Peer-To-Peer News - The Week In Review - March 12th, '05

[JackSpratts]

Quotes Of The Week


"We concluded that giving up our management control by selling more than half of the shares to recording companies is the only way for us to end the conflict with the local music industry and put the business back on track." – Park Sung-hoon


"Many people feel it is not that bad, like making a home tape recording. It could be damaging if the industry is seen to be suing its own customers." – British record exec


"Recent reports indicate that file sharing is bigger than ever—and so are the record industry's profits. As a result, it's hard to see the suits as anything other than a wrongheaded attempt by the old media industry." – Annalee Newitz


"The record industry has never won this argument anywhere in the world." – Mary Still


"We have noticed that there are three factors to stimulate users to use data services. First, more content and unlimited access to the Internet. Second, cheap rates. And third, we need a new generation of handsets." – Rene Obermann


"Placing handcuffs on students will not resolve the inability of Canadian artists to earn a decent living." –Charlie Angus


"I discovered the meaning of life somewhere between 'Bitches Ain't Shit' and 'Zak and Sara'." - Whitney Maus


"This is really a group of 'little people' making the effort to fight the tactics of the RIAA." – WinMx activist me here
















Legal Reprieve For Russian MP3 Site?
John Borland

Moscow prosecutors have declined to press criminal charges against a popular Internet site that sells MP3s for just pennies, according to Russian news reports.

Record industry groups in the United States and Europe are trying to close the Russian AllofMP3.com, which offers downloads of MP3s--including songs from The Beatles and other groups that have not authorized digital distribution--for just a few cents per song.

Late last month, Moscow police completed an investigation of the issue and recommended to prosecutors that the site be charged with copyright violations. The International Federation of the Phonographic Industry (IFPI) also submitted a formal complaint about the site.

On Friday, Russian news agency Tass reported that prosecutors had declined to press criminal charges, citing specifics of Russian copyright law.

A spokeswoman for IFPI said Monday that the organization had not heard an official response from the Moscow prosecutors.

"We have received no confirmation of any decision, and we do not expect it for some time," said IFPI spokeswoman Fiona Harley. "However, if it is true that the prosecutor has not taken the case this would be very disappointing, considering the blatant and large-scale infringement that continues to take place."

The tussle over AllofMP3.com highlights the difficulties that copyright companies are having around the world, faced with myriad versions of laws that are often imperfectly adapted to new Internet distribution models.

The Russian site says it has legal rights to sell the music in the form of licenses from the Russian Multimedia and Internet Society. Record labels say that group does not have the authority to grant distribution rights to their music.

Similar issues have arisen in Spain, where a pair of Net companies began distributing music online citing the approval of local license authorities. Record labels sued both, but only one--Weblisten.com--remains in operation.

The IFPI spokeswoman said the group would pursue the case further if the Moscow prosecutor takes no action.
http://news.com.com/Legal+reprieve+f...3-5602743.html


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European Parliament Cries Foul Over Patent Directive
Matthew Broersma

Lawyers have been asked to probe Denmark's failure to prevent the software patent directive being adopted by the European Council

The European Parliament (EP) and the Danish parliament are investigating whether the EU Council broke procedural rules by adopting the draft directive on software patents in the face of opposition from ministers. In an extraordinary meeting called on Monday night, the EP's Legal Affairs Committee (JURI) decided to ask the Luxembourg presidency for full documentation of the EU Council's meeting.

"It would have been much better if we had returned to a first reading," Lichtenberger told the JURI meeting. "After the Commission's restart denial and now the unclear decision in the Council, we are faced with procedural questions rather than having a constructive dialogue on the content of the dossier."

A Danish minister said he would ask the Danish parliament's lawyers to examine the validity of the EU Council's decision in the light of Danish Minister of Commerce Bendt Bendtsen's mandate from the Danish parliament to reopen debate. Bendtsen was directed by the Danish Parliament's Europe Council to transfer the text from an A-item, not requiring further discussion, to a B-item, which could have led to a renegotiation of the Common Position. However, the text was allowed to proceed as an A-item with only a formal statement attached expressing Denmark's reservations.

The procedural investigations are unlikely to make much difference to the progress of the draft directive, said Florian Mueller, who runs an anti-patent Web site. "In purely formal terms the Council just followed its usual procedures," he said. "The Danish minister may have acted against some Danish law or even the Danish constitution but that's a Danish issue, and not a software patent issue."

Opponents of the directive are urging MEPs to make substantial changes to the text or, preferably, to reject it, Mueller said.
http://uk.news.yahoo.com/050309/152/fdzmh.html


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Canadian musician/MP strongly against copyright changes

Digital Angus

Editorials - As per usual, NDP Heritage Critic and Timmins-James Bay MP Charlie Angus has given the feds a royal tongue lashing.

Angus was in Toronto recently for Canadian Music Week where he spoke on a panel called “Canada Saves the World”.

He chastised the government for looking at copyright legislation that could be detrimental to the digital revolution.

Angus cited measures that would force schools to pay for the students’ use of the internet and limiting file sharing in libraries.

“Placing handcuffs on students will not resolve the inability of Canadian artists to earn a decent living,” he said.

The internet needs to be embraced, not shunned as a medium. And we must say, the good definitely outweighs the bad.

Adapt or die. That brutal Darwin philosophy.

However, with or without legislation, file sharing isn’t going away. We just need to make sure that it works for everyone.

No one can deny that downloading has cost musicians, but it’s laughable to hear those billionaire record companies say, “Think of the artists!”

Yeah, think of the artists – that’s why these same companies pay the artists two cents to the dollar... because the artists are important, of course.

Please.

Besides, with the advent of copy-protecting technology on audio CDs, it’s getting more difficult for the average Joe to mooch off the music industry.

So there is really no excuse to be intruding on the digital frontier.

Don’t forget, Angus is in a band too. Shouldn’t his opinion count for anything?

But A&R folks don’t particularly enjoy responding to logic or reason.

Unless it upgrades the hood ornament on their cars.
http://www.northernnews.ca/webapp/si...=Northern+News


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Kazaa Assets Frozen in Australia
Patrick Gray

The assets of Sharman Networks, the maker of the Kazaa peer-to-peer software, have been frozen pending the outcome of a lawsuit brought against the software-maker by the recording industry.

The personal assets of Sharman's directors, including their homes, have also been frozen following the latest legal push. Australia's Federal Court heard the music industry's motion in Sydney on Friday. The assets of Altnet, which licenses technology to Sharman and is a co-respondent in the action brought against Sharman, have also been affected.

The maneuvering comes just days after Altnet said it would set up a fund designed to give independent record labels a share of Kazaa's advertising revenue. Lee Jaffe, Altnet's president, told Wired News the asset freeze is nothing more than an attempt by the major record labels to choke off a revenue stream destined for the cartel's smaller rivals.

"They're just trying to freeze any money going to independents," Jaffe said. "We made an announcement that we had convinced Sharman to share its advertising revenue with all the labels that we've signed deals with ... and I think that really freaked them out."

However, Michael Speck, the managing director of Australia's Music Industry Piracy Investigations, a division of the Australian Recording Industry Association, says the action has more to do with preserving the assets of the respondents in the Kazaa case.

"What freaked us out is finding out they'd sold their homes," Speck said. Sharman CEO Nikki Hemming recently sold her house to Sharman's accountant for a profit, only 12 months after she bought it, Speck added.

If the music industry's suit is successful, the assets may be awarded as damages to the music industry.

Following the filing of a motion with Australia's Federal Court, all parties voluntarily agreed to having their assets restricted, Speck said. The directors will be prevented from transferring their personal and business assets offshore before March 22, when Justice Murray Wilcox, the judge hearing the case, returns from vacation. Until then, all identifiable assets will remain frozen.

But Jaffe insists the latest move is simply designed to protect the music industry's monopoly of the marketing and distribution of music. "It's frustrating that four record labels would want to prevent dozens of other record companies from getting paid," Jaffe said. "That, to me, doesn't make sense. That's upsetting."

Speck says the orders specifically exempt ordinary business transactions from the freeze. "They came to court today and agreed to all of their assets being frozen. Clearly there is no concern about the ordinary business of the company," he said.

Sharman's legal woes began in February 2004, when its Sydney offices were raided by the music industry, which was granted a civil search order by Australia's Federal Court. Attempts by Sharman to invalidate the search order, known as an Anton Piller Order, were unsuccessful.

The suit alleges Sharman has directly and indirectly infringed on the recording companies' copyrights, violated Australian fair trade laws and conspired to harm the music industry.

The Federal Court will reconvene on March 22 and hear final oral submissions, which lawyers expect to run for one or two days. Justice Wilcox will then retire to make a decision. The process expected to take several weeks.

The trial primarily focused on the authorization of copyright infringement. Lawyers representing the music industry say Sharman can prevent the transfer of illegal material. It doesn’t, it says, because the primary activity of Kazaa users is to infringe copyright.

The decision in the case is likely to be appealed, regardless of the outcome, Jaffe said.
http://www.wired.com/news/digiwood/0,1412,66792,00.html


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Australian ISP Is Raided in File Swap Hunt
Mike Corder

Australian recording industry investigators raided an Internet service provider on Thursday suspected of having used high-speed file- swapping technology to allow the pirating of hundreds of thousands of songs and video clips, an industry official said.

The raid was believed to be the first on an Australian Internet company involving popular BitTorrent file sharing software.

The investigators raided the headquarters of Swiftel Communications in Perth, the capital of Western Australia state, Music Industry Piracy Investigations said. MIPI is part of the Australian Record Industry Association.

"These raids are a new and important development in our fight against Internet music piracy," MIPI General Manager Michael Speck said.

BitTorrent is a software program which allows the downloading of large files from multiple sources at the same time, thereby speeding up the transfer. Users connect directly to each other, but there is a central server which coordinates the transfers.

Speck accused Swiftel of using BitTorrent technology "to link infringers to music clips and sound recordings. We believe hundreds of thousands of downloads have been conducted during the last year in breach of copyright laws."

He said his investigators seized "digital evidence relating to Web pages and Internet transactions consisting of both illegal sound recordings and illegal video clips."

Swiftel Communications could not immediately be reached for comment.

The raids were conducted with rarely used search warrants known as Anton Piller orders which are used exclusively in civil proceedings. No police were involved, and the record industry sent its own investigators to carry out the search and seize evidence.

Last year, Speck's organization used Anton Piller orders to raid offices and homes in Sydney linked to the Kazaa file-sharing network. The recording industry is involved in an ongoing civil trial against Kazaa that is expected to wind up later this month.

Lawyers for the recording industry say Kazaa's owners are allowing the network's millions of users to illegally exchange billions of copyrighted music files each month.

Kazaa's owners say they are not responsible for the actions of people using their software.

Speck said Thursday that among music videos found traded on Swiftel were "Kids" by Robbie Williams and Kylie Minogue and "Sometime" by Britney Spears.

"The record industry will continue to take legal action to protect its copyright whether it's on the internet or elsewhere," Speck said. "We will continue to act against ISPs who we believe are set up as vehicles for piracy."
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Parents Of Net Music Thieves To Be Fined £4000
David Derbyshire and Matt Born

Parents whose children illegally swap music over the internet could be fined at least £4,000 following a landmark legal settlement announced yesterday.

British record labels said 23 people who shared thousands of tracks unlawfully were forced to pay compensation totalling £50,000.

Kazaa is a peer-to-peer network that offers free sharing of files

The "online thieves" included a councillor, an IT director and parents of children who had used peer-to-peer music sharing websites. Some had put 9,000 songs on the internet for others to share.

In at least two cases, the parents had no idea that their children were using the family computer to swap thousands of songs with strangers.

The British Phonographic Industry, which is leading the battle against music pirates, said only the most prolific file sharers were being tracked down and fined.

As it became clear that some of the "prolific" downloaders were sharing only a few hundred songs, the BPI said it was bringing legal action against a further 31 suspects.

The announcement will alarm parents who suspect children spend hours a night downloading music.

Geoff Taylor, the BPI's general counsel, said: "We have no desire to drag people through the courts, so we have attempted to reach fair settlements where we can.

"We hope people will now begin to get the message that the best way to avoid the risk of legal action and paying substantial compensation is to stop illegal file sharing and to buy music online, safely and legally, instead."

The war against online music piracy was declared last year when the BPI announced plans to sue 28 prolific file sharers.

All had been using websites such as Kazaa, Grokster and BearShare which offer free access to music tracks.

Most using these websites are interested only in downloading songs for free. But an active minority of "uploaders" offer their own music collections.

Because this group is easier to trace, these were the people challenged by the BPI.

It said 23 people had agreed settlements averaging £2,000, while two were paying more than £4,000 each to settle their cases.

Three people were still in negotiations while two others on the original list had appeared twice, under different identities.

The settlements have been agreed by 17 men and six women, aged between 22 and 58 from all over Britain. All signed High Court undertakings admitting that they lifted tracks illegally and promising not to do it again.

Fifteen had used the Kazaa peer-to-peer network, four used Imesh, two used Grokster, one used WinMx and one used BearShare. The compensation will cover the industry's legal costs.

At least five computers identified in the BPI investigation were in households with children.

"Looking at the type of music, it was a mixture that would tend to suggest that it was not just the parents who were at it," a spokesman for the BPI said. "Parents were shocked to find what was on their computer."

The British music industry claims illegal downloading is damaging sales.

Sales of singles have slumped by more than 50 per cent since 1999, when the practice became popular.

While CD sales are at unprecedented levels, the BPI believes the figures would be much higher if it were not for online sharing.

Research commissioned by the music industry found that an illegal downloader spends a third less on albums and 59 per cent less on singles than other music fans.

Record labels are concerned that album sales will plunge with the growth of broadband, the fast internet connection that speeds up download times.

The legal download market has boomed since the launch of sites such as iTunes and Napster. In the final week of 2004 legally downloaded tracks outsold physical singles for the first time.

The BPI says the legal action is intended as a deterrent. It follows thousands of lawsuits against music pirates in America.

According to the industry, the campaign against pirates has been a success and has "contained" illegal downloading. The most popular file-sharing network saw a 45 per cent fall in use since its peak in April 2003.

Critics say that for record companies to sue young customers is a public relations disaster. In one case in America, Brianna LaHara, 12, was told to pay £1,175 after being accused of illegally swapping songs.

Some industry figures say sharing is a useful way to promote music and does not damage sales. Bands such as Blur and Franz Ferdinand, have spoken in favour.

Others in the independent music sector believe the BPI has been heavy handed.

One executive said leading labels and download sites were partly to blame for the proliferation of sharing because they were charging too much for legally downloaded songs.

"We have to make music better value so the incentive isn't there," he said.

"Many people feel it is not that bad, like making a home tape recording. It could be damaging if the industry is seen to be suing its own customers."
http://www.telegraph.co.uk/news/main...ixnewstop.html


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Ahnud at it again

Induce Bill Morphs Into Filtering Mandate

A bill in the California state senate (SB 96), previously dubbed the "Cal-Induce Act," has now morphed via amendment into a requirement that copyright and porn filters be included in many network software programs.

Here's the heart of the bill:

Any person or entity that [sells, advertises, or distributes] peer-to-peer file sharing software that enables its user to electronically disseminate commercial recordings or audiovisual works via the Internet or any other digital network, and who fails to incorporate available filtering technology into that software to prevent use of that software to commit an unlawful act with respect to a commercial recording or audiovisual work, or a violation of [state obscenity or computer intrusion statutes] is punishable ... by a fine not exceeding [$2500], imprisonment ... for a period not to exceed one year, or by both ...

This section shall not apply to the following:

(A) Computer operating system or Internet browser software.

(B) An electronic mail service or Internet service provider.

(C) Transmissions via a [home network] or [LAN]. [Note: The bill uses an odd definition of "LAN" that would exclude almost all of the real LANs I know. -- EF]

As used in this section, "peer to peer file sharing software" means software ... the primary purpose of which ... is to enable the user to connect his or her computer to a network of other computers on which the users of these computers have made available recordings or audiovisual works for electronic dissemination to other users who are connected to the network. When a transaction is complete, the user has an identical copy of the file on his or her computer and may also then disseminate the file to other users connected to the network.

The main change from the previous version of the bill is the requirement to include filtering technologies; the previous version had required instead that the person "take reasonable care in preventing" bad uses of the software. This part of the bill is odd in several ways.

First, if the system in question uses a client-server architecture (as in the original Napster system), the bill applies only to the client-side software, since only the client software meets the bill's definition of P2P. Since the bill requires that a filter be incorporated into the P2P software, a provider could not protect itself by doing server-side filtering, even if that filtering were perfectly effective. This bill doesn't just mandate filtering, it mandates client-side filtering.

Second, the bill apparently requires anyone who advertises or distributes P2P software to incorporate filters into it. This seems a bit odd; normally advertisers and distributors don't control the design of the products they advertise. Typically, third party advertisers and distributors aren't allowed to inspect a software product's design.

Third, the "primary purpose" language is pretty hard to apply. A program's author may have one purpose in mind; a distributor may have another purpose in mind; and users may have a variety of purposes in using the software. Of course, the software itself can't properly be said to have a purpose, other than doing what it is programmed to do. Most P2P software is programmed to distribute whatever files its users ask it to distribute. Is purpose to be inferred from the intent of the designer, or from the design of the software itself, or from the actual use of the software by users? Each of these alternatives leads to problems of one sort or another.

Note also the clever construction of the P2P definition, which requires only that the primary purpose be to connect the user to a network where some other people are offering files to share. It does not seem to require that the primary purpose of the network be to share files, or that the primary purpose of the software be to share files, but only that the software connects the user to a network where some people are sharing files. Note also that the purpose language refers only to the transfer of audio or video files, not to the infringing transfer of such files; so even a system that did only authorized transfers would seem to be covered by the definition. Finally, note that the bill apparently requires the filters to apply to all uses of the software in question, not just uses that involve networking or file transfer.

Fourth, it's not clear what the bill says about situations where there is no workable filtering software, or where the only available filtering software is seriously flawed. Is there an obligation to install some filtering software, even if doesn't work very well, and even if it makes the P2P software unusable in practice? The bill's language seems to assume that there is available filtering software that is known to work well, which is not necessarily the case.

The new version of the bill also adds enumerated exceptions for operating system or web browser software, email services, ISPs, home networks, and LANs (though the bill's quirky definition of "LAN" would exclude most LANs I know of). As usual, it's not a good sign when you have to create explicit exceptions for commonly used products like these. The definition still seems likely to ensnare new legitimate communication technologies.
http://www.freedom-to-tinker.com/archives/000779.html


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Start-Ups Blur Lines Between Radio, Music Swapping
John Borland

A new generation of start-ups is taking a page from Apple Computer's iTunes playbook, allowing Net radio listeners to draw their programming at will from one another's hard drives.

At the head of a movement that could transform online radio, Live365 and start-up Grouper are the latest to blur these lines between Internet radio and online song-swapping, with an alliance aimed at turning the older companies' stable of amateur broadcasters into the hubs of peer-to-peer communities.

The model looks to Apple's iTunes software, which lets people on the same network, such as in a dorm or office building, listen to songs from one another's music collections. Grouper's peer-to-peer service lets people stream songs at will to one another over the open Internet.

The company's alliance with Live365 is helping extend an advanced vision of Net radio already being pioneered by Mercora, another peer-to-peer radio service. By letting groups of listeners tap into one another's music collections, the companies hope to come close to providing on-demand radio services, while abiding by the strict legal rules governing online broadcasting.

"It wasn't first thing on our mind, but we saw a way to enable the relationships between audiences and broadcasters to go beyond just the broadcast stations," said Grouper CEO Josh Felser.

The Live365 deal and others like it are signs that the Net radio business is shaking off the gloom of the dot-com crash and pushing strongly ahead. Innovation and investment is finally coming from the start-up level and from giants such as Clear Channel and Yahoo.

In part, that's an indication that digital music in general is booming, led by Apple's success with its iPod music player and iTunes digital song store. Online radio advertising is also finally taking off, following the decision of AOL, MSN, Yahoo and Live365 to sell advertising on their radio networks collectively.

Those successes have drawn the attention of giant companies that have stayed away from Net broadcasting for years. Clear Channel has hired America Online Webcasting guru Evan Harrison, who is in the midst of launching an ambitious Net radio push for the broadcast giant. Rival Infinity Broadcasting also said this week that it would put much of its talk-radio programming online.

But as in the late 1990s, new companies are increasingly beginning to seek ways around the restrictive rules that govern Net radio playlists. According to current copyright law, Net radio services are allowed to play any songs without getting permission first, but they can't let listeners choose when they want to hear a specific song, and they can't play songs by the same artist back-to-back.

Enter peer-to-peer. By allowing songs to be streamed from other listeners' hard drives, companies like Grouper and Mercora hope to work within the rules but still provide something close to an on-demand experience.

On-demandish

In Mercora's case, every person in the network streams a list of songs, and listeners can search across the network to find a specific tune or artist at any given moment.

In Grouper's case, listeners can search for specific songs on the hard drives of a group no larger than 30 people. By keeping the communities small, Grouper executives say, providing access to the music is more like playing a song for a friend than like true Net broadcasting, and is thus allowable by law.

Grouper's software goes further, allowing people to download photos, video files or documents off the hard drives of people in their small group. The company has blocked downloads of songs, hoping to avoid the ire of record labels.

The company's software is available freely online. Live365 executives say they see the groups as a way for their network of thousands of amateur broadcasters to extend their reach, and the company has now built the Grouper software into its service.

"It is another way our broadcasters can share their tastes and talents with their audience," said Dave Porter, Live365's director of business development.

Record labels have so far taken a hands-off approach to these new services. A representative for the Recording Industry Association of America declined to comment specifically on the Grouper model.

Certainly, music labels have not been shy about suing Webcast services they believe are crossing legal lines. Several years ago, they filed suit against a handful of services they said were giving listeners too much control over the choice of music.

Digital Media Association, or DiMA, Executive Director Jon Potter, who represents Webcasters in Washington, D.C., said the emergence of the new services is a sign that his industry is rebounding after a long dry spell.

"There's a lot of innovation going on that we're just beginning to see that's going to make this a fun industry again," Potter said.
http://news.com.com/Start-ups+blur+l...3-5598987.html


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Chinese Censors and Web Users Match Wits
Howard W. French

For many China watchers, the holding of a National People's Congress beginning this weekend is an ideal occasion for gleaning the inner workings of this country's closed political system. For specialists in China's Internet controls, though, the gathering of legislators and top political leaders offers a chance to measure the state of the art of Web censorship.

The authorities set the tone earlier this week, summoning the managers of the country's main Internet providers, major portals and Internet cafe chains and warning them against allowing "subversive content" to appear online.

"Some messages on the Internet are sent by those with ulterior motives," Qin Rui, the deputy director of the Public Information and Internet Security Supervision Bureau, was quoted as saying in The Shanghai Daily.

Stern instructions like those are in keeping with a trend aimed at assigning greater responsibility to Internet providers to assist the government and its army of as many as 50,000 Internet police, who enforce limits on what can be seen and said.

"If you say something the Web administrator doesn't like, they'll simply block your account," said Bill Xia, a United States-based expert in Chinese Internet censorship, "and if you keep at it, you'll gradually face more and more difficulties and may land in real trouble."

According to Amnesty International, arrests for the dissemination of information or beliefs via the Internet have been increasing rapidly in China, snaring students, political dissidents and practitioners of the banned spiritual movement Falun Gong, but also many writers, lawyers, teachers and ordinary workers.

Already the most sophisticated in the world, China's Internet controls are stout even in the absence of crucial political events. In the last year or so, experts say the country has gone from so-called dumb Internet controls, which involve techniques like the outright blocking of foreign sites containing delicate or critical information and the monitoring of specific e-mail addresses to far more sophisticated measures.

Newer technologies allow the authorities to search e-mail messages in real time, trawling through the body of a message for sensitive material and instantaneously blocking delivery or pinpointing the offender. Other technologies sometimes redirect Internet searches from companies like Google to copycat sites operated by the government, serving up sanitized search results.

China's latest show of growing prowess in this area came in January after a major political event, the death of the former leader Zhao Zhiyang, who had been held under house arrest since appearing to side with students in 1989 during the Tiananmen demonstrations.

When the official New China News Agency put out a laconic bulletin about his death, placing it relatively low in its hierarchy of daily news stories, most of the rest of China's press quickly and safely followed suit. On their Web sites, one newspaper after another ran the news agency's sterile bulletin rather than take risks with commentary of their own.

What happened on campuses was far more interesting, though. University bulletin boards lit up with heavy traffic just after Mr. Zhao's death was announced. But for all of the hits on the news item related to his death, virtually no comments were posted, creating a false impression of lack of interest.

"Zhao's death was the first big test since the SARS epidemic," said Xiao Qiang, an expert on China's Internet controls at the University of California at Berkeley.

But if the government is investing heavily in new Internet control technologies, many experts said the sophistication of Chinese users was also increasing rapidly, as are their overall numbers, leading to a cat-and-mouse game in which, many say, it is becoming increasingly difficult for the censors to prevail.

At 94 million users, China has the world's second-largest population of Internet users, after the United States, and usage here, most of it broadband, is growing at double-digit rates every year.

"What they are doing is a little bit like sticking fingers into the dike," said Stephen Hsu, a physicist at the University of Oregon who formerly developed technologies for allowing ordinary Chinese to avoid government censorship. "Beijing is investing heavily in keeping the lid on, and they've been pretty successful at controlling what appears. But there is always going to be uncontrolled activity around the edges."

As with the policing efforts, the evasion techniques range from the sly and simple - aliases and deliberate misspellings to trick key-word monitors and thinly veiled sarcastic praise of abhorrent acts by the government on Web forums that seem to confound the censors - to so-called proxy servers, encryption and burying of sensitive comments in image files, which for now elude real-time searches.

For those reasons and others, some Chinese experts have publicly advocated that the government gradually get out of the business of Internet censorship.

"All of the big mistakes made in China since 1949 have had to do with a lack of information," said Guo Liang, an Internet expert at the Chinese Academy of Social Sciences in Beijing. "Lower levels of government have come to understand this, and I believe that since the SARS epidemic, upper levels may be beginning to understand this, too."

The most eagerly watched key word in China today is probably Falun Gong. "I don't know the number, but I would guess every Chinese has received a Falun Gong e- mail," Mr. Guo said. "There is no way to stop it. You can shut down the Web site, but you cannot kill the users. They just go somewhere else online, sometimes keeping the same nickname."
http://www.nytimes.com/2005/03/04/in.../04censor.html


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"This is a really interesting paper."

New Paper On The Poisioning And Pollution Of P2P Networks

Filed under: tools interdiction — Joseph @ 10:58 pm

Nicolas Christin has just put the finishing touches on a new paper authored with Andreas Weigend and SIMS professor John Chuang, “Content Availability, Pollution and Poisoning in File Sharing Peer-to- Peer Networks” (PDF) that will be presented at ACM’s Conference on Electronic Commerce (EC’05) this summer in Vancouver, Canada. Here is the abstract:

Copyright holders have been investigating technological solutions to prevent distribution of copyrighted materials in peer-to-peer file sharing networks. A particularly popular technique consists in “poisoning” a specific item (movie, song, or software title) by injecting a massive number of decoys into the peer-to-peer network, to reduce the availability of the targeted item. In addition to poisoning, pollution, that is, the accidental injection of unusable copies of files in the network, also decreases content availability. In this paper, we attempt to provide a first step toward understanding the differences between pollution and poisoning, and their respective impact on content availability in peer-to-peer file sharing networks. To that effect, we conduct a measurement study of content availability in the four most popular peer-to-peer file sharing networks, in the absence of poisoning, and then simulate different poisoning strategies on the measured data to evaluate their potential impact. We exhibit a strong correlation between content availability and topological properties of the underlying peer-to-peer network, and show that the injection of a small number of decoys can seriously impact the users’ perception of content availability.

This is a really interesting paper. They measure a number of P2P network metrics - query response time, temporal stability, spatial stability and download completion time - using a widely distributed set of PCs on the PlanetLab network running scripted P2P software. This is a clever way to simultaneously study the characteristics of different P2P networks (notably eDonkey, eDonky/Overnet, FastTrack and Gnutella) as well as quantitatively illustrate differences in the underlying network algoritms. The really nifty part of this paper, in my opinion, involves measuring the effects of various content poisoning and pollution strategies. Their results show that fairly simple strategies are fairly simply defeated while more sophisticated and hybrid strategies aimed at mucking-up-the-net are difficult to detect and thwart.
http://groups.sims.berkeley.edu/pam-p2p/index.php?p=40


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Students

In the ID Wars, the Fakes Gain
Warren St. John

EARLY last month, after being shut down by the police for two days for serving underage drinkers, the owners of the West End, a Manhattan bar and restaurant near Columbia University, deployed a new weapon in their continuing battle against fake ID's: an E-Seek scanner, a high-tech age-verification device designed to tell a real driver's license from a fake in a simple swipe.

But if the arrival of this fake-ID devourer - its manufacturer makes a similar hand-held model called the Buster - was supposed to strike fear in the hearts of aspiring beer guzzlers in the freshman and sophomore classes at Columbia, it hasn't had quite that effect.

"Within a week I could be beating the West End no problem," said a Columbia student who claims to have forged over 400 driver's licenses but said he stopped for fear of being arrested (and wanted his name withheld for the same reason). "If you know how to use Photoshop and a simple Epson printer, you can print ID's in your dorm room."

The age-old battle of wits pitting police officers and bar owners on the one hand against under-age drinkers on the other is as lively as ever, though it has entered a new technologically advanced phase. Gone are the days of the art major down the hall who was a wizard with an X-Acto knife, a stencil and some super glue. Using Internet resources and sophisticated computer graphics software, college students are forging drivers' licenses of startlingly good quality, complete with shimmering holograms, special inks and data encoding that can fool the police and even occasionally the latest generation of scanners. To hear law enforcement officers tell it, in the fake-ID arms race the kids are winning.

"They're definitely a step ahead of us," said Steven Ernst, the district administrator in San Diego for the California Alcoholic Beverage Control Department. "In terms of the color, the typeset and the hologram they're real, real good. Most can't be picked out by the naked eye."

While getting a fake ID is a right of passage for many young people who want no more than access to the occasional six-pack or campus pub, the potential security threat posed by forged drivers' licenses - most prominently, the threat of access to commercial airliners - has cast the old barroom conflict in a new light.

"People think of fake ID's for buying beer or cigarettes when you're 19," said Sgt. William Planeta, who runs the New York Police Department's document fraud squad. "But it has a lot of different implications in a post-9/11 world. You can use that fake ID to do all sorts of things."

In an effort to catch up with counterfeiters, therefore, the government and a growing document verification industry are turning to both legislation and technological innovations. "We're going to give the fake ID a run for its money," said James E. Copple, the director of the nonprofit International Institute for Alcohol Awareness at the Pacific Institute for Research and Evaluation, with headquarters in Maryland, which studies public health.

They are having some success, at least with clumsily forged ID's. With help from his Intelli-Check scanner, Paul Barclay, 48, the owner of a Boston club called the Rack, confiscated 600 fake ID's last year, including 13 in a single weekend night. Mr. Barclay said he pays his bouncers $20 for each fake they bring in.

"It's a full-blown war at this point," he said. "We've come across amazing ones, where they've impregnated the back with legitimate data from someone else. The kids have gotten a lot more clever."

Scanners, though, are rare, and word quickly circulates when a bar gets one. Web sites like www.hotspotboston.com rate bars and clubs by the strictness of their ID policies, so under-age drinkers know which ones to avoid.

When it comes to getting a fake ID, students can be as discriminating as they are about the music on their iPods. Students shy away from fake licenses from nearby states because bouncers and bartenders are so familiar with the authentic versions. They also avoid certain licenses, like one older type from New Jersey, that are so easy to tamper with that no bouncer worth his black light would let one pass without a thorough going-over.

"ID's made by students tend to be much better than ID's you buy in the Village or Times Square," said a 19-year-old Columbia sophomore who has a fake driver's license and asked not to be identified for fear of the police. As for the importance of having a fake ID, she said: "All of my friends have fake ID's, everyone I know from high school and all my friends at school. It's definitely a necessity."

THE nation's fixation with security cards and ID systems has also been a boon for manufacturers of fake ID's. The widespread use of corporate ID's has created a large pool of people who know the inner workings of the security features in the cards. In online chat rooms dedicated exclusively to the manufacture of fake ID's, unscrupulous members of this pool - including some drivers' license bureau workers, the police say - share or sell information about security features and even run a black market in the more sophisticated components of ID's.

"There are guys online who manufacture the bar codes and holograms," said the Columbia student who made fake ID's. "The hologram like on a Texas will glow. I can order that."

Some ID mills are offshore and sell online. Many sites purporting to sell fake ID's are scams set up to take advantage of gullible under-age drinkers, but Michael Cawthon, the special agent in charge of the Nashville district of the Tennessee Alcoholic Beverage Commission, said that others offer forgeries of drivers' licenses. Mr. Cawthon said some offshore counterfeiting outfits solicit students to market for them on campuses and even conduct background checks on their American liaisons to make sure they are not the law.

"The Internet stuff is beginning to kill us," he said.

For students who prefer to make their own ID's, the Web offers all the raw materials. High-quality graphics templates for most state drivers' licenses - with accurate renderings of intricate background patterns and color schemes - can be found online. High-tech driver's license plastics and laminates that were once available only to drivers' license bureaus are now easily available online as well at legitimate office supply sites and specialty sites.

Once counterfeiters have compiled the necessary raw materials for a convincing fake, they get photographs from their customers, which are easily taken in a dorm room with a Web cam. Then they fill in the personal information on the template with a computer, assemble the pieces and laminate them. High-quality fake ID's can cost $50 to $200. Once college students have gone through all this trouble for a fake ID, they seldom make just one.

"It's not unusual to bust a counterfeiter who has made over 10,000 falsified documents," said Maj. David Myers of the Florida Alcoholic Beverages and Tobacco Division.

From the under-age drinker's point of view - and, the police would add, the terrorist's - the holy grail of fake ID's is an authentic driver's license issued to someone presenting a bogus or borrowed birth certificate or Social Security card. Short of that, discriminating buyers of fake ID's want forged licenses that are properly encoded and can pass muster with a scanner.

Licenses store information in two formats: magnetic stripes like those on credit cards, and two-dimensional bar codes, strips of small dots arranged to convey information in a kind of graphic Morse code. Magnetic stripes can be erased with a magnet and reprogrammed with, say, a new birth date, using basic ID-making equipment, and bar codes can be photocopied or transferred from a legitimate ID to a fake one.

While a careful bouncer or police officer might figure out such ruses by comparing the information from the data strip to that on the front of the ID, most don't bother. Instead, scanners search the encoded strips for a birth date and issue a thumbs-up or a thumbs-down on whether the cardholder is the legal drinking age.

"All it tells you is if the age is older than 21 or not," said the former ID maker at Columbia. "You just have them all programmed over 21."

PENALTIES for possessing and making fake ID's vary from state to state. In New York possession of a fake driver's license is a felony punishable by up to seven years. Often when the police encounter a fake ID these days, they are more interested in getting information on who made it than in prosecuting the under-age user.

That was the case in Louisiana in late 2003, when a 19-year-old L.S.U. student named Corey James Domingue died of acute alcohol poisoning after using a fake Texas driver's license to buy four fifths of liquor from a local Winn-Dixie supermarket. By questioning Mr. Domingue's roommate and friends with similar forged ID's, Louisiana authorities were able to unravel a high-tech ring that had issued thousands of counterfeit licenses.

"These kids built their own computers from scratch," said Steven E. Spalitta, the enforcement director of the Louisiana Office of Alcohol and Tobacco Control, who handled the case. "We learned the ID's were not just perfect but they were encoded. There's almost no way you can tell it's a fake with the naked eye."

In all, five people pleaded guilty to forgery and a sixth is facing trial. Using computer records Mr. Spalitta's agency also tracked down and issued hundreds of criminal citations to students who bought fake ID's from the ring.

Mr. Spalitta said that finding the violators was easier than he had anticipated. "The students used their personal information" on the fakes, he said. "The only thing they changed were their addresses and their dates of birth."

Mr. Copple, of the Pacific Institute, said that in the coming year a variety of changes could make getting away with a fake ID tougher.

Some states will begin using new watermark technology akin to that used on currency for drivers' licenses next year. This spring the United States Senate is expected to vote on a bill already passed by the House that would require states to standardize the format of the data encoded on the backs of drivers' licenses, making it easier to scan them. Software companies are rushing to develop verification programs for scanners that can be updated in real time, not unlike antivirus software, in response to evolving forgery techniques.

While the backers of these efforts say they herald the demise of the fake ID, officers on the beat have doubts.

"They find a loophole and exploit it," said Sergeant Planeta of the New York document fraud squad, which has arrested 90 people for faking documents since its formation last year. "We plug it, and they find their way around it. And it goes back and forth."
http://www.nytimes.com/2005/03/06/fashion/06fake.html


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Japan

Content house taking over old-line content distributor

Fuji TV Gets One-Third Stake in Broadcaster
Natalie Obiko Pearson

Japan's largest media company raised the stakes Tuesday in its high-profile battle with an upstart Internet provider, announcing it had acquired enough stock in Nippon Broadcasting to secure voting rights thus a role in determining the company's future.

The move by Fuji Television Network Inc. to buy a 39.26 percent voting right stake in Nippon Broadcasting was a strike against Livedoor Co. Ltd.'s takeover bid, but the Internet service provider could fight back by securing 50 percent of the broadcaster's shares.

"Livedoor still has a better position in this takeover battle," Nobutoshi Yamanouchi, a management and acquisition lawyer at the Tokyo office of international law firm Jones Day, told Dow Jones Newswires.

Fuji TV announced on Tuesday that its tender offer bid, which closed Monday, had been accepted, enabling it to obtain enough shares to bring its stake in Nippon Broadcasting System to more than one third.

"We were able to secure the more than one third stake necessary for vetoing rights," said Fuji TV Chairman Hisashi Hieda.

Fuji TV offered 5,950 yen ($57) a share and will spend 47 billion yen ($447,000) to buy 7.9 million shares, Fuji TV said in a statement.

The purchase boosts Fuji TV's stake to 11.96 million shares, or 36.47 percent of shares, from 4.07 million shares, or 12.39 percent. Not all shares of Nippon Broadcasting, however, have voting rights, and the transaction left Fuji TV with a 39.26 percent voting right stake.

With more than a one-third stake in Nippon Broadcasting, Fuji TV can block any move by Livedoor to dismiss directors at the radio company. But it can't block appointments, Yamanouchi said.

Livedoor could prevail if its succeeds in its attempt to buy more than a 50 percent stake in Nippon Broadcasting in the open market. It already has more than 45 percent, according to local media.

Gaining a majority would allow Livedoor to appoint new board members at the radio firm, which could eventually allow it to squeeze out Fuji TV, Yamanouchi said. Current directors' terms end this year, and new directors are to be nominated at a shareholders meeting scheduled for June, a spokesman for Nippon Broadcasting said.

The Fuji stock purchase is the latest move in a highly publicized battle pitching the long-established media company against Livedoor, led by brash entrepreneur Takafumi Horie. Fears are growing among the conservative business elite that such young upstarts and foreign investors are aiming to take over Japanese companies.

Livedoor now owns about 40 percent of the broadcaster and has been seeking to buy more shares. Nippon Broadcasting is the top shareholder in Fuji TV, and control of Nippon Broadcasting would give Livedoor managerial influence over Fuji TV.

Livedoor reiterated its pledge to keep buying shares in the open market until it owns at least half of the broadcaster.

Now attention moves to the courts.

Nippon Broadcasting has said it will try to block the Livedoor takeover by issuing new stock available only to Fuji, raising the TV network's stake while diluting Livedoor's.

Livedoor has requested an injunction in Tokyo District Court to block the warrant issue. Local media reports have said the court could reach a decision as early as this week.

The government's top spokesman, asked about the development Tuesday, indicated that such threats should be expected by listed companies. "Stockholders change and management changes," Chief Cabinet Secretary Hiroyuki Hosoda said. "It's possible if your stocks are listed."

Fuji TV is at the center of a media empire and includes a film studio, recording company, publisher and newspaper. Its executives have repeatedly refused to talk with Horie, saying an alliance with Livedoor is out of the question.

Nippon Broadcasting shares sank 4.09 percent to 6,330 yen ($60) on Tuesday after the Fuji purchase spurred fears it would be delisted. Under Tokyo Stock Exchange rules, a company will be delisted if the combined ownership of the top 10 shareholders exceeds 80 percent for more than a year.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Content guy taking reins at old-line technology house

Shakeup at Sony Puts Westerner in Leader's Role
Andrew Ross Sorkin and Saul Hansell

The board of the Sony Corporation of Japan named Sir Howard Stringer its chairman and chief executive today, an unusual instance of a leading Japanese company turning to a foreigner to fill a top position, the company said in Tokyo.

Sir Howard, a Welsh-born former television news journalist, runs Sony Corporation of America and has helped revive the company's music and movie businesses in the United States. He will succeed Nobuyuki Idei, Sony's current chairman and chief executive, who had planned to retire next year after Sony's 60th anniversary.

This is a remarkable humbling for a company that once defined Japanese innovation and technological prowess in the years after World War II. In recent years, however, Sony has lost ground to American stalwarts like Apple Computer with its dominant iPod digital music player and a raft of upstart electronics manufacturers in China and South Korea.

It is also a recognition of the turnaround in Sony's entertainment businesses, which are among the most profitable parts of the company, riding blockbuster movies like "Spider-Man." And it underscores the changes that are sweeping Japan, once ascendant in the world economy, but suffering through a decade of little or no growth.

In a statement issued from Sony's Tokyo headquarters, Sir Howard hinted at future efforts to integrate the entertainment and electronics focuses of the company. "We look forward to joining our twin pillars of engineering and technology with our commanding presence in entertainment and content creation to deliver the most advanced devices and forms of entertainment to the consumer," Sir Howard said.

Sir Howard, a charismatic 63-year-old who does not speak Japanese, was born in Cardiff, Wales, and is an American citizen who splits his time between New York and his family's home in London. Before joining Sony in 1997, he worked for 30 years as a journalist, at CBS, at one point as a producer for Dan Rather at CBS, and ultimately went on to run that network.

Sir Howard was knighted by Queen Elizabeth in 1999 and has become known for being a likeable consensus builder, comfortable negotiating with both Hollywood divas as well as eccentric engineers and managers in Japan.

"Forgive the awful pun, but he has kind of oriented himself to his Japanese colleagues," said Peter G. Peterson, chairman and co-founder of The Blackstone Group and a former board member at Sony who helped recruit Sir Howard to the company. "It's a great achievement. They trust him. He's a harmonizer."

Mr. Idei, 67, was the first nonengineer to run Sony, and his departure will come two years into his three-year plan to overhaul the company. During his 10-year tenure, Mr. Idei used his background in marketing to reshape Sony into a more media-focused company.

Sir Howard, of course, is hardly an engineer himself. But in recent years he has taken an increasing interest in Sony's electronics business, particularly in areas that relate to music and movies. Sir Howard, who is also vice chairman of Sony's board, has tried to break through the bureaucratic logjams that have kept Sony - the company that invented the Walkman - from competing effectively against Apple's iPod, the dominant digital music player. And he has taken a key role in negotiating with other Hollywood studios to get support for the new Blu-Ray disk format, which Sony supports.

More recently, Sir Howard has been increasingly outspoken within Sony that the company has to break down its balkanized structure in order to move much more quickly in the marketplace. In a provocative speech to Sony managers in January he declared that "the business of Sony has become management not product design."

Sir Howard joins a small club of foreign executives who have taken the helm of major Japanese companies. This includes Carlos Ghosn of Nissan and Rolf Eckrodt, a German who led a failed effort to turn around Mitsubishi Motors.

Sir Howard does not keep a home in Tokyo, but he is expected to spend more time in Japan, a Sony executive said.

Still, he has shown that he can build bridges to all sides of that company.

"Howard is the ultimate diplomat," said Vic Pacor, the former head of Sony's television and home audio division in the United States. "He is even handed and will bring the kind of stability that the company needs," said Mr. Pacor, who is now president of D&M Holdings, a Japanese-American electronics company.

Allowing a foreigner to take over the reins of Sony would be one of the boldest moves a Japanese company could make. Most Japanese boards and executive ranks are filled with lifetime employees who win those spots more through their loyalty than through their creativity.

Yet in appointing a foreigner to its top spot, Sony's management appears to be completing a course originally set out in the 1950's by its co-founder, Akio Morita.

He recognized then that Sony had the potential to become a global powerhouse if it not only sold products overseas, but incorporated foreign thinking in its products, its brand and even its management.

Sony was the first Japanese company to list its stock on the New York Stock Exchange, something other Japanese rivals soon copied. Sony was also one of the first big Japanese companies to invite a foreigner to sit on its board.

Sony is now one of the most widely held Japanese companies. Foreigners hold more than one-third of Sony's shares, and foreign investors have had a growing influence on the company's behavior.

Kunitake Ando, Sony's president is also set to resign and be replaced by Ryoji Chubachi, 57, the company's executive deputy president who has recently has been in charge of Sony's production operations. Mr. Chubachi will also take charge of the ailing consumer electronics business, which still represents 70 percent of Sony's revenue.

The appointment of Sir Howard appears to be a blow to Ken Kutaragi, the 54 year old executive who built Sony's PlayStation video game unit into the company's most profitable division. A defiant and idiosyncratic engineer, Mr. Kutaragi, who has long been seen as the leading candidate to become Sony's next chief executive, was given responsibility for electronics and semiconductors two years ago. Now he will again just run the game unit. And he gives up his seat on Sony's board.

Several former Sony executives speculated that Mr. Kutaragi is still a likely candidate to ultimately become chief executive. But Mr. Kutaragi has been so outspoken within Sony that it would it would be too radical, even at this point, for Sony to appoint him as the deputy to Mr. Stringer. Mr. Chubachi, who is well regarded inside Sony, would be more acceptable to the engineers who run Sony's powerful internal divisions.

Since last year, Mr. Chubachi has been leading an effort to wring more efficiency from Sony factories by sharing technology and know-how among plants. He is one of the three key executives in charge of carrying out Sony's current revitalization strategy, along with Mr. Kutaragi and Shizuo Takashino, 61, the man who invented the original Walkman and is now in charge of improving product design.

Ultimately, Mr. Idei may have been forced to resign early because the financial results of the company have been consistently disappointing. In Japan, his tenure is most remembered for what has become called "Sony Shock" in 2003 when the company's shares fell by 25 percent after an unexpected quarterly loss.

In January, the company disappointed investors again saying that its profits would be less than it had earlier forecast for its fiscal year that ends March 31, mainly because it has had to lower prices on its core electronics products.

Mr. Idei has long painted lofty pictures of digital technology and how it could be combined with Sony's music movie and game content. Yet the strategy, which was first devised in the 1980's by Mr. Morita, has been slow to evolve. Sony's engineers initially resisted the growing power of the media divisions.

By the time Mr. Idei corralled them into cooperating, the company's electronics division was under had lost its way in its two most important product categories: televisions and portable music devices. It missed both the shift to flat screen sets and MP3 players like iPod.

One pet project of Mr. Idei's, the introduction of the Vaio computer line, has met with mixed results.

Mr. Idei has initiated a broad project, called Transformation 60, meant to increase profit margins through new products and reducing costs. The company has had successive rounds of layoffs and is moving more production to China. Yet profit margins are far from Mr. Idei's targets.

"Just because Howard becomes C.E.O. doesn't mean we can expect a dramatic change in earnings," said John S. Yang, an electronics analyst for Standard & Poor's in Tokyo. "I think Mr. Stringer will be facing as many problems as Idei-san did. But the good thing is that Sony has been proactive about changing."

Sir Howard will likely need to repeat his success in the media business on a much broader scale. In the United States, Mr. Stringer made a series of unusual management choices. One of his first hires was Robert S. Wiesenthal, a banker at Credit Suisse First Boston, who became the company's chief strategy officer and later its chief financial officer. He later brought in Andrew Lack, the former head of NBC, to run Sony Music and Michael Lynton, the president of Time Warner International to run Sony Pictures.

In 2003, he combined Sony's music business with Bertelsmann's BMG Music.

And last year, he had Sony organize an investor group to buy Metro-Goldwyn-Mayer, with its deep catalog of movies to bolster Sony's DVD business.

At the same time, Sir Howard orchestrated several severe waves of layoffs. Mr. Peterson says that Sir Howard's experience restructuring Sony's movie and music companies will help him take the tough actions necessary in Tokyo.

"At the end of the day, people want to cooperate with him in achieving his objectives," Mr. Peterson said.

Todd Zaun reported for this article from Tokyo and Ken Belson from New York.
http://www.nytimes.com/2005/03/07/bu... tner=homepage


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Sony to Debut Flash-Memory Audio Players
May Wong

Hoping to regain some of its luster in a market dominated by the iPod, the company that brought us the Walkman is coming out with a big lineup of portable music players.

In unveiling nine new players, Sony Corp. is taking particular aim at Apple Computer Inc.'s slim new iPod Shuffle.

That's because, like the Shuffle, the new Sony players use flash memory, a storage medium more durable, lightweight and compact than its larger-capacity cousin, the hard drive.

The new Sony players also support the generic MP3 audio format, which is what most people use when converting their music CD collections to digital files. That's a major concession for Sony, which had tried until recently to persuade consumers to only use its proprietary audio format, called Atrac.

Industry analysts seemed impressed by Sony's latest move.

"It's like the empire strikes back," said Richard Doherty of The Envisioneering Group. "Sony has taken a lot of quiet and loud criticism and has turned it into a brilliant line of players."

The lineup includes a set of cigarette lighter-sized models, a bit more expensive than the iPod Shuffle but with a much longer advertised battery life - 50 hours of playback time with a rechargeable battery compared to Apple's 12 hours.

And unlike the Shuffle, the Sony players have bright, 3-line screens to display song information.

A 512-megabyte model costs $130 and a 1-gigabyte model costs $180. Models with an FM tuner each cost $20 more. By comparison, Apple's shuffle is priced at $99 for 512 MB and $149 for 1 GB. The models will be available in May.

A second set of players, set to ship later this month, are roundish, with a diameter slightly larger than a poker chip. They run on AAA batteries, which Sony says will give the user 70 hours of playback time on a single battery. The prices range from $90 for 256 MB of memory to $150 for 1 GB of memory.

A third design is water-resistant, costing $130 for 256 MB of memory.

"We know we've been behind a bit," acknowledged Kelly Davis, a Sony product manager for digital players. "But we definitely want to be a strong contender in 2005."

Analysts don't expect the Japanese electronics giant to dethrone Apple, which holds more than a 60 percent share in the fast-growing portable music player market. But some predict Sony can climb into a No. 2 position by year's end, surpassing a slew of other pocketable players that are based on Microsoft Corp.'s Windows audio format.

Last year, Sony began shipping the Walkman Digital, a palm-sized, aluminum- encased player with a 20 GB hard drive that retails for about $350.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Media

How the Tumultuous Marriage of Miramax and Disney Failed
Laura M. Holson

Correction Appended

Partygoers in elegant evening wear scurried to take their seats at tables decorated with delicate white orchids in the grand hall of the Pacific Design Center here. It was the night before the Academy Awards, and perhaps the last affair that Harvey and Bob Weinstein would throw for the 25-year-old Miramax Films.

"No event or person will ever break up the brothers Weinstein," Bob Weinstein declared to the assembled glitterati, dismissing critics, he said, who now believe that the Weinstein era is over. Sitting in somber silence, among the nearly 600 guests, were Leonardo DiCaprio, Cate Blanchett and Martin Scorsese.

It did not go unnoticed that Michael D. Eisner, the chief executive of the Walt Disney Company, was not among them. The Weinsteins, who are based in New York, were in Hollywood negotiating the final points of a separation agreement from Disney, which had acquired their film studio in 1993 for $80 million. What is clear is that the Weinsteins will have to leave behind the Miramax name and the company they founded.

While with Disney, Miramax released more than 300 movies that generated $4.5 billion in American ticket sales and tallied 220 Academy Award nominations and 53 wins, including best picture Oscars for "Shakespeare in Love," "The English Patient" and "Chicago."

But the Weinsteins had many low moments at Disney, too. They argued bitterly over huge losses from Talk magazine, now defunct, as well as over the ballooning size of movie budgets and Disney's refusal to release what would prove to be one of the Weinsteins' most profitable acquisitions, "Fahrenheit 9/11."

The story behind the Disney-Miramax breakup, on one level, is about money and ego. The 12-year relationship went the way of many famous Hollywood marriages: infatuation, then betrayal and, expected soon, a divorce with a rich settlement.

But it is also a morality play with important lessons. It was not enough for the Weinsteins to make great movies - Disney wanted those movies to reap lots of money, too. What bothered Mr. Eisner most, said representatives from both sides, was that Disney had unwittingly put together a deal that, in later years, so richly compensated the Weinsteins at Disney's expense.

Disney and Miramax had other substantive disagreements, including over how much autonomy the brothers would have. And in the tug-of-war between art and commerce, Mr. Eisner's seeming inability to manage creative, sometimes temperamental, moviemakers was just as important as mastering the bottom line. At one point, Disney offered Bob Weinstein a contract that, in essence, would have treated him almost like any other Disney employee. He considered it an insult, a negotiator involved in the discussions said.

The terms of the breakup are expected to be revealed in the coming week, though with the volatile nature of the talks, either side could yet walk away from the table. When a breakup is finalized, both Disney and Weinsteins are sure to claim victory.

Neither, though, will emerge as a clear winner. The Weinsteins will be leaving behind the comfort of a corporate parent with deep financial pockets. For Mr. Eisner, whose brusque management style has been widely chronicled, the departure will be viewed, rightly or wrongly, as yet another incident where he clashed with associates who were then compelled to leave.

People who know both Mr. Eisner and the Weinsteins say it did not have to end this way.

"It should never have reached the level of acrimony and bitterness that it did," said Hal Vogel, a media analyst who has followed the careers of both parties. "Both sides benefited. The Weinsteins earned a lot of money and a reputation bordering on legendary. Disney got a lot of movies it would not have otherwise had."

Contentious Personalities

Representatives for Disney and Miramax declined to comment on the split. But several people involved in the negotiations between the companies agreed to be interviewed, while insisting on anonymity because of the delicate nature of the talks and the contentious personalities involved.

Few in Hollywood know that the breakdown can be traced to simmering tensions following the Sept. 11 terrorist attacks, according to those involved in the negotiations.

Disney's fortunes were in a tailspin then, brought on by a lingering recession and a decline in attendance at its theme parks as potential visitors were reluctant to travel. The company's ABC network was lagging in the ratings. And investors were beginning to pressure Mr. Eisner to improve Disney's financial performance. As a result, all of Disney's divisions were forced to cut costs.

The lone exception was Miramax, which had a strict autonomy provision that shielded it from corporate interference. In 2000, the Weinsteins renegotiated their contract with Disney and were guaranteed a yearly budget of $700 million along with a promise that they would run Miramax until September 2005, with an option to extend until 2007.

They quickly flexed their newfound muscle, expanding into books, television and Talk magazine. Miramax began making big-budget movies, too, drifting from its independent roots, although Disney capped Miramax's per-movie investment at $35 million.

But Miramax's expansion delivered mixed results, causing resentment at Disney's headquarters in Burbank as other divisions were cutting back, according to current and former Disney executives. Two expensive movies produced by Miramax that were released in December 2001, "Kate and Leopold" and the Oscar hopeful "The Shipping News," bombed at the box office.

Talk magazine was a bust; publishing executives estimate it lost $54 million, half of which came out of Miramax's pocket. Miramax's staff had ballooned to more than 450 employees. And in fiscal 2001, according to the executive who reviewed Miramax's finances, the division lost $37 million, although some at Disney suggest it was more than twice that.

That gave Mr. Eisner pause. In early 2002, Peter Murphy, Disney's chief of strategic planning who negotiated the Weinsteins' contract in 2000 and who often carried out Mr. Eisner's plans, told the Weinsteins that Disney was losing money on their deal, another executive involved in the negotiations said. The Weinsteins' bonuses were not tied to their operating profit and Mr. Eisner wanted Miramax to show more restraint, the executive said. That year, Miramax laid off 15 percent of its staff, the first layoffs in its history, and closed Talk magazine.

Mr. Eisner's criticism stung. "They went out of their minds," said a Hollywood executive who talked to the Weinsteins then. The brothers saw their successes a different way: They believed they were building a valuable library with films like "Pulp Fiction," "The Piano" and "Good Will Hunting."

And the Weinsteins believed Miramax's movies were generally more financially successful than Disney's own live-action movies, according to the executive who reviewed Miramax's finances. But what upset them the most was that Mr. Eisner criticized them after he rejected some ideas that turned out to be huge hits. Among the projects Mr. Eisner had vetoed financing was "The Lord of The Rings" series, which made New Line Cinema a fortune. Instead of cutting back, the Weinsteins sought money elsewhere with Disney's permission, said several people close to Disney and Miramax. Mr. Murphy told the brothers in May 2003 that Disney would consider increasing Miramax's budget if they could attract outside investors. The Weinsteins immediately contacted Goldman Sachs, and, within a matter of weeks, investment bankers there proposed raising $450 million to $500 million in an equity offering that gave a financial edge to Disney because its return would not be limited.

'A Fundamental Lack of Trust'

But after several presentations, Mr. Murphy rejected the proposal, saying it had a debt component that made the cost of capital too high, according to a negotiator involved in those discussions. (Disney had nixed a similar financing for its Touchstone division.)

The decision was not without consequence. After that, the negotiator said, "there was a fundamental lack of trust between the Weinsteins and Disney."

That summer, a Hollywood lawyer, Bertram Fields, who represented former Disney executive Jeffrey Katzenberg in a contract dispute with Disney in the 1990's, sought an audit on behalf of the Weinsteins of Disney's records related to charges Miramax paid for home video distribution.

The situation deteriorated the next year. In May 2004, it emerged that Disney had refused to distribute "Fahrenheit 9/11," the Michael Moore political documentary financed by Miramax, fueling a controversy that Mr. Moore and others at Miramax fanned to generate publicity for the film. (The movie, which cost $7 million to make and was distributed by Lions Gate, earned $119 million at the domestic box office.)

At the time, Disney executives said the controversy was embarrassing to Mr. Eisner, who was coming off a shareholder revolt that cost him his chairman's title. And it was ill-timed for the Weinsteins, who were in the midst of contentious negotiations over whether Disney would extend their employment contracts past September 2005.

As one Disney executive explained, "The relationship could have been salvaged up until then."

In a quarterly earnings call on May 12, Mr. Eisner lobbed a grenade at Miramax, telling analysts that the unit had made money only two out of the last five years.

"Can you believe this?" a negotiator close to Miramax recalled Harvey Weinstein saying after hearing Mr. Eisner's comment. According to the executive who reviewed Miramax's finances, the studio had an operating profit every fiscal year from 1999 to 2003, except in 2001. The total profit over the period was $395 million.

Those yearly numbers, though, according to Disney, did not include the cost of overhead it charged Miramax. In fiscal 2002, for example, Miramax showed operating income of $48 million. But with a $50 million charge for overhead, Miramax showed a loss of $2 million.

The Weinsteins disputed Mr. Eisner's numbers. Miramax, in its own accounting under its agreement with Disney, already included overhead costs, and what Disney charged was additional, according to the executive who reviewed Miramax's finances. But even after subtracting Disney's numbers, Miramax still showed an operating profit of $154 million for the five years, the executive said.

In Mr. Eisner's view, however, that amount was unacceptable because it was less than the $162 million bonus the Weinsteins were paid under their contract from 1999 to 2003.

"The bottom line is, deals that are too good to be true usually don't last," said a Hollywood executive who knows both the Weinsteins and Mr. Eisner.

At a dinner in New York in late May, Mr. Eisner told friends he was ready to sever the relationship, according to a person who was there. By June, relations between the two sides were at a low. At a star- studded Los Angeles screening of "Fahrenheit 9/11," Harvey Weinstein joked that he and his brother had taken out newspaper ads: "Two executives looking for a company to run. Resumes on request."

Even the most mundane exchanges took an air of pettiness. On a trip Harvey Weinstein made to Disney's headquarters in Burbank last summer, an employee called Disney's fire marshal, who asked Mr. Weinstein to stop smoking after seeing his lighted cigarette, a Disney executive said.

Miramax had bigger troubles, though, as it had by then spent most of its $700 million for the year. Mr. Eisner was not inclined to give the Weinsteins more.

While many at Disney were happy to sever ties to Harvey Weinstein, others wanted to keep his brother Bob and his family-friendly, highly profitable Dimension Films in the Disney fold.

So in early August, the Weinsteins sought a compromise. Under terms proposed by Skip Brittenham, the Weinsteins' negotiator, Bob Weinstein would stay and have an annual budget of $300 million and a small development staff. He agreed to cut his profit sharing in half. Harvey Weinstein, for his part, would become an independent producer and secure financing for movies to be distributed by Dimension.

Disney declined, one negotiator said, because the terms were too similar to the previous deal. ("Half a bad deal is still a bad deal," the negotiator argued.)

But the counter offer was dismissed as insulting by the Miramax team. Mr. Murphy offered Bob Weinstein a cut of a movie's profits only after all other costs, including distribution, were taken out. (Other successful Hollywood producers earn as much as 5 percent of a movie's revenue upfront.)

On Aug. 24, 2004, Mr. Murphy informed the Weinsteins in a letter that their contract would not be extended past September 2005. Two months later, the Weinsteins threatened to take Disney to arbitration. According to two negotiators, David Boies, the famed litigator hired by the Weinsteins, called Mr. Murphy and told him the brothers were prepared to file a preliminary injunction against Disney if Mr. Eisner or others interfered before the contract expired.

Any court battle was sure to be as embarrassing for each party as the lawsuit over the 1995 hiring and firing of former Disney president Michael Ovitz, which was then being played out in a Delaware courtroom. With the two sides at a standstill, Richard Cook, chairman of the Walt Disney Studios, agreed to meet with Harvey Weinstein two days before Thanksgiving in a conference room on the second floor of Disney corporate headquarters in Burbank.

"It would be in the best interest of all us to settle this amicably," Mr. Cook told Mr. Weinstein as Mr. Cook settled into a chair at the head of the table, according to a person who attended.

Mr. Weinstein, who friends say only days earlier came to grips with the relationship's demise, calmly agreed. And during the next several hours - without tantrums, threats or the glare of public scrutiny - the two men hammered out the general framework of an agreement.

Looking forward to another 25 years in the business, the brothers have already sought backing from several Wall Street firms. Of course, they will have to find a new name, as Miramax, which is derived from those of their parents, Miriam and Max, is being kept by Disney. But the often-volatile Harvey Weinstein is again thinking big. At the pre-Oscar party, he ended the evening by saying, "We've just begun to fight."

Correction: March 7, 2005, Monday

Because of a production error, a Page 1 article in some copies yesterday about the breakup of the business relationship between the Walt Disney Company and the founders of Miramax Films omitted a passage at the continuation. The affected section should have read:

"The story behind the Disney/Miramax breakup, on one level, is about money and ego. The 12-year relationship went the way of many famous Hollywood marriages: infatuation, then betrayal and, expected soon, a divorce with a rich settlement. "But it is also a morality play with important lessons. It was not enough for the Weinsteins to make great movies - Disney wanted those movies to reap lots of money, too. What bothered Mr. Eisner most, said representatives from both sides, was that Disney had unwittingly put together a deal that, in later years, so richly compensated the Weinsteins at Disney's expense."
http://www.nytimes.com/2005/03/06/movies/06miramax.html


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The Independents

The Movie Midas
Ross Johnson

On the Saturday before the Academy Awards, film executives jammed into a tent on a Santa Monica beach to trade accolades at the Independent Spirit Awards, an event devoted to honoring independent films.

The open secret, of course, is that most independent film labels today are owned by major Hollywood studios: Focus Features, the producer and distributor of "Eternal Sunshine of the Spotless Mind," is owned by NBC-Universal, a division of General Electric, and Fox Searchlight, which produced last year's critical darling, "Sideways," is a part of Rupert Murdoch's multinational behemoth News Corporation.

The most notable shutout at the Spirit Awards was suffered by a true independent: Lions Gate Entertainment, the largest surviving distribution and production company not owned by any Hollywood studio, did not manage a single nomination, despite having released "Fahrenheit 9/11," which grossed $119 million in domestic box office, and the low-budget "Open Water," which grossed $31 million last year.

But Lions Gate executives had this consolation as they watched the Spirits and the following night's Academy Awards ceremonies from the nosebleed seats: they were making all the money.

On Oscar weekend, Lions Gate's "Diary of a Mad Black Woman" was the No. 1 film at the nation's box office, with ticket sales of $21.9 million in only 1,483 theaters. On the same weekend, the company's "Saw," a gruesome serial killer film, was on top of the DVD charts, with sales and rentals reaching almost $80 million after its Feb. 15 video release.

Lions Gate's Oscar weekend market share was anything but a fluke. Five years after joining Lions Gate, its chief executive, Jon Feltheimer, and its vice chairman, Michael Burns, have forged the largest vertically integrated competitor to the major studios, with a production facility, television unit, foreign sales arm and - most important to Wall Street media watchers - an 8,000-title library. The library, which collects titles for the home entertainment market, generates nearly half of Lions Gate's revenues.

While paying off the debt from acquisitions that filled that library, Lions Gate has functioned with a strict cost discipline that sets it apart not just from the studios but also from other independents: it will not risk more than $8 million to produce or acquire a feature film. And the company follows Mr. Feltheimer's instructions to seek out audiences, like the one for "Diary," that other film companies do not often reach (in this case, black women of a certain age).

As a result, Lions Gate's movies grossed $302 million at the nation's theaters in 2004, beating all the studio specialty labels except Miramax Films, which is owned by the Walt Disney Company.

"I'd love to have a film like 'Sideways,' but with that you're betting on execution and awards season marketing," Mr. Feltheimer said. "What's more important is that we stick to the plan that me and Michael Burns came up with five years ago: We want to be the smallest studio with the smartest plan and the biggest library."

Lions Gate's recent success has come as an unwelcome surprise to many Hollywood studio players, who had predicted a poor showing for "Diary," an adaptation of an African-American gospel play. And many of this crowd would rather be seen mowing their own Bel Air lawns than dealing in the rough trade like "Saw."

Lions Gate, which trades on both the New York Stock Exchange and the Toronto exchange, closed at $11.38 a share on Friday, up 14 percent a share for the week - and has a current market capitalization of $1.2 billion, up more than 12-fold since 2000, when Mr. Feltheimer joined as chief executive.

At the time, Lions Gate, which was founded in 1997 by Frank Giustra, a Canadian mining promoter, was reeling after a disastrous deal with Mandalay Entertainment. The company was then recapitalized by a group of investors recruited by Mr. Burns and Mr. Feltheimer, who came to Los Angeles 30 years age as a rock guitarist and eventually took top executive posts at New World Television and Columbia TriStar Television.

Nowhere is Mr. Feltheimer's edict that his company "service the film audiences that are not being serviced by the studios" more evident than with "Diary," an adaptation of a play by Tyler Perry, who also wrote, produced and starred in the film. Mr. Perry is known for plays with positive messages, upscale characters and, often, a gun- toting, pot-smoking grandmother whom he plays in drag.

Despite grossing close to $100 million in ticket and merchandise sales in the last five years, Mr. Perry, 35, was a virtual unknown in Hollywood until he signed with the William Morris Agency in 2003. Soon he had a development deal with CBS and was talking to Fox Searchlight about a film adaptation of "Diary."

Both the deal and the talks collapsed. "The problem at CBS and at Searchlight was that I kept being told that I needed other writers to make my projects work in Hollywood," Mr. Perry said last Thursday. Furthermore, he said, "I got mad when a man from a studio told me that black people who go to church don't like to go to movies."

By contrast, after Lions Gate got his script in May 2004, it took only a week to get a green light. It helped, of course, that Mr. Perry picked up half of the $5.4 million production cost. Black Entertainment Television, a division of Viacom, split the rest of the cost with Lions Gate. As of Sunday night, "Diary" had grossed close to $38 million in domestic box office in its first 10 days.

"No one at a studio ever takes the time to try to understand audiences like the ones that go to Tyler's plays," said John Hegeman, Lions Gate's marketing chief. "This core audience is older, female, black and is largely ignored by Hollywood, so they just stopped going to movies."

Although Lions Gate has increased its theatrical production, including a film in which the singer Usher will play a starring role and "Crash," starring Sandra Bullock and Don Cheadle, it has also stepped up productions and acquisitions of titles that are popular in home video. Last year, American consumers spent $1 billion on Lions Gate home video titles.

"It's home video that really makes the company go," said Dennis McAlpine, a media analyst with McAlpine Associates.

Rob Zombie is the type of artist who fits the Lions Gate home video equation, said Peter Block, the head of acquisitions. Mr. Zombie, a heavy-metal musician whose real name is Robert Cummings, had a film project, "House of a 1,000 Corpses," that was bounced from Universal to Metro-Goldwyn-Mayer and then to Lions Gate before it was released in 2003. It generated $12.8 million in domestic theatrical box office and $15 million in revenues for the home video division.

Lions Gate's "Monster's Ball," for which Halle Berry won an Oscar, was the company's first theatrical hit, in 2001. But the first big surprise on video was Mr. Zombie's film, which was acquired for just $1 million. "It hit because Rob pretty much does what Tyler Perry does," Mr. Block said. "He toured with his band and told his audiences all about his movie, which was great free publicity."

But what has Wall Street interested in Lions Gate - possibly as a takeover target - is not the piles of on-screen corpses but the company's coveted library of titles. With the help of investors like Paul Allen, Mr. Feltheimer bought out the library of Trimark Pictures for $80 million in 2000, and the library of Artisan Entertainment for $200 million in 2003.

As a result, Lions Gate's library will generate about $400 million of the company's revenues of $750 million for fiscal year 2005, according to filings with the Securities and Exchange Commission.

Mr. McAlpine, the analyst, said that Lions Gate is "the last of the vertically integrated independents and the most likely acquisition candidate for the major studios."

For now, the film Mr. Block is most excited about is "Hard Candy," which he picked up at this year's Sundance Film Festival for $2.5 million. It tells of a 32-year-old Internet predator who meets a young girl in a chat room. The centerpiece of the film is "a castration scene with a twist," Mr. Block said.

"The secret to what we do is that we put out films where the audience says, 'That's not a studio film. It's a Lions Gate film,' " he said.
http://www.nytimes.com/2005/03/07/bu...a/07lions.html


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NYT

Is a Cinema Studies Degree the New M.B.A.?
Elizabeth Van Ness

RICK HERBST, now attending Yale Law School, may yet turn out to be the current decade's archetypal film major. Twenty-three years old, he graduated last year from the University of Notre Dame, where he studied filmmaking with no intention of becoming a filmmaker. Rather, he saw his major as a way to learn about power structures and how individuals influence each other.

"People endowed with social power and prestige are able to use film and media images to reinforce their power - we need to look to film to grant power to those who are marginalized or currently not represented," said Mr. Herbst, who envisions a future in the public policy arena. The communal nature of film, he said, has a distinct power to affect large groups, and he expects to use his cinematic skills to do exactly that.

At a time when street gangs warn informers with DVD productions about the fate of "snitches" and both terrorists and their adversaries routinely communicate in elaborately staged videos, it is not altogether surprising that film school - promoted as a shot at an entertainment industry job - is beginning to attract those who believe that cinema isn't so much a profession as the professional language of the future.

Some 600 colleges and universities in the United States offer programs in film studies or related subjects, a number that has grown steadily over the years, even while professional employment opportunities in the film business remain minuscule. According to the Bureau of Labor Statistics, there are only about 15,050 jobs for film producers or directors, which means just a few hundred openings, at best, each year.

Given the gap between aspiration and opportunity, film education has often turned out to be little more than an expensive detour on the road to doing something else. Thus, Aaron Bell, who graduated as a film major from the University of Wisconsin in 1988, struggled through years of uninspiring nonunion work managing crews on commercials, television pilots and the occasional feature before landing his noncinematic job designing advertising for Modern Luxury Media LLC, a Chicago-based magazine publisher.

"You sort of have this illusion coming out of film school that you'll work into this small circle of creatives, but you're actually more pigeonholed as a technician," said Mr. Bell, who is now 39.

For some next-generation students, however, the shot at a Hollywood job is no longer the goal. They'd rather make cinematic technique - newly democratized by digital equipment that reduces the cost of a picture to a few thousand dollars and renders the very word "film" an anachronism - the bedrock of careers as far afield as law and the military.

At the University of Southern California, whose School of Cinema-Television is the nation's oldest film school (established in 1929), fully half of the university's 16,500 undergraduate students take at least one cinema/television class. That is possible because Elizabeth Daley, the school's dean, opened its classes to the university at large in 1998, in keeping with a new philosophy that says, in effect, filmic skills are too valuable to be confined to movie world professionals. "The greatest digital divide is between those who can read and write with media, and those who can't," Ms. Daley said. "Our core knowledge needs to belong to everybody."

In fact, even some who first enrolled in U.S.C.'s film school to take advantage of its widely acknowledged position as a prime portal to Hollywood have begun to view their cinematic skills as a new form of literacy. One such is David Hendrie, who came to U.S.C. in 1996 after a stint in the military intending to become a filmmaker, but - even after having had the producer/director Robert Zemeckis as a mentor - found himself drawn to the school's Institute for Creative Technologies, where he creates military training applications in a variety of virtual reality, gaming and filmic formats. One film he developed was privately screened for the directors John Milius and Steven Spielberg, who wanted to understand the military's vision of the future.

"That was like a film student's dream," said Mr. Hendrie, who nonetheless believes he has already outgrown anything he was likely to accomplish on the studio circuit. "I found myself increasingly demoralized by my experiences trying to pitch myself as a director for films like 'Dude, Where's My Car?' " Mr. Hendrie said. "What I'm doing here at I.C.T. speaks to the other interests I've always had, and in the end excited my passion more."

In recent weeks, members of a Baltimore street gang circulated a DVD that warned against betrayal, packaged in a cover that appeared to show three dead bodies. That and the series of gruesome execution videos that have surfaced in the Middle East are perhaps only the most extreme face of a complex sort of post-literacy in which cinematic visuals and filmic narrative have become commonplace.

Melding easily with the growing digital folk culture, some film majors have simply taken to creating art forms outside the boundaries of the established film business. In one such instance, Wes Pentz, a k a DJ Diplo - a 2003 graduate of Temple University, where film majors are encouraged to invent new career paths in museums, leisure businesses and elsewhere - broke through with his trademark Hollertronix, a style modeled on cinematic soundtracks. "I think of my songs as having a movement, like I would watch in a film, and there's a narrative feel to them," said Mr. Pentz, who said he had learned to frame music differently because of his film school experience.

In the public policy arena, meanwhile, students like Yale's Mr. Herbst hope to heighten political debate with productions far more pointed than the most political feature film. Even a picture like "Hotel Rwanda," with its unblinking look at African genocide, is "a soup kitchen approach," Mr. Herbst said: "You're offered something to eat, but there are no vitamins." Bringing film directly into politics, he expects to throw objectivity out the window and change minds - perhaps not an unrealistic aim at a time when, in a bit of what a headline in The Wall Street Journal characterized as "film noir," the Edward D. Jones & Company brokerage has entered the fray over the proposed Social Security overhaul with a highly produced video.

To some extent, such broadening vision is already helping to make economic sense of film education, which in the past was often a long path to nowhere. "Most find their way, and the skills they learn from us are applicable to other careers and pursuits," Dale Pollock, dean of the School of Filmmaking at the North Carolina School of the Arts, said of his students. "So we're not wasting their time or money."

Still more, Ms. Daley, the U.S.C. Cinema-Television dean, argues that to generalize such skills has become integral to the film school's mission. More than 60 academic courses at U.S.C. now require students to create term papers and projects that use video, sound and Internet components - and for Ms. Daley, it's not enough. "If I had my way, our multimedia literacy honors program would be required of every student in the university," she said.
http://www.nytimes.com/2005/03/06/mo...icle_popular_1


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Meet John Doe

The RIAA Runs Its Lawsuits As A Volume Business, And Sometimes Downloaders Just Gotta Settle
Nick Mamatas

Of the millions of people who illegally download free music using various peer-to-peer (P2P) networks, only about 8,400 have been sued by the recording industry—including, last month, an 83-year-old dead woman from West Virginia. Those odds seem pretty good, until it happens to you. This past October, my former Internet provider alerted me that they had been subpoenaed by the Recording Industry Association of America (RIAA) on behalf of its member labels with the demand to turn over the names and addresses of 100 "John Does" that the RIAA had detected sharing music. The RIAA is now appealing an 8th Circuit Court decision, which ruled that Internet services providers don't have to reveal names of customers who have not yet been sued.

"We surf peer-to-peer music networks," Jonathan Lamy of the RIAA communications office says. "We look for people who are offering songs, and if they have a substantial number of songs, we take note of all the songs they are offering for distribution and their IP addresses." Suits are filed against the anonymous file-sharers in bulk and then the RIAA goes to court to get names and addresses from ISPs. From there, the RIAA offers downloaders a chance to settle the complaint, or they can go to court and fight it.

For me, the experience of settling with the RIAA was almost painless— except for the thousands I agreed to pay. Dragging my "shared" folder to the trash icon, promising not to download anymore, and acknowledging that illegal downloading is wrongful were easy enough. I happened to know an intellectual-property lawyer who agreed to handle the negotiations pro bono. He was the one who called the RIAA settlement center number and spoke not to a lawyer, but to a staffer empowered and trained to negotiate. "It feels like they're doing a volume business," my lawyer told me.

Lamy says that of the 8,400 suits filed (8,100 of which were filed against John Does) there have been about 1,700 settlements to date. The process, from detection to settlement, can take months, but its critics believe the RIAA moves far too quickly. Annalee Newitz, policy analyst for the civil liberties group the Electronic Frontier Foundation, says the practice of suing not just a single anonymous person but dozens at a time is called "spamigation." "That's one of the slimier things that entertainment companies are doing," she says, because mass lawsuits allow "companies to sue hundreds of people for the same cost as suing only one. So instead of respecting the defendants' due process rights and suing them individually, the companies are able to cut down on court fees and sue them as a group. This makes it much easier for companies to sue people willy-nilly, even if they aren't sure that the person being sued is in fact infringing, because it doesn't cost them any extra money to add another name to their suit." The EFF has helped compel entertainment companies to file individual rather than group lawsuits in Northern California, and has also worked with other John Does to have the RIAA and other entertainment company cases moved to their home states.

Most settlements top $3,000, and according to Newitz, some can go as high as $7,000. The RIAA wouldn't confirm these figures, but it didn't dispute them either. Lamy says that of all the John Doe cases so far, "none have come to trial." And indeed, it is hard to imagine going to trial doing much good for a hypothetical Doe, since millions of users are illegally downloading and sharing music. Frequent downloader Cecilia Gonzalez didn't settle against the RIAA, and on January 7, she received only a summary judgment in a U.S. District Court. Throwing out Gonzalez's claims that she was simply "sampling" songs to see if she wished to buy them and that she was an "innocent infringer" unaware that she was violating record company copyrights, the court ordered her to pay damages of $750 for each of 30 songs she was found to have downloaded illegally, for a total of $22,500. That's more than the poverty line income for a family of five in 2004 ($22,030), but it is worth pointing out that damages of $750 per infringement is the minimum the RIAA could have received, and that the original complaint filed against Gonzalez claimed that she had nearly 2,500 downloaded songs. Damage payments could potentially be much higher. Finally, courts have found that the "cumulative effect" of downloaders makes individual downloaders liable for damages, even if their personal downloading has only a marginal impact, so even penny-ante downloaders are potentially at risk.

The RIAA is not eager to go to trial, according to Lamy. "We would prefer to settle sooner rather than later. . . . We make numerous attempts to engage downloaders throughout the process." The RIAA is even eager to adopt P2P technology, he says. "Record companies are aggressively licensing digital music," and even Napster founder Shawn Fanning has come in from the cold with SNOCAP, a clearinghouse of properly licensed digital music. The problem is that legal digital music firms have to compete against P2P outfits with "parasitical business models." It's cheaper to distribute stolen free stuff than it is to pay up front, after all.

For all the furor over the suits, they may not be having that much effect on the amount of illegal downloading. Newitz says that "recent reports indicate that file sharing is bigger than ever—and so are the record industry's profits. As a result, it's hard to see the suits as anything other than a wrongheaded attempt by the old media industry to push upstart innovators out of the marketplace rather than working with them." The RIAA points to the rise in legal downloading to show that its strategy is working. In a December press release, RIAA president Cary Sherman said, "With legal online retailers still forced to compete against illegal free networks, the playing field remains decidedly unbalanced. . . . That's why continued enforcement against individuals stealing and distributing music illegally is essential, as is holding accountable the businesses that intentionally promote and profit from this theft."

The EFF has its own suggested model for legal downloading, called "voluntary collective licensing." P2P users would pay a flat rate, say five dollars a month, for use of the networks, and that money would be passed on to ASCAP or some other suitable association representing artists and producers. "This is exactly how radio works, except that radio stations pay the licensing fees rather than listeners," Newitz says. "It would be easy to figure out how much to pay artists using a VCL for P2P technologies, because it's simple to use current software to track how many times a song is downloaded"—a method that would make such a scheme even more precise than the estimates radio uses. But the RIAA isn't going for it. "We do oppose compulsory licensing schemes that would set a specific price" for a license to download, says Lamy. SNOCAP and other pay-for-play systems like iTunes is what the industry supports.

And downloading? Well, I'm done with it now, except for legal amazon.com freebies, but even my close friends haven't been scared off. One scoffed at my settlement, and said that if she were sued, she'd fight the RIAA in court. For her, downloading is "civil disobedience" in protest against the legal digital music systems that just don't have all the music she wants. Of course it's easy to strike a rebel pose like that . . . until you become just another John Doe.
http://www.villagevoice.com/music/05...,61813,22.html


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Music Biz Calls On European ISPs To Act Against P2P Sharing
Simon Aughton

The international music industry has called on European ISPs to implement a series of measures to stop illegal, peer-to-peer file sharing.

Speaking at the European Telecommunications Network Operators' Association conference, John Kennedy, CEO of the IFPI, asked ISPs to agree to a code of conduct that would see them actively seek to help the music industry eliminate sharing.

The code, he said, should include agreeing to ask the record industry to let them know when illegal sharing is taking place, confirming or implementing terms and conditions that prohibit unauthorised P2P activity and agreeing to enforce such terms.

'As an industry we ask you to help us build a bigger and better market for our legitimate, authorised professionally created content,' Kennedy said, 'and that in turn will mean a bigger and better market for your commercial broadband services.'

Earlier Kennedy said that in Europe, within the space of 12 months, legitimate digital music had gone from a niche market to the mainstream of consumer life, with 2004 seeing 10 times the number of downloads that there were in 2003.

'These figures are astonishing given that legal music service providers have had to compete against free peer-to-peer file sharing,' he said. 'what other business has to break into a 100 per cent pirate market?'

Kennedy defended the legal action taken in the UK, US and elsewhere against alleged file sharers.

'We have used litigation repsonsibly, effectively and alongside tireless education information campaigns,' he said. 'When you take into account the extent to which we waited and educated before taking action, you could say that we are the nicest litigators in the world.'

He also dismissed criticism that download prices are too high.

'Music is great value,' he argued. 'You wouldn't always believe it because many commentators complain about the price of music. But in the online world you can buy a piece of music, a true origial work of art, for 99 cents and it is yours to own forever. A song for life for less than a can of coke, a loaf of bread, a bottle of water, a cup of coffee or a bus fare.'
http://www.pcpro.co.uk/news/70163/mu...p-sharing.html


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Nokia Launches Handset TV Project
Matti Huuhtanen

Nokia Corp. on Tuesday launched a pilot project enabling cell phone users to watch television broadcasts on their handsets in the Helsinki region.

In the first venture of its kind in Finland, Nokia is working with the country's largest broadcaster, the Finnish Broadcasting Company, YLE, and leading commercial TV channels and major mobile service providers, including TeliaSonera and Elisa, the world's largest cell phone maker said.

Besides Finnish TV programming, 500 test users in the capital region can also watch international television broadcasts, such as BBC World and CNN, and tune into radio programs.

Nokia tested the system last year before launching Tuesday's pilot project, scheduled to continue until June, the Finnish company said.

The company's research found people like to watch mobile TV in cars and public places, such as cafes. Watching mobile TV at home and in workplaces was also common.

Test users were most interested in news, weather, sports, current affairs and entertainment, according to the research.

Nokia, based in Espoo just outside the Finnish capital, has sales in 130 countries with some 55,500 employees.

The Nordic region's largest telecommunications operator, TeliaSonera Corp., has almost 3 million mobile customers in Finland, while Elisa Corp. has 1.4 million Finnish mobile subscriptions.

YLE TV is watched daily by some two-thirds of the Finnish population of 5.2 million.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS


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Local news

Ben Folds Rocks Out At UCONN
Sean Corbett

"You're going to learn a great deal tonight," Ben Folds said with a smile last Thursday at the sold out Jorgensen Theatre at University of Connecticut in Storrs.

Behind him on stage were a bassist and drummer. Folds has not performed an entire show with a band since 1999, when his former band, Ben Folds Five, broke up.

Overnight sensation Gavin DeGraw opened the show for Folds. However, his piano skills, lyrics and overall show seemed juvenile and flaccid in comparison to what was to come.

The audience liked DeGraw, but there was an overwhelming level of respect for Ben Folds throughout his entire 2-hour show. It was as if Folds was teaching a well-disciplined class of some sort. Maybe he was.

Lesson One: How to Nearly Murder a Piano.

For those who have ever known anyone with a piano in their house, the convention is to tune it once or twice a year. Ben Folds, though, wailed on his Steinway & Sons ebony grand piano with such passion and intensity Thursday that after only 2 hours of playing, it could no longer hold a sufficient tune.

Commenting on the encore, pianist John Cusick '07 of Wesleyan University said, "the piano was noticeably out of tune, which is next to impossible. It's the musical equivalent to a lightweight boxer taking down a guy five or six times his size, in one punch."

Lesson Two: How to Conduct a 2,600 Person Audience in a Four-Part Harmony.

"If a couple thousand people can't do it, how can three guys?" Folds pointed out as he began teaching the audience the four complex harmonies of "Bastard," an unreleased song off his upcoming CD. He cut the audience into four neatly defined sections. He taught each section a different part of the song. He lifted his arms into the air. The audience sang. He became the conductor of nearly 3,000 people, all eager to learn from the master.

In a slightly more famous display of his musicianship which appears on his official live CD, he later transformed the audience into a horn section for the song "Army."

"This side's saxophones, this side's trumpets," he said. The next minute, the audience was singing like the Vienna Boy's Choir.

Lesson Three: How to Choose a Song to Cover.

Folds has been known to cover such piano-based classics as "Tiny Dancer" by Elton John, which is perfectly fitting. But it is always more impressive and enjoyable when an artist attempts a cross-genre cover. Ben chose a song by Dr. Dre called "Bitches Ain't Shit."

The chords that made up the song were among the most beautiful and uplifting of the whole night. Dr. Dre may indeed have something to learn from this jazzed out version of his vulgar ode to working girls.

As Fairfield University's Whitney Maus '08 put it, "I discovered the meaning of life somewhere between 'Bitches Ain't Shit' and 'Zak and Sara (played after the Dr. Dre song).'"

Lesson Four: Ironic Stage Presence.

Ben Folds arguably has one of the largest cult followings today and he seemed to handle it quite well on stage. This powerful man has an appetite for commanding melodies and brilliant rhythm that shines through his humble and slender existence.

He successfully personifies his ironic humor and anger by pounding on the black and whites while giving the audience a goofy look or two.

At one point during the concert, he told a vulgar story about Santa, stood up, ran around the stage and beat-boxed a bit, only to sit down and say, "after you build up this kind of weird vibe, the best thing to do is to go right into a slow real song."

In another possible attempt to entertain, he only brought ten t-shirts and 20 or so singles for merchants to sell at a fold-out card-table, while pop sensation Gavin DeGraw had an endless supply of merchandise set up in an elaborate display.

Folds performed songs mostly from his solo career. He did, though, perform some Ben Folds Five favorites such as, "Where's Summer B.?" "Emaline," "Army" and "Philosophy."

With constant smiles from Ben to his band mates and to the audience during and between songs, Storrs stood witness to a proud and joyful Ben Folds, despite rumors of recent dissatisfaction with performing.

Ben Folds is currently on an international tour with his new band that will reach Australia, Europe and Japan. Expect the first full-length CD in over three years called Songs for Silverman on Apr. 26.
http://www.fairfieldmirror.com/news/...n-876009.shtml


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"Operation Higher Education"

Three Plead Guilty In Distribution Of Pirated Software

HARTFORD, Conn. (AP) - Three men prosecutors dubbed the ``Robin Hoods of cyberspace'' pleaded guilty Tuesday to putting copyrighted computer games, movies and software on the Internet so that people around the world could make copies for free.

All three said they made no money on the scheme, and did it just for the sport of it.

Seth Kleinberg, 26, of Los Angeles, Jeffrey Lerman, 20, of New York, and Albert Bryndza, 32, of New York, pleaded guilty to federal copyright charges. They are the first Americans convicted in what the Justice Department said was the largest-ever investigation of software piracy.

Investigators said that software valued at millions of dollars was copied and sold for pennies in foreign countries. They said that Kleinberg pursued the scheme from 1998 to 2004, Lerman from 2002 to 2004, and Bryndza from 1999 to 2004.

The investigation was aimed at an underground network known as the ``warez scene''

``It's a competition of different groups racing to release pirated software over the Internet,'' said Kleinberg, who, with a high-school education and a home computer, cracked the computer industry's toughest copyright protections.

Prosecutors said Lerman edited the software so it could fit on a single compact disc, and Bryndza built servers that stored the software.

They were released without bail for sentencing in July. They reached plea bargains calling for sentences of about three to six years.
http://www.siliconvalley.com/mld/sil...l/11083682.htm


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Michigan State Police Quit Anti-Terrorism Database
AP

State police officials say they will drop out of a multistate data-collection system that came under fire as a potential threat to people's privacy.

The Michigan State Police said it will stop participating in the pilot project, known as ``Matrix,'' when it ends March 18.

The department said too few states are participating to make the project worthwhile. The project began in December 2003 with 13 states; Florida, Ohio, Pennsylvania and Connecticut remain.

State police also said they were concerned about future funding and unrealistic expectations to expand the Multistate Anti-Terrorism Information Exchange.

``The need for law enforcement investigators to access legally available information sources for criminal investigations continues to be a critical goal,'' said Lt. Colonel Peter Munoz, deputy director and commander of the Field Services Bureau.

The project collects data, including driver's license and criminal history information, and shares access with participating states.

Critics have argued the system gives law enforcement unprecedented access to details about innocent people.
http://www.siliconvalley.com/mld/sil...printstory.jsp


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From October

Parkingticket.com Finds Cities In Violation
Matt Hines

Glen Bolofsky doesn't think you should necessarily have to pay your parking tickets, and he's doing something about it.

Years ago, the native New Yorker got sick of paying off the endless stream of tickets that he found pinned to his windshield. So, after running in circles to find the right methods to appeal the violations, Bolofsky decided to try to capitalize on his experience. In 1982, he started a company that sold a package of documents meant to help people navigate the frustrating maze of New York's parking-ticket appeals system.

By 1993, Bolofsky's enterprise had morphed into a software program for businesses that wanted information on fighting tickets. Then in 2001, he launched Parkingticket.com, which provides a ticket appeals service online. This year the company, which now operates strictly via the Web, will rake in more than $3 million in revenue providing ticket-fixing services for individuals and a growing number of corporate clients.

Parkingticket.com's list of customers includes large companies with huge fleets of delivery vehicles, such as Anheuser- Busch and Kraft Foods. Other corporate clients are television networks such as NBC and CNN, whose vehicles are notorious targets for meter maids.

The reason the system works roughly 75 percent of the time and has helped clear an estimated $100 million in tickets over its 20-plus years of operation, Bolofsky says, is simple. He believes that most parking tickets are themselves in violation. For instance, it is actually legal for most commercial vehicles to double-park while making deliveries, for up to three hours. General ignorance of such rules may be why United Parcel Service is another company that has approached the site about subscribing to its services.

"Most big cities use parking tickets as a method of generating revenue, not for creating an environment of safety for drivers and pedestrians, the reason why parking tickets were invented," he said. "If you begin looking at the actual regulations, you'll find that most tickets are not really enforceable."

The Parkingticket.com system is simple. If you're a resident of New York City, San Francisco or Washington, D.C., you can log on to the site and submit the details of any parking violation. For half the cost of what the ticket charges, the company will fight the ticket for you--and it usually wins, Bolofsky said. If you lose, the company refunds your original payment.

Parkingticket.com refuses to appeal any tickets that involve perceived safety issues, such as blocking a fire lane or misusing a handicapped parking spot.

Bolofsky contends that successfully fighting most parking tickets is not actually that hard; the trick is in knowing how to find the right forms and regulations, learning the rules and filing an appeal.

Some cities, for example, will merely send a second notice to people that have filed for an appeal by mail, without telling them that their complaint was never scheduled or heard. Most people read this as a sign that they have already lost and simply pay the fine, he said. But knowing the rules can make it easy to win.

"We're not trying to cheat the cities out of money," Bolofsky said. "We're helping people exercise their rights."

The Web has proved to be the killer application for Bolofsky's scheme, as he has grown Parkingticket.com from a one-man operation in an apartment to an 11-person business based in Paramus, N.J. He said the collapse of the Web boom actually made it possible for him to launch the site, as he could only afford sufficient hosting services and site design services when prices began to plummet.

The company will launch services for Chicago and Los Angeles later this year, and has plans for similar offerings for people in Boston, London and Montreal. Among the consultants Bolofsky currently employs are retired police officers from New York and Washington, as well as a retired New York judge.

"These cities are becoming increasingly aggressive about handing out tickets, and for the most part, these are just trumped-up violations," Bolofsky said.

Calls seeking comment on the site from the parking departments of New York, San Francisco and Washington were not immediately returned.
http://news.com.com/Parkingticket.co...3-5399591.html


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Kid’s a regular Pyryte

Teen Convicted Under Internet Piracy Law
Beth DeFalco

PHOENIX (AP) -- An Arizona university student is believed to be the first person in the country to be convicted of a crime under state laws for illegally downloading music and movies from the Internet, prosecutors and activists say.

University of Arizona student Parvin Dhaliwal pleaded guilty to possession of counterfeit marks, or unauthorized copies of intellectual property.

Under an agreement with prosecutors, Dhaliwal was sentenced last month to a three-month deferred jail sentence, three years of probation, 200 hours of community service and a $5,400 fine. The judge in the case also ordered him to take a copyright class at the University of Arizona, which he attends, and to avoid file-sharing computer programs.

"Generally copyright is exclusively a federal matter," said Jason Schultz, an attorney with the Electronic Frontier Foundation, a technology civil liberties group. "Up until this point, you just haven't seen states involved at all."

Federal investigators referred the case to the Maricopa County Attorney's Office for prosecution because Dhaliwal was a minor when he committed the crime, said Krystal Garza, a spokeswoman for the office.

"His age was a big factor," she said. "If it went into federal court, it's a minimum of three months in jail up front."

Although Dhaliwal wasn't charged until he was 18, he was 17 when he committed the crime. Prosecutors charged him as an adult but kept it in state court to allow for a deferred sentence. Garza also said Dhaliwal had no prior criminal record.

The charge is a low-level felony but may be dropped to a misdemeanor once he completes probation, she said.

A call to Dhaliwal's attorney, James Martin, was not returned.

A man who identified himself as Dhaliwal's father, but refused to give his name, returned a message left Monday at Dhaliwal's parents' home. He said his son had made a mistake, and was trying to put the case behind him. The man declined to comment further.

Brad Buckles, executive vice president for anti- piracy at the Recording Industry Association of America, said estimates say Internet piracy has cost the industry up to $300 million a year in CD sales alone.

The FBI found illegal copies of music and movies on Dhaliwal's computer, including films that, at the time of the theft, were available only in theaters. They included "Eternal Sunshine of the Spotless Mind," "Matrix Revolutions," "The Cat In The Hat," and "Mona Lisa Smile."

A federal task force that monitors the Internet caught on to the student and got a warrant, Garza said, adding that Dhaliwal was copying and selling the pirated material.
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