Peer-To-Peer News - The Week In Review - September 3rd, ’05

[JackSpratts]

"It's safe to say that buying shitloads of lame new music from major labels online will become as popular as P2P sharing." – Annalee Newitz


"The Whack-A-Mole game continues. The authorities go after one [P2P] system and another one pops up." – Andrew Parker


"Google, an enormously successful company, claims a sweeping right to appropriate the property of others for its own commercial use, unless it is told, case by case and instance by instance, not to. In our view this contradicts both law and common sense." – Association of American University Presses


"This program will help users discover more books, publishers sell more books and authors to ultimately write more books." – Adam Smith, Google


"Print publishing has had a great 500-year run, but the print book is morphing into the screen book. The big publishing houses just don't get it." – Warren Adler


"The main thing is, give readers a new book for free, and they might go back and buy some of the former books." – Warren Adler


"The probation department realizes this is small potatoes." – William Bispels






























September 3rd, 2005




Flooding Stops Presses and Broadcasts, So Journalists Turn to the Web
Steve Lohr and Felicia R. Lee

With their offices and presses flooded, news media outlets in New Orleans mostly abandoned newsprint and television broadcasts yesterday and set up shop on the Web.

The Times-Picayune, whose daily circulation is 270,000, put out only an electronic edition yesterday with a one-word headline summing up the impact of Hurricane Katrina: "Catastrophic."

A morning update on the Web site said The Times-Picayune was evacuating its building in New Orleans and that staff members were heading for Houma, a bayou town about 60 miles to the west. The newspaper's office phones and its e-mail system went dead.

Only one of the four local television stations, WWL Channel 4, a CBS affiliate, has been able to stay on the air throughout the last few days. Channel 4, owned by the Belo Corporation, used a tower and transmitter at the company's new facility in Gretna, La., and also sent journalists to the communications center at Louisiana State University in Baton Rouge, more than 75 miles away.

Two other stations, WNOL Channel 38, a WB affiliate, and WGNO Channel 26, an ABC affiliate, went off the air and relied on their Web sites, which featured weather updates, video footage and advice for coping with the disaster.

"What we've done in the interim is use the Web sites of both stations to get news to viewers and employees," said Gary Weitman, a spokesman for Tribune Broadcasting, which owns the stations.

WDSU Channel 6, an NBC affiliate, moved its operations to two sister stations, one in Jackson, Miss., and another in Orlando, Fla. With some interruptions, it got back on the air and presented news and weather programming on its Web site as well. "The Web played a big role in all of this," said Tom Campo, a spokesman for Hearst-Argyle, the station's owner.

The Internet, as a decentralized communications network, can be more resilient than traditional media when natural disasters occur. "Owning broadcast towers and printing presses were useless," said Jeff Jarvis, a consultant to online media companies. "The Web proved to be a better media in a case like this."

Yesterday, phone calls to the New Orleans region met with only busy signals, and the occasional communications from New Orleans to other parts of the country tended to be sent from the private e-mail accounts of editors and reporters.

In the afternoon, a message from Peter Kovacs, a Times-Picayune managing editor, reached the paper's bureau in Washington, with a brevity of a wartime cable message. "Still in Houma. Phones don't work well," Mr. Kovacs wrote. "Leaving for Baton Rouge to set up shop. Shea staying behind to set up a copy desk," a reference to Dan Shea, the paper's other managing editor.

Despite the scramble to find a new base of operations, The Times-Picayune was able to add a few staff-written stories to its Web site during the day as well as updates from The Associated Press. The Times-Picayune is part of the Newhouse chain of newspapers, owned by Advance Publications. The paper's Web site, www.nola.com, is run from computers in a data center in New Jersey, said Mr. Jarvis, the former president of Advance.net, which oversees the Web sites of the Newhouse papers.

Steven Newhouse, the chairman of Advance.net, said he had mostly been watching The Times-Picayune's struggle to keep reporting the news from a distance since he lost e-mail and phone contact with the editors.

"So we've been out of touch, but they've had this amazing publishing thing on the Web and the Web log and they've done it under these terrible conditions," Mr. Newhouse said. "It's a credit to everyone's ingenuity and their willingness to figure it out on the fly."

Web logs, or blogs, have become magnets for advice, opinion and personal observations sent in by individuals to media Web sites and on personal blogs - as they typically do in response to major news events.

On "Kaye's Hurricane Katrina Blog," Kaye Trammell, an assistant professor of mass communication at L.S.U., cautioned readers, for example, that cellphone use was still limited in the New Orleans region. "So if you're trying to call a loved one that might have been impacted by the storm," she wrote, "please keep in mind that not getting through on a cellphone is not an indication of their safety."

Others were more personal. John Strain, a social worker in Covington, La., described the hurricane's assault on Monday. "The wind is really picking up now and I hear the roof above me wobble," he wrote in his online journal. "The sound is like a waterfall or rushing river."

Katharine Q. Seelye contributed reporting for this article.
http://www.nytimes.com/2005/08/31/na...l/31media.html





Filesharing Traffic Leads Internet
Jason Meserve

eDonkey is the new BitTorrent

A new study that looks at the impact of peer-to-peer (P2P) traffic on service provider networks shows that file swapping forges on unabated.

CacheLogic, a Cambridge monitoring firm, says the practice shows no sign of slowing down, despite court rulings that have shut down some popular sites, such as Suprnova, a BitTorrent tracking service that offered links to pilfered television and movie content.

CacheLogic's global monitoring network shows that 60 per cent of all internet traffic is the result of P2P file-sharing platforms, with eDonkey taking over the top spot from BitTorrent.

"The Whack-A-Mole game continues," says Andrew Parker, CacheLogic's CTO. "The authorities go after one [P2P] system and another one pops up."

At the end of 2004, BitTorrent accounted for 30 per cent of internet traffic. But after the Motion Picture Association of America's moves to shut down BitTorrent tracking sites - centralised servers for locating distributed content - swappers began moving to other less-publicised services.

Today, eDonkey, a system that uses no centralised servers or tracking sites, consumes the most bandwidth of any application on the internet, according to Parker. And in the US, Gnutella has seen resurgence in popularity among swappers.

Of the files being swapped on the four major file-sharing systems (eDonkey, BitTorrent, FastTrack and Gnutella), 62 per cent are video and 11 per cent are audio, with the rest made up of miscellaneous file types, according to the study.

The problem for ISPs is that the traffic is symmetric, meaning the same amount of traffic going downstream (where the pipe is bigger) is coming back up, choking the smaller upstream broadband pipes. And traffic is constant, unlike email and web surfing, which tails off during the night.

In addition to releasing internet traffic details, CacheLogic has announcing that it is looking to expand its monitoring network by offering free equipment to selected service providers. CacheLogic and the ISP would share the traffic analysis data.

P2P filesharing does have some legitimate uses, as it pushes the distribution load away from a central origin server and out to the very edge: each individual user/viewer.

The BBC has launched iMP, a download service that relies on P2P technology to deliver television programming to subscribers. Each program could be multi-gigabyte; this would be nearly impossible to serve to all BBC subscribers from a central location, Parker says.
http://www.pcadvisor.co.uk/index.cfm...view&news=5010





MPAA Anti-Piracy Lawsuits Target Individuals
Bary Alyssa Johnson

The MPAA announced today that, as part of its large-scale anti-piracy campaign, it has begun to take aggressive action against individuals who illegally download and trade movies through the Internet.

The Motion Picture Association of America says it has filed hundreds of lawsuits against people who have obtained or distributed copyrighted material through P2P (peer-to-peer) file-sharing Web sites. It's highly likely that more suits will follow, according to an MPAA representative.

"The MPAA has developed a multi-pronged approach to combat piracy, and we are working to deliver our movies to consumers in new and innovative ways," said Gayle Osterberg, a spokesperson for the MPAA.

"However, when it comes to consumers stealing our product, we also have a very aggressive enforcement aspect to our anti-piracy program. In cases where people are illegally downloading films, there is a great likelihood that they risk being sued at some point down the line."

The MPAA recently shut down over 30 Web sites, after suing the server operators for facilitating illegal file sharing. Many of these sites used Bittorrent technology to allow for faster distribution or transfer of large files, according to an MPAA representative.

MPAA officials acquired the ISP addresses of individuals who were using those file-sharing services to download copyrighted content from the Web site operators, according to a recent news release.

"We are filing suit in the districts where the ISPs are operating from and are working with local organizations to get actual names of users, whom we will contact in an attempt to settle," said Osterberg.

"If they choose to ignore those overtures or refuse to settle with us, we will then move forward with lawsuits against specific individuals."

The MPAA has filed more than 250 individual lawsuits on behalf of the major Hollywood movie studios, as part of its multifaceted approach to fighting piracy, according to the news release.

"Certainly, illegal file sharing is an increasing concern for our industry," said Osterberg. "We estimate for hard goods piracy alone last year, the industry lost about $3.5 billion. Smith Barney carried out a private study to factor in online piracy, and they estimate losses to be in the $5.5 billion range this year."

To combat these losses, the MPAA campaign aims to educate individuals about the consequences of illegal downloading and to use innovative technology to make it easier to acquire movies legally. Additionally the MPAA is taking a proactive stance with worldwide law enforcement officials to crack down on Internet piracy operations, according to the news release.

"Internet movie thieves be warned: You have no friends in the online community when you are engaging in copyright theft," said senior vice president and Worldwide Anti-Piracy Director John G. Malcolm in a company statement.

"The fact that people who engage in illegal activity through torrent sites have now been identified and sued should come as no surprise. People who think they are acting anonymously when engaging in movie theft online are just fooling themselves and will face the consequences of their actions."
http://www.pcmag.com/article2/0,1895,1853573,00.asp





Movie Studios Poised for Piracy Fight
Jon Newton

Universal Pictures has already started touting its US$150 million re-hash of "King Kong," due out around Christmas. But how will the mighty ape be kept safe from the Evil File Sharing Villains?

High-speed Internet connections can mean huge, extremely fast downloads and, as a result, movie studios are now faced with the "same thorny challenges that the music industry encountered several years ago with the emergence of file-sharing programs," says the New York Times.

Interviewed by J.D. Lasica, ex-MPAA (Motion Picture Association of America) boss Jack Valenti said, "I visited the labs at Caltech, and they're running an experiment called FAST where they can bring down a DVD-quality movie in 5 seconds. The director told me it could be operative in the market in 18 months. Well, my face blanched."

Valenti also said, "Some new business model may want to put a movie out on the Internet just after it leaves theatrical exhibition. We can't afford to let that be copied at that juncture because it's the [home entertainment] aftermarket where you make your profits."

Behind the Times?

FAST or not, Hollywood is sticking to old, and badly outmoded, physical marketing, sales and distribution models. Instead of looking to P2P and other 21st century technologies to get them moving in the digital era, the major studios and their compatriots in the music industry are behaving like King Canute who tried, and failed, to hold back the tide. And it's these same physical DVDs which allow counterfeiters to not only live long, but also to prosper.

File sharers don't come into it. Despite many examples of creative accounting and imaginative reports, neither the labels nor the studios have ever able to solidly convince anyone that a shared file equals even a single lost sale.

On the other hand, the billions of physical CDs and DVDs flooding retail outlets around the world are so easy to copy, it's ridiculous. Counterfeiters and duplicators snap them up and hours later, faithful copies, often complete with look-alike packaging, are being peddled on street corners and in flea-markets. DRM? Forget it. The only people "copyright protection" impresses are the mainstream media.

There's no denying counterfeits and fakes must put a dent in Holywood's potential bottom line but, "Hollywood reported global revenue of $84 billion in 2004, according to PricewaterhouseCoopers, the accounting firm," says the NYT. "With most theatrical releases amounting to little more than an unprofitable, expensive form of marketing, DVDs have become Hollywood's lifeblood: together with videos, they kick in $55.6 billion, or about two-thirds of that annual haul, with box-office receipts making up most of the rest."

Never Enough Cash

Nonetheless, the entertainment cartels continue to claim they and their millionaire stars and well-paid support networks are suffering terrible financial and personal hardships because of file sharing, which they try to link with "piracy," as they've dubbed the practice of copying and re-selling their product.

Interestingly, Sony (NYSE: SNE) , a prime mover in both the studio and music worlds and one of the most vociferous complainants, also develops, makes and markets a significant proportion of the mini recorders it says are used by "cammers" to copy movies in the cinemas, as well as burners and associated supplies and equipment.

And speaking of Sony, it traced a "pirated" copy of "Something's Gotta Give" to a screener from actor Carmine Caridi, a member of the Academy of Motion Picture Arts and Sciences. "The Last Samurai" and other pirated screeners were also tracked back to Caridi. Russell Sprague, who ended up dead in an L.A. jail cell, received 130 movies from Caridi, who was ordered to pay Warner Bros. a paltry $300,000 for providing them.

Placing Blame

A now-famous AT&T Labs report, "Analysis of Security Vulnerabilities in the Movie Production and Distribution Process," revealed that of a total of 285 movies sampled on P2P networks, 77 percent were leaked by industry insiders.

Last year Mel Gibson's "The Passion of the Christ" was one of the most popular movies on the P2P networks. Gibson sued a Hollywood post-production company claiming bad security allowed three employees to copy the movie, which eventually turned up online and on the black market.

Much more recently, the Star Wars movie, "Revenge of the Sith," suddenly appeared online the same day it opened in theaters. But that wasn't down to would-be file sharers equipped with Sony's latest "pirate" camcorders. Rather, it was another, and very deliberate, Hollywood insider leak.

P2pnet publishes a unique weekly Movies File Share Top Ten based on BigChampagne stats and our TT chart for August 25 has "War of the Worlds" still in the global No.1 spot, with "Wedding Crashers" as the top U.S. movie.

But this doesn't mean millions of people are downloading and viewing these movies instead of paying for cinema tickets. In 2004, a record number of people visited cinemas in Western Europe in 2004, with admissions reaching 896.6 million, an increase of nearly 50 million on 2003.

And global revenue of $84 billion -- in one year
http://www.technewsworld.com/story/45777.html





Deals Pending For Students Accused Of Computer-Tinkering
AP

Most of the 13 students accused of tinkering with their school-issued laptop computers to download programs and spy on administrators are being offered deals in which the felony charges would be dropped, lawyers and a family member say.

In return, the students would perform 15 hours of community service, write an apology, take a class on personal responsibility and serve a few months probation, the attorneys said.

''The probation department realizes this is small potatoes,'' said William Bispels, an attorney representing nearly half the accused students.

School district officials and prosecutors did not return phone messages Thursday.

The 13 were charged as juveniles with computer trespass and computer theft, both felonies, and could have faced a wide range of sanctions, including juvenile detention.

The Kutztown Area School District said it reported the students to police only after detentions, suspensions and other punishments failed to deter them from breaking school rules governing computer usage.

But the students, their families and other supporters said authorities overreacted, punishing the students not for bad but because they outsmarted the district's technology workers.

The school had issued some 600 Apple iBook laptops to every student last fall. Kutztown is about 15 miles west of Allentown.

The charges allege the students breached security and downloaded forbidden programs, such as the iChat instant messenger. Some students also turned off a remote monitoring function that let administrators see what students were viewing on their screens -- and used it to view administrators' own computer screens.

Bispels said a few students are thinking about refusing the deal because they don't feel they have broken any laws.

But Mike Boland, who represents one student, said his client will likely accept the offer. ''It doesn't require my client to acknowledge he is guilty of anything,'' he said.

''It's about as mild as you can go,'' agreed James Shrawder, whose 15-year-old nephew was among those offered the deal. ''It's more of a face-saving measure.''

One student who has had prior dealings with the juvenile probation office was not offered a deal and the case was expected to proceed.
http://www.siliconvalley.com/mld/sil...y/12486229.htm





L.A. Cracks Internet Warez Ring
Roy Mark

In the first criminal Internet file-sharing case brought in California, a 34-year-old former Los Angeles resident pleaded guilty over the weekend to single felony count of grand theft.

Jed Frederick Kobles faces up to three years in prison for running an Internet file-sharing hub for trading movies, TV shows, music and games. Kobles, who now lives in Las Vegas, pleaded guilty on the same day the felony charge was issued. He remains free on his own recognizance until his Oct. 20 sentencing.

According to the criminal complaint, Kobles and still unnamed co- conspirators made films, music videos and television shows available for sharing during a four-day period in January.

Films available for illegal downloading included "Terminator 3: Rise of the Machines," "National Treasure" and "A Beautiful Mind." The videos were all by Madonna while the sole television show as an episode of "The Simpsons."

According to the Los Angeles County High Tech Crimes Unit, an undercover investigator joined Kobles' hub and downloaded more than 14 movies, television shows and music videos in January.

The undercover investigation led to a search warrant being served on Kolbes s residence in Los Angeles on Feb. 25. L.A. Assistant District Attorney Jeff McGrath said Kobles was in caught in the act of downloading the Xbox game Leisure Suit Larry when the warrant was served.

In the overt acts listed in the complaint, L.A. officials claim Kobles, under the screen name Raging8, operated a hub called UTB Smokinghouse. To join the group, users had to have access to a large amount of material they were willing to share with other members of the hub.

Commonly known as "warez" groups, the networks operate as the original sources for the majority of pirated works distributed and downloaded on the Internet. The stolen works frequently eventually filter down to peer-to-peer (P2P) networks and other public file-sharing networks.

In addition to filtering down to P2P networks, warez groups often are the primary source for the for-profit criminal distribution networks of DVDs and CDs since the digital files can be easily converted to optical disks.

Because of advancements in the use of sophisticated electronics and the Internet by warez groups, McGrath said, "These are difficult cases that require a great deal of expertise to investigate and prosecute."
http://www.internetnews.com/xSP/article.php/3531106





Local news

Connecticut Man Pleads Guilty To Selling Microsoft Source Code
AP

A Meriden man has pleaded guilty in federal court to charges related to the theft of the source code to Microsoft's Windows software.

William Genovese Junior is known on the Internet as "illwill." He pleaded guilty in New York City today to an indictment charging him with unlawful sale and attempted sale of the source code for Windows Two-Thousand and Windows N-T Four-Point-Oh.

Prosecutors say the software was obtained previously by other people and unlawfully distributed over the Internet.

The indictment against the 28-year-old Genovese was filed in February of last year. It alleges that he posted a message on his Web site offering the source code for sale, on the same day Microsoft learned significant portions of the code were stolen.

Access to a software program's source code can allow someone to replicate the program. Industry experts expressed concern that hackers reviewing the Microsoft software code could discover new ways to attack computers running some versions of Windows.

Genovese faces up to ten years in prison and a $250,000 fine when he is sentenced in the fall.
http://www.wtnh.com/Global/story.asp...1&nav=3YeXdtby





Surveillance

F.B.I., Using Patriot Act, Demands Library's Records
Eric Lichtblau

Using its expanded power under the antiterrorism law known as the USA Patriot Act, the F.B.I. is demanding library records from a Connecticut institution as part of an intelligence investigation, the American Civil Liberties Union said Thursday.

The demand is the first confirmed instance in which the Federal Bureau of Investigation has used the law in this way, federal officials and the A.C.L.U. said. The government's power to demand access to library borrowing records and other material showing reading habits has been the single most divisive issue in the debate over whether Congress should extend key elements of the act after this year.

Because of federal secrecy requirements, the A.C.L.U. said it was barred from disclosing the identity of the institution or other main details of the bureau's demand, but court papers indicate that the target is a library in the Bridgeport area.

The A.C.L.U., a leading critic of the Bush administration over the Patriot Act and its antiterrorism policies, brought a lawsuit on Aug. 9 in Federal District Court in Bridgeport on behalf of the Connecticut institution. The suit was filed under seal, and names and other information were redacted in a public version it released Thursday.

The A.C.L.U. said it would seek an emergency order allowing it to discuss details of the case publicly. A hearing has been set for Wednesday in federal court in Bridgeport.

In the debate over the future of the antiterrorism law, the administration has said that it has never used the so-called library provision in the law, which falls under Section 215, to demand records from libraries or booksellers.

The A.C.L.U. said that in the Connecticut case, the bureau was using a separate investigative tool, a type of administrative subpoena known as a national security letter, to get records related to library patrons, reading materials and patrons' use of the Internet.

The bureau's power to use national security letters to demand records without a judge's approval was expanded under the antiterrorism law. Last year, a federal judge in Manhattan struck down part of the subpoena provision as unconstitutional, in part because it allowed for no judicial oversight, but the Justice Department is appealing the ruling.

Anthony D. Romero, executive director of the A.C.L.U., said the demand for the Connecticut library records "shows that our supposed hysteria over the Patriot Act wasn't so hysterical after all."

"This is a prime example of the government using its Patriot Act powers without any judicial oversight to get sensitive information on law-abiding Americans," Mr. Romero said.

Officials at the Justice Department and the F.B.I. refused comment on the issue because it involves pending litigation. But one government official, speaking on condition of anonymity because of the litigation, cautioned against reading too much into the bureau's demand for the records in Connecticut.

Because the law prevents public disclosure concerning such demands for records, the official said: "Not all the facts have come out here. But national security letters are a legitimate investigative tool, and to draw conclusions without knowing what the underlying facts are, people have to be careful about that."

The letter from the F.B.I., which was included in the lawsuit, said the material being sought was needed as part of an investigation "to protect against internal terrorism or clandestine intelligence activities." The letter warned that the recipient was prohibited "from disclosing to any person that the F.B.I. has sought or obtained access to information or records under these provisions."

The lawsuit said the Connecticut organization, which is a member of the American Library Association, "strictly guards the confidentiality and privacy of its library and Internet records, and believes it should not be forced to disclose such records without a showing of compelling need and approval by a judge."

While the antiterrorism law is still awaiting final reauthorization by Congress, both the Senate and the House moved last month to extend at least temporarily the government's power to demand library records in terrorism investigations.

Administration officials have repeatedly emphasized that they have no interest in investigating the reading habits of law-abiding Americans.

But the administration has faced strong criticism from groups like the American Library Association, which released a survey of its members in June showing that law enforcement officials had contacted libraries at least 200 times since 2001 with formal and informal inquiries about their internal records.
http://www.nytimes.com/2005/08/26/po...26patriot.html





Opposition To Google Library Project Intensifies
Antone Gonsalves

Google Inc.'s book-copying library project has come under fire by two more publishers' groups, with one raising the possibility of legal action.

The Association of Learned and Professional Society Publishers and the Association of American University Presses have joined the Association of American Publishers in denouncing Google's copying of books without first seeking permission from the copyright holder.

Google, based in Mountain View, Calif., said this month that it would suspend until November scanning copyrighted books into its database, unless it has prior permission from the publisher or other copyright holder. At the end of the suspension, Google will resume copying books, unless it receives from publishers a list of specific titles they do not want in the search engine's database.

Google, however, has failed to satisfy the concerns of publishers. Google believes it's legal to copy the books, but publishers disagree. Their opposition comes in spite of Google's contention that its is copying the books to eventually provide in search results links to retailers where the material can be purchased.

"We firmly believe that, in cases where the works digitized are still in copyright, the law does not permit making a complete digital copy for such purposes," Sally Morris, chief executive of the ALPSP, based in England, said in a statement released this month.

The organizations also object to having the burden placed on them to opt out of the Google project.

"Google, an enormously successful company, claims a sweeping right to appropriate the property of others for its own commercial use, unless it is told, case by case and instance by instance, not to," the AAUP board said in a statement. "In our view this contradicts both law and common sense."

The ALPSP was the first of the three groups to indicate publicly that it was ready to go to court.

"We call on Google to hold an urgent meeting with representatives of all major publishing organizations, in order to work out an acceptable pragmatic way forward and to avoid legal action," Morris said.

Google was not immediately available Monday for comment. But the company has said that copying library books, part of its mission to digitize as much of the world's information as possible and make instantly available to people, benefits everyone.

"This program will help users discover more books, publishers sell more books and authors to ultimately write more books," Adam Smith, product manager for Google Print, said this month in an interview with TechWeb.

Smith also said Google believe its actions are "allowed under fair use and is consistent with all the principles underlying copyright law itself." Book publishers, however, argue that fair use under the law only applies to using portions of books for educational or non-commercial activities.

Google announced its library project in December, starting with collections in Harvard, Stanford, the University of Michigan, the University of Oxford and The New York Public Library. Besides expanding its network of search advertising, the project could someday put Google into direct competition with giant Internet retailer Amazon.com, experts say.

Book publishers are not the only ones rankled over Google's handling of copyrighted material. Adult magazine publisher Perfect 10 Inc. is asking a federal court in Los Angeles to prevent Google from displaying pictures and links to the company's copyrighted photos.

Perfect 10, whose namesake magazine competes with other soft porn publications, such as Playboy, sued Google in November 2004 in U.S. District Court for showing thumbnails of its photos in search results. The company also objects to Google linking to Web sites showing Perfect 10's photos without permission.

The Beverly Hills, Calif., magazine publisher has asked the court to hear its request for a preliminary injunction Nov. 7.
http://www.techweb.com/wire/ebiz/170101412





Steal This Book. Or at Least Download It Free.
Claudia H. Deutsch

TALK to Warren Adler, and watch some favorite clichés crumble.

Remember "The War of the Roses," the novel - and later, the movie - about a brutal divorce? Mr. Adler wrote the book and the screenplay, even though he has been married (happily, he says) to the same woman for 54 years. So much for "don't write what you don't know."

How about "don't fix what ain't broke"? Mr. Adler has published 27 novels. But did he follow the tried-and-true conventional print route for "Death of a Washington Madame," his 28th? No. He's self-publishing that one electronically, and e-mailing it free, a chapter at a time, to anyone who asks. Fogies (like this reporter) who still want the feel of pages "can always print the chapter out," he said. "The main thing is, give readers a new book for free, and they might go back and buy some of the former books."

The way Mr. Adler, 77 (there goes "you can't teach an old dog new tricks"), sees it, portable electronic readers will soon do to paper books what the Walkman and iPod did to boomboxes.

"Print publishing has had a great 500-year run, but the print book is morphing into the screen book," he said during a recent lunch at Pigalle, a French restaurant in Manhattan's theater district.

But what does that mean for those many, many people who believe there is a novel inside them, clamoring to be let out? Making a living as a writer has never been easy - even Mr. Adler was a self-described "failed writer" until, at 45, he finally caught a publisher's attention. So will all this technological upheaval make it easier or harder to get read?

Both, Mr. Adler insists. The Internet, with its limitless capacity for blogs and whole books that can be electronically whisked from place to place, means people can pretty well publish what they want. On the downside, the competition for readers, already intense, will become maddeningly so. But writers need not make it past the gatekeepers at publishing houses to be published. Vanity publishing - a term Mr. Adler hates - has come into the electronic age.

Nothing can guarantee a sale, but, Mr. Adler said, for as little as $295 - plus a fee for each book sold - self-publishing services will register a copyright and put a book into an electronic format that can be sold as an e-book or printed out. Up the price to $1,000 or so, and the services will send out news releases, contact reviewers and offer the book to stores and online vendors like Amazon.com.

"The big publishing houses just don't get it," Mr. Adler said. Apparently, Mr. Adler does: next month, he will begin selling all his past novels on flash memory cards, readable on e-book players.

It took Mr. Adler a long, long time before his "obsession with the need to tell stories" gave him the luxury of choosing formats. He started writing when he was 16, waking at 4 a.m. and writing until 7. He made his living first as a journalist, then as an ad man - but those three hours were always sacrosanct. He married at 22 and still, at 4 a.m., to the typewriter he went.

There was no money in it at first - but Mr. Adler was no stranger to making do with little. As a child growing up in Brooklyn, he lived with his parents, his two brothers and assorted relatives in his grandparents' house. At one point, 11 people shared a bathroom, "but it seemed a glorious childhood," he said.

He was a so-so student - "I read voraciously but I hated studying" - but still made it through New York University, majoring in English. He took a job as a copy boy at The Daily News, "because it was the closest I could get to the printed word." One day, on a Long Island beach, he struck up a conversation with Sonia Kline. They married in May 1951 and have three sons.

After a stint in the Army and a briefer stint in public relations, Mr. Adler started his own ad agency. By then, he had written three novels. Publishers were monumentally uninterested - until 1973, when he struck a deal with Whitman Publishing: he publicized John David Garcia's "The Moral Society" free, and Whitman published "Options," Mr. Adler's third book.

"Options" bombed - but he was finally a published author. That made it easier to get G. P. Putnam's Sons to publish "Banquet Before Dawn" in 1974. The advance was just $4,000, "but it felt like I'd won the lottery," Mr. Adler said. "It was the defining moment of my life."

Putnam published six more of his novels. Then it was bought by Universal Pictures, and "they dumped me," Mr. Adler said. Warner Books picked him up and published "War of the Roses."

He has learned from the many business mistakes he made along the way. In the 70's he sold the movie rights to "Trans-Siberian Express" for $250,000; the movie was never made, but he could not get the rights back. When he sold movie rights to "Private Lies" several years later, he made sure the rights reverted to him after 10 years.

Still, the writing life has been good to him. He lived in Hollywood, working on movie scripts. And he lived in Washington for years, hobnobbing with politicos. For the last 15 years, the Adlers have lived in Jackson Hole, Wyo., most of the time, and on Manhattan's Sutton Place some of the time.

All the while, of course, he has kept writing. So, not surprisingly, he has lots of tips for would-be writers in the electronic age. Some - "force yourself to write each day," "approach your work seriously" - are pretty hoary. But many have modern-day spins, and many, while basic, are counterintuitive. Here are a few tidbits, including some for people who want to publish an old-fashioned, printed book:

Take a writing course, and draft your professor as a quasi publisher. It is pretty easy for writing professors to set up links on university Web sites to electronic versions of novels they find promising. "They might even get reviewers to periodically weigh in," he said. No money would change hands, "but before you make money you have to get read," he said.

Think of yourself as a writing machine, with an on/off switch. If you decide to write from 5 a.m. to 7 a.m., be at that keyboard on the dot - and get up from it on the dot. "You sit there through writer's block, and you stop even if the ideas are flowing," Mr. Adler said. Start and end each session by rereading the last few pages. You'll make sure the facts are consistent - a character's blue eyes on page 12 are not green on page 48 - and it will get your subconscious working on the next plot point.

Send a one-page synopsis to an agent who specializes in your genre. Check out Literary Marketplace, which tells you who deals with mysteries and who likes gothic romances. If you are unsure of the genre - is it sci-fi or fantasy? - IUniverse and a few other companies will help determine it, and even lightly edit the book.

If you find a print publisher, negotiate like an entrepreneur. Standard contracts give publishers electronic, foreign and movie rights. But if you have a halfway decent voice, try to negotiate the right to record your own books. And don't automatically give the publisher options on a second book. "It may feel like an easier way to stay in the publishing pipeline, but if that first book does well, you can negotiate a better contract on the second," he said.

Be creative about generating buzz. "Your friends can hold book parties as easily as Tupperware parties," Mr. Adler said. He suggests pasting your name and book title on the side of a rented Winnebago and driving through town. If the book is about, say, older people, then visit a senior citizen center to talk it up. If you can't afford a full-time publicist, hire one for a few hours to book you on a few radio shows. And start a blog in which you talk about yourself, your experiences, anything at all. "Like chicken soup, it can't hurt," Mr. Adler said.

Don't think you are a lousy writer because publishers reject you. As Mr. Adler put it, "In the end, as in all things, luck trumps talent."
http://www.nytimes.com/2005/08/21/bu...y/21lunch.html





Hollywood, Microsoft Align On New Windows
John Borland

As Microsoft readies the next version of its Windows operating system, called Vista, the software giant is building in unprecedented levels of safeguards against video piracy.

For the first time, the Windows operating system will wall off some audio and video processes almost completely from users and outside programmers, in hopes of making them harder for hackers to reach. The company is establishing digital security checks that could even shut off a computer's connections to some monitors or televisions if antipiracy procedures that stop high-quality video copying aren't in place.

In short, the company is bending over backward--and investing considerable technological resources--to make sure Hollywood studios are happy with the next version of Windows, which is expected to ship on new PCs by late 2006. Microsoft believes it has to make nice with the entertainment industry if the PC is going to form the center of new digital home networks, which could allow such new features as streaming high-definition movies around the home.

PCs won't be the only ones with reinforced pirate-proofing. Other new consumer electronics devices will have to play by a similar set of rules in order to play back the studios' most valuable content, Microsoft executives say. Indeed, assuring studios that content will have extremely strong protection is the only way any device will be able to support the studios' planned high-definition content, the software company says.

"The table is already set," said Marcus Matthias, product manager for Microsoft's digital media division. "We can come in and eat at the buffet, or we can stand outside and wash cars."

Hollywood studios didn't get all the protections they wanted in Vista, and record labels have even seen some of their key concerns about copy- protecting CDs left unaddressed. But the Vista operating system as a whole goes much further than any general-purpose computing platform before it toward addressing content companies' piracy fears.

Although ordinary MP3 files and DVDs will play without any difference, the deep changes in the way the operating system handles some entertainment content will come with costs. The most obvious of these may be the risk of compatibility problems between some older monitors or TVs and Vista computers, particularly when trying to play high-quality video. Vista may also make it harder to do some casual copying, such as recording Internet audio.

"This is definitely being driven by Microsoft's desire to position Windows as a home entertainment hub, and to do that they have to make some concessions," said Matt Rosoff, an analyst with research firm Directions on Microsoft. "They're walking a line, trying to please both sides (content companies and consumers) at the same time."

These changes are worrisome to some computer programmers and digital activist groups. They fear that increasingly high security levels will block off avenues of programming innovation, or even stop computer owners from accessing portions of their own machines--a little like walling off a room inside a private house.

"There is a concern that there is a tendency to lock down parts of the design to protect the flanks of the copy-protection system," said Princeton University computer science professor Edward Felten, who has been an outspoken critic of rigid copy-protection rules. "That makes it harder for everyone, including Microsoft, to adapt to new uses."

Putting video behind a wall
Several major changes have been made to the way the operating system will handle video and audio, though few of these are included in the early version now in the hands of beta testers. The rest of the components will likely be added in the next, as yet unscheduled, beta release, and will be in the final launch of the operating system next year.

At the most basic level, some audio and video--at least when it is in Microsoft's Windows Media format--will be handled in a new "protected environment" that will keep applications such as media players or plug-ins separate from the actual media data.

Essentially, this means that much of the actual heavy lifting of decoding, unlocking and playing the audio will happen in what some engineers refer to as a separate "sandbox." Media player applications will send remote control commands such as play, fast-forward or stop into this protected space, without directly handling the data as they do today.

Technology called the "Protected Video Path" will then attempt to ensure that a video stream is encrypted--and thus difficult to copy--all the way until it reaches a monitor or other device where it is being displayed.

This won't always be possible, because most analog plugs, and some digital connections, don't support this kind of copy protection. Part of Vista's job will be to check to see what kind of devices are linked to the computer, and through what kind of connection, and decide whether the content can be encrypted or otherwise protected over that link.

If the answer is "no," in the case of high-resolution Video Graphics Array (VGA) connections, or some early Digital Video Interface connections, the computer could shut down output of video altogether through those plugs, if the content owners require that.

Alternately, Vista will include a "constriction" feature that can decrease the resolution of high-definition video on the fly, outputting a version that is slightly fuzzier (about the same as today's DVDs) than the pristine original. This can be used as an alternative to blocking a connection altogether, if a content company won't let high-definition video play over the lower-security outputs.

This feature won't affect most HD televisions, which typically are already shipped with secure connection technologies. PC monitors have been slower to adopt tools such as Intel's HDCP (High-Bandwidth Digital Content Protection) that support secure connections, however.

Most of these advanced copy-protection features in Vista are designed to apply to high-definition content and are unlikely to change the way today's DVDs or broadcast-quality content is played, Microsoft says.

Labels lack copy-protected CD support
A similar process will happen for copy-protected audio files, potentially encrypting the audio until it leaves the computer, and offering the ability to turn off specific outputs if content owners deem them insecure.

For the last year, record labels have sought additional features in the operating system that would make playing copy-protected CDs a more streamlined experience. But so far, Microsoft has not added any features specifically supporting these new CDs, saying that the technology isn't yet mature, and that other companies--Apple Computer and other music software companies included--also need to be involved.

"We're seeing digital distribution move at a rapid enough pace that the rules for which people access content today across the music services are very consistent," said John Paddleford, lead program manager for the Microsoft team that works directly with content companies. "This is what we're driving the labels to reach on the CD itself, so there's a consistent consumer experience. I think it is going to take time for the labels and the application vendors--not just Microsoft--to find a middle ground."

A spokesman for the Recording Industry Association of America, which has engaged in discussions with Microsoft on this issue, declined to comment.

Sensitive subject
Microsoft is aware that the high level of protection--which could result in some monitors and TVs not playing high-definition content at full resolution-- could spark criticism and confusion.

The company is quick to say that this has not been a case of studios dictating policy to programmers.

"The studios are very good about not trying to design software," Paddleford said. "I've never had a studio say, 'We need an API (application programming interface) that does this.' But they do talk about, 'Well, we want to make sure that our theatrical content doesn't get played in any place but a theater.'"

For their part, studio executives say they haven't been involved in the intimate details, but are happy to see what Microsoft has done.

"The greatest problem in existing operating systems is that content is in the clear across certain interfaces," said Chris Cookson, chief technology officer for Warner Bros. "They've undertaken to improve that, which everyone was glad to see."
http://news.com.com/Hollywood%2C+Mic...3-5844393.html





Why DRM Will Have a Negative Affect in the Long-Run
Alexander Grundner

I was just bouncing around some ideas about DRM (Digital Rights management) and its impact on consumers. I've read various reports on the topic (most long-winded and vague), but I was never satisfied with their findings. So here's how I see it...

Points/Categories:

Category 1: Average consumers buy what's made available to them and they don't pirate music and videos (this represents the majority of the population).
Category 2: Above average consumers, with knowledge of how various peer-to-peer (P2P) technologies and DRM stripping techniques work, will find ways to circumvent DRM on media they own or will download illegal copies of the same works and others of interest (this is a small portion of the population).
Category 3: Blatant pirates, people who make it their life's work to crack DRM and distribute pristine illegal copies of media through various online channels, are virtually impossible to stop (these are the one percent-ers).

Conclusion:
No matter how many barriers media companies place on protecting their media from duplication or piracy, an unlocked version will always be available to those who seek it. (FYI, although it's available, it doesn't mean it's practical to get – i.e. multi-gig High-Definition video). Moreover, if media companies restrict duplication and interoperability to the point where fair-use is not an option, you'll see more consumers jumping into Category 2. So, in reality, media companies are pushing consumers to engage in "illegal activities" by offering an inferior product (be it physical or software based) instead of courting them with a new, and even more empowering feature-set.

Aside:
In order to understand what consumers want, you have to look at what they currently have – in particular CDs and DVDs.

· CD/DVD: extremely high-quality digital media that you physically own
· CD: ability to transcode the audio into different codecs and bitrates
· CD: unlimited duplication capabilities
· CD/DVD: playable on any CD/DVD drive (interoperability factor)
· CD/DVD: share media with friends and family by either burning a copy or letting someone borrow a CD or DVD

The truth is once you strip DeCSS encryption from a DVD, you have the exact same features a CD allows you to have.
http://www.ehomeupgrade.com/entry/1310/why_drm_will





Apple, Digital Music's Angel, Earns Record Industry's Scorn
Jeff Leeds

Two and a half years after the music business lined up behind the chief executive of Apple, Steven P. Jobs, and hailed him and his iTunes music service for breathing life into music sales, the industry's allegiance to Mr. Jobs has eroded sharply.

Mr. Jobs is now girding for a showdown with at least two of the four major record companies over the price of songs on the iTunes service.

If he loses, the one-price model that iTunes has adopted - 99 cents to download any song - could be replaced with a more complex structure that prices songs by popularity. A hot new single, for example, could sell for $1.49, while a golden oldie could go for substantially less than 99 cents.

Music executives who support Mr. Jobs say the higher prices could backfire, sending iTunes' customers in search of songs on free, unauthorized file-swapping networks.

Signs of conflict over pricing issues are increasingly apparent. This month, Apple started its iTunes service in Japan without songs from the two major companies - Sony BMG Music Entertainment and Warner Music Group - leaving artists like Avril Lavigne, Beyoncé and Rob Thomas out of the catalog because the companies refused to license their music to iTunes, executives involved in the talks said.

That gap in the Japanese music market, the world's second biggest, is considered a harbinger of what may await American consumers as the contracts that record companies have with Apple in the United States come up for renewal early next year.

Mr. Jobs in the past has cast himself as an innovator battling established media giants like Disney and Microsoft. But these days, allies and adversaries both agree, he has more power online than Wal-Mart has in the bricks-and-mortar world.

Apple commands an estimated 75 percent of digital music sales, and roughly 80 percent of sales of MP3 players, with its market-leading iPod. While many still admire Mr. Jobs's touch - iTunes quickly established a market for paid downloads after the industry wasted years on misfires - he also inspires enmity or jealousy from others in the industry, which is back in a slump after a modest rebound last year.

Mr. Jobs' vision of simple, uniform pricing for songs and a policy of limiting Apple's music to Apple's devices are increasingly under attack.

"He'd like to continue to define the rules of the game," said Paul Vidich, a special adviser to America Online and former executive vice president of the Warner Music Group. Mr. Vidich said the digital music market, while growing, was still a fraction of the music business, but added, "I just think the music companies are now at a point where there's too much money on the table not to insist" that Apple accept variable prices.

"The question is," Mr. Vidich said, "what do they want the profile of the business to look like going forward?"

A sore point for some music executives is the fact that Apple generates much more money selling iPod players than it does as a digital music retailer, leading to complaints that Mr. Jobs is profiting more from tracks downloaded to fill the 21 million iPods sold so far than are the labels that produced the recordings.

Andrew Lack, the chief executive of Sony BMG, discussed the state of the overall digital market at a media and technology conference three months ago and said that Mr. Jobs "has got two revenue streams: one from our music and one from the sale of his iPods."

"I've got one revenue stream," Mr. Lack said, joking that it would require a medical professional to locate. "It's not pretty."

In a more conciliatory statement yesterday, Mr. Lack said: "I look forward to sitting down with Steve in the fall when we are scheduled to discuss Apple and Sony BMG's relations going forward. I think Steve has done a great job on behalf of the industry and in the months ahead we have lots of challenges to conquer together."

Apple has long allowed different prices for full albums sold on the service, though it believes that maintaining the 99-cent price for each song on an album acts as a natural cap. The service, which is available to consumers who download iTunes software to their computers, allows users to choose from roughly 1.5 million songs from major and independent labels. The songs, once paid for and downloaded, can be transferred to an iPod device, burned to blank discs, or played on the computer. At the price of 99 cents a song, the share of the major labels is about 70 cents.

Some analysts suggest that the willingness of the music companies to gamble on a new pricing structure reflects a short memory.

"As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them," said Mike McGuire, an analyst at Gartner G2. "It'd be rather silly to try to destabilize him because iTunes is one of the few bright spots in the industry right now. He's got something that's working."

The push for variable pricing is not uniform across the business. The Universal Music Group, a unit of Vivendi Universal and the industry's biggest company, appears to support Mr. Jobs's desire to maintain the price of 99 cents a track for the time being. The EMI Group, the British music giant, has expressed a desire for more variation in prices but does not appear interested in a protracted fight.

The divide among the four record companies reflects a broader philosophical argument about whether the fast-expanding digital market is stable enough to bear a mix of prices, particularly a higher top end, while millions of consumers still trade music free on unauthorized file-swapping networks.

"I don't think it's time yet," said Jimmy Iovine, the chairman of Interscope Records, Universal's biggest division. "We need to convert a lot more people to the habit of buying music online. I don't think a way to convert more people is to raise the price.

"I believe that he really feels that everybody isn't hooked yet into the whole concept," Mr. Iovine said, referring to Mr. Jobs. "You make it affordable, at a reasonable price, so they can learn about it. It's not an unreasonable position."

The other main battleground in Apple's coming confrontation with the industry has to do with "interoperability" of services and devices. Mr. Jobs has so far refused to make the iTunes software compatible with music players from other manufacturers, and he has prevented the iPod from accepting music sold from competing services that use a Microsoft-designed music format. As a result, songs purchased from Napster, for example, will not play on an iPod.

Apple's critics say the strategy echoes the company's decision, in the early years of personal computers, not to license its Mac operating system software. Many computer industry analysts say that approach allowed the rival Windows system to establish itself, and consigned Apple to a far smaller share of the computer market.

Apple has said that it will benefit more from improving iTunes than from devoting resources to make it compatible with other, smaller systems.

Still, to some executives, that practice makes Mr. Jobs appear more concerned with maintaining market dominance for his high-margin iPods than with allowing a more open digital market. All of the music companies, to one degree or another, have been urging Mr. Jobs to abandon the strategy, according to executives involved in the talks.

Hilary Rosen, the former chairwoman of the Recording Industry Association of America, agrees on that point. "If Apple opened up their standards, they would sell more, not less," she said. "If they open it up to having more flexibility with the iPod, I think they'd sell more iPods. On the other hand, I don't think it's their fault that nobody else has come up with something great" to compete.

Sony BMG in particular has taken steps that may apply pressure to Mr. Jobs to make Apple's software compatible with that of other companies. The company has issued dozens of new titles - including high-profile CD's from the Dave Matthews Band and the Foo Fighters - with software to limit the number of copies that can be made from the disc.

The software is compatible with Microsoft's music software, but not Apple's, and as a result music from those Sony BMG albums cannot be transferred to iPods that are hooked up to Windows-based PC's. EMI has been test-marketing similar software with a handful of titles.

Even some music executives who favor altering the iTunes service doubt that they will be able to force Mr. Jobs' hand by withholding their music. Instead, they are counting the months until the major wireless phone carriers enter the business of selling songs to mobile phone customers. Since there are many more mobile phones in use than there are iPods, the industry thinking goes, the arrival of a broad mobile music market will erode the leverage Mr. Jobs now holds.

But Apple has also been working with Motorola to develop a phone that can import songs from an iTunes-equipped computer.

Mr. McGuire said Apple was not likely to quietly surrender its position in the market.

"I think if they're throwing down for a street fight," he said, "they may have picked somebody who's as good or better at it than they are."
http://www.nytimes.com/2005/08/27/te...rtner=homepage





Royalty Fight Clouds Music Subscriptions
By John Borland

Digital-music companies and music publishers have reached an impasse in royalty negotiations, clouding the future of online subscription services such as those from Yahoo, RealNetworks and Napster.

The two sides have been negotiating on and off for years over the amount of money that songwriters and music publishers should get from these subscription plans, which allow listeners to download or stream an unlimited amount of music per month.

The services have long since struck agreements with record labels, and download stores such as Apple Computer's iTunes have their royalties settled. Subscription services have been operating under a temporary agreement with the publishers since 2001, however.

"The problem is that it's been four years, and we have not had one penny distributed to songwriters or publishers," said David Israelite, chief executive officer of the National Music Publishers' Association. "The digital subscription market has been inhibited by the lack of certainty."

The latest round of negotiations between the NMPA and the Digital Media Association (DiMA), which represents large companies including Yahoo, RealNetworks and Apple, has largely broken down over price.

Music publishers and songwriters, led by the NMPA, have proposed a new kind of license for subscription services that would lump together several different types of fees paid by radio stations and download services.

This "unilicense" is necessary because subscription services use both streams and downloads, the publishers contend.

In return, the group has asked that nearly 17 percent of subscription services' gross revenues go to songwriters and publishers. That's far above what publishers and songwriters typically get for a music sale, which usually is around 5.25 percent for online radio or 8.5 percent for digital downloads.

The services say that figure is far too high, and have suggested 6.9 percent instead. Both sides have now stopped negotiating and are trading angry letters instead.

"These companies are passionately committed to paying all copyright owners fair value for their creative work, and simultaneously creating successful businesses that defeat the scourge of pirate networks," DiMA Executive Director Jon Potter wrote in a letter to the publishers groups on Friday. "This careful and expensive balancing act requires enormous investment in creative content, product development, marketing and customer service, but it cannot justify--for any executive regardless of title--paying double and triple royalties in comparison to historical industry economics."
http://news.com.com/Royalty+fight+cl...3-5843822.html





Web, DVDs Could Mark CDs' Slow Death
Yuki Noguchi

When Ohio-based rock band the Sun releases its first full-length album next month, it will be available on DVD, online and on vinyl record. But not on the medium that's still the biggest seller in the music industry today: the compact disc.

"It's a tip of the hat to the past and the tip of the hat to the future," said Perry Watts-Russell, a senior vice president at Warner Bros. Records Inc., which signed the band.

The label expects the Sun to be the first of many artists to embrace a no-CD, video-only strategy. And that is part of a larger move away from the traditional album concept that some experts say is steering the CD the way of the hand-cranked gramophone.

The full-length CD format, which debuted in 1981, last year sold 766.9 million copies, down from a high of 942.5 million in 2000, according to statistics from the Recording Industry Association of America. At the same time, online sales -- championed by the popular Apple Computer Inc. iTunes Web site -- is picking up part of the slack: 139.4 million tracks were sold online in 2004.

The digitization of music has created a shift in how tunes are shared and consumed. Because it's faster to copy and transmit digital music, more people are copying and sharing tracks -- prompting copyright concerns from the entertainment industry. On the other hand, the cheapness of Internet distribution allows many no-names to release music that otherwise might never be seen or heard outside a garage.

The Sun's 14-song album, "Blame It on the Youth," will be released Sept. 27 and will come with one disc option -- a DVD of music videos that can be manipulated through a computer to download the songs onto an MP3 player or burn them onto a CD. Actually, there is a second disc, but it's made of vinyl -- a nod to a burgeoning subculture that is reviving the old long-play format.

Having a new generation of listeners who may be building libraries of songs by piggy-backing off their friends' collections doesn't bother Sam Brown, drummer and songwriter for the Sun, which had a $50,000 budget to produce the videos for the album. "As more people find out about our band, more people will turn out when we play," he said. And for smaller acts like his, live performance is where the money is.

Members of the Sun, which is a garage pop band with a slightly retro aura and a sound one critic called "slick and gritty," knew that its demographic reflected its own persona: younger, digital and alternative.

"I haven't bought a new CD in a very long time," Brown said. Instead, he searches for vinyl versions, or rips songs to his iPod, or gets music from friends, he said.

The five-member band produced its own videos, and the record label was sold on the digital-video-only option, he said. "It is sort of a leap of faith to the future," Brown said, but "it feels good to be in the company of forward-thinking people."

Watts-Russell of Warner Bros. acknowledges that all-video and all-Internet distribution changes the definition of the word "album" -- a sequenced body of songs with heavy emphasis on the all-important cover art.

"I think the gestalt of having an album has been changing on its own, with or without this change," he said. "A few years from now, this is going to be exceedingly common," Watts-Russell said. "You can avoid the CD. It's on its way out. It's in no way out now, but the writing is on the wall."
http://www.washingtonpost.com/wp-dyn...082501999.html





Pixar Shares Dip on Report of SEC Inquiry
AP

Shares of Pixar Animation Studios Inc. fell nearly 2.5 percent Friday after a published report said the Securities and Exchange Commission Inc. has requested information leading up to the filmmaker's report earlier this month of lower second-quarter earnings.

The company issued a statement at midday confirming that it had received "an informal request for information from the SEC, as companies do from time to time, and we believe we have fully complied with that request."

But the one-sentence statement did not address what the SEC wanted or when the request was made, and spokesman Nils Erdmann declined to elaborate. "We have no other comments," he said.

Pixar shares fell $1.01 to close at $41.99 Friday on the Nasdaq Stock Market, where its shares have traded in a 52-week range of $36.56 to $54.47.

The Wall Street Journal reported Friday that the SEC launched an informal inquiry into Pixar after heavier- than-expected returns of "The Incredibles" DVD led the studio to miss its second-quarter earnings forecast.

The story, citing unidentified people familiar with the case, said Pixar is cooperating with the SEC.

On Aug. 4, Emeryville, Calif.-based Pixar reported it earned $12.7 million, or 10 cents per share, in the second quarter compared to $37.4 million, or 32 cents per share, a year earlier. Revenue fell to $26.4 million from $66.3 million.

In June, Pixar lowered its earnings estimates for the second quarter after finding that home video sales of "The Incredibles" were weaker than expected.

Upon reviewing sales data, the studio decided to increase its cash reserves in anticipation that it might have to refund retailers for unsold copies of the movie.

The company said at the time that the move would result in lowering net income in the quarter by 5 cents per share, or $6 million.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS