, this office has not issued any advisory or opinion on this issue.’’
Massachusetts has seen several cases in which civilians were charged criminally with violating the state’s electronic surveillance law for recording police, including a case that was reviewed by the Supreme Judicial Court.
Michael Hyde, a 31-year-old musician, began secretly recording police after he was stopped in Abington in late 1998 and the encounter turned testy. He then used the recording as the basis for a harassment complaint. The police, in turn, charged Hyde with illegal wiretapping. Focusing on the secret nature of the recording, the SJC upheld the conviction in 2001.
“Secret tape recording by private individuals has been unequivocally banned, and, unless and until the Legislature changes the statute, what was done here cannot be done lawfully,’’ the SJC ruled in a 4-to-2 decision.
In a sharply worded dissent, Chief Justice Margaret Marshall criticized the majority view of a law that, in effect, punished citizen watchdogs and allowed police officers to conceal possible misconduct behind a “cloak of privacy.’’
“Citizens have a particularly important role to play when the official conduct at issue is that of the police,’’ Marshall wrote. “Their role cannot be performed if citizens must fear criminal reprisals when they seek to hold government officials responsible by recording, secretly recording on occasion, an interaction between a citizen and a police officer.’’
Since that ruling, the outcome of Massachusetts criminal cases involving the recording of police by citizens has turned mainly on this question of secret vs. public recording.
Jeffrey Manzelli, 46, a Cambridge sound engineer, was convicted of illegal wiretapping and disorderly conduct for recording MBTA police at an antiwar rally on Boston Common in 2002. Though he said he had openly recorded the officer, his conviction was upheld in 2007 on the grounds that he had made the recording using a microphone hidden in the sleeve of his jacket.
Peter Lowney, 39, a political activist from Newton, was convicted of illegal wiretapping in 2007 after Boston University police accused him of hiding a camera in his coat during a protest on Commonwealth Avenue.
Charges of illegal wiretapping against documentary filmmaker and citizen journalist Emily Peyton were not prosecuted, however, because she had openly videotaped police arresting an antiwar protester in December 2007 at a Greenfield grocery store plaza, first from the parking lot and then from her car. Likewise with Simon Glik and Jon Surmacz; their cases were eventually dismissed, a key factor being the open way they had used their cellphones.
Surmacz said he never thought that using his cellphone to record police in public might be a crime. “One of the reasons I got my phone out . . . was from going to YouTube where there are dozens of videos of things like this,’’ said Surmacz, a webmaster at BU who is also a part-time producer at Boston.com.
It took five months for Surmacz, with the ACLU, to get the charges of illegal wiretapping and disorderly conduct dismissed. Surmacz said he would do it again.
“Because I didn’t do anything wrong,’’ he said. “Had I recorded an officer saving someone’s life, I almost guarantee you that they wouldn’t have come up to me and say, ‘Hey, you just recorded me saving that person’s life. You’re under arrest.’ ’’
Italians Take the 'p' to Fight Back Against Big Brother
Panopticon to Anopticon: Opposing the surveillance state
Italians are fighting back against the surveillance society with a grass roots project designed to publicise the location of CCTV cameras – and to "out" those that have been set up contrary to Italian Law.
The "Anopticon" project (http://www.tramaci.org/anopticon/), which was launched earlier this year, is a deliberate parody of the "panopticon" – an ideal prison first put forward by Jeremy Bentham in 1791. Its inhabitants were forced to conform to social standards, as even the slightest action they take is watched by "all-seeing" guards.
If the "panopticon" is an environment in which everything is seen, an "anopticon" would be one in which private activity remains private and free from surveillance.
The initial "Anopticon project" was started with a website (http://tramaci.org/tramacio3) launched by a Venice-based group, who used online mapping as a means to pinpoint publicly where all known CCTV sites in Venice are situated. Since then, it has spread out to other cities, including Padova, Foggia, Urbnino and Solero.
It is also supported by a (small) group on Facebook (http://www.facebook.com/pages/tramac...ll&ref=search).
Although the project began with the simple aim of revealing where cameras were located, it has already concluded that a high proportion of CCTVs are not lawful, in that they fail to provide the "information notice" required by Legislative Decree 196/2003 (the Italian equivalent of the Data Protection Directive).
In addition to surveying camera location and legality, the project has therefore expanded recently, with a call for Italian supporters to "out" those cameras that do not comply with existing law.
This has led to a new campaign - "Denounce illegal CCTVs" – which will actively seek to identify every surveillance device that does not respect Italian data protection law (including the need for an "information notice"). Details of these devices will then be passed to the Italian Data Protection Authority.
The Anopticon project appears to be an implementation of a similar initiative proposed for the UK on the mySociety projects blog (http://mysociety.blogs.com/mysociety...cctv_map.html). This is a space where individuals can put forward ideas that would aid in the maintenance of an open society.
Back in 2003, the project proposer justified such a system as a means to "watch the watchers", allowing the public to be instantly aware of where they are being watched and by whom. They write:
"By inviting members of the public armed with GPS (or able to use online mapping services to retrieve coordinates) we can map out CCTV locations within the UK and track who owns them by their Data Protection Act signs. Members of the public can input information about the people in control of CCTV systems to build up a picture of the organisations who are monitoring the public. The entries can be checked by a rating and peer review system."
According to mySociety director, Tom Steinberg, this proposal never went any further.
Spain MP Photo Used for Bin Laden
A Spanish politician has said he was shocked to find out the FBI had used his photo for a digitally-altered image showing how Osama Bin Laden might look.
Gaspar Llamazares said he would no longer feel safe travelling to the US after his hair and parts of his face appeared on a most-wanted poster.
He said the use of a real person for the mocked-up image was "shameless".
The FBI admitted a forensic artist had obtained certain facial features "from a photograph he found on the internet".
The digitally-altered photos of the al-Qaeda leader, showing how he might look now, aged 52, were published on the state department's Rewards for Justice website on Friday.
Officials said they had adapted a 1998 file image to take account of a decade's worth of ageing, and possible changes to facial hair.
'Unintentional and inadvertent'
Mr Llamazares, 52, the former leader of the United Left coalition in parliament, said he could not believe it when he was first told about the similarity between himself and the new photo-fit of Bin Laden.
He said he soon realised that his forehead, hair and jaw-line had been "cut and pasted" from an old campaign photograph.
"I was surprised and angered because it's the most shameless use of a real person to make up the image of a terrorist," he told a news conference.
"It's almost like out of a comedy if it didn't deal with matters as serious as Bin Laden and citizens' security."
The FBI claimed to have used "cutting edge" technology, but Mr Llamazares said it showed the "low level" of US intelligence services and could cause problems if he was wrongly identified as the Saudi.
"Bin Laden's safety is not threatened by this but mine certainly is," he said, adding that he was considering taking legal action.
Later, an FBI spokesman told the BBC that it was "aware of the similarities in hairline features of the age-progressed photograph of Osama Bin Laden, posted on the web yesterday, and that of an existing photograph of a Spanish public official".
"When producing age-progressed photographs, forensic artists typically select features from a database of stock reference photographs to create the new image."
"After a preliminary review, it appears that in this instance the forensic artist was unable to find suitable features among the reference photographs and obtained those features, in part, from a photograph he found on the internet."
"The forensic artist was not aware of the identity of the individual depicted in the photograph. The similarities between the photos were unintentional and inadvertent."
A Second GSM Cipher Falls
A group of cryptographers has developed a new attack that has broken Kasumi, the encryption algorithm used to secure traffic on 3G GSM wireless networks. The technique enables them to recover a full key by using a tactic known as a related-hey attack, but experts say it is not the end of the world for Kasumi.
Kasumi, also known as A5/3, is the standard cipher used to encrypt communications on 3G GSM networks, and it's a modified version of an older algorithm called Misty. The paper describing the new attack is not yet public, but the Emergent Chaos blog has a good description of the attack, including an excerpt from the abstract:
In this paper we describe a new type of attack called a sandwich attack, and use it to construct a simple distinguisher for 7 of the 8 rounds of KASUMI with an amazingly high probability of 2−14. By using this distinguisher and analyzing the single remaining round, we can derive the complete 128 bit key of the full KASUMI by using only 4 related keys, 226 data, 230 bytes of memory, and 232 time. These complexities are so small that we have actually simulated the attack in less than two hours on a single PC, and experimentally verified its correctness and complexity. Interestingly, neither our technique nor any other published attack can break MISTY in less than the 2128 complexity of exhaustive search, which indicates that the changes made by the GSM Association in moving from MISTY to KASUMI resulted in a much weaker cryptosystem.
As Emergent Chaos points out, this is not necessarily a sky-is-falling moment, but it's not good news either. The group of researchers who developed the new attack includes Orr Dunkelman, Nathan Keller and Adi Shamir, one of the creators of the RSA algorithm.
The news of the Kasumi crack comes just a couple of weeks after researchers published a method for attacking the older A5/1 GSM algorithm.
Firm to Release Database & Web Server 0days
January promises to be a busy month for Web server and database administrators alike: A security research firm in Russia says it plans to release information about a slew of previously undocumented vulnerabilities in several widely-used commercial software products.
Evgeny Legerov, founder of Moscow based Intevydis, said he intends to publish the information between Jan 11 and Feb 1. The final list of vulnerabilities to be released is still in flux, Legerov said, but it is likely to include vulnerabilities (and in some cases working exploits) in:
-Web servers such as Zeus Web Server, Sun Web Server (pre-authentication buffer overflows);
-Databases, including Mysql (buffer overflows), IBM DB2 (local root vulnerability), Lotus Domino and Informix
-Directory servers, such as Novell eDirectory, Sun Directory and Tivoli Directory.
In an interview with krebsonsecurity.com, Legerov said his position on vulnerability disclosure has evolved over the years.
“After working with the vendors long enough, we’ve come to conclusion that, to put it simply, it is a waste of time. Now, we do not contact with vendors and do not support so-called ‘responsible disclosure’ policy,” Legerov said. For example, he said, “there will be published two years old Realplayer vulnerability soon, which we handled in a responsible way [and] contacted with a vendor.”
At issue is the pesky ethical and practical question of whether airing a software vendor’s dirty laundry (the unpatched security flaws that they know about but haven’t fixed yet) forces the affected vendor to fix the problem faster than it would have had the problem remained a relative secret. There are plenty of examples that show this so-called “full disclosure” approach does in fact prompt vendors to issue patches faster than when privately notified by the researcher and permitted to research and fix the problem on their own schedule. But in this case, Legerov said he has had no contact with the vendors, save for Zeus.com, which he said is likely to ship an update to fix the bug on the day he details the flaw.
Intevydis is among several vulnerability research firms that sell “exploit packs” — or snippets of code that exploit vulnerabilities in widely-used software (others include Gleg, Enable Security, and D2). The company’s exploit packs are designed for users of CANVAS, a commercial software penetration testing tool sold by Miami Beach, Fla. based Immunity, Inc.
While companies that purchase CANVAS along with exploit packs from these companies may have better protection from newly-discovered security vulnerabilities while waiting for affected vendors to fix the flaws, Immunity does not report the vulnerabilities to the affected vendors (unless the vendors also are customers, in which case they would have access to the information at the same time as all other customers).
That approach stands apart from the likes of TippingPoint’s Zero-Day Initiative and Verisign’s iDefense Vulnerability Contributor Program, which pay researchers in exchange for the rights to their vulnerability research. Both ZDI and iDefense also manage the communication with the affected vendors, ship stopgap protection for the vulnerabilities to their customers, and otherwise keep mum on the flaws until the vendor ships an update to fix the bugs.
Legerov said he’s been an anonymous contributor to both programs over the years, and that it is not difficult for good researchers to make between $5,000 and $10,000 a month selling vulnerabilities and exploits to those companies. But he added that he prefers the full disclosure route because “it allows people to publish what they think without being moderated.”
Dmitri Alperovitch, vice president of threat research at McAfee, called Legerov’s planned disclosure “irresponsible,” given the sheer number of businesses that rely on the affected products. Alperovitch said the responsible way to disclose a vulnerability is to send information to the vendor and let them know you plan to release in a reasonable time (usually 60-90 days).
“If they ask for more time — again, reasonably – not a year out — you try to accommodate. If the vendor doesn’t respond, you release and move on,” he said. “But to give them no advance notice just because some vendors don’t take security seriously is irresponsible.”
Charlie Miller, a former security researcher for the National Security Agency who now heads up the Baltimore based Independent Security Evaluators (and is co-founder of the No More Free Bugs meme) , also has earned tens of thousands of dollars from vulnerability management firms — most famously by competing in ZDI’s Pwn to Own contests, which carry a $10,000 First Prize.
“These programs are good because they allow researchers to get something for their effort, and you don’t have to deal with the back-and-forth with the vendor, which is not fun,” Miller said.
Still, Miller said he’s sympathetic to researchers who react to vendor apathy with full disclosure.
“The thing is, finding critical security bugs in widely used software should be rare if vendors are doing their job. But the sad part is, finding a serious bug in something like Adobe Reader is not a very rare event, and it seems to happen every month almost now,” Miller said. “The conclusion we can draw is that some vendors aren’t doing enough to make their software secure. It should be rare enough that vendors should be so surprised and concerned that they’re willing to do what they need to do to get it fixed.”
Setting the full disclosure debate aside for the moment, it has been fascinating to watch the development of the vulnerability management industry. I can recall a heated panel discussion back in 2006 at the CANSEC West conference in Vancouver, B.C. Canada, in which ZDI and several supporters of that effort took some heat for the program from a number of folks in the security industry.
These days, ZDI and iDefense are responsible for pushing software makers to fix an impressive number of software flaws. Take Microsoft, for example: By my count, Microsoft fixed approximately 175 security vulnerabilities in its Windows operating systems and other software last year. Of those, the ZDI program is responsible for reporting 32, while iDefense’s program contributed 30 flaw reports. Put together, the two programs accounted for more than a third of all vulnerabilities Microsoft fixed in 2009.
IE Zero-Day Used in Chinese Cyber Assault on 34 Firms
Operation Aurora unveiled
Hackers who breached the defenses of Google, Adobe Systems and at least 32 other companies used a potent vulnerability in all versions of Internet Explorer to carry out at least some of the attacks, researchers from McAfee said Thursday.
The previously unknown flaw in the IE browser was probably just one of the vectors used in the attacks, McAfee CTO George Kurtz wrote in a blog post (http://siblog.mcafee.com/cto/operati...oogle-others/). Using a sophisticated spear-phishing campaign, the perpetrators included malicious links exploiting the bug in emails and instant messages sent to employees from at least three of the targeted companies.
Contrary to previous speculation, there was no evidence vulnerabilities in Adobe's Reader or Acrobat applications were used in any of the attacks, Kurtz said. In its own statement (http://blogs.adobe.com/asset/2010/01...ing_atta.html), adobe concurred, saying researchers "have not been able to obtain any evidence to indicate that Adobe Reader or other Adobe technologies were used as the attack vector in this incident."
Kurtz said his findings were based on malware samples taken from "three to five" of the targeted companies and he stressed that other zero days or exploits could have been used against other victims.
"In our investigation we discovered that one of the malware samples involved in this broad attack exploits a new, not publicly known vulnerability in Microsoft Internet Explorer," Kurtz wrote. "Our investigation has shown that Internet explorer is vulnerable on all of Microsoft's most recent operating system releases, including Windows 7."
Shortly after the report, Microsoft confirmed the new IE vulnerability was "one of the vectors used in targeted and sophisticated attacks against Google and possibly other corporate networks." A company statement said the attacks were carried out against version 6 of the widely used browser and suggested users protect themselves by enabling security features that have been added to successor versions.
McAfee's report is the latest to shed light on one of the most significant cyberattacks (http://www.theregister.co.uk/2010/01/13/google_china/) in years. Google first disclosed the "highly sophisticated and targeted attack" on Tuesday, saying it originated in China and targeted its intellectual property. It added that 20 other companies suffered similar assaults, a number that independent researchers soon raised to 34. So far, only Google and Adobe have been identified as victims.
Yahoo, Symantec, Northrop Grumman and Dow Chemical have also been penetrated according to (http://www.washingtonpost.com/wp-dyn...011300359.html) The Washington Post, citing unnamed "congressional and industry sources."
The malware that McAfee researchers analyzed was sent to a highly select group of employees of a handful of companies that Kurtz declined to identify.
"This wasn't something that got blasted to 300,000 people in a corporation," Kurtz said in an interview with The Register. "It was really targeted at senior technology leaders that had access to core pieces of intellectual property, source code, et cetera."
Kurtz has dubbed the attack "Aurora," a reference to the filepath on the attacker's machine that showed up in some of the malware code McAfee researchers analyzed. They believe that is the name the attackers gave to the operation. There was nothing in the binaries that indicated either way whether the code writers spoke Cantonese or Mandarin or were located in China.
The IE vulnerability stems from an invalid pointer reference that when exploited allows an attacker to execute malicious shell code on underlying machines. The malware caused exploited machines to download further malicious scripts that installed a backdoor. The machines then connected to command and control channels that were hosted on servers that resided in the US and Taiwan.
A security feature known as data execution prevention, which prevents data loaded into memory from being executed, will block the particular exploits McAfee has observed. But Kurtz warned the vulnerability exists in all versions of IE except for IE 5.01, service pack 4, and that it would be possible for attackers to work around the protection.
In an advisory (http://blogs.technet.com/msrc/default.aspx), Microsoft recommended people use DEP, which by default is enabled in IE 8 but must be turned on in prior versions. The statement also advised users on Vista and later versions of Windows to run IE in protected mode. The advisory didn't say when an update would be released that patches the vulnerability.
The MiFi by Novatel Wireless (re-branded and sold by multiple vendors such as Sprint and Verizon) is a mobile wifi hotspot. The mifi also has a built in GPS to provide location based searching. Turns out that the web interface to this little device has a lot going on that can be exploited, from gaining the user's GPS data to terminating the user's connectivity. Before we get into the details let's start with a story that begins right after I found the initial vulnerabilities (besides notify the vendor).
12:19:58 AM Adam Brault (&yet): so tell me about the mifi pwn
12:20:24 AM Adam Baldwin: http://ngenuity.org/dev/mifi.html (the code is not there for now)
12:20:33 AM Adam Baldwin: just read the source
12:20:35 AM Adam Baldwin: it's simple
At this point my phone rings. Adam was apparently using his MiFi in a remote location at the time he clicked on the link I sent him. It was at that moment that we realized that a valid session was not required and that it would kill the connection for Verizon users with firmware version 11.43.2 (I think). Adam was without Internet and had to factory reset his MiFi.
So there are a few things going on that make this possible. I will try and detail them here.
1. Authentication not required.
The MiFi does not require a valid session to commit changes to configuration settings. This makes exploiting the below issues a lot easier when you don't have to require that the victim have a valid session.
2. Enable GPS without the users knowledge.
The GPS on a MiFi can be enabled by visiting the following URL. Depending on the situation the victim may get a alert that says "Login Required" but if they are like the typical user they will simply click on it and forget it ever happened.
3. Cross-Site Request Forgery (CSRF)
The web interface does not validate referrer or use any magical tokens to protect against CSRF. This means that we can have a victim visit our malicious website and do evil things like change the wireless settings of the MiFi.
4. Output Encoding
In multiple locations of the MiFi web interface user input is not properly encoded when output back to the user. One interesting location is the key field for the wifi settings. I'm wondering why the hell somebody thought it was a good idea to print the wifi key in clear text back to the user, and in this case it's not properly encoded either giving us a nice 63 character persistent injection point for script.
So for those that weren't paying attention: Any MiFi user that visits a specially crafted page will give up their GPS location to the attacker.
Blindness Groups, University Settle Suit Over Amazon.com's Kindle
Two organizations representing the blind have settled a discrimination lawsuit against Arizona State University over its use of Amazon's Kindle e-reader device.
Arizona State is among several universities testing the $489 Kindle DX, a large-screen model aimed at textbook and newspaper readers.
Last June, the National Federation of the Blind and the American Council of the Blind joined a blind ASU student in suing Arizona State, alleging that the Kindle's inaccessibility to blind students constituted a violation of federal law.
The blindness organizations and ASU announced the settlement on Monday. It does not involve payment of any damages or attorney's fees.
Rather, the groups cited ASU's commitment to providing access to all of its programs for students with disabilities, and noted that the pilot program was already ending this spring.
The university, which denies the pilot program violates any law, agreed that if it does decide to use e-book readers in future classes over the next two years, "it will strive to use devices that are accessible to the blind," according to their joint statement.
Although the Kindle has a read-aloud feature that could help the blind and the visually impaired, turning it on requires navigating through screens of text menus.
The blindness groups noted that an impetus for the settlement was the fact that Amazon.com and other companies were already working to improve the accessibility of e-book readers to blind and vision-impaired people.
In December, Amazon said it will add two features to make the Kindle more accessible. The company is working on audible menus, which would let the Kindle speak menu options out loud, and it is creating an extra-large font for people with impaired vision.
Amazon was not named in the lawsuit and did not immediately return an e-mail message Monday for comment.
Closing Pipeline to Needy, City Shreds Clothes
New York City officials destroyed tons of new, unworn clothing and footwear last year that had been seized in raids on counterfeit label operations, abandoning a practice of giving knockoff garments to groups that help the needy.
Last summer, the Police Department rented an industrial shredder to destroy a dozen tractor-trailer loads of bootleg goods after they were no longer needed as evidence in legal proceedings. It also has been shipping truckloads of garments to an incinerator in Hempstead, on Long Island, where the city pays about $150 a ton to burn them. The lost clothing includes winter jackets, shirts, pants and underwear.
“All the disposal is done under the supervision of law enforcement,” said Kathy Dawkins, a spokeswoman for the city’s Department of Sanitation. “It is called a witnessed burn.”
Until last April, the city had turned over some of the seized goods to not-for-profit organizations, including World Vision and the New York City Clothing Bank, which removed labels and defaced the counterfeit trademarks, then distributed the clothing to aid groups across the city.
A spokesman for the Police Department said that no one asked for the knockoffs in 2009 — an explanation that was bewildering to the operators of the clothing bank, who run a warehouse that supplies clothing to needy New Yorkers. They said they had made many requests.
“It would be hard to justify taking a truckload of perfectly good clothes and incinerating them, but that’s what’s happening,” said William Montana, a commercial real estate adviser who is on the board of the clothing bank. “The people who had control over giving us that stuff had been really good to us. Now the pipeline has dried up. Whatever the reasons, we hope that practical heads prevail. We can do this and save the city money, help people who need it, and reduce the carbon footprint.”
One result of the mass destruction has been a dire shortage of goods for needy men in the clothing bank, which relied heavily on knockoffs for men’s garments. The shelves of women’s garments are replenished more often because of frequent changes in fashion; unsold items are donated to the bank by legitimate retailers and manufacturers.
The office of Mayor Michael R. Bloomberg referred questions about the clothing destruction to Paul J. Browne, the chief spokesman for the Police Department. In an e-mail message, Mr. Browne said that the Police Department last provided knockoff clothing to the Department of Homeless Services in December 2008 and had received no requests since then.
The department will continue to supply the clothing “whenever requested and cleared by the courts,” Mr. Browne said.
He was asked how much the city spent on shredding, and how many tons it burned, but did not answer.
Another government agency that confiscates large volumes of pirated clothing, United States Customs and Border Protection, donated $78 million in such goods last year. The donations are made only with the consent of the trademark holder, and are limited to essentials like clothing and shoes; they do not include fake Rolex watches or Gucci handbags.
In Los Angeles, shoes that would otherwise have been destroyed were given to Samaritan’s Feet, said John Saleh, a spokesman for the customs agency. Other ports that have participated are Detroit, El Paso and San Francisco. In New York, customs officials recently began working with World Vision.
“Usually the holder of the intellectual property rights allows us to do it,” Mr. Saleh said. If the trademarks can be removed, the goods are given to organizations near the ports, Mr. Saleh said. If they can’t be, they are shipped abroad.
Until recently, New York had a similar policy. In 2006, Mr. Bloomberg announced that the city would send shipments of knockoffs to aid victims of Hurricane Katrina. In that case, said Jason Post, a spokesman for the mayor, the city had the assistance of World Vision in sorting through the materials, a daunting task — but one that World Vision and the clothing bank say they still do.
Many major fashion brands have their headquarters in New York City, and Mr. Bloomberg has made prosecution of trademark infringement a priority for his administration. The companies also take actions in civil court against the pirates, an expensive process, to protect the designers’ names.
“These are people who spend hundreds of thousands of dollars, some of them millions, to get counterfeit goods off the street,” said Robert Tucker, a lawyer with the firm of Tucker and Lafiti, whose fashion clients include Chrome Hearts, Steve Madden, Zac Posen and Ed Hardy. “Everyone wants to feed and clothe the homeless. But how are you going to spend all this money and then put it back on the street?”
A special enforcement unit, reporting directly to the mayor, goes after landlords who knowingly rent to counterfeiters. Separately, the fashion and licensing industries are major financial supporters of the New York City Police Foundation, which has financed investigations of trademark infringement by a squad of police officers.
Mr. Montana of the clothing bank said his organization was eager to maintain a good relationship with the city. “This is a case of people with good intentions creating an incredibly wasteful and heartbreaking outcome,” he said. “If we can get people to work together, we can do a lot of good in the world.”
Arbitron President/CEO Skarzynski Resigns
Arbitron's Board of Directors announced late on Monday that effective immediately, Michael P. Skarzynski has resigned as President/Chief Executive Officer, and as a member of the Company’s Board of Directors. Also effective immediately, William T. Kerr, a member of the Company’s Board of Directors, will become Arbitron’s President and CEO.
"Bill’s experience as a Chief Executive Officer and Chairman of a large public media company coupled with his board memberships make him uniquely qualified to lead Arbitron. Additionally, Bill’s service as a member of Arbitron’s Board of Directors should provide a fast and effective transition into his new role," said Arbitron Chairman of the Board Philip Guarascio.
According to Arbitron, "Skarzynski and the Company’s Board together determined that he had violated a Company policy in a matter entirely unrelated to the financial performance of the Company. Accordingly, Mr. Skarzynski has submitted his resignation to the Company."
On Monday night, Edolphus Townes (D-NY) revealed that Skarzynski may have provided a false testimony and "intentionally misled" the Committee on Oversight and Government Reform last month. Townes, the Chairman of the Committee, said in a statement that he is "committed to protecting the integrity of the Committee’s proceedings, and will review this matter to determine whether the Committee was intentionally misled and whether further action is warranted."
William Kerr has been a Director of Arbitron since May 2007. From July 2006 to the present, Mr. Kerr has been Chairman of the Board of Directors of Meredith Corporation, a diversified media company that publishes magazines and special interest publications and also owns and operates local television stations. Kerr has been with Meredith Corp. since 1991.
Watching Hours of TV Daily Could Shorten Your Life
Couch potatoes, beware. Sitting in front of the television for hours daily could shorten your life, according to an Australian study.
Researchers from the Baker IDI Heart and Diabetes Institute in the state of Victoria tracked the lifestyle habits of 8,800 adults and found that each hour spent in front of the TV daily increased the risk of dying earlier from cardiovascular disease.
The study, published in "Circulation: Journal of the American Heart Association," found every hour in front of the TV was associated with an 11 percent increased risk of death from all causes, a 9 percent higher risk of cancer death, and an 18 percent increased risk of cardiovascular disease (CVD) related death.
"Compared with people who watched less than two hours of television daily, those who watched more than four hours a day had a 46 percent higher risk of death from all causes and an 80 percent increased risk for CVD-related death," the researchers said in a statement.
The researchers said this association held regardless of other independent and common cardiovascular disease risk factors, including smoking, high blood pressure, high blood cholesterol, unhealthy diet, excessive waist circumference, and leisure-time exercises.
Researcher David Dunstan said the study focused specifically on television watching but the findings suggest that any prolonged sedentary behavior, such as sitting at a desk or in front of a computer, may pose a health risk.
"The human body was designed to move, not sit for extended periods of time," said Dunstan, head of the institute's physical activity laboratory in the division of metabolism and obesity.
"Technological, social, and economic changes mean that people don't move their muscles as much as they used to - consequently the levels of energy expenditure as people go about their lives continue to shrink.
"For many people, on a daily basis they simply shift from one chair to another -- from the chair in the car to the chair in the office to the chair in front of the television."
Dunstan said the findings applied not only to individuals who were overweight and obese, but also those of a healthy weight.
"Even if someone has a healthy body weight, sitting for long periods of time still has an unhealthy influence on their blood sugar and blood fats," he said.
"In addition to doing regular exercise, avoid sitting for prolonged periods and keep in mind to 'move more, more often'. Too much sitting is bad for health."
The researchers interviewed 3,846 men and 4,954 women aged 25 and older who underwent oral glucose-tolerance tests and provided blood samples so researchers could measure biomarkers such as cholesterol and blood sugar levels.
Participants were enrolled from 1999 and followed through 2006 and reported their television-viewing habits.
(Reporting by Belinda Goldsmith, Editing by Miral Fahmy)
Most News Outlets Are Repetitive, New York Times Repeats
The New York Times reports today that newspapers dominate the news creation business.
This is an interesting twist -- instead of touting readers or paid circulation or ads or total revenue, it's talking about production. It's almost as if Ford (F) were to announce: "We make more cars than anyone else." Who the hell cares if they sell any, right? What's important is production, not sales! For the Times, and print media in general, it feels like yet another attempt to justify its existence and "prove" that it is more valuable than the more cost-effective and nimble online outlets.
The Project for Excellence in Journalism, which is part of the Pew Research Center, the number of local news outlets is increasing, but the actual reporting remains the domain of the newspapers. The outcome of the study is based on the tracking of six major story lines in Baltimore from one week back in July. Pew found that 83% of the reports "were essentially repetitive, conveying no new information." Even with slashed newsrooms and eviscerated budgets, "of the stories that did contain new information, nearly all, 95%, came from old media -- most of them newspapers."
Fifty-three sources of local news were identified in the study, from major papers like The Washington Post (WPO) to smaller regional and local newspapers -- of the sort owned by News Corp. (NWS) and Gannett (GCI) -- to local broadcast, online news and blogs.
Of course, this sounds like a reason to celebrate newspapers (which you're bound to find in the Times these days). But, the Pew results suggest that everyone's been a bit deficient. Even the original reporting from the July story lines was heavily based on statements rather than digging -- just like the Times story on the Pew report, and my regurgitation of it here.
Upload Your Files and Access them Anywhere with Google Docs
Over the next few weeks, we’re rolling out the ability to upload all file types to the cloud through Google Docs, giving you one place where you can upload and access your key files online. Because Google Docs now supports files up to 250 MB in size, which is larger than the attachment limit on most email applications, you’ll be able to backup large graphics files, RAW photos, ZIP archives and much more to the cloud. More importantly, instead of carrying a USB drive, you can now use Google Docs as a more convenient option for accessing your files on different computers.
This feature can also help you work with teams to organize and collaborate on information online. For example, an architect can share large schematic files with her construction firm, while a P.T.A. member can share large graphic files for posters with other members. You can even add these files to the same shared project folder your team has already been using to collaborate on documents and spreadsheets.
In addition to uploading any file into Google Docs, our Google Apps Premier Edition customers will be able to seamlessly upload many files at once and sync them with their desktop in real time using third party applications. You can read more about how the ability to upload any file will help businesses on the Google Enterprise blog.
This feature will be enabled for your account over the next couple of weeks — look for the bubble notification when you sign in to Google Docs. For more information, check out our post on the Google Docs blog.
Declaration of Indies: Just Sell It Yourself!
LAST November inside a conference room at the University of Southern California in Los Angeles, a film consultant named Peter Broderick was doing his best to foment a revolution. Mr. Broderick, who helps filmmakers find their way into the marketplace, was spreading the word on an Internet-era approach to releasing movies that he believes empowers filmmakers without impoverishing them economically or emotionally. Mr. Broderick divides distribution into the Old World and New, infusing his PowerPoint presentation with insurgent rhetoric. He has written a “declaration of independence” for filmmakers that — as he did that afternoon — he reads while wearing a tricorn hat.
In the Old World of distribution, filmmakers hand over all the rights to their work, ceding control to companies that might soon lose interest in their new purchase for various reasons, including a weak opening weekend. (“After the first show,” Mr. Broderick said, repeating an Old World maxim, “we know.”) In the New World, filmmakers maintain full control over their work from beginning to end: they hold on to their rights and, as important, find people who are interested in their projects and can become patrons, even mentors. The Old World has ticket buyers. The New World has ticket buyers who are also Facebook friends. The Old World has commercials, newspapers ads and the mass audience. The New World has social media, YouTube, iTunes and niche audiences. “Newspaper ads,” Mr. Broderick said, “are mostly a waste of money.”
The 200 filmmakers inside the conference room laughed, soaking up Mr. Broderick’s pitch as if their careers depended upon it, which perhaps they do. Independent filmmaking has never been for the faint of heart. But the consensus is that the past few years have been especially brutal. Sales have slowed, deal prices have dropped, and most of the major studios have retreated from the independent scene, closing or scaling back divisions like Warner Independent Pictures and Paramount Vantage, which released the kinds of movies that win critical hearts and awards. And good films are going unsold. Given the changes and downsizing, these might seem like worrisome times for movie lovers as well. After all, if these companies disappear, how do we find the next great American independent filmmaker, the new Jim Jarmusch, Wes Anderson 2.0?
For consultants like Mr. Broderick and filmmakers like Jon Reiss (the documentary “Bomb It”) the answer lies in self-distribution, in filmmakers doing it themselves or, more accurately, doing it themselves with a little or a lot of help from other people, including consultants like Mr. Broderick and Richard Abramowitz. Last year Mr. Abramowitz, a film-industry veteran who runs an outfit in Armonk, N.Y., called Abramorama with one full-time employee (him), helped shepherd Sacha Gervasi’s documentary “Anvil! The Story of Anvil,” about a 1970s metal band and its rebirth, into a success, with almost $700,000 at the North American box office. Consultants guide filmmakers on every angle of distribution. They can simply offer advice, but can also develop a marketing strategy, book theaters and collect the money.
If the D.I.Y. drumbeat has grown louder in recent years, it’s not only because the major studios have backed away from the independent sector. That’s a factor, but there are other issues involved, among them that the economic barriers to filmmaking have never been lower. Martin Scorsese once said that John Cassavetes’s first feature, “Shadows,” shot in the late 1950s with a 16-millimeter camera, proved to filmmakers that there were “no more excuses,” adding, “If he could do it, so could we!” Still, even in the glory years of the new American cinema movement, from the late 1960s to the mid-1970s, when the major studios appeared more open to original voices, Cassavetes had to self-distribute his 1974 masterpiece “A Woman Under the Influence,” which he did successfully, pulling in $6 million domestically.
Inexpensive digital cameras and editing software have lowered the barrier for filmmakers even further. Yet even as the means of production have entered into more hands, companies — large and small — continue to dominate distribution. Hollywood’s historical hold on resources and the terms of the conversation have made it difficult for an authentic alternative system to take root in America. The festival circuit has emerged as a de facto distribution stream for many filmmakers, yet the ad hoc world of festivals is not a substitute for real distribution. And then there’s the simple fact that there are independent filmmakers who do not fit inside the Hollywood (and Hollywood-style) distribution model and do not want to. For some stubborn independents D.I.Y. distribution has at times been either the best or only option.
In 1992, the year before Disney bought Miramax Films, thereby initiating the indie gold rush, Joe Berlinger and Bruce Sinofsky became a model for true independence when they distributed their own documentary “Brother’s Keeper” (1992) to substantial critical and commercial success. In the years since, those entering self-distribution have included emerging talent like Andrew Bujalski (who initially sold DVDs of his 2005 film “Mutual Appreciation” online) and established filmmakers like David Lynch (who released his 2006 movie “Inland Empire” in theaters himself). As self-distributed movies have found levels of critical or commercial success or even both, others have followed, including “The Talent Given Us,” “Note by Note: The Making of Steinway L1037,” “Ballast,” “Helvetica” and “Good Dick.”
Some self-distributed titles find their audiences with help from consultants, while others make their way into the marketplace with the help of consultants and companies that take a fee, rather than a percentage of the profits and all the distribution rights. Innovative strategies abound. Mr. Broderick is an advocate of what he calls hybrid distribution, which, as he has put it, “combines direct sales by filmmakers with distribution by third parties.” Thus filmmakers hold on to their sales rights and sell the DVD retail rights to one buyer and the video-on-demand rights to another and so on — rather than handing them all over to one distributor, as has been traditional. This allows filmmakers to reach audiences directly while controlling their own work and destinies, at least in theory.
The new D.I.Y. world is open-source in vibe and often execution. Participants refer to one another in conversation and on their Web sites and blogs, pushing other people’s ideas and projects. (On his Web site, peterbroderick.com, Mr. Broderick even posts discount codes for other people’s books.) But these new-era distribution participants are not engaging in blog-rolling. By sharing information and building on one another’s ideas, they are in effect creating a virtual infrastructure. This infrastructure doesn’t compete with Hollywood; this isn’t about vying with products released by multinational corporations. It is instead about the creation and sustenance of a viable, artist-based alternative — one that, at this stage, looks markedly different from what has often been passed off as independent cinema over the past 20 years.
Although D.I.Y. has become shorthand for this new movement, a more complex idea of the filmmaker-audience dynamic is emerging (Mr. Reiss calls it “a sea change”), partly as a response to the shifts in the industry, though also in reaction to the changes in the audience or more specifically audiences. Although some viewers still enjoy the ritual of going out to see movies, others don’t want to experience their entertainment in a theater, preferring to immerse themselves in a media-saturated world across a variety of platforms. “My son,” Mr. Reiss said, speaking by phone from Los Angeles, “consumes media on his computer and his iPod, and he will occasionally go out to a movie theater.” He tries to encourage his son, who’s 13, to go to the movies, but finds it tough. “He would rather interact with media on his computer than anywhere else.”
One of the buzzy ideas in D.I.Y. is transmedia, a word borrowed from academia, in which stories — think of the “Star Wars” and “Matrix” franchises — unfold across different platforms. “Star Wars” helped expand the very idea of a movie, because it involved a constellation of movie-related products, from videogames to action figures, all of which become part of the understanding and experience of the original, originating work. This isn’t just about slapping a movie logo on a lunchbox or a screensaver: it’s about creating an entertainment gestalt. As the theorist Henry Jenkins writes, “Reading across the media sustains a depth of experience that motivates more consumption.” In other words, you can sell one ticket to a moviegoer or enlist fans into media feedback loops that they in turn help create and sustain.
It might seem counterintuitive that D.I.Y. independents are borrowing a page from the George Lucas playbook. But only if you forget that Mr. Lucas is the most successful independent filmmaker in history. 20th Century Fox distributed the first “Star Wars,” yet Mr. Lucas kept the sequel and merchandising rights. “If I make money,” he said when the movie was released, “it will be from the toys.” The new generation of D.I.Y. filmmakers might not be pushing toys on their Web sites (though I’d like to see an Andrew Bujalski action figure), but they do peddle DVDs, posters, CDs, books and — much as Spike Lee did before them — are getting hip to selling themselves alongside their art.
The downside to this new D.I.Y. world is that filmmakers, who already tend to expend tremendous time and effort raising money, might end up spending more hours hawking their wares than creating new work. “I struggle with this all the time,” Mr. Reiss said. But artists who want to reach an audience are rarely if ever really free of the marketplace, and filmmakers working in the commercial arena tend to be even less so. For Mr. Reiss and other do-it-yourselfers, the most important thing is to reach their audiences, any which way, niche by niche, pixel by pixel, in theaters or online. “This is the other voice of film,” Mr. Reiss said with urgency, “and if this dies, all we’re left with is the monopoly.”
Audiences Experience 'Avatar' Blues
James Cameron's completely immersive spectacle "Avatar" may have been a little too real for some fans who say they have experienced depression and suicidal thoughts after seeing the film because they long to enjoy the beauty of the alien world Pandora.
On the fan forum site "Avatar Forums," a topic thread entitled "Ways to cope with the depression of the dream of Pandora being intangible," has received more than 1,000 posts from people experiencing depression and fans trying to help them cope. The topic became so popular last month that forum administrator Philippe Baghdassarian had to create a second thread so people could continue to post their confused feelings about the movie.
"I wasn't depressed myself. In fact the movie made me happy ," Baghdassarian said. "But I can understand why it made people depressed. The movie was so beautiful and it showed something we don't have here on Earth. I think people saw we could be living in a completely different world and that caused them to be depressed."
A post by a user called Elequin expresses an almost obsessive relationship with the film.
"That's all I have been doing as of late, searching the Internet for more info about 'Avatar.' I guess that helps. It's so hard I can't force myself to think that it's just a movie, and to get over it, that living like the Na'vi will never happen. I think I need a rebound movie," Elequin posted.
A user named Mike wrote on the fan Web site "Naviblue" that he contemplated suicide after seeing the movie.
"Ever since I went to see 'Avatar' I have been depressed. Watching the wonderful world of Pandora and all the Na'vi made me want to be one of them. I can't stop thinking about all the things that happened in the film and all of the tears and shivers I got from it," Mike posted. "I even contemplate suicide thinking that if I do it I will be rebirthed in a world similar to Pandora and the everything is the same as in 'Avatar.' "
Other fans have expressed feelings of disgust with the human race and disengagement with reality.
Cameron's movie, which has pulled in more than $1.4 billion in worldwide box office sales and could be on track to be the highest grossing film of all time, is set in the future when the Earth's resources have been pillaged by the human race. A greedy corporation is trying to mine the rare mineral unobtainium from the planet Pandora, which is inhabited by a peace-loving race of 7-foot tall, blue-skinned natives called the Na'vi.
In their race to mine for Pandora's resources, the humans clash with the Na'vi, leading to casualties on both sides. The world of Pandora is reminiscent of a prehistoric fantasyland, filled with dinosaur-like creatures mixed with the kinds of fauna you may find in the deep reaches of the ocean. Compared with life on Earth, Pandora is a beautiful, glowing utopia.
Ivar Hill posts to the "Avatar" forum page under the name Eltu. He wrote about his post-"Avatar" depression after he first saw the film earlier this month.
"When I woke up this morning after watching Avatar for the first time yesterday, the world seemed ... gray. It was like my whole life, everything I've done and worked for, lost its meaning," Hill wrote on the forum. "It just seems so ... meaningless. I still don't really see any reason to keep ... doing things at all. I live in a dying world."
Reached via e-mail in Sweden where he is studying game design, Hill, 17, explained that his feelings of despair made him desperately want to escape reality.
"One can say my depression was twofold: I was depressed because I really wanted to live in Pandora, which seemed like such a perfect place, but I was also depressed and disgusted with the sight of our world, what we have done to Earth. I so much wanted to escape reality," Hill said.
Cameron's special effects masterpiece is very lifelike, and the 3-D performance capture and CGI effects essentially allow the viewer to enter the alien world of Pandora for the movie's 2½-hour running time, which only lends to the separation anxiety some individuals experience when they depart the movie theater.
"Virtual life is not real life and it never will be, but this is the pinnacle of what we can build in a virtual presentation so far," said Dr. Stephan Quentzel, psychiatrist and Medical Director for the Louis Armstrong Center for Music and Medicine at Beth Israel Medical Center in New York. "It has taken the best of our technology to create this virtual world and real life will never be as utopian as it seems onscreen. It makes real life seem more imperfect."
Fans of the movie may find actor Stephen Lang, who plays the villainous Col. Miles Quaritch in the film, an enemy of the Na'vi people and their sacred ground, an unlikely sympathizer. But Lang says he can understand the connection people are feeling with the movie.
"Pandora is a pristine world and there is the synergy between all of the creatures of the planet and I think that strikes a deep chord within people that has a wishfulness and a wistfulness to it," Lang said. "James Cameron had the technical resources to go along with this incredibly fertile imagination of his and his dream is built out of the same things that other peoples' dreams are made of."
The bright side is that for Hill and others like him -- who became dissatisfied with their own lives and with our imperfect world after enjoying the fictional creation of James Cameron -- becoming a part of a community of like-minded people on an online forum has helped them emerge from the darkness.
"After discussing on the forums for a while now, my depression is beginning to fade away. Having taken a part in many discussions concerning all this has really, really helped me," Hill said. "Before, I had lost the reason to keep on living -- but now it feels like these feelings are gradually being replaced with others."
Quentzel said creating relationships with others is one of the keys to human happiness, and that even if those connections are occurring online they are better than nothing.
"Obviously there is community building in these forums," Quentzel said. "It may be technologically different from other community building, but it serves the same purpose."
Within the fan community, suggestions for battling feelings of depression after seeing the movie include things like playing "Avatar" video games or downloading the movie soundtrack, in addition to encouraging members to relate to other people outside the virtual realm and to seek out positive and constructive activities.
Until next week,
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