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

[JackSpratts]

"One-to-one community building, tape trading, is something we've always been about. The idea of a massive one-stop Web site that does not build community is not what we had in mind. Our conclusion has been that it doesn't represent Grateful Dead values." – Dennis McNally


"The idea that they could stop people from trading these files is absurd. It's no longer under anyone's control. People have gigabytes of this stuff." – David Gans


Cyber Monday "is actually taking place." – Tom Burke


"The people in the countersurveillance industry come from the surveillance community. They know what is possible, and their equipment needs to be comprehensive and needs to counteract any form of surveillance." – Jude Daggett


"It is not considered an issue within the F.B.I.." – Catherine Milhoan


"If the federal government announced plans to directly collect the sort of data Google does, there would be an uproar - in fact there was in 2003, when the Pentagon announced its Total Information Awareness program, which was quickly shut down." – Adam Cohen


"When enough people feel that it’s OK to do a thing, that thing ceases to be wrong in their own cultural context. You can complain about moral relativism all you like, but the facts are inescapable: that’s how people behave." – Ernest Adams






























Turn Off The Tap When You’re Done

Using commonly found off the shelf equipment a group of researchers say most widely used forms of analog wiretaps can be fooled by simply pressing a button at home. The low tech remote shut-off device signals government recorders the parties are done with their calls and fools even digital high-tech F.B.I. "CALEA" systems.

Although the Bureau knows about this and doesn’t seem too worried publicly, there are reports of unexplained "gaps" in surveillance logs, suggesting that at least some citizens have been onto this particular chink in Big Brother’s armor for a while now.

Depending on your level of comfort with a government that increasingly sees the right to privacy as their right to invade yours, this could either be bad news or good.

History shows powerful states abuse individuals. Americans saw it in the 60’s and 70’s. We’re seeing it now with smears on political opponents and police selling personal info to the highest bidders. Maybe it’s not the worst thing in the world if a massive data sucking, privacy annihilating machine has a few cracks the people themselves can exploit.

Thanksgiving Platters

This week researchers announced the development of a new high capacity disc capable of holding some one thousand, six hundred gigabytes of data (1.6 TB) with a playback speed of one hundred and sixty megabits per second. Prototypes like this new DVD-style platter have been announced before but haven’t escaped the lab. When they do they'll usher in a new era of file sharing, on a scale almost unimaginable to those of us who find 150k downloads fast.

A little math: 160 megabits per second equals (apx) 16 megabytes per second, and since 1.6 terabytes equals 1 million, six hundred thousand megabytes, these proposed discs have one hundred thousand seconds or 27 hours of playback time (1.6 million divided by 16). Now if the discs can be written at the same rate they play (which seems unlikely – it probably takes much longer), then one hundred thousand seconds is one very long burn time for commercial pirates, unless they go with expensive photo-lith stamping machines, also I’m somewhat skeptical of a practical business application that would interest players like the movie studios, who really won’t need that kind of disc space anytime soon.

On the other hand, since it’s nearly a gigabyte per-minute stream, getting such fully loaded (and encrypted) discs in the mail from one’s friends - and dubbing them at home over the course of a few days – well that’s a different story. They would run circles around any existing filesharing systems to date. With the added benefit of freeing up bandwidth for such important activities as cybering strangers and badmouthing bosses - they might even find favor with ISPs.

Even if dubbing takes a week, swapping discs that each contain 5000 TV shows or 25,000 CDs (!) will make distributing the world's digital culture a snap for nearly everyone. Sign me up Scotty.

If You Don’t Like Your Weather, Change It

I’ve had a weather gathering program on my PCs for years. As a matter of fact on this particular box I have an early, pre-spyware version of WeatherBug, and I’m still irked I lost the original executable in a data dump. It means I can’t share the pgm with friends anymore, but this week I found something even better than a pristine early exe. I installed a weather app from an outfit called Tropic Designs that in the few days I’ve been using it seems to outperform my old WeatherBug in many ways and does so without spyware or those blaring banner ads. It’s called Weather Pulse. It’s a fast set-up, easy to use program that runs unobtrusively in the toolbar, with configurable radar, satellite imagery and danger alerts for your area. All that and it’s free. It’s a nice little find.



















Enjoy,

Jack



















December 3rd, ’05





Deadheads Outraged Over Web Crackdown
Jeff Leeds

The Grateful Dead, the business, is testing the loyalty of longtime fans of the Grateful Dead, the pioneering jam band, by cracking down on an independently run Web site that made thousands of recordings of its live concerts available for free downloading.

The band recently asked the operators of the popular Live Music Archive (archive.org) to make the concert recordings - a staple of Grateful Dead fandom - available only for listening online, the band's spokesman, Dennis McNally, said yesterday. In the meantime, the files that previously had been freely downloaded were taken down from the site last week.

Dissent has been building rapidly, however, as the band's fans - known as Deadheads - have discovered the recordings are, at least for the time being, not available. Already, fans have started an online petition, at www.petitiononline.com/gdm/petition.html, threatening to boycott the band's recordings and merchandise if the decision is not reversed. In particular, fans have expressed outrage that the shift covers not only the semiofficial "soundboard" recordings made by technicians at the band's performances, but also recordings made by audience members.

To the fans, the move signals a profound philosophical shift for a band that had been famous for encouraging fans to record and trade live-concert tapes. The band even cordoned off a special area at its shows, usually near the sound board, for "tapers" - a practice now followed by many younger jam bands.

But more broadly, it suggests that a touchstone of baby-boomer counterculture - the recording made by and shared, sometimes via mail, among hard-core fans - may be subverted in a digital era when music files can be instantly transmitted worldwide.

The move comes as the group, which disbanded after the 1995 death of its leader and ringmaster, Jerry Garcia, has begun selling downloads of its live concerts through its own official Web site. The band (whose surviving members - the guitarist Bob Weir, the bassist Phil Lesh and the drummers Mickey Hart and Bill Kreutzmann - have since played together under the more compact name the Dead) sells album-length recordings of the shows at prices that can run from about $8 to roughly $16 a copy.

Unlike the digital files sold at popular music services like Apple Computer's iTunes or Real Networks' Rhapsody, the band sells its music as files that can be copied and transferred without restriction.

The independently operated Live Music Archive evidently posed unwelcome competition.

"These folks assembled a Deadhead's dream collection and made it available," Mr. McNally said. "When we discovered it, we decided to take a wait-and-see approach. Eventually, it was the band's conclusion, after a long discussion with them, to request that they change their policies" and make the live recordings available only as streams.

The contretemps makes clear that the band's decades-long support of fan recordings and trading did not anticipate the popularity of music online.

"One-to-one community building, tape trading, is something we've always been about," Mr. McNally said. "The idea of a massive one-stop Web site that does not build community is not what we had in mind. Our conclusion has been that it doesn't represent Grateful Dead values."

Most fans, he continued, "understand they were being granted an extraordinary privilege, and they responded by taking it very seriously" by respecting the band's wishes not to sell their live recordings. "This is not the same situation," he added.

David Gans, who is the host of a syndicated radio program, "The Grateful Dead Hour," said in an interview yesterday that the battle is rooted in the band's "historically lackadaisical attitude toward their intellectual property." He added: "When they were making $50 million a year on the road, there wasn't a lot of pressure to monetize their archives." Now, however, it may be difficult to put the genie back in the bottle. While the move to revise the Live Music Archive may deal a blow to what many fans considered an organized library of material, "the idea that they could stop people from trading these files is absurd," Mr. Gans said, adding: "It's no longer under anyone's control. People have gigabytes of this stuff."
http://www.nytimes.com/2005/11/30/ar...ead.html?8hpib





Grateful Dead Members Change Mind About Downloads
UPI

After the Grateful Dead's biggest fans protested the band's decision to stop downloads of their gigs from a nonprofit web site, they've had a change of heart.

The band's surviving members -- Bob Weir, Phil Lesh, Mickey Hart and Bill Kreutzmann -- pulled the Internet plug on the Deadhead bootleg network on Internet Archive last week.

Deadheads -- widely regarded as rock's most loyal bunch -- responded with an online petition calling for a boycott of anything related to the group until GDM reversed its position.

The band changed their position Wednesday and has agreed to make audience recordings available for download again, but not live recordings made directly from concert soundboards.
http://www.kget.com/entertainment/mu...D-0C048D050BD1





Canadian Government Falls On No-Confidence Vote

A corruption scandal forced a vote of no-confidence Monday that toppled Prime Minister Paul Martin's minority government, triggering an unusual election campaign during the Christmas holidays.

Canada's three opposition parties, which control a majority in Parliament, voted against Martin's government, claiming his Liberal Party no longer has the moral authority to lead the nation.

The loss means an election for all 308 seats in the lower House of Commons, likely on Jan. 23. Martin and his Cabinet would continue to govern until then.

Opposition leaders last week called for the no-confidence vote after Martin rejected their demands to dissolve Parliament in January and hold early elections in February. Monday's vote follows a flurry of spending announcements in Ottawa last week, with the government trying to advance its agenda ahead of its demise.

Martin is expected to dissolve the House of Commons on Tuesday.

The Conservative Party leader Stephen Harper joined with the New Democratic and Bloc Quebecois parties to bring down the government — prompting the first Christmas and winter campaign in mostly Christian Canada in 26 years. Recent polls have given the Liberals a slight lead over the Conservatives, with the New Democrats in third place.

The same surveys suggest the Bloc Quebecois would sweep the French-speaking province of Quebec, making a majority government unlikely no matter which party wins the most seats.

Harper would become prime minister if the Conservatives receive the most seats in Parliament. He favors tax cuts and opposed Martin's successful bill to legalize same-sex marriage throughout Canada.

The opposition is banking on the public's disgust with a corruption scandal involving the misuse of funds targeted for a national unity program in Quebec.

An initial investigation absolved Martin of wrongdoing, but accused senior Liberal members of taking kickbacks and misspending tens of millions of dollars in public funds.

The government ran into peril this month when it lost the support of the New Democratic Party, whose backing earlier this year helped Martin escape a previous no-confidence motion by a single vote.

New Democrat leader Jack Layton said he hadn't received enough assurances the Liberal Party would fight the increased use of private health care in Canada. Martin made the deal for support from Layton's leftist party last spring by pledging $3.6 billion in social spending and promising to delay billions in corporate tax cuts.

Martin appears prepared to take his chances with a holiday campaign and blamed his opponents for any inconvenience to the predominantly Christian electorate.

He had promised to call an election within 30 days of the release of a follow-up report on the corruption scandal. The document is expected Feb. 1, which would have meant elections in the first week of April, a time that suits Canadians better than the bitterly cold and busy holiday season.

Although no formal agreement is in place, all the parties are likely to agree to a pause in the campaign around the Christmas and New Year holidays. The campaign is expected to start Tuesday, after Parliament is dissolved.

Grace Skogstad, a political science professor at the University of Toronto, said she believes Canadians will pay little attention to the election until after the New Year, so Martin's opponents are unlikely to face a backlash for forcing a holiday campaign.

"It's going to be those last three weeks after Jan. 1 that are going to matter," said Skogstad, who believes the Liberals will win another minority government. "For the Liberals, they are going to try to put all the focus on the economy which is doing phenomenally well."

Unemployment in Canada is at a 30-year low and Canada runs a budget surplus.

Andrew Stark, a political science professor at the Rotman School of Management at the University of Toronto, also maintained that the campaign would not be decided until the final days. Stark, however, believed the Conservatives will win a minority government if Canadians view another Liberal and New Democrat coalition as being unaccountable with tax money.

The last time a Canadian political campaign coincided with the holiday season was in 1979, when Joe Clark's minority Conservative government was toppled just weeks before Christmas. That vote was delayed until February, however, when Pierre Trudeau and the Liberals took back Parliament.

The latest collapse comes 17 months after an election that turned a Liberal majority into a fragile minority on June 28, 2004.
http://www.usatoday.com/news/world/2...tm?POE=NEWISVA





No `iPod Tax' For Now
AP

Japan yesterday abandoned a planned revision to copyright laws -- dubbed the "iPod tax" -- that would have imposed a royalty payment on purchases of digital music players, after a government panel failed to agree on how to police violations.

The Cultural Agency committee's decision followed a yearlong debate over how to update the nation's system for levying extra copyright fees on gadgets, given dramatic changes in recent years in the digital content business, government official Hiroyuki Suzuki said.

Under the current system, the charge -- generally 3 percent of the product's wholesale price -- is included in the price of recording devices and other gadgets that can be used to duplicate copyrighted material, and most shoppers aren't even aware they're paying it.

Since last year, recording companies and other lobbyists have said the same system should be applied to recording devices with hard drives, including music players like Apple Computer Inc's iPod, as well as flash-memory players.

The panel's members, including academics and consumer-rights activists, have been so divided on where to draw the line on what constitutes copyright infringement that many had speculated they would not be able to agree by the December deadline.

Although the media here calls the system the ``iPod tax,'' the money goes to recording firms, composers and artists so it's technically not a tax. Similar systems exist in some European nations.

Opponents say the current system is an obsolete way of monitoring digital music purchases, while others contend that consumers would be doubly charged under the proposed change because they often already pay royalties on digital purchases.

Apple in Japan had no comment yesterday on the decision.

Apple's iPod, controls about 70 percent of the global market, with its market share in Japan growing to 60 percent recently.
http://www.taipeitimes.com/News/worl.../02/2003282668





Dutch Firm Releases P2P Media Player

A Dutch company has introduced a Linux- based media player designed to give Internet users easy access to content from a variety of peer-to-peer networks.

A Dutch company has introduced a Linux- based media player designed to give Internet users easy access to content from a variety of peer-to-peer networks, reports News.Com.

The LamaBox is a VCR-size player that enables users to choose from a collection of audio and video as well as burn downloads to DVD.

The report says the LamaBox's ability to access networks where copyrighted material is routinely shared raises legal issues.

However, LamaBox has shifted the responsibility to content providers and users, saying the device only makes such material accessible.
http://mybroadband.co.za/nephp/?m=show&id=1354





EU, U.S. Pledge Zero Tolerance on Fakes
AP

The European Union and the United States will take a "zero tolerance" approach to counterfeiting around the world, senior officials said Wednesday.

EU Trade Commissioner Peter Mandelson and U.S. Secretary of Commerce Carlos Gutierrez said they had agreed to work together closely to share information and coordinate activities to crack down on product piracy.

The global trade in counterfeit goods is worth up to 360 billion euros ($424 billion) a year, ranging from fake medicines and pirated movies to toys that don't meet safety standards, Mandelson said.

"What we need more than anything is to pool our intelligence, share our analysis, plan our activity coordinated where appropriate," said Mandelson.

Gutierrez said fighting piracy was a major priority for President Bush.

Gutierrez said on Tuesday that the EU and United States had mutual interests in protecting intellectual property rights and would encourage other countries to step up enforcement.

"These are the two most innovation intense economies in the world ... a lot of our economy, a lot of our jobs are tied to things like patents, copyrights, trademarks," he said. "We are going to ensure together that there is a global trading environment that respects those things."

He told Dow Jones Newswires that he was prepared to share with European authorities customs information and corporate complaints against Chinese manufacturers.
http://hosted.ap.org/dynamic/stories...stom wire.htm





Europeans Still Dig Illegal File Sharing

Though the International Federation of the Phonographic Industry (IFPI) has been cracking down on overseas file-sharing, a new study shows that more Europeans use illegal Web sites to download music than legal sites. The new report, from Jupiter Research, says that illegal file sharing networks are used three times more throughout Europe than legal downloading sites. Only five percent of all Internet users pay for their music, compared to 15 percent who illegally download copyrighted material. The report also warns that file-sharers, particularly young people, have little concept of music as a paid commodity.

"The digital youth of today are being brought up on a near limitless diet of free and disposable music from file-sharing networks," said Jupiter analyst Mark Mulligan, according to the BBC News. "When these consumers age and increase spending power they should become key music buying consumers. Unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behaviour and the recording industry could suffer long-term harm."

On the bright side, the report did find a solid demand for paid music downloads from sites such as iTunes, with 10 percent of Europeans willing to pay for tracks, says the BBC. Sweden reported the highest demand with 31 percent prepared to pay.
http://www.fmqb.com/Article.asp?id=149317





Illegal File-Sharing Prevalent Despite Thwarting Efforts
Keith Regan

"Unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behaviour and the recording industry could suffer long-term harm," Jupiter analyst Mark Mulligan said.

Young people in Europe are three times more likely to illegally swap songs than they are to download them from legitimate sites such as Apple's (Nasdaq: AAPL) iTunes Music Store, according to new data that suggests the music industry has yet to solve its lingering digital conundrum.

Jupiter Research said file-sharers outnumbered those who paid to download music by a margin of three-to-one. In addition, a third of all 15- to 24-year-olds have illegally shared copyrighted music at least once.

Though the report focused primarily on the UK and European markets, analysts say it holds important lessons for the music industry as a whole and serves as a reminder that extensive work remains to replace illegal file-sharing with legitimate download options for good.

Jupiter analyst Mark Mulligan said the high-profile victories for the music industry against the likes of Grokster and other P2P sites are only driving users further into the Web underground, or to other means. For instance, the research found that 43 percent of young consumers would rather copy a friend's compact disc than buy their own.

"By its very nature, music file-sharing can't be stopped down by taking out a single entity," Mulligan said. "Users simply move to other networks to stay ahead of the music industry."

Accustomed to Access

Mulligan said the problem in Europe in particular is that young people have become accustomed to having nearly unlimited access to free digital music. That culture has become so ingrained that users see little benefit -- beyond avoiding lawsuits -- to moving to legitimate sites where they have to pay.

Because young users are critical to the music industry, record labels still face a crisis if they are not able to convince more of them to abandon illegal swapping.

"Unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behaviour and the recording industry could suffer long-term harm," Mulligan said.

One reason the industry has been slow to evolve, analysts say, is that they are reluctant to encourage free music, even though some studies show that giving away songs can encourage purchasing of music.

Continued Crisis

The talk of a continued crisis seems to fly in the face of some recent positive news for the music industry.

Its most recent win came when it reached a settlement that resulted in the shutdown of peer-to- peer network Grokster, which had emerged as a next-generation heir to the legacy of Napster -- which the industry also shut down with legal action. But Mulligan said while the industry touted that win, Grokster was never one of the most significant swapping sites in terms of volume, especially for music.

Meanwhile, Apple's iTunes has continued to grow rapidly, with other sites, such as the new Napster and RealNetworks' (Nasdaq: RNWK) subscription offerings also catching on with consumers and more legitimate options being rolled out all the time -- including options to have songs downloaded or streamed to mobile phones and other hand-held devices. .

But various reports have suggested that while lawsuits may scare away some casual file-sharers and despite the rise of iTunes and other sites, those hooked on swapping songs will continue to find new venues to carry it out.
http://www.technewsworld.com/story/G...-Efforts.xhtml





Young 'Prefer Illegal Song Swaps'

The music industry could be facing a crisis because of the number of young people still illegally downloading from the internet, a report has warned.

The report by Jupiter Research suggests European consumers who download music from illegal file-sharing websites outnumber those using legal services.

It says illegal networks are used three times as much as legal ones.

It also warns that file-sharers, particularly young people, have little concept of music as a paid commodity.

The UK music industry has been cracking down on illegal file-sharing.

The BPI recently stepped up its campaign by launching 65 new legal cases against those it accuses of large-scale file-sharing.

Free consumption

Jupiter analyst Mark Mulligan said: "The digital youth of today are being brought up on a near limitless diet of free and disposable music from file-sharing networks.

"When these consumers age and increase spending power they should become key music buying consumers.

He added: "Unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behaviour and the recording industry could suffer long-term harm."

The research suggests only five per cent of all internet consumers pay to download music while 15% share the music without paying.

In the 15-24 year age group, 34% admitted to sharing music online without paying for it.

However, the report did find a solid demand for paid music downloads from sites such as iTunes, with 10% of Europeans willing to pay to download tracks.

Sweden reported the highest demand with 31% prepared to pay.
http://news.bbc.co.uk/go/pr/fr/-/1/h...nt/4478146.stm





The Effect of P2P File-Sharing Depends On Popularity

A fascinating paper from David Blackburn, a Harvard PhD student, on the economics of P2P file-sharing concludes that it does indeed depress music sales overall. But the effect is not felt evenly. The hits at the top of the charts lose sales, but the niche artists further down the popularity curve actually benefit from file-trading.

Blackburn does a little mathematical magic to simulate what would happen if file-trading were reduced by 30%.

In this counterfactual world with 30% less file sharing, the lower 75% of the distribution of sales is shifted further to the left, while the top of the distribution increases its sales. This is what should be expected given the estimates from above. Artists who are unknown, and thus most helped by file sharing, are those artists who sell relatively few albums, whereas artists who are harmed by file sharing and thus gain from its removal, the popular ones, are the artists whose sales are relatively high.

This conclusion leads to further questions regarding the impacts that file sharing has had and will have on the recorded music industry. In particular, if file sharing essentially shifts sales away from established acts toward unknown acts, this has potentially very important implications for how talent is developed and distributed in the industry. As with the simple short-run effects of file sharing on sales, the direction of the impact is not clear. While one might guess that increasing the sales of new acts would lead to more investment in developing new talent, it is also possible that the investment in new acts is done as a fishing expedition to find artists who will sell millions of records. File sharing is reducing the probability that any act is able to sell millions of records, and if the success of the mega-star artists is what drives the investment in new acts, it might reduce the incentive to invest in new talent. This is, at its heart, an empirical question which is left to future work.

The data follows, but first a little explanation. The 1% line refers to the sales of the least popular albums; the 99% line is the sales of the most popular. The third column is the calculated sales if file-sharing were reduced by 30%. As you can see from the below, that would help the sales in the top 25% of popularity, and hurt those below. Which is another way of saying that file-trading seems to help those in the bottom three-quarters of popularity, probably for the reasons stated above.

Percentile | Actual Sales | Sales with 30% less file-sharing
1% 73 70
5% 170 166
10% 281 277
25% 757 745
50% 2,852 2,851
75% 10,110 9,831
90% 26,531 26,934
95% 45,255 47,357
99% 133,983 165,054

The Long Tail implications of this are pretty clear. For the majority of artists further down the tail, free distribution is good marketing, with a net positive effect on sales. Which is yet another reminder that the rules are all too often made to protect the minority of artists at the top of the curve, not most artists overall.
http://www.thelongtail.com/the_long_...fect_of_p.html





Napster Users 'Giving Up On CDs'

Music fans are giving up buying CDs in favour of downloading music, according to download service Napster's UK arm.

Some 150,000 of Napster UK's 750,000 members say they no longer buy CDs, the company has revealed.

And Napster UK manager Leanne Sharman said it was "a matter of time" before downloading overtook high street shops as the most popular way to buy music.

CD sales have dipped slightly so far in 2005 compared with last year's record high when 163 million albums were sold.

Some 55 million songs have been downloaded or streamed since Napster UK launched in May 2004, with James Blunt the most popular artist.


NAPSTER USERS' TOP 10 ARTISTS

1. James Blunt
2. Mario
3. Gorillaz
4. 2Pac
5. Tony Christie
6. Coldplay
7. Jem
8. Green Day
9. Nelly
10. Gwen Stefani


Napster began life in the late 1990s as an illegal download hub, becoming the scourge of the music industry.

But it relaunched as a legal service and this is the first time the company has revealed details about its users and their tastes.

"I think it's only a matter of time until consumers are wanting digital platforms as their number one method for music consumption," Ms Sharman said.

"We believe we're in a transitional period. And we believe we will see an increased demand for online personalised music services because it's all about
how much time do people have these days?

"People want music one click away - one click away from all the music you could ever want, which is what Napster offers."

She said record companies should not worry because the overall demand for music had increased and fans were just buying their music a different way.

Napster also revealed 80% of its users were over 25 and 75% were male.

High street battle

The figures come days after high street giants HMV and Virgin announced plans for new download services to ensure they are not left behind in the sales battle.

More than 13 million songs have been legally downloaded in the UK so far this year - compared with virtually zero in 2003.

In June, market leader Apple revealed that more than 50 million tracks were bought in the first year of its European iTunes service, across 17 countries.

Apple says it has sold more than 500 million songs worldwide in total.

Napster president Brad Duea recently told the BBC News website the online music industry would become an "exploding multi-billion dollar space in the next two years".
http://news.bbc.co.uk/go/pr/fr/-/1/h...ic/4216400.stm





Watch Out, Napster, Here Comes Nareos
Galya Yemini

There are many players at the starting line in the race to provide file-sharing services to the world and they are all planning for their big break. These are critical times: Record companies are involved in major lawsuits and pledge that they will not surrender to free, peer-to-peer, file-sharing services on the Internet. As a result, the Grokster file-sharing service was recently forced to shut down its activities, for instance, and the BitTorrent site promised not to provide links to copyrighted files. While the battle rages, everyone is trying to find solutions to allow both sides to collaborate successfully.

Shawn Fanning starred in a colossal article in The New York Times last week. The inventor and founder of Napster (a file-sharing software program and service that was ordered to close down four years ago by the United States Supreme Court) described a new software program, which he will soon launch on the Internet, entitled Snocap. Snocap will make it possible to create a community of paying file sharers. Everyone will share with everyone else - major record companies, minor labels, artists and surfers in their homes. The network will permit users to download files from computers owned by other users, just as in conventional peer-to-peer file-sharing, but users will not be able to download a song before they have paid for it. If the downloading user decides to share the song thereafter with others, they too will be obligated to pay.

It is safe to assume that Fanning cannot imagine that the tempestuous Middle East might offer the source of a solution, now entering the market, which resembles his new "baby." The solution in question comes from the Israeli Nareos startup company, which developed a program that makes it possible for record companies to legally distribute songs, for a price, on all existing file-sharing networks. The technology allows the companies to encrypt and control their own files: to charge a fee, to block downloads, or to permit limited listening, providing only a few replays. Record companies may distribute encoded files using all file-sharing programs and protocols on the Internet - and there are dozens of these.

Nareos' technology prompts legal files to appear before the illegal files do in response to a search. When a surfer indicates a desire to download a file, the program causes a pop-up window to appear requesting a fee of 99 cents per song. The listener will able to hear the song once before payment by credit card. The typical surfer may be perturbed by this new development - those who choose to pay for songs now surf sites like iTunes or MSNmusic. But, on the other hand, the errant surfer is now presented with an opportunity to clear his conscience and embark on a righteous path, perhaps despite his initial dalliance with the free, peer-to-peer sharing network.

Starting big

Founded in 2004, Nareos has begun selling its services in recent weeks and has already signed contracts with three, major American digital music distributors: INgrooves, CD Baby and the Digital Rights Agency (DRA). All three collaborate with hundreds of record companies. Thus, Nareos will soon begin distributing millions of legal songs in file-sharing networks.

The company's headquarters, in Petah Tikva, looks exactly like every other joy- filled startup did in the salad days of the high-tech bubble: a grayish office building in the Ramat Siv industrial zone, third floor, no elevator. But inside, the walls are painted orange and yellow, the kitchen is crammed with refreshments and the crowded offices are occupied by computer entrepreneurs and experts of Russian extraction, female marketing managers of Anglo-Saxon origin and programmers with twinkles in their eyes. There are now 16 employees in the company, but CEO Alexander Lazovsky promises that there will be 20 employees by the end of 2005.

Three young former computer students founded the company: Lazovsky, Jhanna Proger-Lazovsky and Alexander Zaidelson. They found private investors who invested a few million dollars - and went to work.

"We saw the demand for digital files. It can't be stopped," Lazovsky says. "Four- hundred million people in the world already share files in a general way. At any given moment, 10-15 million people are downloading files. We developed a platform, which makes it possible to distribute digital content - now mainly music, but also movies and books in the future - on all the existing file-sharing networks. Downloading files this way is much quicker because the files are legal. This distribution system makes it possible for smaller record companies to also distribute music by less well-known singers and to offer legitimate songs with no initial payment."

In other words, a legal file will work on all file-sharing networks. For example, if a surfer downloads a song on Kazaa and pays for it, and then uploads the song on eMule, a pop-up window calling for payment will also appear when someone tries to download the song using the new program. Lazovsky promises statistical analyses pertaining to the downloading of songs, including geographic distribution, to record companies that employ Nareos technology. Data supplied by Nareos will not only reflect songs that the company distributes - it will document everything that is happening on file-sharing networks.

Lazovsky is aware that competition from online stores and file-sharing programs is fierce, and that some also offer downloading files for pay on their sites. "The difference is that I am present throughout the Internet, on every file-sharing program and protocol. I don't work with only one of them," he says.

The CEO's ambition is boundless. In the future, he wants to open his own online store, which will be advertised in the pop-up payment window that appears in file- sharing networks. Lazovsky promises that it will also be possible to use this technology to purchase songs on a mobile phone and charge it to a mobile phone account using a credit card, and he dreams of becoming a major player in this arena.

Will a seemingly anonymous entrepreneur in Israel successfully compete with the legendary Shawn Fanning? It has already been proved that in the crazy world of the Internet, anything is possible. On the other hand, Lazovsky and his friends are embarking on an uphill climb.
http://www.haaretz.com/hasen/spages/650615.html





Connecting

Flock Founder Hopes New Browser Will Fly

'Social browser' integrates RSS, blogging, photo- and file-sharing, plus bookmark options.
Elizabeth Montalbano

Startup Flock has released a Firefox-based browser meant to enhance the user experience by incorporating some of the Web's most social features, such as file sharing, RSS feeds, and Web logging, according to the company's co-founder.

Bart Decrem, who in the past helped develop the business model for the Mozilla Foundation and its Firefox browser, is CEO and a founder of Flock. The Palo Alto, California startup is developing what Decrem calls a "social browser" that will let users take advantage of the full next-generation Web experience.

Browser Evolution

"The Web has evolved very dramatically from a big library to a library, shopping mall and increasingly a social space where people exchange information, communicate with each other and share information," Decrem said Friday from Camden, Maine, where he was attending the Pop!Tech 2005 conference.

The evolution of Web browsers, however, have not been as significant, he said. Though Firefox is different because it puts the user experience first and offers more security in comparison to Microsoft Internet Explorer, current browsers are still very similar to ten years ago, Decrem said. IE faced little challenge in the browser market until recently and so did not evolve much in the way of feature innovation.

Flock hopes to change that by integrating more functions into the browser, giving users easier access to the Web's social aspects. The developer preview of Flock Browser available Friday showcases the inclusion of the "low-hanging fruit" of that experience, according to Decrem.

The preview includes technology for more efficient bookmarking and bookmark-haring through the online service del.icio.us; automated RSS feed sign-up and organization; and technology that "takes the headaches out of blogging," he said, such as the capability to highlight text on a Web page and immediately have it appear in a new entry in a user's blog.

Flock also will support podcasting, and photo- and other file-sharing technologies as it evolves, Decrem said. Developers are putting out a new build of Flock Browser every one to two days, with the hope of having a consumer-ready beta of Flock Browser available before December 15, he said.

Heat Up Competition

Michael Gartenberg, analyst with Jupiter Research, said Flock's focus on offering features that are popular with the most contemporary Web users--those who are more apt to switch browsers--will likely put pressure on Microsoft, as well as bite the hand that is feeding the startup, Mozilla's Firefox.

"This seems to be about a feature-driven Web experience for users who are interested in going beyond just generic browsing," he said. "Microsoft had enough pressure responding to Firefox, much less responding to something that adds even more features than the generic browsing experience."

Still, though consumers today have more choice of browsers between Firefox, Apple's Safari for Macintosh, and Opera than they have had in years, it remains to be seen whether the organizations that own those browsers will make any money on them, Gartenberg added.

Like its technology, Flock's business model also reflects the Web's evolution, Decrem said. The company will offer its browser free and plans to partner with companies such as Yahoo and Google to include search boxes that hook up with their search engines, and with other online services such as Amazon.com and Six Apart's Typepad blog- hosting service.

Partnerships Eyed

In a partnership scenario with a company such as Amazon.com, Flock would build a link to Amazon.com right in the browser and earn commission fees if users use that link to go onto the site and make a purchase, he said. Flock also will offer subscriptions to blog-hosting sites for users who lack such subscriptions, and will earn fees from companies such as Typepad for sending users to such services.

However, Decrem said Flock wants to be careful not to try to pigeonhole users into certain services on the Web and hopes to provide them with as much choice as possible.

"We believe there are additional opportunities for us to make money and to do so in a way that respects users' privacy and doesn't affect the user experience by always giving users choice," he said. "You ought to be able to use whatever blogging platform you like, whatever photo-sharing services you like."

At the same time, Flock will offer default services, such as Typepad and several others for blogging, in case users haven't already made decisions about which services to use, he added.
http://yahoo.pcworld.com/yahoo/artic...,123165,00.asp





Musician Who Tangled With Bush to Run
AP

A year after tangling with the Bush campaign over the use of a pop tune he penned in the 1970's, Democrat John Hall now wants to take on Rep. Sue Kelly.

Hall, a former county legislator who lives in Dover Plains, announced Tuesday he is running for Congress.

A co-founder of the band Orleans, Hall criticized the Bush re-election effort last year for using "Still the One," a song he co-wrote, at campaign rallies.

The campaign insisted it had legal right to use the song, but stopped playing it after Hall complained.

Westchester, and Rockland counties.

Hall is not the only Democrat seeking to unseat Kelly.

Lawyer Judy Aydelott has raised over $100,000 for her effort.

Kelly also faces a potential primary challenger in Jeff Cook, an Orange County resident who worked with the Log Cabin Republicans before deciding to challenge Kelly.
http://hosted.ap.org/dynamic/stories...TAM&SECTION=US





NBC Stuck to Sunny Rebroadcast of Last Year's M&M's
Andy Newman

NBC did not interrupt its broadcast of the Macy's Thanksgiving Day parade yesterday to bring viewers the news that an M&M balloon had crashed into a light pole, injuring two sisters.

In fact, when the time came in the tightly scripted three-hour program for the M&Ms' appearance, NBC weaved in tape of the balloon crossing the finish line at last year's parade - even as the damaged balloon itself was being dragged from the accident scene. At 11:47 a.m., as an 11-year-old girl and her 26-year-old sister were being treated for injuries, the parade's on-air announcers - Katie Couric, Matt Lauer and Al Roker - kept up their light-hearted repartee from Herald Square, where the parade ends.

"Will these classic candymen get out of this delicious dilemma?" Mr. Roker asked, referring not to the accident but to the premise of the attraction, a red M&M's attempt to save his yellow counterpart, who had been blown from the basket of a hot-air balloon.

Ten minutes later, the upbeat broadcast ended without mention of the accident in Times Square. CNN carried a flash about the accident at 11:51, while the parade telecast was still going on. NBC's cable news network, MSNBC, followed two minutes later. And WNBC, the New York affiliate, carried the news at 12:30 p.m.

But Cameron Blanchard, a spokeswoman for NBC's entertainment division, which broadcast the parade, said that the anchors did not deviate much from the script because it was not clear at the time what had happened. "We had been alerted that there had been an incident," she said. "But no further details had been conveyed to us."

When the balloon failed to arrive at Herald Square at the appointed time, she said, "we rolled with some previously recorded footage."

That said, the situation made for a jarring confluence of scripted and unscripted reality.

At 11:47 a.m., about 7 minutes after the accident, the screen image faded from live coverage of a high school marching band from Kennesaw, Ga., to last year's tape of the M&M balloon. Ms. Couric, advising the audience that it was now looking at old tape, riffed on the balloon's concept of M&M's in distress.

"Now, because of today's windy conditions," Ms. Couric told viewers, "these characters are on video, and if we told you they were not in a panic, we'd be full of hot air."

Mr. Lauer, Ms. Couric's co-anchor on the "Today" show, chimed in: "You may be thinking 'color us clueless' as they flirt with trouble, with Yellow hanging on by a thread and Red struggling to keep his best buddy from flying off into the blue."

Mr. Roker then spoke his lines: "Will these classic candymen get out of this delicious dilemma? Hard to say, but when it comes to sweetness, Yellow and Red continue to melt your heart, but not in your hand."

Ms. Blanchard said she did not know what the announcers knew about the accident at the time.

After that, it was on to the Pillsbury Doughboy, and, bringing up the rear, Santa and his wife. "Old Saint Nick and Mrs. Claus, his wife of, what, 200 years?" Ms. Couric said. "What a marriage. What a team!"

With that, the parade was over.

"It's obvious the three of us have had a great time today," Mr. Lauer concluded, "and we hope all of you did as well."

Patrick LaForge contributed reporting for this article.
http://www.nytimes.com/2005/11/25/ny... ner=homepage





Turn On. Tune In. Take Over.

Viewers, light your torches! The television revolution is at the gates.
Adam Sternbergh

Before we discuss how everything we know about television has changed forever, let’s start with three recent, apparently unrelated, and essentially mundane anecdotes:

(1) Last month, Apple unveiled yet another new iPod, this one capable of playing video. At the time, it seemed underwhelming—little more than another Bravo, Steve Jobs! moment and a chance to watch U2 videos on a screen three inches high. As an ancillary benefit, however, Apple started selling commercial-free episodes of Lost and Desperate Housewives on its iTunes Website, along with select music videos, for $1.99 each. Three weeks later, iTunes had sold its 1 millionth such video.

(2) This summer, Universal did something kind of weird: It released Serenity, a sci-fi movie based on a poorly rated TV show, Firefly, that had been canceled after eleven episodes. Making movies of hit TV shows has a self-explanatory logic, but there aren’t too many movies based on TV flops. But I saw Serenity and liked it a lot, so I went out and bought the entire run of the Firefly TV series on DVD, watched it, and liked it a lot as well.

(3) Last week, Fox announced that, owing to scheduling conflicts, it planned to put its new series Prison Break—which spends the whole season following one man’s compelling, if slightly absurd, effort to break himself and his brother out of prison—on hiatus until late May. The show’s fan base howled all over the Internet, and for good reason: Prison Break is premised on a puzzle that takes all season to solve, with each episode a mini-cliff-hanger. One fan-generated suggestion to Fox was, why not move the show to a less-competitive time slot, such as Friday, where die-hard fans can still find it? I’ve been recording the show on my DVR (TiVoing it, you might say, except the folks at TiVo don’t like you to use that word unless you own, you know, a TiVo) and enjoying each episode at my leisure. So naturally, my first reaction to this debate was, Wait a minute. Prison Break airs on Monday nights?!

What do we know about TV? Here’s the basic model: Networks air particular shows at particular times on particular nights; say, Commander in Chief on ABC, every Tuesday at nine. These shows are available to viewers for free, subsidized by intrusive blocks of ads—a leftover from the days when TV was magically plucked from the air by your rooftop antennae, like radio with pictures. A TV show’s ratings determines both its sustainability (on the network schedule) and its profitability (in terms of how much its advertisers can be charged). These ratings are calculated by following the habits of a small number of representative viewers, tracked by the Nielsen company, whose preferences are then extrapolated for the entire audience. The prime economic directive of TV, therefore, has always been, TV doesn’t sell shows to viewers: It sells viewers to advertisers.

It’s an interesting business model, one that came about by accident, and one that is now entirely obsolete. If you have a DVR—and in New York city, 20 percent of Time Warner’s digital customers do—you can watch shows whenever you like; the shows are, in effect, untethered from their time slots. (Exhibit A: the recently redesigned TV Guide, retooled around the assumption that no one uses a TV Guide anymore.) So she watches Prison Break on Monday at nine, he watches it Monday at midnight, and I watch it Wednesday morning at eight, before work, over a bowl of oatmeal.

But what if she, he, and I aren’t enough viewers to keep a show alive on the network? No problem: We’ll just buy the DVD. Fox’s critically praised 24 was nearly canceled after a disappointing first season in 2002—its low ratings owing, in part, to the difficulty for the audience of jumping into the high-concept show midstream. So, Fox released the first season on DVD just before the second one premiered (the first time anyone had released a DVD of a show that early on), and it sold so well that it renewed Fox’s commitment to the show, which went on to become a hit. Fox’s Family Guy actually was canceled, then the DVD came out and sold about 2 million copies, and Fox did something no network had done before: It revived the canceled show. Of course, networks are quick to point out that DVD sales still pale next to ad revenue (which, in turn, pale next to syndication, TV’s pot of gold at the end of the rainbow), but the precedent’s been established: People are paying directly for shows. And the popularity of DVDs, both culturally and as a source of found money for studios, is not only rescuing faltering shows but altering the content of new ones: It’s one reason we’re seeing so many new “arc” shows that follow a single storyline over a whole season, à la Lost, Prison Break, or the recently ordered NBC show Kidnapped, about a single abduction.

As long as shows were reliant on ads for their revenue, the total number of viewers mattered. Now, not so much. In fact, whereas broadly popular shows prospered under the old model, niche shows with hard-core fan bases prosper under the new one. Shows like 24 and Firefly sell a lot of DVDs. Shows like Yes, Dear and Two and Half Men do not. Studios (which make the shows) and networks (which buy and air them) are still fond of traditional, mass-appeal programs such as Two and a Half Men because of their high ad rates and lucrative afterlife in syndication. But both of those markets seem in jeopardy. Once you’ve got an overflow of your favorite shows stored up on your DVR (and your iPod and your DVD shelf), why watch reruns of Home Improvement on TBS?

Okay, so maybe you don’t have to watch a show at a particular time anymore. And maybe a show doesn’t need a huge audience to be financially viable. It’s still TV, right? It’s still half-hour- and hour-long shows that came through a box in your living room? Sure—for now. That’s assuming you don’t download the latest episode through the BitTorrent Website or buy it from iTunes to watch on the subway to work. For years, networks have trembled at the idea of selling individual episodes because it fundamentally undermines the way TV works—or used to work. But after the success of ABC’s bold toe-in-the-pool partnership with iTunes, NBC and CBS last week announced plans to sell their own shows through video-on-demand services for 99 cents an episode. And suddenly it’s not so hard to envision a future (by which I mean two years, not twenty) in which you buy most of your TV shows the way you do, say, magazines —subscribing to some, picking and choosing others. At which point there’s no more need to stick to the half-hour/hour-long model on TV than there is for magazines to publish each issue at precisely 100 or 200 pages.

Before we venture further, this might be a good time to point out that, when it comes to technology, I’m not an early adopter. I fit more comfortably in the category known as “late majority” (iPod, yes; BlackBerry, no). So the fact that I can now DVR my way to my own private TV schedule and download ad-free episodes to my computer (a machine I barely understand) says something about the future of TV. Specifically, that pretty soon I, and he, and she, and you, won’t need one. Sure, there will be a big screen on your wall and sometimes you will watch shows on that. There will be a little screen in your pocket and sometimes you will watch shows on that. And there may be a medium-size screen you carry in a handbag, and sometimes you will watch shows on that. (And maybe, someday, there will be a holo-chip in your head, beaming shows right into your brain.) Connected to them all will be a small box into which you download, and store, the shows you’ve decided to buy.

TV came to us like a kind of visual cookie dough, dull but pleasant. We could take it or leave it, but we’ve had very little control over the recipe.

Of course, tech evangelists love to trumpet brave new futures—Buy all your dog food at pets.com! Purchase clothes worn by your favorite stars while you watch them on TV!—assuming that, just because we’re able to do something, we will. (This argument is proved fallacious by that unused ab exerciser you once bought because “you can use it while watching TV.”) Each new technology takes a while to find its use, as we, the actual users, pick it up, consider it, and figure out what it’s really good for. The Internet has proved great for uniting geographically disparate people with common interests (eBay collectors, MacGyver fanatics, balloon fetishists) and not so good as, say, an Alpo clearinghouse.

We’re living in just such a murky moment—stepping into the future, even as we try to find our footing. And while this has led to all sorts of tedious arguments about how TV producers will make their money—a question of interest primarily to TV producers—the matter of how it affects you and me is one of more pressing relevance. This is especially true given that, in the old model, the viewer was little more than the last stop in an assembly line: the “end user,” in the jargon of the suits. TV came to us like a kind of visual cookie dough, dull but pleasing, and extruded into our living rooms. We could take it or leave it, but we’ve had very little control over the recipe.

In the new model, the audience is right there in the kitchen. The Internet already provides gathering places for fans to praise or rant about their favorite shows—sites far more influential than, say, the letter-writing campaign to save Cagney & Lacey, because they happen in real time, interactively, often with TV producers responding or lurking all the while. (Why not, given that the sites are, in essence, the world’s largest focus groups?)

All of which leads to an enticing possibility: Let’s say that Joss Whedon, creator of Firefly, wanted to bring the series back to air. (Though “back to air” is a TV phrase now as anachronistically quaint as “switching the dial.”) Let’s say he found a million Firefly fans online—and, trust me, they’re not hiding—who were willing to pay, say, $39.99 each for a sixteen-episode season of Firefly. (Not an unreasonable price, given how many people pay about that amount for full seasons on DVD.) Suddenly, Joss Whedon’s got roughly $40 million to play with—and he doesn’t need a network. Or a time slot. Or advertisers. He can beam the damn shows right to your computer if he wants to. There’s even a mini-precedent for this: The online phenomenon of “ransom games,” in which a board-game developer sets a price (usually something minuscule, like $1,000), then, once he’s received that amount in pledges from strangers, creates the game and releases it for free.

But the idea of TV funded by the audience conjures another, less sunny scenario. After all, there’s already an entertainment-delivery system that funds itself through mini-contributions from millions of viewers: It’s called the movies, which aren’t exactly undergoing an artistic golden age. Furthermore, wherever democracy blooms, mob violence is only one step behind: How happy will Joss Whedon be when the $39.99-paying legions, assembled at wesavedfirefly.com, demand that a killed character be resurrected or that an irritating plotline be written out of the show?

Either way, TV’s days as a benign dictatorship—a little bread, a lot of circuses—are over, and the revolution is nigh. TV studios may still milk the old sources of revenue, but the fundamental economic law has been abolished—TV is selling shows to viewers—which, in TV terms, is like saying that the law of gravity is null and void. Everything’s up in the air. Including you, O Viewer, finally freed from your easy chair, ready to march into the streets and maybe—just maybe—drag your TV along with you.
http://www.newyorkmetro.com/nymetro/...038/index.html





Netflix Presents at Lehman Brothers Small Cap Conference
Davis Freeberg

This post should not be construed as financial advice. Davis Freeberg is both a shareholder and current customer of Netflix.

Barry McCarthy, the Chief Financial Officer of Netflix gave one of the best investor presentations I've ever heard at the Lehman Small Cap conference earlier today. If you've never listened to a conference call or an investor presentation, this is the one to catch. In the call, he made a strong argument for why Netflix will make it to 20 million subscribers by 2010 - 2012.

During the presentation he gave great statistics about past growth and indicated that they believe they will hit 4 - 4.2 million subscribers by the end of this year. He also said that "our objective through the end of next year is to finish with at least 5.65 Million Subscribers." An amazing accomplishment considering that they had less then 2.6 million subscribers a year ago.

He pointed out that a key driver to their growth will be the superiority of their website design and proprietary algorithms. In the presentation he points out that "among online retail businesses we have been rated the best website on the internet and as we grow, our objective is to become an iconic brand." He sees brand loyalty, strong customer satisfaction and personalization as being key components to their growth.

The personalization of their site is really what makes their service so unique. At this point Netflix has now collected over 1 billion ratings for moves. They use these ratings to make recommendations of longtail content for their consumers.

"we help you find movies you've never heard of. By the way of example there were 554 movies released theatrically last year and I bet most of us can't name 20. A lot of those movies you would enjoy, if you knew that they existed. If you don't know that they existed then they might as well have not been invented. Our goal is create demand for content and own the gross margins associated with owning demand."

He later goes on to compare this approach with Blockbuster.

"Historically Blockbuster has reported that about 90% of the movies they rent are new theatrical releases. They do a great job of fulfilling demand, created by the studios who spend $4 billion per year marketing new theatrical releases and the studios own the gross margins associated with creating that demand . . . Now they have a slightly different mix online. A couple of quarters ago they said that about 70% of what they rent online is new releases and about 30% is back catalog. That's not true in our business and it's never been true in our business. The day we came public and in the most recent quarter about 30% of what we rent is new releases and about 70% is back catalog and it's not because we have a different subscriber. It's because we create demand for content and we help you find great movies that you'll really like, we do it algorithmically and we do it with recommendations and ratings."

You can argue that the concept of the longtail is merely theoretically or that it's nothing more then a fad, but to me this is proof that the longtail is not only relevant, but will revolutionize Media as we know it today. I don't believe that I have ever rented a new release from Netflix, simply because there are currently 216 movies in my queue that are highly relevant to my interests. I want to see all of the movies very badly and only on a very rare occasion have I wanted to see a movie as soon as it's released to DVD.

While their rental mix has not changed their demographics certainly have. In the call he said that when they went public 80% of their customers were high income, educated males. Today 54% of their subscribers are women and 40% of their customers didn't go to college.

Later in the presentation he talked a lot about the upcoming High definition DVD's that are coming out.

"As many know there's been a format war. Two formats have been proposed as a successor to DVD, one sponsored by Warner primarily and one sponsored by Sony. Warner is HDDvd and Sony is Blu-Ray. I think it's pretty clear that Blu-Ray has won. Even Warner has agreed to license and to release technology to Blu- Ray, only Universal hasn't made a commitment at this point, so I think the format wars are a thing of the past and I think it's going to be Blu-Ray. I think the content will get priced at a 20% premium. I think it's going to roll out slowly over time."

If the content does get priced at a premium this will benefit Netflix tremendously because it will extend the life of their current inventory dramatically.

The two biggest bombshells during the presentation were the possibilities of lower prices and the inclusion of advertising on their website. While both of these issues are still in an experimental phase, it's clear that the company is continuing to experiment with the business model that they have created.

"Along the way we are going to test lower prices, some of you may already be in a test cell, if you're not a subscriber and you've recently come to the site and you may have seen some initial testing of lower prices. The reason why we're testing it is because we think that the market is price elastic. We want to get bigger, the bigger we get I think the more video stores we put out of business."

If they decrease prices, they don't expect it to impact their gross profits because they expect to reduce marketing expenses to offset the loss of profits.

On the advertising front McCarthy pointed out that they are currently test marketing ads to different "cells" and are trying to gauge it's impact on churn. While as an investor I think the idea of creating alternative revenue streams is great the thought of paying to look at banner ads does not sit well with me as a consumer. One thing that I really enjoyed about Netflix when Netflix took over for Walmart was that they gave me an opportunity to opt out of the Walmart ads on the site. My question to them would be that given that you have great personalization tools, why not create an advertising model where consumers can choose to opt out of ads if it bothers them? This way Netflix could have their cake without it impacting churn or customer satisfaction.

While these conferences are rarely exciting and compelling, I felt that this was a very impressive overview of what Netflix has accomplished to date and a great layout of their strategies going forward. I highly recommend listening to the entire call for anyone who is interested in their company.
http://thomashawk.com/2005/11/netfli...-brothers.html





Questions on the Legality of Campaign Fund-Raising
Carl Hulse

The American system of underwriting political campaigns is often derided as legalized bribery. Now the Justice Department is contending that it can amount to illegal bribery as well.

In pursuing a case that threatens to envelop Congress in an election-year lobbying scandal, federal prosecutors are arguing that campaign dollars and other perks routinely showered on lawmakers by those with legislative and political interests on Capitol Hill can reach the level of criminal misconduct.

The prosecutors say that among the criminal activities of Michael Scanlon, a former House leadership aide who pleaded guilty on Monday to bribery conspiracy, were efforts to influence a lawmaker identified in court papers only as Representative No. 1 with gifts that included $4,000 to his campaign account and $10,000 to a Republican Party fund on his behalf.

Lawyers and others who follow such issues say the case against Mr. Scanlon amounted to a shift by the Justice Department, which, they say, has generally steered clear of trying to build corruption cases around political donations because the charges can be hard to prove.

"The department has rarely charged campaign contribution cases," said Joseph E. diGenova, a defense lawyer and former federal prosecutor. "It would be a surprise that a contribution that has been lawfully reported" would lead to a criminal charge.

The case against Mr. Scanlon, who became wealthy in a partnership with the lobbyist Jack Abramoff, reaches far beyond the contributions to Representative No. 1. Court documents filed by prosecutors lay out an extensive conspiracy in which Mr. Scanlon and Mr. Abramoff, identified in the documents only as Lobbyist A, sought to defraud clients - mainly Indian tribes with gambling interests - and win legislative help from lawmakers in exchange for campaign donations, trips, dinners, greens fees and jobs.

Watchdog groups and some lawmakers say the emerging details of how at least one set of well-connected lobbyists operated should help build momentum for changes in lobbying rules. And, they say, the case demonstrates that the Justice Department shares their longstanding contention that campaign contributions can be used to game the system.

"I think the Justice Department wants to show that there is a line that can be crossed," said Larry Noble, executive director of the Center for Responsive Politics.

Others say a vast majority of lawmakers are committed to operating within the rules that already exist and in any event would not be easily swayed by the attentions of special interests, no matter how generous.

"Contributions can only take you so far," said former Senator John B. Breaux, a Louisiana Democrat who has relocated to a K Street law firm and is now advising clients on lobbying strategy. "I tell them, 'Look, you can give to an elected official and take them to lunch, dinner and breakfast. But if you are asking them to vote yes on an issue and they have 2,000 letters from home telling them to vote no, then you have a problem.' "

Representative Bob Ney, an Ohio Republican who has acknowledged being Representative No. 1, dismisses any suggestion that he was persuaded to do Mr. Scanlon's bidding because of campaign aid or perks like meals, entertainment or overseas travel.

"Whenever Representative Ney took official action," a statement from his office said, "actions similar to those taken by elected representatives every day as part of the normal, appropriate government process, he did so based on his best understanding of what was right and not based on any improper influence."

But the scrutiny of Mr. Ney has caught the attention of anxious lawmakers who have lobbying relationships of their own. It has also spurred advocacy groups. The campaign finance watchdog Democracy 21, for instance, is calling for inquiries by the House and Senate ethics committees into whether three dozen other members of Congress received contributions in exchange for intervening on behalf of a client of Mr. Abramoff.

The Associated Press reported this month that various lawmakers of both parties had asked the Interior Department to reject a casino application from a tribe that was a rival to one of Mr. Abramoff's clients. The lawmakers later received campaign aid from the tribe and Mr. Abramoff. Among the beneficiaries was the Senate Democratic leader, Harry Reid of Nevada, who received a $5,000 contribution to his political action committee shortly after sending a letter to the department in 2002.

Jim Manley, a spokesman for Mr. Reid, said Mr. Abramoff and the donation had had nothing to do with the position of the senator, who Mr. Manley noted was an author of Indian gaming laws and an opponent of new Indian casinos. "There was absolutely no connection between the letter and the contributions," he said.

Federal law requires that to prove bribery, the government must establish that a "thing of value" was provided in a direct effort to obtain a specific official act - the essential quid pro quo. A more vague expectation that something like a contribution might influence a public official has been deemed insufficient.

Mr. diGenova and others said that as a result, the Justice Department had been reluctant to try to link official actions to political donations, leaning instead toward cases in which public officials had been personally enriched.

Those watching the current case see Mr. Scanlon's decision to cooperate in the continuing investigation of Mr. Abramoff and others as a crucial link to the possibility of further charges: as an insider, he could conceivably provide evidence of a strong tie between efforts to influence lawmakers and their official actions.

Criminal charges aside, some watchdogs and members of Congress say they hope that public exposure of lobbying abuse stirs the Congressional ethics committees to police lawmakers more aggressively and that it simultaneously builds support for tighter lobbying restrictions.

"I think most Americans play by the rules and expect their leaders in government to do the same," said an author of one such proposal, Representative Martin T. Meehan, Democrat of Massachusetts. "It is time for Congress to clean up its act."
http://www.nytimes.com/2005/11/25/politics/25memo.html





Placing Ads in Some Surprising Spaces
Stuart Elliott

THE parade of mainstream advertisers starting to use nontraditional media is growing almost as long as that march through Manhattan yesterday sponsored by a certain department store.

Joining the throng are the Budget Rent a Car unit of the Cendant Corporation and the toy maker Hasbro. Budget turned to blogs to promote a contest with a scavenger hunt motif, buying advertisements on 177 blogs bearing names like BuzzMachine, Gizmodo, Jossip, Largehearted Boy, Overheard in New York, Stereogum and The Superficial.

And beginning next week, Hasbro will sponsor an unconventional series of make-believe classified ads to promote a new version of its Monopoly board game.

The classifieds will appear in newspapers read by consumers shopping for cars, houses and boats.

Although the ads will resemble those that sell cars, houses and boats, the "merchandise" is actually in the form of tokens from the new Monopoly 70th anniversary edition.

The campaigns from Hasbro and Budget are a sign of the increasing appeal of nontraditional media to once-conservative mainstay marketers as they seek to reach bombarded consumers. The growing willingness to consider alternatives to television commercials, billboards and print ads is one of the most significant changes in marketing in decades.

"I've got to be smart and make my brand feel smart to the consumer," said Scott Deaver, executive vice president for marketing at the Cendant Car Rental Group in Parsippany, N.J., which oversees Budget and Avis.

"I can't outspend Hertz," Mr. Deaver added, "but I can outsmart them."

What is most valuable about nontraditional media like blogs, Mr. Deaver said, is their ability to "actively engage the consumer" compared with "passive TV spots" and other traditional choices.

That assessment was echoed by Mr. Deaver's counterpart at Hasbro.

"When you do something unusual, unexpected, with something so well known as Monopoly, you can get a lot of talk value," said Mark Blecher, senior vice president for marketing at the Hasbro Games division of Hasbro in Longmeadow, Mass.

"We're not going to shift all our money into this," Mr. Blecher said, "but using innovative advertising you can generate some word of mouth for a fraction of the cost of a commercial on a major network TV show."

John Staffen, executive creative director of the Hasbro Games agency, the New York office of Arnold Worldwide, estimated that the budget for the make-believe classified ads was "a couple of thousand dollars." That sum is buying space in publications like Deals on Wheels and Yacht Trader, interspersed among the classifieds from actual sellers.

Reading those publications is "what middle America does to live out its dreams," said Mr. Staffen, whose agency is part of the Arnold Worldwide Partners division of Havas. That matches the dream-big theme of Monopoly, he added, as symbolized by its brand character, once known as Rich Uncle Penny Bags and now called Mr. Monopoly.

The Monopoly ads feature photographs of the tokens from the new game rather than real houses, boats or automobiles. They are written in the typically terse prose of classifieds, the better to blend in with their prosaic surroundings.

The car-token ad reads: "1935 classic. Just upgraded. Low mileage. Mint cond. Chrome finish. Runs like a dream in Monopoly 70th Anniversary Edition. The best Monopoly board game money can buy. Call 877-MONOP70 or go to monopoly70th.com."

The blog campaign for Budget cost about $20,000, Mr. Deaver said. The ads appearing on the 177 blogs asked readers to visit a blog sponsored by Budget (upyourbudget.com) and enter a treasure hunt being held for four weeks in 16 cities with cash prizes of $160,000. The final contest, in San Diego, ended this week. "Blogs seemed an appropriate fit for Budget's young, tech-savvy audience," said Jay Arnold, president and chief executive at the Impax Marketing Group in Philadelphia, which created the blog campaign for Budget.

"And fortunately, some of the people who won the contests were Budget users," Mr. Arnold added, laughing. The Budget ads were simple, presenting cartoon characters urging blog readers to visit the Budget blog and enter the contests.

The blogs were selected, Mr. Arnold said, with the help of a consultant, B. L. Ochman, using criteria like how frequently they are updated and how interesting they are to the so-called technorati. In fact, Mr. Arnold said, the tracking service technorati.com was used to help pick the blogs.

Among some of the other blogs on which the ads appeared were Blurbomat, BoingBoing, CityRag, Coolfer, Daily Heights, DCist, Gothamist, IndieWire and This Is Broken.

As online diaries, most blogs are by their nature candid and uncensored. As a result, "you don't have the same kind of control of or ability to know the content as with mainstream advertising," Mr. Arnold said, adding: "There's no question about the fact it's a little riskier. We want to push the envelope, but not be inappropriate."

The blogs were screened to cull those with content like "naked body parts," Mr. Arnold said, adding that he and Mr. Deaver received no complaints during the month the campaign ran.

Mr. Deaver said he was pleased enough with the results of the campaign to have decided "we'll certainly be back in this space." (The Budget blog tells readers the next contest will be "sometime in spring 2006.")

Even so, "the jury's still out on the metrics," Mr. Deaver said. "I'd be lying if I said I know what to measure to determine success."

By a preliminary count, Mr. Deaver said, the blog pages on which the Budget ads appeared had 19.9 million impressions, which generated about 60,000 click-throughs to the Budget blog. That accounted for about half the total traffic to the Budget blog, he added.

"I'm happy about those numbers," Mr. Deaver said, "but the real determination is, what do we learn? Are we smarter when we do it next time?"
http://www.newscoast.com/apps/pbcs.d...446/BUSINESS19





As Corporate Ad Money Flows Their Way, Bloggers Risk Their Rebel Reputation
Louise Story

When Anita Campbell started her Web log about small-business trends two years ago, she thought it would simply be a service for her clients and help her consulting business grow.

Instead, she said, the blog "just took off," attracting more readers than she had dreamed of. Then, companies offered to pay her to post advertisements and product mentions on her site. There were enough offers, she said, that she could choose to work with only the ones relevant to her readers. And so, her blog, once just a marketing tool, became a money generator on its own.

"I never try to hide the fact that I am writing about an advertiser," she said in an e-mail statement. "But I also don't apologize for accepting advertising, and I make it clear that just like everyone else I have to earn a living and pay the expenses of keeping the site going."

After beginning as a vehicle for anti-establishment, noncommercial writers, many Web logs have laid out welcome mats for corporate America in the last couple of years. No one tracks how much advertising money is flowing to Web logs. Nor is it clear how many bloggers, like Ms. Campbell, disclose their sponsors. But when writers have not been completely open, their fellow bloggers have been quick to criticize.

Businesses have noticed the growing readership and influence of these Internet postings and are spending $50 million to $100 million this year on blog advertising and marketing, said Charlene Li, an analyst at Forrester Research, a company that looks at the impact of technology on business and consumers. Recognizing that blogs have become more mainstream, companies are paying for advertisements or mentions on blogs, courting blog writers with public relations efforts and inviting writers to come blog on one of their corporate sites.

The blogosphere, companies said, is an important place to have a presence, and blog writers are not shying away from the attention.

"The attitude has completely changed from where it was two years ago and even a year ago," said Jim Kukral, the publisher of ReveNews, a site about making money from Web logs. "People have started to realize that, hey, this is fun; we've proven it's fun; I enjoy doing it; now let's apply a few advertising techniques and make some money."

There is now an annual Blog Business Summit and several books on how to make money blogging.

Many blog writers have signed up for Google's AdSense program, which started in 2003 and pays Web publishers based on how many times advertisements on their sites receive clicks. Google places the ads on participating Web sites using contextual word matching, in an attempt to ensure that the advertisements relate to the content on the page.

Bloggers are also making money through "affiliate networks," which, in contrast to Google's automated system, allow blog writers to choose which advertisements to put on their pages. They also can be paid based on how often ads on their sites lead to sales rather than how often the ads receive clicks. Shareasale, Commission Junction and LinkShare are three such network companies.

"You have all these self-publishers, people like the bloggers, who suddenly become business partners with Fortune 500 companies," said Heidi S. Messer, the president and chief operating officer of LinkShare, which connects Web writers with companies like Dell, Wal-Mart and Apple Computer.

Sometimes blog writers make money by simply linking to companies' home pages. Companies come up higher in Google, Yahoo and other search engines when they are frequently linked to and mentioned on many sites, including blogs.

USWeb, an online marketing firm, has run campaigns this year that pay people $5 to mention a company or link to its site. Most of the companies USWeb works with do not allow the company to identify them, said Ed Shull, the chief executive of USWeb, but some that he can mention include Lussori.com, a watch and jewelry company; Dot Flowers; and Terra Entertainment.

Currently, USWeb is asking people with personal profile pages on myspaces.com, a social networking site, to include a trailer from Terra Entertainment's coming release of the film "One Perfect Day" on their pages. In exchange, these Web users will have their names listed on the end of the credits on the film's DVD, Mr. Shull said.

USWeb has been criticized by some blog writers for not requiring its network of about 5,000 blog writers to disclose payments. It is currently completing guidelines on how bloggers should disclose that they were paid to mention products, Mr. Shull said.

"We are still leaving this as an option to bloggers," he said in an e-mail statement, "but we do recommend that they disclose to readers that advertisers do support the site through paid mentions."

To be sure, most blog writers do not make any money, and those who do often make only enough to pay their site fees. There are now at least 21.5 million Web logs worldwide, according to Technorati, a company that tracks blog postings. Many blogs remain primarily personal postings that Internet users pursue purely because of their own interests.

Still, large numbers of online writers are interested in making money.

Large blog Web sites like Gawker Media and Weblogs have offered blog writers another opportunity to cash in. These sites display their postings alongside that of many other writers, increasing bloggers' abilities to attract readers and advertisers.

So far, the idea seems to be working. Jason McCabe Calacanis, chief executive of Weblogs, a site acquired by the America Online unit of Time Warner this fall, said the site would generate a few million dollars this year. Weblog's 140 bloggers are paid based on how often they write, he said. A Forrester Research survey found in February that 64 percent of national marketers are interested in advertising on blogs.

Audi, for example, paid for about 70 million ads about its A3 compact model on 286 Web logs in the spring. Many of the blog ads featured links to other blogs that mentioned Audi's campaign for the A3, not to Audi's site, said Brian Clark, chief executive of GMD Studios, an experimental media firm that worked with Audi's advertising agency to create the campaign.

"It was a substantial buy, and it was a really effective buy for the campaign in terms of the response," Mr. Clark said. "You find that blogs are these series of citational records of what bloggers read. People with blogs read blogs. You get a feedback cycle."

Web logs also give advertisers the chance to aim at specific readers. If you want to advertise to New York Mets fans, for example, you can easily find blogs that cater to those readers, Mr. Clark said.

Last spring, Volvo spent several million dollars to sponsor Microsoft's MSN Spaces, a site that offers free Web logs and personal pages. The blog investment was worth it, said Anna Papadopoulos, the interactive media director at Euro RSCG 4D, a division of Havas that is running Volvo's Web log campaign. Since April, about five million pages have been set up by individuals, and a million people have visited Volvo's home page directly from the blog site, she said.

"These are people that we wouldn't have gotten through other marketing efforts," Ms. Papadopoulos said.

SBC Communications, which adopted the AT&T name on Monday, has found that advertisements on the blog site it started last fall, ProjectDU.com, have a higher click- through rate to its home page than its advertisements have had on other Web sites, said Michael Grasso, associate vice president for consumer marketing at AT&T.

Companies are also starting Web logs on their sites written by their employees. General Motors, for example, created two within the last year. Blogs may eventually replace many of the company's news releases, said Michael Wiley, director of new media for General Motors.

General Motors has also started to treat some Web log writers as it does traditional journalists, and is deciding which bloggers to invite to media showings of its new cars.

"It's very similar to media relations, but it's a little more grass roots," Mr. Wiley said. "The level of respect for certain influential bloggers is certainly growing."

When Piaggio USA, the makers of Vespa scooters, decided to include a Web log on its site, the company recruited Vespa customers who were already blogging about scooters. The two Vespa blogs, which started posting last summer, do not pay the writers and ask the writers not to sell later the material they write for Vespa.

One Vespa writer, Neil Barton, said he was willing to blog on Vespa's site free because of the visibility it would give his blogs, formerly published only on his own site, UrbanNerd.com.

"I just thought, well you know, no one really knows about UrbanNerd, but a lot of people know about Vespa, so it will be a cool way to get what I'm writing out there," said Mr. Barton, who lives in New Jersey. "The only limit I could see with Vespa is if I wanted to write about a competitor's scooter. I probably would post it on my blog as opposed to Vespa's."
http://www.heraldtribune.com/apps/pb...47/1018/NEWS02





Great for Craigslist but Not for Newspapers
Maria Aspan

The number of users of online classified advertising services increased 80 percent this year, according to a report released yesterday by the Pew Internet and American Life Project based on data gathered by comScore Media Metrix.

In 2005, almost nine million of those visitors went to Craigslist.org, a 165 percent increase from 3.4 million last year. "It was a huge increase on top of a pretty large base to begin with," said Lee Rainie, director of the Pew project. Mr. Rainie said that Craigslist, which offers free listings for everything from apartments to furniture and personal ads, attracted more patrons by opening 15 city- or region-specific sites this year.

The report is bad news for classified advertising sources like newspapers, which have historically dominated the market. Mr. Rainie cited Craigslist's relief services after Hurricane Katrina as an example of its ability to meet the needs of a large, diverse consumer group. "One of the most appealing things to users of Craigslist is how adaptable it is," he said.
http://www.nytimes.com/2005/11/28/te...y/28drill.html





Universities Say New Rules Could Hurt U.S. Research
Scott Shane

American universities are warning that rules proposed by the Defense Department and expected soon from the Commerce Department could hurt research by limiting the ability of foreign-born students and technicians to work with sensitive technology in laboratories.

One target of the proposed rules is believed to be China because more than 60,000 Chinese citizens are studying in the United States and Chinese intelligence officials are strongly seeking American technology for military use, experts in the field said.

Universities have submitted hundreds of comments criticizing the proposed rules, and they argue that tight restrictions on research by foreigners could backfire and actually hurt national security by hindering scientific progress.

"The impact on research could be very serious," Barry Toiv, a spokesman for the Association of American Universities, said Friday. "The bottom line is that research that benefits both our economy and our national security just won't happen."

The rules govern the use of software, equipment or technical data that has military applications and therefore cannot be exported to certain countries without a license. A similar license, called a deemed export license, is required when the same sensitive technology is used by a foreign citizen in an American laboratory, on the ground that such a foreigner might return home and reproduce the technology there.

In practice, many foreign researchers are exempt from the licensing requirement if they are conducting basic research and their work is intended for publication, on the ground that the information they are producing will be shared widely to advance science.

The Commerce Department, whose inspector general last year recommended tighter regulations, is expected to propose the new rules by the end of this year.

The Defense Department proposed new regulations in July and is expected to produce final rules early next year, say lobbyists who follow the matter.

In a report last year, the Commerce Department's inspector general, Johnnie E. Frazier, warned that existing regulations were not protecting secrets from potential spies in American laboratories. The report proposed tightening the rules, including using the country of birth of a foreign laboratory worker, not his current citizenship, to determine whether a license is needed.

The report said, for instance, that an Iranian-born Canadian citizen who held dual citizenship would be considered a Canadian under the current regulations and would therefore not be subject to the licensing requirement.

But Tobin L. Smith, a senior federal relations officer for the Association of American Universities, said a person's country of birth often gave no clue to his allegiance. Moreover, the report's recommendations would cost universities millions of dollars to inventory sensitive equipment, determine students' birthplaces and study which foreigners were using which machines.

"Our faculties don't want to say, 'Before you can work on this equipment I need to know where you were born,' " Mr. Smith said.

The proposed Defense Department rules would require contractors, including universities getting research financing, to create separate security badges for foreign citizens and "segregated work areas" for research using export-controlled technology.

"That's not really realistic in a campus environment," where students and researchers must share laboratories, equipment and information, Mr. Smith said.

According to the Institute of International Education, 565,000 foreign students were enrolled last year at United States colleges and universities. The largest number of them, 80,466, came from India, with China in second place at 62,523.

Larry M. Wortzel, a former military intelligence officer who worked in the American Embassy in Beijing and at the Pentagon, said he believed that the rules should be tightened and that a foreign researcher's birthplace should be considered.

"You have to recognize that Chinese intelligence does target ethnicity," said Dr. Wortzel, a member of the U.S.-China Economic and Security Review Commission, which was created by Congress in 2000 to monitor the security implications of trade with China.

Noting that American jet engine technology is superior to China's, he said: "I don't see any reason why we should make it easier for China to build supersonic jets they could use to attack Taiwan, Japan or the U.S. They're not an ally."

At the same time, Dr. Wortzel said, "if this is done clumsily, it really will hurt university research."
http://www.nytimes.com/2005/11/26/ed...6research.html





Designer of Supercomputers Leaves Cray to Join Microsoft
John Markoff

Burton Smith, a longtime supercomputer designer and chief scientist at Cray, has resigned to take a position at Microsoft.

Mr. Smith was a founder of Tera Computer, which in 2000 acquired Cray Research from Silicon Graphics. The company, which was based in Seattle, was renamed Cray.

A Microsoft spokesman said Friday that Mr. Smith would work for Craig Mundie, one of Microsoft's chief technology officers and formerly chief executive of Alliant Computer Systems, a maker of an early minisupercomputer.

Microsoft announced two weeks ago that it planned to introduce a new version of its Windows software for scientific and engineering users, and that Mr. Smith would be involved.

"He's a really smart guy and an innovator," said Steven Wallach, a founder of the Convex Computer Corporation, and currently a venture investor. "The designs he developed were milestones in computer architecture."

While at Tera and previously at a Denver start-up supercomputer maker, Denelcor, Mr. Smith was a pioneer of an innovative computer design called multithreaded architecture, or MTA, which allows several programs to run simultaneously in computer hardware.

The approach was an alternative to Seymour Cray's "vector" style of computing, which was optimized for quickly performing calculations on long arrays of numbers.

Although the MTA idea was adopted in Intel's microprocessors, Mr. Smith's supercomputer designs were not commercially successful and are no longer offered as products by the supercomputer maker. The company does continue to support the design for a government intelligence agency.

Cray, which lost $204 million last year, has continued to offer the vector style of computer as well as a second series of machines based on the Opteron microprocessor of Advanced Micro Design.

Cray has stated that its design direction is toward a heterogeneous approach, which will combine features of vector processing and microprocessor-based massively parallel supercomputing designs.

In addition to being Cray's chief scientist, Mr. Smith has been head of the company's Cascade supercomputing initiative, which is one of three competitions supported by the Defense Advanced Research Projects Agency as part of an effort to design computers able to process at a petaflop, or a thousand trillion mathematical operations a second.

At this year's supercomputing show Microsoft's entry was greeted by some skepticism. The company is trying to persuade technical computing users to adopt its software, but that community still relies heavily on Unix and related types of software.
http://www.theledger.com/apps/pbcs.d...1260425/-1/APN

[JackSpratts]

Writing the Fastest Code, by Hand, for Fun: A Human Computer Keeps Speeding Up Chips
John Markoff

SEATTLE - There was a time long ago when the word "computer" was a job description referring to the humans who performed the tedious mathematical calculations for huge military and engineering projects.

It is in the same sense that Kazushige Goto's business card says simply "high performance computing."

Mr. Goto, who is 37, might even be called the John Henry of the information age.

But instead of competing against a steam drill, Mr. Goto, a research associate at the Texas Advanced Computing Center at the University of Texas at Austin, has bested the work of a powerful automated system and entire teams of software developers in producing programs that run the world's fastest supercomputers.

He has done it alone at his keyboard the old-fashioned way - by writing code that reorders, one at a time, the instructions given to microprocessor chips.

At one point recently, Mr. Goto's software - collections of programs called subroutines - dominated the rarefied machines competing for the title of the world's fastest supercomputer. In 2003 his handmade code was used by 7 of the 10 fastest supercomputers. (The Japanese Earth Simulator, which was then the world's fastest machine, however, did not use his software.)

In the most recent ranking of supercomputers, I.B.M. machines overtook a number of supercomputers using Mr. Goto's software to capture the top three spots in the fastest computer rankings. Still, the Goto Basic Linear Algebra Subroutines, or BLAS, as his programs are known, were used by 4 of the world's 11 fastest computers.

Mr. Goto has become a legend in the supercomputing community because of his solitary crusade. And he shows no signs of flagging in the contest to wring every ounce of computing speed from the world's fastest microprocessor chips.

But for all the acclaim he has received, Mr. Goto is a relative newcomer to the supercomputing field, having made his breakthrough about a decade ago.

"At first I didn't know anything," he said in an interview at the annual supercomputing conference held in Seattle in mid-November. "This was all trial and error, but now I have experience."

The value of his work goes far beyond setting speed records. Because his programs can more efficiently solve complex linear equations, they can offer better solutions to virtually every computational science and engineering problem. For example, the subroutines are used in simulation programs to model the flow of air over the surface of a plane or a car more precisely.

One of Mr. Goto's principal rivals is a software project known as Atlas, created by a group of researchers working with Jack Dongarra, a computer scientist at the University of Tennessee. Atlas is an automated effort to find the most efficient way to solve linear algebra functions for specific microprocessors - a task that Mr. Goto does meticulously by hand.

Like chess-playing software, the Atlas project tries to overcome the shortcomings of different kinds of computer designs by systematically testing thousands of solutions for each chip to find the most efficient one for each type of microprocessor.

By contrast, Mr. Goto uses only a program called a software debugger that allows him to track how data moves among different components of a microprocessor.

He then reorganizes the individual software instructions so that his subroutines perform crucial algebraic functions more quickly to gain small amounts of processing speed from a specific type of computer chip.

Typically these are highly repetitive operations that can consume vast amounts of computing capacity. For example, one challenging type of calculation requires the microprocessor to multiply numbers from two tables stored in memory together.

Mr. Dongarra acknowledges that Mr. Goto's hand-tuned programs are more efficient and can still outperform Atlas.

"I tell them that if they want the fastest they should still turn to Mr. Goto," said Mr. Dongarra, who is one of the researchers who maintains the Top 500 listing of the world's fastest-performing computers from a computing speed race held twice a year.

Mr. Goto came to his passion for supercomputing almost by accident. Educated in power engineering at Waseda University in Tokyo, he worked as an employee of the Japanese Patent Office, doing research on early inventions like video recorders.

To help in his work, Mr. Goto purchased a Digital Equipment workstation based on the Alpha microprocessor in 1994 to perform a simulation.

But when it arrived he could not understand why it was performing so slowly. So he explored the Alpha's design to see where the performance bottlenecks were.

He later purchased a second Alpha-based computer and by rewriting the crucial subroutines was able to improve its performance to 78 percent of its theoretical peak calculating speed, up from 44 percent.

Although he was not formally trained in computer or software design, he perfected his craft by learning from programmers on an Internet mailing list focusing on the Linux operating system for the Alpha chip. His curiosity quickly became a passion that he pursued in his free time and during his twice daily two-hour train commute between his job in Tokyo and his home in Kanagawa Prefecture.

"I would frequently work on these problems until midnight," he said. "I did it to relax."

As a teenager, Mr. Goto developed a passion for electronic design, building his own stereo equipment from the most basic components.

His current interest, he says, is not in the pure mathematics of the linear equations, but rather in finding clever ways to overcome the shortcomings of the architecture and internal organization of microprocessors that are used in every kind of computer, from hand-held devices to supercomputers.

Modern computers are organized to offer the programmer a hierarchical series of data storage areas that range from the computer's disk drive DRAM memory, as well as relatively small temporary memory areas called caches. Typically, the fastest memories are also the smallest.

One of the simplest ways to speed a program is to keep the calculation in the memory unit, which is closest to the microprocessor's calculating engine.

Every time the calculation engine is required to stop what it is doing to get new data from a more distant memory area, processing speed slows. But in some cases, keeping data in the closest memory cache may not be as efficient as keeping it in a larger cache that is farther away.

Robert A. van de Geijin, a computer scientist who works with Mr. Goto at the Texas Center, said that Mr. Goto's special skill was in the step-by-step reordering of software instructions to take the greatest advantage of the performance trade-offs offered by each type of chip.

"He combines both scientific insight and engineering skills," Mr. van de Geijin said.

They met in 2002 when Mr. Goto took a sabbatical from his job at the patent office to spend a year at the Texas center. (He has since resigned from the patent office.)

Once Mr. Goto arrived in Texas, he turned his attention to optimizing the speed of the Pentium 4 microprocessor. When computer scientists at the University at Buffalo added Goto BLAS to their Pentium-based supercomputer, the calculating power of the system jumped from 1.5 trillion to 2 trillion mathematical operations per second out of a theoretical limit of 3 trillion.

The increase was so astounding that the record keepers for supercomputing Top 500 called the researchers in Buffalo because they did not think such a speed was credible.

"I teased them and suggested that the speed of light was faster in Buffalo than it was in Tennessee," Mr. van de Geijin recalled.

Recently there has been a quiet controversy around the Goto BLAS because Mr. Goto has been slow to offer his work as open-source software, the free model of software distribution.

Some programmers have suggested that Mr. Goto has not joined the open-source movement because he wants to protect his secrets and strategies from competitors.

That is not so, he said recently, noting that the Goto BLAS software is freely available for noncommercial use. And he said he was preparing an open-source version.

He said his next big challenge was to expose chip designers to his ideas to help speed their processors.

"Computer architects are stubborn," he observed. "They have their own ideas." His ideas on computing efficiency, he said, speak for themselves.
http://www.nytimes.com/2005/11/28/te...y/28super.html





No, It's Not the New Napster

BitTorrent's creator says he's building a business, not a pirate network.
Steven Levy

Bram Cohen estimates that a third of all Internet bandwidth these days is tied up in his file-distribution program called BitTorrent. If that's right, the program that the 30-year-old New York native (now living in the Bay Area) wrote in 2001 is now responsible for one in three bits moving on the Net. BitTorrent, which cleverly exploits peer-to-peer technology to move big files speedily (especially media like music and video), is both a scary reality (piracy!) and enticing possibility (efficiency!) for Hollywood. Forty-five million people have used it, many for illegal copying. But for whatever reason, Cohen has so far been spared the fate of Napster and Grokster, and has yet to be sued by record labels or movie studios. In fact, he recently flew down to L.A. to take a meeting with top movie-industry lobbyist Dan Glickman. And investors see a future in BitTorrent: Cohen's company recently received $8.75 million in venture capital. Though no one knows what's in store for BitTorrent, the program and its creator are definitely in for a wild ride. Cohen shared his thoughts about it via his cell phone in California.

LEVY: Why did you write BitTorrent?
COHEN: It was fairly technically motivated. There was this core problem in file distribution—there's plenty of upload capacity out there, how do we utilize it?

Considering what happened to Napster, were you nervous releasing it on the Net?
No. I've made a very-general-purpose tool that can be used for anything. Napster was designed like a covert application for copyright infringement. BitTorrent is for publishing things which you own.

Nonetheless, lots of copyrighted files are on BitTorrent. Why haven't you been sued?
If there's widespread copyright infringement, you really want to go after the ringleader. And we're not being the ringleader for that. The Web types that are doing piracy are the ringleaders for that.

Speaking of pirates, in Hong Kong someone who used BitTorrent to upload movies was just given a jail sentence. Your reaction?
Well, it's hardly surprising. Copyright infringement is illegal. I make a tool. It's a very powerful and general-purpose tool, but it is a lot like a car. Its primary function is a very, very utilitarian one. Cars kill people, you know, a lot more than guns do, but we still love our cars.

What was it like meeting with the MPAA head Dan Glickman?
He seems really interested in what to do next. Everyone knows that things are changing, and I believe he's very interested in adapting. I was really surprised at how if you go to them nonconfrontationally they respond in kind.

What's the BitTorrent business plan?
We're setting up a marketplace for selling content online, and it's going to be both pay-per-download and advertising space. We're aiming to have some amount of content that you can't get elsewhere, but we're aiming to be fairly all-inclusive in terms of if you want to get content online, you can just go to our Web site and get it.

You've been open about being diagnosed with Asperger's syndrome. How has that affected you as a software author and as a CEO?
It makes you less emotional when you're coding. It's like you don't take it personally when the computer doesn't work well. I'm still relatively new to the CEO thing, so ask me that question in a couple years.

What's the biggest misconception about Asperger's?
That people with Asperger's are immoral, which isn't true at all. People with Asperger's frequently don't understand what's going on, and don't know how to express what they're thinking, but that's very different from not wanting to do the right thing.
http://www.msnbc.msn.com/id/10099449/site/newsweek/





Wireless Moves the Cash Register Where You Are
Jennifer A. Kingson



When Michelle Dubé, a golf instructor in Rancho Santa Margarita, Calif., finishes a lesson, she whips out her BlackBerry wireless device - to schedule the next appointment, sure, but also to swipe the student's credit card for payment right there on the driving range.

It takes only a few seconds, and it saves Ms. Dubé a trip to the bank to deposit a check or a fistful of cash. Plus, her clients like it. "They're just surprised - they're like, 'Wow, you're a techno-wizard,' " she said.

The novelty may soon wear off. Plumbers, limousine drivers, flea market proprietors and merchants of all sizes and stripes are beginning to take credit and debit cards in odd places, often using nothing more than an ordinary cellphone and a card swipe attachment, or a handheld device with a built-in swipe slot. Now that wireless networks span the nation and devices that tap into them are cheap and reliable, expectations for the technology are running high outside these niches.

Already in some restaurants a waiter will swipe a credit card tableside (a practice that is widespread in Europe), and some car rental companies use hand-held devices to check people out when they return cars. A day could soon come when a clerk at a large department store will ask customers in the aisle if they would like to check out there, or a shopping cart at the grocery will have a built-in scanner and card reader.

"It's a whole new world that's opening," said Doug Byerley, a senior vice president at the First Data Corporation, the nation's largest credit card processor, "and it's all being brought about because of wireless communications."

Wireless credit card acceptance is not new. But within the last year or two, as wireless companies have improved their networks and hand-held devices have come down in price, the technology has started to look like an attractive alternative to dial-up payment machines. Indeed, previous generations of mobile terminals had a reputation for losing signal connections and breaking.

Domino's Pizza has experimented with wireless terminals and has so far rejected them. "We found in the early tests it was hard for drivers to drive if they had these things on their belts," said Tim McIntyre, a spokesman for Domino's. "In the course of working in a car and a pizza store, some of these things weren't as durable as they needed to be, and once they were manufactured to be durable enough, they were no longer cost-effective."

Domino's does accept credit cards by telephone and gives customers receipts to sign at the front door, "but we haven't reached the point where we just walk up and you just swipe your card," Mr. McIntyre said.

On the other end of the spectrum is Sonic, the chain of drive-in restaurants that is halfway through an effort, begun two years ago, to install satellite-based credit card terminals at its 3,000 outlets. With the technology, customers can pull up, order meals, pay on the spot by credit or debit card, then wait for a carhop to deliver the food and a receipt.

Without the technology, Sonic customers who want to pay with plastic have to wait for two visits from the carhop, one to take the card indoors to process it and another to deliver the food and receipt, said Mitchell W. Gregory, chief information officer at Sonic, which is based in Oklahoma City. It takes 30 seconds to process a card payment using the landlines, he said, and 6 seconds using the satellite terminals.

"There's a whole step that's eliminated, plus the consumer doesn't lose control of their card," Mr. Gregory said.

Retailers of all sizes, including Sonic, have found that customers tend to spend more money when they are not limited by the amount of cash in their wallets. Greg Crance, who sells hot dogs from a boat in the Delaware River to tourists who raft and canoe there in the summer, said revenue had been higher since he bought a cellphone that accepts credit cards five years ago. And he worries less about employee theft, because his system notifies him of all card sales and gives him a daily total.

Mr. Crance, or the Famous River Hot Dog Man, anchors his concessions stand off Resolution Island in Pennsylvania. "We have a big sign that says, 'We take credit cards,' and people think we're, like, lying," he said.

Security is not a concern, because the wireless devices convey account information with the same heavy level of encryption as plugged-in terminals, if not more. And for merchants that normally phone in customers' credit card numbers for approval, there are price breaks: banks charge retailers a lower rate when the actual card is swiped and the account information is conveyed electronically.

"The average cost per merchant on a monthly basis is $20 to $30, which in most cases is less than the cost of a phone line," said Paul Rasori, vice president for marketing at VeriFone, a terminal maker San Jose, Calif.

For small merchants, a cellphone equipped with card-acceptance software can cost as little as $200 or $250, which can often be recouped through higher sales volumes or lower card-acceptance fees.

Cellphones are slower and cheaper than more sophisticated wireless systems that rely on Internet or satellite technology, but some merchants find bigger investments worthwhile. "If you run a sandwich shop in downtown New York and you have a two-hour period during the day where all your business happens, it matters to you if it takes 30 seconds for a dial-up credit card transaction, and it's important to you that wireless can do it in 2 seconds," Mr. Rasori said.

For large retailers that are still wedded to elaborate dial-up systems, the shift to wireless will take longer, but many in the industry view it as inevitable. Because wireless payment technology is faster and can move more data, retailers will be able to couple it with everything from inventory tracking systems and loyalty and rewards programs to electronic identification checks for people who are buying alcohol or tobacco.

Some retailers are already experimenting with hand-helds as a way to do what they call line-busting: making sure that people waiting in long lines for a cashier do not give up and abandon their merchandise. Apple Computer, for instance, started using them just this month in some of its retail stores to help reduce some of the holiday crush at cash registers.

"If you're buying a couple of dresses, a retail store wants the ability to walk up to you at that time, read the tags on the clothing items and create a sale right there," said O. B. Rawls IV, president of the North America region for Hypercom, a company based in Phoenix that sells payment card terminals and technology. "In a wireless mode, you can take advantage of impulse buying and line-busting, and I think that's pretty slick."

David Hogan, chief information officer at the National Retail Federation, a trade group, said members were studying the costs and benefits of upgrading to wireless checkout technology, but that such conversions would take time. Many retailers updated their payment systems right before 2000, when wireless was not that prevalent, he said, and it usually takes 7 to 10 years for a company to revisit such decisions.

Wireless terminals are among a range of payment options that are being tried in fits and starts. Visa, MasterCard and American Express have all been dabbling in radio frequency technology, letting some customers wave specially equipped credit cards in front of transponders instead of swiping them through machines that read magnetic stripes.

MasterCard's PayPass system, for instance, has been installed in places like McDonald's restaurants, Duane Reade drugstores and Giants Stadium, and J. P. Morgan Chase and Company has been heavily promoting its Blink credit card, which can work with this system.

Some municipalities, including Coral Gables, Fla., now let people pay by credit card at parking meters, though these systems do not actually have people swiping their cards instead of pumping in coins. Rather, people must register a card account number, cellphone number and license plate, and phone in to a central system when they want to park. They then phone again to indicate they are leaving.

But it is the simplicity and convenience of the wireless terminal that seems to be setting most imaginations astir. "The name of the game today is speed," said Niki Manby, vice president for market and technology innovation at Visa U.S.A. "The name of the game tomorrow is going to be all these value-added experiences that merchants want to offer to their customers."

For now, retailers using wireless devices are primarily focused on the practical advantages. Consider 1-800-GOTJUNK?, a business based in Vancouver, British Columbia, that sends trucks to people's homes to remove their clutter. The company, which has franchises across North America, has spent the last year equipping its drivers with hand- held terminals, reducing the amount of time and energy it must spend collecting unpaid bills.

"In the past if you wanted to pay by credit card, we'd have to take a carbon copy of your card and take it back to our office and process it that way, and sometimes it would come back as declined or not approved," said Sentwali Lewis, a manager there.

Even some small businesses are carefully mapping a future that depends on wireless payments. Kerri Evans, who runs a mobile dog-grooming business in Mountain View, Calif., has hired a technology consultant to set up a BlackBerry-based system that will both track appointments and handle card payments; she hopes to have her four groomers geared up within six months.

"Because I'm based in Silicon Valley, I definitely want people to think I'm technology-forward," Ms. Evans said. "And wireless credit cards are coming."
http://www.nytimes.com/2005/11/26/bu...y/26swipe.html





Initial Reports Are Mixed for Retail's Busiest Day
Michael Barbaro

Two reports measuring consumer spending for Friday, both released last night, painted an unusually muddy portrait of what has become the busiest shopping day of the year.

ShopperTrak, a national survey firm, said sales for the day after Thanksgiving - called Black Friday in the industry because of hopes that it will catapult retailers into the black for the year - fell 0.9 percent over last year, to $8.01 billion.

Visa USA, on the other hand, reported that use of its credit cards had risen 13.9 percent.

Both companies characterized the results as a healthy start to the season, but the wide gap between them raised questions about the strength of the holiday shopping period, which accounts for as much as 25 percent of annual sales for the retail industry.

Merchants are already skittish about the season, worried that higher fuel prices and heating costs will pinch consumer budgets. But several major retailers, including Wal- Mart, Toys R Us and J.C. Penney, reported higher foot traffic in their stores on Friday than on the same day last year.

ShopperTrak, which measures spending at mall-based stores but not discount chains like Wal-Mart or online merchants, speculated that steep discounts may have lowered overall sales for Friday.

"The figure did not dramatically grow, as anticipated," said Bill Martin, a ShopperTrak cofounder. He added that sales for Black Friday last year, which rose 10.8 percent over 2003, made for a tough comparison this year.

Paul Cohen, a vice president at Visa USA, said the jump in cardholder spending on Friday "is a very positive sign for merchants."

Visa found that shoppers spent 24 percent more on electronics this Black Friday - a category ShopperTrak largely overlooks - while purchases at specialty retailers inside the nation's malls rose 16 percent. Consumers, Mr. Cohen said, "are clearly in the spending mood."

Ellen Davis, a spokeswoman for the National Retail Federation, said sales on Black Friday "are not always an indicator of the holiday season," adding that "people went out for the deals on Black Friday and are saving a large part of their holiday shopping for later."
http://www.azcentral.com/news/articles/1127sales27.html





Calling Out the Cable Guy
Lorne Manly and Ken Belson

TERRY DENSON and Dan York are not exactly boldface names in entertainment industry circles, but perhaps they should be. After all, nearly $30 billion and the future of two Baby Bells hang in part on whether these two refugees from the television programming world find success in their new jobs.

Mr. Denson, who works for Verizon Communications, and Mr. York, his counterpart at AT&T, are playing starring roles in their companies' risky forays into the TV business. In the latest twist in an accelerating technological free-for-all, the Baby Bells are trying to shore up their flagging fortunes by muscling their way into what was until just a decade ago the bailiwick of cable companies. Rarely competitors in the past, cable operators and telephone companies are now scrambling to be the one-stop shop that will gladly accept your monthly payments to watch television, use the phone and have high-speed Internet access.

Executives at both Verizon and AT&T, which last week officially changed its name from SBC, hope that the extensive selection of channels, whiz-bang features and low pricing of their video offerings will sway television viewers around the country to switch. Although cable and satellite have spent billions upgrading their delivery systems to accommodate a future in which all forms of entertainment are digital and perhaps interactive, the Baby Bells contend that bandwidth is destiny.

When they're done spending their billions, the phone companies say, they will surpass their rivals. They promise a seemingly infinite number of channels, many in crisp high definition, and plenty of interactive tie-ins, like the ability to check e-mail messages or screen incoming telephone calls on the TV set.

But as the Baby Bells know better than most, talk is cheap and the challenge is daunting. The capital expenditures are staggering. Holding little leverage with the content creators, they also end up paying more for programming than cable companies and satellite operators, who already hold the accounts of 92 million consumers and are rapidly making inroads into the telephone companies' own business of phone service.

What's more, the Baby Bells aren't expected to reach consumers in meaningful numbers anytime soon. Verizon began its Fios service in its first town, Keller, Tex., only two months ago, and AT&T will not roll out a service until later this year or next year. That means that the cable operators will have had years to solidify their relationships with customers for all their television and telecommunications needs.

"It's awfully difficult to see how a late entrant operating at a dramatic cost disadvantage and employing a strategy of charging less for more has any shot at earning acceptable returns," said Craig E. Moffett, a cable and satellite analyst at Sanford C. Bernstein & Company.

THE phone companies, of course, cannot be discounted. The newly combined AT&T, with $90 billion in revenue, and Verizon, with $71 billion, dwarf the biggest cable operator, Comcast, with $20 billion. The phone giants have about 50 million local phone lines each and their service representatives communicate with many customers each day, offering prime opportunities to sweet-talk them into buying their television services.

The Baby Bells are not strangers to television, either, but that history is one that they would just as soon forget. During the mid-1990's, when the cable companies had the playing field to themselves, telephone companies formed two groups that tried - and failed - to establish TV programming services. Bell Atlantic, Nynex and Pacific Telesis, whose names have mostly been lost to the industry's mania for mergers, worked on Tele-TV, but that consortium's reliance on wireless technology proved its undoing. The other group, called Americast and made up of Ameritech, BellSouth and SBC, never got off the ground.

But the Baby Bells could be forgiven for acting distracted. The landmark Telecommunications Act of 1996, which deregulated the industry and allowed the Baby Bells to jump into the long-distance phone market, offered what seemed like a far cheaper and potentially more lucrative alternative to taking on the cable industry.

Things haven't worked out so swimmingly, however. Nearly 10 years later, the core business of the Baby Bells - renting phone lines - is under attack as never before, shrinking by an average of 4 percent each year over the last three years. Nearly 13 million people are forgoing land lines, relying entirely on cellphones instead, according to CTIA, a wireless-industry trade group. While the erosion has been minimized by the ownership stakes that Verizon, AT&T and BellSouth have in Verizon Wireless and Cingular, the cable companies and small independent concerns like Vonage and SunRocket are picking off thousands of customers a day with their Internet-based phone lines.

In just two years, the cable industry alone has persuaded about two million households or businesses to forsake the phone company. Cablevision has signed up more than 600,000 customers. Time Warner Cable is nearing one million accounts. And Comcast, the country's largest cable operator, with 21.5 million customers, has finally turned its marketing machine on the phone business, meaning that the pace of defections is likely to quicken.

The Baby Bells "see their land-line business as an ice cube melting in the sun right now, so they need to become a purveyor of content," said Todd Dagres, a partner at Spark Capital, a venture firm focused on media and technology.

The formidable task of acquiring that content and taking on the cable operators and satellite companies has fallen to Mr. Denson and Mr. York. The two men share more than a job description. Mr. Denson, 39, and Mr. York, 42, have both worked in midlevel positions on two sides of the television business equation - for the programmers and the cable companies.

Mr. Denson, vice president for video programming and content marketing and strategy at Verizon, toiled at ABC and MTV Networks before moving to Insight Communications, the country's ninth-largest cable operator. Mr. York, executive vice president for programming at AT&T, spent 13 years at HBO and then switched to In Demand, a venture of three cable companies that carries pay-per-view movies and subscription sports packages. They both took their new gigs for similar reasons, attracted by the opportunity to create something new on a large, blank canvas.

And both came into the negotiating process with the upper hand firmly held by the folks across the bargaining table. Content providers like the Walt Disney Company, Viacom and Time Warner charge a per-subscriber fee for their cable networks and demand carriage of some of their smaller cable channels in return for the right to carry the broadcast networks. Few television viewers will scurry to sign up with Verizon or AT&T because they prefer those companies' network architecture.

The prime responsibility of Mr. Denson and Mr. York - buying content at a reasonable price - will be a determining factor, at least until newfangled features like the ability to choose multiple camera angles for a sporting event or to view digital photos become reality.

Facing entrenched competitors, the telephone companies can ill afford not to match or surpass what cable and satellite offer. That imperative has led many analysts covering this converging world to estimate that the content providers will be able to wrest a hefty premium - as much as 25 percent - from Verizon and AT&T, meaning that profitability for the Baby Bells' television services may be years, perhaps decades, away.

Mr. Denson and Mr. York cautioned against accepting too readily the conventional wisdom. "Obviously, we're not negotiating Comcast rates," Mr. Denson said. But those estimates, he said, were off the mark.

Besides, they say, Verizon and AT&T are not entirely lacking in the clout department themselves. "We're not a mom-and-pop start-up cable system," Mr. York said. "We are one of the largest communications companies in the world and partners with some of the content providers already."

Indeed, Verizon and AT&T control the two biggest cellphone companies in the country in Verizon Wireless and Cingular, and content providers searching for new outlets are frantically striking deals with wireless companies to carry their programming. And the two phone giants just happen to be among the biggest advertisers on the media conglomerates' cavalcade of broadcast and cable networks. Annoy them too much, and they could take a chunk of their advertising elsewhere. Companies like Disney, Viacom and NBC Universal, a unit of General Electric and Vivendi Universal, know better - most of the time - than to push too hard and jeopardize a gushing revenue source.

"Don't assume they're paying a big premium," said Sean R. H. Bratches, executive vice president for sales and marketing at ESPN and ABC Sports, both of which are divisions of Disney. Mr. Bratches was the lead negotiator for the parent company's recent deal with Verizon.

Another motive keeps Disney, Viacom and other content providers from exacting too many pounds of flesh. "We are enamored of the fact there will be more gatekeepers in the marketplace," Mr. Bratches said. The more fragmented the industry offering television service, content providers say, the harder it will be for the biggest players, like Comcast, to push back against the annual increases in programming fees that content companies desire and demand.

But the programmers are certainly reaping benefits. For example, all of the cable channels of Disney and Viacom - including relative newcomers like ESPNU, an all-college sports network, and MTV Desi, a music-video-centric channel for South-Asian Americans - reside on Verizon's extended basic tier rather than on a more limited, more expensive digital tier. Disney and Viacom do not have similar deals with any cable operator or satellite provider.

The benefits for the content companies are substantial. They are paid a per-subscriber fee for a lot more people. And getting their newer channels in front of more viewers often translates into higher ratings and more advertising revenue.

VERIZON will even be a partner on promotions, as it was recently for ESPNU in Keller, Tex.: during a Friday night football game, the company was a co-sponsor of a halftime kicking contest, complete with Randy White, the former Dallas Cowboys star. Disney has also created a whole new revenue stream by persuading Verizon to pay a fee for each of its 4.8 million high-speed Internet subscribers to receive Disney's selection of proprietary broadband Web sites, including ESPN 360.

While Verizon lacks the leverage of cable and satellite companies with their millions of subscribers, it hopes to wow consumers with extra channels and diverse programming. Cable operators have regularly struggled with the capacity constraints of their systems, forced to limit the number of channels so they can deliver innovations like video-on- demand and high-definition channels. "We don't have to make that trade-off or compromise," said Mr. Denson, because Verizon's network is more advanced.

That explains why Verizon and AT&T have agreed to carry on their extended basic tiers truly niche networks like the Soundtrack Channel, a four-year-old offering devoted to - yes - movie soundtracks, with a healthy dollop of entertainment news and features. "Because they are new to the marketplace themselves, their appetite for channels like ours - that will help differentiate their offerings - is far greater," said William Lee, the channel's chief executive.

But just how much prospective customers care about receiving hordes of niche channels - like the Gospel Music Channel and Blackbelt TV - remains unclear.

"There's also too much of a good thing," said Joseph Laszlo, an analyst at Jupiter Research. "If Verizon added the Lint and Dust Channel, they would just end up with a program guide that is difficult to navigate."

The Baby Bells are under no illusions that smaller channels will persuade people to jettison their current providers. "Are we going to get two, three, four percentage points because we have the Black Family Channel?" said Mr. Denson, referring to gains in market share. "No, we're not."

But they will do everything they can to reinforce a message of serving the customer's needs in all aspects, including service, something that the cable industry has struggled with for decades.

In Keller, Tex., about 30 minutes north of Fort Worth, Verizon is doing just that. With its new fiber lines, Verizon can sell multiple phone lines and broadband connections that are six or more times as fast as the cable company's. Verizon's lowest-priced television service charges $39.95 a month for 180 channels. The most similar offering from Charter Communications, the local cable company, provides 260 channels for $52.99.

"The first thing that got me was price. When you're a dad, that's what it's all about," said Tony Rodges, a Keller resident who switched to Verizon's Fios service from Charter. "But then the little things kick in, like the picture, the sound, the channels."

MR. RODGES also marveled at the eagerness of the Verizon technician. "The guy jumped through hoops" for the installation, he said. "I didn't feel he was going to leave me hanging like the cable guys."

Verizon's decision to run fiber-optic cable all the way to customers' homes is a calculated - and expensive - risk, and a counterpoint to AT&T's television strategy. Verizon will spend an estimated $22 billion through 2010 burying high-capacity cables, according to Sanford C. Bernstein research. But that substantial investment gives Verizon the flexibility to add data-hungry high-definition programs, faster broadband speeds and other features that customers like Mr. Rodges are already enjoying. Though costly, these fiber connections are seen by Verizon as the only way to reliably leapfrog the competition. By the end of 2006, the company expects to make these fiber-based services available to six million homes in its territory, including Fairfax, Va., and Huntington Beach, Calif.

By contrast, AT&T is installing fiber cables only to within 3,000 feet of homes and using compression technology to make sure that television, phone and broadband signals can travel the rest of the way over older and narrower wire already in the ground. That will save billions of dollars in construction costs and help AT&T start selling television faster. Sanford C. Bernstein estimates that AT&T will spend more than $7 billion through 2010; the company has said that it will spend about $4 billion through 2008.

But there are hiccups. The software that Microsoft is installing for AT&T has rarely been deployed on such a large scale. And while AT&T says that it will start selling television this year or early in 2006, only one market - the company's home base in San Antonio - is expected to get the service initially. AT&T hopes to make its television service available to 18 million homes by the first half of 2008.

As the Bells rumble into action, cable companies are aggressively selling discounted bundles of television, broadband and phone services. They are also offering many of the services that the Bells expect to provide. Comcast, for instance, now gives away nearly 3,800 hours of on-demand movies and programs to some subscribers. Time Warner Cable and others offer a raft of free interactive features like video games and home shopping and are leasing powerful digital video recorders.

That will not only generate more revenue but will also make it harder for Verizon and AT&T to lure away cable customers. According to Jonathan Schildkraut, an industry analyst at Jefferies & Company, customers who buy at least two products from one company are half as likely to switch carriers than if they had just one.

Mr. Rodges, for example, is already hooked on Verizon's bundle of services, and he is unlikely to switch back. But he is one of the few who have the option of buying television from a Baby Bell.

Brian L. Roberts, the chairman of Comcast, is careful not to count out the phone companies, with their millions of customers, billions of dollars in cash and long history of fighting back. He also knows that the cable industry unwisely laughed off satellite companies when they entered the television market a decade ago. Now, he must wrestle with the likes of DirecTV, which is part of Rupert Murdoch's media empire.

EVEN SO, Mr. Roberts figures that the Bells have too many hurdles - financial, technical and cultural - to make a serious dent in his business. "I don't understand their economic model; I don't understand how that pays off," he told investors recently. "It didn't work when Bell Atlantic did it. It didn't work when Tele-TV did it. And it didn't get cheaper to do in 2005 and 2006."

How the Baby Bells will fare may be subject to debate, but one outcome can be reliably predicted, said Nicole Browning, president of affiliate sales and marketing for MTV Networks and BET. "It means more choice and more recourse," she said, "when you're not satisfied with what you're getting."
http://www.nytimes.com/2005/11/27/bu...y/27cable.html





Skype: Big Bad Wolf?
Gerry Blackwell

Part 1
With Skype's profile suddenly higher in the wake of its acquisition by eBay in September, the free peer-to-peer Internet phone service recently found itself in the gun sights of some new critics. Info-Tech Research Group, an analyst- consulting firm in Canada, issued a strongly-worded press release earlier this month citing potential security and compliance concerns and advising big corporations to immediately ban Skype from their networks.

Info-Tech senior research analyst Ross Armstrong, author of the research note on which the release was based, is quoted as saying, "The bottom line is that even a mediocre hacker could take advantage of a Skype vulnerability."

Info-Tech was clearly intending to grab attention and stir controversy, and it succeeded. The next day, a UK analyst firm, Butler Group, issued a press release of its own suggesting the Canadian firm had missed the boat and that the real risk from Skype was that users' computers could be commandeered for use as virtual PBXs, degrading their performance for other tasks.

Tempest in a teapot? Some observers think so, though others agree with at least some of what Info-Tech and Butler say. The issues raised do draw attention, not just to the potential risks but also, and perhaps as important, to the potential benefits of using Skype in a business environment.

The urge to save
Many European and Asian companies, faced with generally higher long distance rates and pay-per-call local telephony, are already using Skype. Fewer North American firms have gone the same route, perhaps because they have less need. When Skype surveyed users, 25 percent said they used the service for business. According to Info-Tech, 17 million Skypers worldwide use it for business.

Even Armstrong agrees that "some companies, particularly smaller companies and perhaps call centers, may end up saying, 'We know about the security risks, but the savings are just too juicy to turn down.' It comes down to business need."

"I think there are times when [using] Skype [for business] makes absolute sense," says Joe Laszlo, a research director with Jupiter Research. "For calls from a remote worker in another country back to home office, for example. It could also be a very cost effective way to keep in touch with people on the road, though most have cell phones with large bundles of minutes, so I'm not sure you could expect to see a ton of cost savings. But it's worth exploring at least."

Jupitermedia Corp., of which Jupiter Research and the publisher of this journal are both divisions, is exploring the possibility of using Skype internally for conferencing. Laszlo says some Jupiter employees are already using it for informal communications.

Skype and enterprise: a good fit?
Skype, however, continues to mainly target consumers and small businesses, by which it means companies with under 25 employees. It has made few concessions to enterprise users. Recent releases do make it possible for network managers to turn off the instant messaging (IM) and file transfer functions in Windows Registry as a way to reduce peer-to-peer traffic over a company's Internet connection. But that's as far as it goes.

When asked if Skype might introduce an enterprise version of the software in the future to address some of the concerns raised by Info-Tech and others, Skype vice president of operations Michael Jackson says, "Not really. The fact is, to change [Skype] to be something that could work in a full enterprise would take an awful lot of work, and [enterprise VoIP] is a market now well served by other manufacturers."

Skype does include a section at its Web site listing third-party freeware and trialware aimed at business users. They include sales force automation, teleconferencing and collaboration software and hardware/software devices for integrating Skype with a PBX.

Three strikes against
But is it wise to think of using Skype in the enterprise? In the widely distributed Info-Tech research note, Armstrong listed five reasons why all enterprises should immediately ban Skype. They boil down to three of substance:

Because Skype is not standards based, can easily penetrate firewalls and is often undetectable, it could expose corporate networks to viruses, worms and other kinds of hacker attacks.
Skype's encryption is closed source and possibly not well managed. If it were compromised at some point, outsiders could intercept and decrypt calls resulting in damaging information leaks.
Because Skype communications are unauditable, employees using it could make it more difficult for their companies to meet compliance requirements.

Armstrong argues that Skype needs to evolve to become a "good corporate citizen"—much as instant messaging has. "If it's to acquire greater acceptance in the enterprise, we'll first have to see a security-heavy, controllable Skype offering," he says.

Should companies in the meantime ban the service from their networks? Maybe not, or at least not from all company networks. As we'll see in the second in this two-part series, the Info-Tech position drew some strong reaction in the Internet and peer-to-peer communities.
http://www.wi-fiplanet.com/voip/article.php/3567391





Scenes From an Arranged Marriage
Jeff Leeds

IMAGINE, for a moment, that you're a promising new rhythm and blues singer who can deliver like a grittier Donny Hathaway. You have a work ethic that drives you to compose and record three songs in a single day. But you have no following. In fact, outside of a handful of industry insiders and fanatics who dig deep into liner notes, no one has ever even heard of you. Meanwhile the music industry is cranking out thousands of new CD's each year and only the luckiest new artists will manage to score a spot on a radio playlist.

What you might need is someone to open doors. A trusted ally who could put his arm around you and introduce you to his friends. Say, a million or so of them.

Acting on that theory, record labels in recent years have made a point of introducing new, little-known acts as protégés of established stars. In some cases the two musicians might have grown up on the same block. Or perhaps they had shared the struggle of performing in the same unknown group. Either way, it's a rich backstory that can be woven into any future marketing effort.

But what if the new singer doesn't have any long-lost pals who've gone platinum?

For an increasingly desperate industry, that is but a minor obstacle. These days, label executives routinely shop their new prospects around from one star to another, trying to convince them to act as a mentor. Then the newcomer is marketed as a devotee, or a card-carrying member of the star's "camp."

That was the Atlantic Records plan for Governor (the professional name of Governor Washington Jr.), an R&B singer who joined the label's roster almost four years ago. Atlantic first tried to pair him with the producer Dr. Dre, and then with the rapper (and now actor) 50 Cent. Both plans fell through. In search of quick jolt of street credibility, the label brokered a deal for the singer to join the camp of T.I., a rapper and platinum-seller from the Bankhead neighborhood of Atlanta, who is sometimes nicknamed Rubberband Man.

So, in a darkened Atlanta studio recently, over a recycled OutKast beat, Governor pledged fidelity to his latest ally: "I took my show down south to ATL/ Rubberband Man, Bankhead, gave me a place to dwell."

The songs from that session are destined for a mixtape by DJ Drama. In addition to creating the "Gangsta Grillz" mixtapes, a series popular in clubs and among bootleggers, Drama is a member of T.I.'s camp, too.

If all goes according to plan, Governor and T.I. will end up seeming like close collaborators with a shared network of friends. So what if they've only just met?

Governor Washington Jr. started out singing at the Virginia church where his father was a minister. Later he joined the Navy fresh out of high school and served in the Persian Gulf war. Roughly four years ago, he fell in with a production team called the Trackmasters who helped him record an album's worth of material. He also lent his vocal talents to the demo tape of a then-unknown rapper by the name of 50 Cent.

He, in turn, introduced Governor to his friend Jacques Agnant, a manager with a tough reputation and a desire for new business. Mr. Agnant, also known as Haitian Jack, met with Craig Kallman, now the chairman of Atlantic Records, and there in the Peninsula Hotel in Beverly Hills he played Governor's demo CD.

It worked: Soon after, Governor had a recording contract. Mr. Agnant had a percentage of the prospective sales. And Atlantic had a talented new solo artist - who would have to stand out in a hip-hop world where "camp" affiliation is the coin of the realm.

That such relationships can be sorted out in corporate suites and conference calls is a far cry from hip-hop's earliest days some 30 years ago, when dancers and rap artists from the same neighborhood formed informal "crews" to show off in underground clubs and parties.

Many music executives say a turning point came with the 1993 arrival of the rap group Wu-Tang Clan, a Staten Island-based collective made up of nine rappers, some of whom are cousins and all of whom had grown up together. They took an unusually entrepreneurial approach to their name, creating Wu-Wear clothing and releasing a single to promote it. The line between a gaggle of buddies from the block and a business entity has been blurring ever since.

These days, said Jeff Chang, author of the hip-hop history "Can't Stop Won't Stop," crews are viewed "almost as if they were professional basketball teams. 'We're picking up this person for our team,' 'This person has left this camp and they're going to this camp.' "

And as in the N.B.A., relations among teammates are sometimes quite tense. Through a deal brokered in part by Interscope Records, a new rap artist who calls himself the Game was officially placed last year in 50 Cent's camp, G-Unit. The Game had been working on his album with Dr. Dre (who also has an Interscope-distributed label, Aftermath), for roughly two years. "They came up with the idea that I should roll with G-Unit because they already have a crazy buzz and they selling albums," Game told MTV.

The match meant that 50 Cent helped to write four songs on the Game's album, "The Documentary," and was listed as a co-executive producer in return for a cut of sales. But tensions ran high behind the scenes, and in February, as 50 Cent made an appearance on the WQHT (Hot 97) radio station in New York, members of the two men's entourages broke into gunfire outside. By then, though, the contrived pairing had already had its intended effect: the CD had sold about 1.4 million copies.

Clearly such pairings can be a powerful device. Still, some executives caution about overreliance on these "arranged marriages." "The marketplace is definitely smart," Mr. Kallman said. "I think they can see through the ones that are manufactured. I don't think you can fake it. But when it's natural and it's a fit and it feels genuine and sincere, it's still an incredibly powerful way of introducing and breaking an artist."

SOON after Governor signed his contract with Atlantic Records, Dr. Dre, the Grammy-winning producer, heard some early tracks and expressed an interest in overseeing his new album. Atlantic, thrilled by the potential involvement of the industry's most respected hit maker, dispatched Governor to Los Angeles for the first in a series of studio sessions.

They were long and intense. "I remember waking him up off the couch telling him to come listen to the next song," Governor said.

The two handled the songwriting process with cold diligence; sometimes Dr. Dre didn't even show up, just left material for Governor to work on. "He's a distant dude," Governor said, describing himself the same way.

But Dr. Dre seemed to believe the singer had promise: he separately agreed to pay about $750,000 for Governor's music-publishing rights, according to people with knowledge of the deal.

When talk turned to the release of Governor's recordings, however, negotiations between Interscope, which distributes Dr. Dre's work, Aftermath and Atlantic foundered over financial terms. The 16 songs the two had recorded together were shelved.

Governor was crushed, as were Atlantic executives, who turned to 50 Cent. As a former collaborator of Governor and now a major star in his own right, he seemed the obvious choice. But those talks, too, collapsed on financial terms. "It's like staring at your dreams through a looking glass," Governor later said of the repeated setbacks. "It's right there but you can't touch it. It has hurt. There's been a lot of pain involved from all the moving."

The idea arose that maybe Governor should go it alone. But Mr. Kallman said, "We always thought that if we could find any additional entry point with him, to really grab the streets, and help get a fan base built, and really connect him to the hip-hop community, it would be smart."

Atlantic found its chance when Jason Geter, the manager and business partner of T.I., visited the label's offices in Manhattan.

On the face of it, T.I., whose real name is Clifford Harris, seems an unlikely candidate for such a match. He didn't start out singing religious songs for church congregants, but rather rapping to entertain his older relatives in his depressed section of Atlanta. And he didn't sign up for the Gulf war; he sold crack, winding up with a felony drug conviction. After a long and at times uncertain ascent, he had finally developed a national fan base - only to be arrested in 2004 for violating probation. (He avoided prison through a work-release program.)

A further complication: Governor is a soft-spoken R&B singer; T.I. is a flamboyant rapper.

But Mr. Geter was impressed by Governor's style, and saw the appeal of expanding T.I.'s reach. Several weeks later, while the rapper was still on tour, Mr. Geter called Governor and invited him to Atlanta to discuss the prospect of working with T.I.'s Grand Hustle outfit. The business details got hammered out a little while later, and in the spring, T.I. met the newest member of his camp at a recording studio.

Governor was quiet, Mr. Geter recalled, and seemed wary of embarking on another round of recording with yet another partner. It was also clear that the preacher's son was not cut from the same cloth as the flashy rapper, who once shot a music video at Atlanta's Fulton County jail while on work release. Still, Governor said, "When we first met, I didn't feel like I'm talking to a mogul." He added that T.I. wore his typical jewelry: "He came in blinging, but he still had a very natural vibe about himself."

T.I. seemed to want to put his new protégé at ease. So he and his crew treated the singer to a rapper's night out, at a strip club. "I understood what he was trying to do," Governor said, though he added, "I wasn't looking to find acceptance in anything social. I don't care about that."

In the months since Governor and T.I. first met, Governor has spent a lot of time in the studio; under Mr. Geter's oversight, he has recorded half a dozen new songs. Governor said that the new music he recorded reflects more of a "Southern feel," a trait he said he has in common with T.I. Without the relationship, he said, "I wouldn't be the same mindset, the music wouldn't have been the same."

T.I. has been around only sporadically; for much of the time he was on tour. But when the two have been in Atlanta together, T.I. has taken Governor to his old neighborhood to meet friends. During Governor's recent two-day session to record material for his "Gangsta Grillz" mixtape, T.I. stopped by with two friends after attending an Atlanta Falcons football game. As he walked through the door, the assorted members of the Grand Hustle team drifted over from different corners of the studio to greet their boss.

But he only stayed for a few minutes to record a promotional "drop," and then headed out again. Governor returned to the studio console, listening to the latest song he had recorded for the forthcoming mixtape, over and over.

It wasn't much of an advertisement for the closeness that arranged pairings can bring. But the most productive partnerships aren't always the coziest. And the people who brokered it still have high hopes for the synergy it may bring.

Even the participants, it seems, favored the pairing. "If there wasn't a genuine connection between us," T.I. said, "this situation wouldn't work. We've got a feel for him, loved his music, loved his work ethic. It's a good marriage."
http://www.nytimes.com/2005/11/27/ar...c/27leeds.html





Leggo My Ego

Google Print and the other culture war.
Tim Wu

Did you know you can search television? That you can type in "yada yada yada," and find the exact frames where George Costanza's girlfriend Marcy said it first? Weird as it may seem, you can do it with one of Google's little-known products, "Google Video." It's part of Google's not-quite-secret master plan—to make as much of the "offline world" searchable online as humanly possible.

Google is the company that wants to be loved, and it is invariably shocked when people object to what they are doing. That, recently, has amounted to a lot of shock. Earlier this month, the New York-based Author's Guild filed charges against Google, calling the company both "brazen" and a "massive copyright infringer." The lawsuit capped a year in which Google has been called "arrogant," "greedy," "stretched," and even, by the French, "un ogre."

Tough going for a company whose motto is "Don't be evil."

What's going on? Google has become the new ground zero for the "other" culture war. Not the one between Ralph Reed and Timothy Leary, but the war between Silicon Valley and Hollywood; California's cultural civil war. At stake are two different visions of what might best promote authorship in this country. One side trumpets the culture of authorial exposure, the other urges the culture of authorial control. The relevant questions, respectively, are: Do we think the law should help authors maximize their control over their work? Or are authors best served by exposure—making it easier to find their work? Authors and their advocates have long favored maximal control—but we undergoing a sea-change in our understanding of the author's interests in both exposure and control. Unlike, perhaps, the other culture war, this war has real win-win potential, and I hope that years from now we will be shocked to remember that Google's offline searches were once considered controversial.

What I've called the "exposure culture" reflects the philosophy of the Web, in which getting noticed is everything. Web authors link to each other, quote liberally, and sometimes annotate entire articles. E-mailing links to favorite articles and jokes has become as much a part of American work culture as the water cooler. The big sin in exposure culture is not copying, but instead, failure to properly attribute authorship. And at the center of this exposure culture is the almighty search engine. If your site is easy to find on Google, you don't sue—you celebrate.

It is this dramatic shift—to a culture of exposure—that Google and others want to export to the worlds of books, video, and other large stores of offline information. Consider Google's widely misunderstood "print" product, which is at the heart of the litigation with the Author's Guild. Designed to be similar to Google's Web search, Google Print searches the full text of Google's library of scanned books. (This page shows the results of a search for "Harriet Miers.")

There's a key difference between Google "Print" and the regular Google "Web." On the Web search, if you find something, you can then just click through to the Web page. But using Google Print is different—you only get the results. To get the "full" result, you actually have to buy the book. This is a common misunderstanding about Google Print—it is a way to search books, not a way to get books for free. It is not, in short, Napster for books.

Where does Google get the books in its search? Most, so far, are sent in by publishers who want to be noticed. But Google last year also began slowly adding to its database scans of some of the largest university libraries in the world (here is an example). That's the main controversy and also the main attraction. There is a lot of really great and valuable stuff in college libraries, but it is hard and time-consuming to find. Professors are not usually excitable creatures, but I have personally heard squeals at the prospect of full-text searching our libraries. That book searches are great for users and researchers is a no-brainer.

The big question is whether they are good for authors. Many of my friends who are authors are, to be sure, initially very suspicious. "It's not up to Google or anyone other than the authors, the rightful owners of these copyrights, to decide whether and how their works will be copied" says Nick Taylor, president of the Author's Guild. Taylor isn't suggesting that book search engines are necessarily bad for authors. His objection is that Google Print has deprived authors of their control— their right to decide whether to be in a book search in the first place. The author knows best, the argument goes, and she should be the one who makes all the decisions. If exposure serves the authors' interest, she can agree to be on Google—otherwise, forget it.

The idea that there is no tradeoff between authorial control and exposure is attractive. But it is also wrong. Individually, more control may always seem appealing—who wouldn't want more control? But collectively, it can be a disaster. Consider what it would mean, by analogy, if map-makers needed the permission of landowners to create maps. As a property owner, your point would be clear: How can you put my property on your map without my permission? Map-makers, we might say, are clearly exploiting property owners, for profit, when they publish an atlas. And as an individual property owner, you might want more control over how your property appears on a map, and whether it appears at all, as well as the right to demand payment.

But the law would be stupid to give property owners that right. Imagine how terrible maps would be if you had to negotiate with every landowner in the United States to publish the Rand McNally Road Atlas. Maps might still exist, but they'd be expensive and incomplete. Property owners might think they'd individually benefit, but collectively they would lose out—a classic collective action problem. There just wouldn't really be maps in the sense we think of today.

The critical point is this: Just as maps do not compete with or replace property, neither do book searches replace books. Both are just tools for finding what is otherwise hard to find. And if we really want to have true, comprehensive book searches, we cannot require that every author's permission be individually sought out. The book search engines that emerge would be a shadow of the real thing, just as a negotiated map would be a lousy one. Studies suggest that millions of out-of-print books are of unclear copyright status, and Google estimates that relying solely on books provided by publishers and authors will yield only 20% of the books in existence. Not only might it be difficult to get permission. (At least with real property we know who the owners are.) But there are just too many books with owners who are hard or impossible to find—"orphan works."

Each of those is a hole in the "map," and a shame.

What's at stake in a comprehensive book search? In a word, authorial welfare. It is true that once authors are famous and successful, control becomes more important than exposure. But authors don't know in advance that fame is going to happen. If we imagined a hypothetical bargain between all the nation's potential and future authors, I think they'd agree to put exposure first—and make book searches permissible. From that original position, a system making it easier to find your work is preferable to the system we have now, namely reviews, word of mouth, and marketing campaigns. And while searches will never displace these means entirely, we have seen that searches can help make eccentric bloggers as popular as newspaper columnists.

While I've stressed the tension between exposure and control, it's not if the ideal is no authorial control. What we want is the right balance. The Google Print booksearch, for example, gives copyright owners an "opt-out." As on the web, if you don't want to be searchable, you don't have to be. If you're really embarrassed about your first novel, you can tell Google, and make it unfindable. That's not enough for some, like the Author's Guild, who demand that the owner give permission before Google acts, not vice-versa. But with devices with opt-outs—which may be critical to Google's fate in court—we can respect authorial wishes without making everyone's work hard to find.

We must remember, looking to the future, that books, as a medium, face competition. If books are too hard to find relative to other media, all authors of books lose out, and authors of searchable media like the Web, win. And that's too bad for those who love books—those who still like a slow read better than the blustery urgency of blogs.

I believe that everyone who considers themselves an author or an author's advocate should take a deep breath and, at least this time, praise Google Print. In the end, it is just a search, not a replacement product. We readers need help finding what exists, and we authors also need help being found. There is here, as anywhere, such a thing as too much control. It may be time for the offline media to learn something from online media—namely, the virtues of letting go.
http://www.slate.com/id/2128094/





Holographic DVD to Hold 1.6 Terabytes
Ed Oswald

Move over HD DVD and Blu-ray. Bell Labs spin-off InPhase Technologies and Hitachi Maxell are currently working on a computer disc about the size of a DVD that could hold up to sixty times the data. The companies hope to have the disc and compatible drives on the market by the end of next year.

The new discs will use a technology known as holographic memory. Data is stored on a crystal material that is sensitive to light. In order to read and write data, a light beam is split in two and one is passed through semi-transparent material. This material alters the beam to encode data.

The two beams then merge again in the crystal and the pattern of interference of the altered beam is recorded. Information is read and written quickly, as a large number of bits can be recorded and retrieved in parallel with one another.

This technique would ultimately allow a single disc to hold up to 1.6 terabytes of data read at 160 megabits per second -- 340 times the capacity and 20 times the data rate of traditional DVDs, and more than twice the data rate of Blu-ray and HD DVD with more than fifteen times the space.

Initially, however, holographic discs will launch with a capacity of 300GB.

While the format is not being marketed as a consumer alternative to either HD DVD or Blu-ray, some believe it could pose a threat to the new formats. A single disc could hold a dozen high-definition movies at better quality than the currently proposed next-generation DVD formats.

The manufacturers have already proved that using the holographic format for movies would be feasible; InPhase has tested a disc that streams a HDTV-formatted movie. Television network TNT has also utilized the format for streaming an advertisement on-demand during its program schedule.

"We believe the capacity and data rates of holographic storage will be critical to achieving the breakthrough improvements in work flow and cost reduction that the broadcast industry is seeking," said Nelson Diaz, InPhase CEO.
http://www.betanews.com/article/prin...tes/1133197797





Browser Face-Off
Erik Larkin

Browser competition hasn't been this fierce since the mid-1990s, and the fight is becoming even more intense as Microsoft, Mozilla, and Opera ready new versions of their software for release.

With version 7 of Internet Explorer, Microsoft's developers have seriously overhauled the browser, giving it popular features such as tabbed browsing, as well as improved security, thus closing the gap between it and its rivals. But even though the new iterations of both Firefox and Opera bring mostly incremental changes, that's still enough to keep them ahead of IE.

We took Internet Explorer 7 Beta 1, Firefox 1.5 Release Candidate 1, and Opera 9 Preview 1 out for a spin. Both the Firefox beta and the Opera beta are available for download, although Opera isn't publicizing this early testing version; the browsers' final editions should be out around the time you read this. On the other hand, the IE 7 beta will not be available for downloading until early next year.

IE's MakeoverFirefox Gets Auto-UpdatesOpera SurgesBrowsing to ComeIE's Makeover

The new Phishing Filter in IE shows you an alert if you land on a suspicious Web site.IE's changes are long overdue, and the browser remains a work in progress, with final code not slated until sometime in 2006. But as it stands, many of its new features still don't match functionality already present in the other browsers.

The new version of IE will finally allow you to open multiple Web pages on tabs in the same window, a capability that Firefox and Opera have offered for a while. But the feature works in only a basic way for now. Microsoft says more is in store, including an option to view all tabs in a one-page thumbnail layout (absent in both Firefox and Opera). However, the ability to drag and drop tabs to rearrange them, now included in Firefox and already available in Opera 8.5, likely won't make it into IE, says Gary Schare, head of IE 7's project management team.

IE adds RSS feed support, but only lets you bookmark an individual feed as you would any other page.IE 7 lets you easily find and bookmark an RSS feed on any given Web page, but once subscribed you have no way to get a quick preview of that feed's headlines--as you can with Firefox's Live Bookmarks--so you lose a significant part of RSS's usefulness.

IE's layout is changing too, making it look more like its rivals. Included is an integrated search box similar to that in Firefox and Opera, and the toolbar and button arrangement in IE 7 is more compact.

In addition, IE 7 and the new version of Firefox each offer an easy method for deleting personal browsing data--including the cache, history, and saved data from online forms you've filled out--via one menu option. The feature already exists in Opera 8.5.

Microsoft has tightened IE's security in other ways, too. For example, an added antiphishing filter aims to warn users if they visit a known or potential phishing site--a function previously available only via third-party toolbars. You also get an add-on manager that leaves some ActiveX controls enabled but can disable IE's access to other ActiveX controls, like those within the Windows operating system, which criminals could manipulate to gain control of your computer. In addition, the company says it has modified IE's code to make it harder for hackers to exploit. The changes sound promising, but the real test will come when consumers use IE 7--and the new browser becomes a target for malware authors.

Firefox Gets Auto-Updates

Firefox lists the headlines for each of your RSS feeds, but you get no further story preview.Firefox made a big splash with its initial 1.0 release in November 2004. With more than 100 million downloads since, the Mozilla Foundation is now trying to build on that success with version 1.5, which includes no radical changes to the open-source browser but does have some incremental upgrades, such as drag-and-drop tab reordering.

Automatic updates for the browser will probably prove the most welcome change for users. Firefox's old update procedure was more like a full reinstall; the new process is streamlined and smooth.

Aside from convenience, making updates easier and faster can help security, which has become more of an issue for Firefox. With the new approach, more people will likely obtain and install updates, helping to minimize the number of vulnerable systems. Critical flaws discovered in 2005 have demonstrated Firefox's vulnerabilities, though the browser still beats IE in that regard. In a recent study, security analysis and software company Secunia found that Firefox had 3 unpatched security risks out of 25 discovered problems, compared with 20 unpatched risks for IE out of 86 found. Opera had them both beat, with no unpatched holes out of 8 detected. Of course, as browsers become more popular, they also become more attractive targets.

Many browser extensions (add-ons that incorporate new functionality) already have updates for the new release, which automatically checks for new versions of out-of-date add-ons when you start the browser. But quite a few don't yet work with version 1.5. Current scripts for the popular Greasemonkey add-on might not work in version 1.5, for example, and users will have to wait to see which authors will update their scripts and when.

Tools for subscribing to RSS feeds remain unchanged. If sites are not coded for Firefox, you must go through a clunky mechanism to add feeds to your favorites, or use one of the many extensions available to simplify the process.

Opera Surges

The most significant change for Opera happened in September, when the company eliminated ads in the interface of its free browser. More than 3 million new users downloaded the browser in the three weeks following, according to the company, quadruple the usual rate. But Opera still has just a fraction of the user base Firefox has.

Opera has a full-featured feed aggregator that pulls all the headlines for all your feeds into one tab and offers previews of selected entries.The upcoming version 9 does serve up a few tasty tidbits for the Opera aficionado, however. Although we were unable to test these features, the company says the final version will include support for widgets, small external programs that use Opera's engine and can run on the desktop. Existing widgets for other programs can display the weather, show Webcams, and much more. Users will also be able to choose which Web sites can run JavaScript or display images. And the impressive built-in RSS feed handler, which we tried in the beta, now supports Atom 1.0 (a newer protocol similar to RSS).

Most remaining changes involve page display and layout. That may be because Opera, a suite with an integrated e-mail client, already has many of the goodies being added to IE and Firefox. But because many Web pages are exclusively tested with--or written for--Internet Explorer, which tends to disregard Web consortium guidelines, the standards-loving Opera programmers have to work hard to ensure pages display properly in their browser. The company will continue the practice of "site patching," in which it automatically distributes custom JavaScript to its browsers to fix layouts for sites that it knows display improperly.

Browsing to Come

The renewed browser wars are still in their early stages, and though IE has been losing market share over the past year, it remains dominant. As of late October 2005 almost 81 percent of Americans used IE, and 14 percent favored Firefox, according to Web analytics company OneStat.com. Only a small percentage of people used Opera, Netscape, and all other browsers combined.

The number of users jumping to Firefox has slowed recently after its Cinderella-like debut, leading some experts to suggest only a finite number of people are willing or able to try an alternate browser. "For many people, Internet Explorer is just not broken," Geoff Johnston, an analyst with research firm WebSideStory, said in a press release.

Those users may have even less reason to switch when IE 7 launches. At that point, IE, Firefox, and Opera will all have similar features and similar, tight interfaces.

To enjoy more-distinctive features, you have to turn to smaller browsers. Flock, a Firefox-based browser, just hit the Net with a pre- beta offering that is still rough but contains a number of nice features in the new realm of social browsing. This growing trend puts heavy emphasis on sharing information via blogs, swapping photos and bookmarks, and interacting with people, as opposed to consuming static Web content and keeping your preferences and opinions to yourself.

Flock ties available services directly into its browser. The Deli.cio.us site already lets users store and share bookmarks; Flock bookmarks synchronize with the site automatically. A blog editor is built in, as is a Flickr toolbar that lets you easily upload pictures to that photo-sharing site. Whether Flock will become anything more than a niche browser remains to be seen, but it's worth tracking.

Consumer Choice

In the end, it's the perfect war: No one loses. If you use IE and don't want to bother with one of the richer options, you'll finally get some of the features that fans of other browsers have crowed about, with added security to boot.

If you want more out of your browser, choosing Firefox or Opera comes down to whether you like to tinker.

Firefox's huge laundry list of add-ons let you poke and play until you have a browser heavily customized to your personal tastes. That's a seductive idea, but in practice it requires a fair amount of time and effort.

Opera is different. It comes with several advanced features that you can get in Firefox only with add-ons, and that IE lacks entirely. However, Opera has no plans to introduce Firefox-like extensions, so if you don't like the way it does something, you're stuck.

Regardless, just having a choice is a great thing for consumers. Vive la difference.
http://news.yahoo.com/s/pcworld/2005...pcworld/123615





Money Is There to Aid Rural Internet, but Loans Are Hard to Get
Vikas Bajaj

Daniel and Linda Hawkins expected to lose some amenities when they moved to this small farming town, population 1,759, from a slightly larger city nearby. But they were so sure they would have high-speed Internet access that they had high-capacity wiring installed in every room in the house.

After all, many farmers who live nearby subscribe to a high-speed wireless service provided by Prairie iNet, a small company based outside Des Moines, and they zip effortlessly around the Web.

But to the couple's dismay, their new house, complete with a fishing pond in the back, lies in a wireless dead zone, one that Prairie iNet is not likely to fill soon. Turned down by a federal loan program meant to bring high-speed access to rural areas in 2004, the company is using its limited private funds to expand service to small businesses in the Des Moines suburbs rather than farmers and homes spread among the rolling corn and soybean fields of Iowa and Illinois, a constituency it started serving in 2000.

"There is demand on the commercial side, and we recover our costs quicker on that side," said Neil J. Mulholland, Prairie iNet's founder and chief executive. "And it's too bad, because there are a lot of people out in these areas that really want to get our service, and they will pay the $50. Many of them are paying $70."

Across rural America, entrepreneurs, lawmakers and Internet company executives say they are frustrated with a loan program created by Congress in 2002 to help extend high-speed Internet service to rural areas. Run by the Rural Utilities Service, an arm of the Department of Agriculture, the program has been allocated nearly $3 billion but the agency has lent less than half that.

As of Sept. 30, the end of the 2005 fiscal year, the utilities service had rejected 87 loan applications totaling $1.1 billion and approved 48 loans totaling $770 million. The agency had nearly $2 billion in unused money, and $556 million of that must be committed to new loans before the end of the fiscal year next September or its authorization will expire. Most of the loans carry the same interest rates as United States Treasury bonds, about 4.5 percent.

Critics say the agency's standards are so tough that applicants that have not been profitable for at least two years are rejected if they do not have enough cash on hand to cover a full year's operating expenses. When Prairie iNet applied for a $7.7 million loan in 2003, it was losing money (though it registered two small quarterly operating profits early in 2005). Its investors, among them Liberty Media, said they would chip in $4.2 million in new capital, but the lending agency wanted an investment of at least $7.7 million.

"This has created ridiculous situations where companies have sought $5 million and as a condition for approval they have been required to have that much money in the bank," said Senator Tom Harkin, Democrat of Iowa, who helped create the program and is now a big critic of the agency's handling of it. "If they have that much money in the bank, why would they need the loan?"

Agriculture Department officials acknowledge that the program has had a slow start and agree that some of the financial restrictions may need to be revised. But the rules, those officials say, were meant to ensure that borrowers were financially stable and that the loans would be repaid in full.

"I am empathetic to those concerns, but we do have a responsibility to make sure that we utilize the taxpayers' dollars judiciously," said Tom Dorr, the Agriculture Department's under secretary for rural development. He declined to discuss Prairie iNet's application, saying he was not intimately familiar with it.

Started as the Rural Electrification Administration by President Franklin D. Roosevelt in the 1930's, the Rural Utilities Service has a storied record of underwriting loans that brought electricity and phone service to rural America. None of its telephone company borrowers have ever defaulted on a loan, though $30.4 million in loans for high-speed Internet access, or broadband, are in default now.

Mr. Dorr, whose family once owned a farm in Iowa, said that the agency historically lent to monopolies that had reliable and steady revenue and that most borrowers had no trouble qualifying for loans or repaying them. But with broadband, the agency has had to create new methods to assess the creditworthiness of start-up firms.

Indeed, 70 percent of its broadband loans have gone to established telephone companies, even though 42 percent of its applications are from start-ups. Companies that have received loans praise the program, but even they express some frustration with it.

The Rural Telephone Service Company, a 50-year-old phone company based in Lenora, Kan., has received four loans totaling $21.4 million to bring high-capacity fiber optic lines to towns with populations of 500 to 3,000.

"I don't think we could have done what we have done without it," Larry Sevier, the company's chief executive, said noting that private lenders had been reluctant to finance broadband projects since the telecommunications bust.

But he said the utilities service can take up to a year to approve loans and disburse the funds. "They have put a tremendous demand on their work force," Mr. Sevier said. "They have not hired more people."

Hilda Gay Legg, who was administrator of the utility service from 2001 until February and is now a private consultant, said the agency was not allotted money to hire more people to run the broadband program. She added that the agency was less demanding than private lenders in requiring companies to have at least one year's operating expenses or 20 percent of the loan's value in cash. "There have been some very good loans, and there have been some lessons learned that need to be evaluated," she said.

Mr. Dorr said the Agriculture Department would revamp the program once a new administrator takes over at the utilities service, but he declined to discuss the details until then. [On Nov. 10, the Senate confirmed the nomination of James M. Andrew, a former president of the National Rural Electric Cooperative Association and a former Georgia utility official.]

Christopher A. McLean, a Rural Utilities Service administrator in the Clinton administration and now a consultant, said the agency must take the kind of risks that made rural electrification successful if President Bush's goal of having ubiquitous national broadband access by 2007 is to be achieved.

"The agency should never lend money where it knows that it's going to lose money," said Mr. McLean, who helps companies apply for loans. "But at the same time, the agency should not forget that its whole mission is to go to places where the marketplace hasn't been able to go before."

Critics, which include rural cable companies, say the program has often done the opposite. A recent audit by the inspector general of the Agriculture Department faulted the program for approving $103.4 million in loans to suburban areas, including $45.6 million to 19 affluent new subdivisions just outside Houston. The utility service contends that those areas qualify as rural because the law was written to include small towns near urban areas.

Iowa farmers who use broadband say their lives are immeasurably better for having the service.

"I don't know what I would do without it," said Diane Fox, who manages the business affairs on a 600-acre farm near Dallas Center that has been in the Fox family for four generations. "They can take away my TV, they can take away my refrigerator, but they can't take away my central air and Internet."

Ms. Fox, who lives a few miles from the Hawkinses and pays $50 a month for Prairie iNet service, checks on corn subsidies, detailed weather forecasts and soil conditions online. Along the way she browses Amazon and eBay to buy gifts for her daughters, who live in Washington.

There is no cable TV line running to her house, and Qwest Communications, her local phone company, cannot tell her when it will offer high-speed Internet service to her.

A spokeswoman for Qwest, Kara Rovere, said the company, which is based in Denver, expected to have broadband in all Iowa telephone exchanges by the end of 2006.

The Hawkinses said a high-speed connection would help their 18-year-old son, Luke, research high school assignments. A faster link would also allow them to send a video of him winning a track meet to family members and let Mrs. Hawkins take online classes to keep up her nursing license.

But the signal from one Prairie iNet wireless transmitter near their house is too weak, and the transmission from another is blocked by a stand of trees.

Mr. Mulholland said that Prairie iNet could install wireless transmission equipment onto a water tower near the Hawkins home. Each new wireless site typically costs the company $12,000 to $20,000, not including the $400 it spends on each receiving device in a home or business.

Such an investment, which could serve several dozen farms and rural homes, would have been far more affordable had the company received the federal loan. But with its private funds, Prairie iNet is better off spending that cash in the fast-spreading suburban office parks outside Des Moines.

Daniel Hawkins, a loan officer at a community bank, said he understood Prairie iNet's position but was not sure why the government did not step in to fill the void as it had in the past.

"This is no different than back in the 30's when farms didn't have electricity - people used to have kerosene lights," Mr. Hawkins said. "This is just a matter of keeping you in touch with the world. I think it would be a huge economic benefit for rural areas."
http://www.gadsdentimes.com/apps/pbc...511290359/1011





What's the Buzz? Rowdy Teenagers Don't Want to Hear It
Sarah Lyall



BARRY, Wales - Though he did not know it at the time, the idea came to Howard Stapleton when he was 12 and visiting a factory with his father, a manufacturing executive in London. Opening the door to a room where workers were using high-frequency welding equipment, he found he could not bear to go inside.

"The noise!" he complained.

"What noise?" the grownups asked.

Now 39, Mr. Stapleton has taken the lesson he learned that day - that children can hear sounds at higher frequencies than adults can - to fashion a novel device that he hopes will provide a solution to the eternal problem of obstreperous teenagers who hang around outside stores and cause trouble.

The device, called the Mosquito ("It's small and annoying," Mr. Stapleton said), emits a high-frequency pulsing sound that, he says, can be heard by most people younger than 20 and almost no one older than 30. The sound is designed to so irritate young people that after several minutes, they cannot stand it and go away.

So far, the Mosquito has been road-tested in only one place, at the entrance to the Spar convenience store in this town in South Wales. Like birds perched on telephone wires, surly teenagers used to plant themselves on the railings just outside the door, smoking, drinking, shouting rude words at customers and making regular disruptive forays inside.

"On the low end of the scale, it would be intimidating for customers," said Robert Gough, who, with his parents, owns the store. "On the high end, they'd be in the shop fighting, stealing and assaulting the staff."

Mr. Gough (pronounced GUFF) planned to install a sound system that would blast classical music into the parking lot, another method known to horrify hang-out youths into dispersing, but never got around to it. But last month, Mr. Stapleton gave him a Mosquito for a free trial. The results were almost instantaneous. It was as if someone had used anti-teenager spray around the entrance, the way you might spray your sofas to keep pets off. Where disaffected youths used to congregate, now there is no one.

At first, members of the usual crowd tried to gather as normal, repeatedly going inside the store with their fingers in their ears and "begging me to turn it off," Mr. Gough said. But he held firm and neatly avoided possible aggressive confrontations: "I told them it was to keep birds away because of the bird flu epidemic."

A trip to Spar here in Barry confirmed the strange truth of the phenomenon. The Mosquito is positioned just outside the door. Although this reporter could not hear anything, being too old, several young people attested to the fact that yes, there was a noise, and yes, it was extremely annoying.

"It's loud and squeaky and it just goes through you," said Jodie Evans, 15, who was shopping at the store even though she was supposed to be in school. "It gets inside you."

Miss Evans and a 12-year-old friend who did not want to be interviewed were once part of a regular gang of loiterers, said Mr. Gough's father, Philip. "That little girl used to be a right pain, shouting abuse and bad language," he said of the 12-year-old. "Now she'll just come in, do her shopping and go."

Robert Gough, who said he could hear the noise even though he is 34, described it as "a pulsating chirp," the sort you might hear if you suffered from tinnitus. By way of demonstration, he emitted a batlike squeak that was indeed bothersome.

Mr. Stapleton, a security consultant whose experience in installing store alarms and the like alerted him to the gravity of the loitering problem, studied other teenage-repellents as part of his research. Some shops, for example, use "zit lamps," which drive teenagers away by casting a blue light onto their spotty skin, accentuating any whiteheads and other blemishes.

Using his children as guinea pigs, he tried a number of different noise and frequency levels, testing a single-toned unit before settling on a pulsating tone which, he said, is more unbearable, and which can be broadcast at 75 decibels, within government auditory-safety limits. "I didn't want to make it hurt," Mr. Stapleton said. "It just has to nag at them."

The device has not yet been tested by hearing experts.

Andrew King, a professor of neurophysiology at Oxford University, said in an e-mail interview that while the ability to hear high frequencies deteriorates with age, the change happens so gradually that many non-teenagers might well hear the Mosquito's noise. "Unless the store owners wish to sell their goods only to senior citizens," he wrote, "I doubt that this would work."

Mr. Stapleton argues, though, that it doesn't matter if people in their 20's and 30's can hear the Mosquito, since they are unlikely to be hanging out in front of stores, anyway.

It is too early to predict the device's future. Since an article about it appeared in The Grocer, a British trade magazine, Mr. Stapleton has become modestly famous, answering inquiries from hundreds of people and filling orders for dozens of the devices, not only in stores but also in places like railroad yards. He appeared recently on Richard & Judy, an Oprah-esque afternoon talk show, where the device successfully vexed all but one of the members of a girls' choir.

He is considering introducing a much louder unit that can be switched on in emergencies with a panic button. It would be most useful when youths swarm into stores and begin stealing en masse, a phenomenon known in Britain as steaming. The idea would be to blast them with such an unacceptably loud, high noise - a noise inaudible to older shoppers - that they would immediately leave.

"It's very difficult to shoplift," Mr. Stapleton said, "when you have your fingers in your ears."
http://www.nytimes.com/2005/11/29/in...ent.html?8hpib





Sales Climb at Retailers on Internet
Michael Barbaro

Shoppers, intent on skipping crowded stores and 6 a.m. squabbles over the last bargain laptop, spent 26 percent more money online over the Thanksgiving weekend than they did in 2004, according to figures released yesterday.

Consumers spent $925 million on retail Web sites from Thursday to Sunday, nudging online purchases since Nov. 1 up 24 percent over 2004, according to comScore Networks, a market research firm.

And after a long weekend of pointing and clicking, millions kept right on shopping at work Monday, beginning at 9 a.m., retailers said, validating the holiday shopping season's latest buzz phrase, Cyber Monday.

VisaUSA said that online buying by its cardholders on Monday rose 26 percent, to $505 million from the same day last year.

Little was accomplished at the office as the number of workers who shopped online jumped to 15 million from 11.1 million in 2004.

Cyber Monday "is actually taking place," said Tom Burke, vice president of BarnesandNoble.com, which, along with Staples, said sales on Monday were the biggest this holiday season. "We are just finally putting a moniker on it."

Holiday traffic peaked on Monday, reaching 27.7 million visits, compared with 23.9 million on Friday, and 21 million on Saturday and Sunday, Nielsen Net Ratings, a marketing research firm, found.

The robust start to the online shopping season buoyed retailers, many of which are still fretting over a lackluster weekend in their brick and mortar stores. ShopperTrak, which measures purchases at stores in malls but not online, said sales over the weekend rose a slim 0.4 percent from last year.

It appears the Web snatched at least part of that mall business. Diana Gonzalez, a 22-year-old legal secretary on Wall Street, said scenes of long lines from the day after Thanksgiving "made it unappealing to go to the stores."

So Ms. Gonzalez waited until Monday, when she spent "most of the eight-hour work day" searching for an MP3 player and "dropping hints" to family members by forwarding links to her favorite products.

The most popular sites were eBay, with 11.7 million visitors Monday; Amazon, with 5.6 million; and Wal-Mart, with 3 million.

The name Cyber Monday grew out of the observation that millions of otherwise productive working Americans, fresh off a Thanksgiving weekend of window shopping, were returning to high-speed Internet connections at work on Monday and buying what they liked.

This year, retailers said they saw a significant spike in the number of visits that translated into sales. That shift, they said, indicated that consumers had researched products and prices at brick and mortar stores before heading into the office to make their purchase online.

"People knew what they wanted," said Georgianne K. Brown, executive vice president for marketing at Baby Universe.com That site, which sells gear for babies like toys, strollers and car seats, had a sales increase of 50 percent over the same day last year, even as the amount of time customers spent on the site fell by an average of one minute, she said.

Raul Vazquez, vice president for marketing at Walmart.com, said that "customers were more decisive in their purchases." Three million shoppers visited walmart.com on Monday, a strong showing, but not enough to overtake the Friday after Thanksgiving, when five million clicked onto the site.

To encourage buying, online retailers dangled the same kind of incentives used in their stores. BabyCenter offered a 10 percent discount on select items; CompUSA, free shipping, and Godiva, a gift with purchase. Dozens of stores also sent e-mail messages to customers dangling special deals Monday morning.

Lawrence Cohen, a 32-year-old investment banker from Cedarhurst, N.Y., flipped on his computer Monday and searched for Amazing Amanda, the popular talking doll, for his daughter. Toys "R" Us did not have it. Neither did Amazon.

So he called his wife, who drove to a nearby store, where she snapped up the store's last Amazing Amanda.

So it still pays to shop offline?

"In this situation, yes," Mr. Cohen said.

Ann Farmer contributed reporting for this article.
http://www.nytimes.com/2005/11/30/te...y/30cyber.html





Surveillance

Security Flaw Allows Wiretaps to Be Evaded, Study Finds
John Schwartz and John Markoff

The technology used for decades by law enforcement agents to wiretap telephones has a security flaw that allows the person being wiretapped to stop the recorder remotely, according to research by computer security experts who studied the system. It is also possible to falsify the numbers dialed, they said.

Someone being wiretapped can easily employ these "devastating countermeasures" with off-the-shelf equipment, said the lead researcher, Matt Blaze, an associate professor of computer and information science at the University of Pennsylvania.

"This has implications not only for the accuracy of the intelligence that can be obtained from these taps, but also for the acceptability and weight of legal evidence derived from it," Mr. Blaze and his colleagues wrote in a paper that will be published today in Security & Privacy, a journal of the Institute of Electrical and Electronics Engineers.

A spokeswoman for the F.B.I. said "we're aware of the possibility" that older wiretap systems may be foiled through the techniques described in the paper. Catherine Milhoan, the spokeswoman, said after consulting with bureau wiretap experts that the vulnerability existed in only about 10 percent of state and federal wiretaps today.

"It is not considered an issue within the F.B.I.," Ms. Milhoan said.

According to the Justice Department's most recent wiretap report, state and federal courts authorized 1,710 "interceptions" of communications in 2004.

To defeat wiretapping systems, the target need only send the same "idle signal" that the tapping equipment sends to the recorder when the telephone is not in use. The target could continue to have a conversation while sending the forged signal.

The tone, also known as a C-tone, sounds like a low buzzing and is "slightly annoying but would not affect the voice quality" of the call, Mr. Blaze said, adding, "It turns the recorder right off."

The paper can be found at http://www.crypto.com/papers/wiretapping.

The flaw underscores how surveillance technologies are not necessarily invulnerable to abuse, a law enforcement expert said.

"If you are a determined bad guy, you will find relatively easy ways to avoid detection," said Mark Rasch, a former federal prosecutor who is now chief security counsel at Solutionary Inc., a computer security firm in Bethesda, Md. "The good news is that most bad guys are not clever and not determined. We used to call it criminal Darwinism."

Aviel D. Rubin, a professor of computer science at Johns Hopkins University and technical director of the Hopkins Information Security Institute, called the work by Mr. Blaze and his colleagues "exceedingly clever" - particularly the part that showed ways to confuse wiretap systems as to the numbers that have been dialed. Professor Rubin added, however, that anyone sophisticated enough to conduct this countermeasure probably had other ways to foil wiretaps with less effort.

Not all wiretapping technologies are vulnerable to the countermeasures, Mr. Blaze said; the most vulnerable are the older systems that connect to analog phone networks, often with alligator clips attached to physical phone wires. Many state and local law enforcement agencies still use those systems.

More modern systems tap into digital telephone networks and are more closely related to computers than to telephones. Under a 1994 law known as the Communications Assistance for Law Enforcement Act, telephone service providers must offer law enforcement agencies the ability to wiretap digital networks.

But in a technology twist, the F.B.I. has extended the life of the vulnerability. In 1999, the bureau demanded that new telephone systems keep the idle-tone feature for recording control in the new digital networks, which are known as Calea networks because of the abbreviation of the name of the legislation.

The Federal Communications Commission later overruled the F.B.I. and declared that providing the idle tone was voluntary. The researchers' paper states that marketing materials from telecommunications equipment vendors show that the "C-tone appears to be a relatively commonly available option."

When the researchers tried the same trick on newer systems that were configured to recognize the C-tone, it had the same effect as on older systems, they found.

Ms. Milhoan of the F.B.I. said that the C-tone feature could be turned off in the new systems and that when the bureau tested Mr. Blaze's method on machines with the function turned off, the effect was "negligible."

"We were aware of it, we dealt with it, and we believe Calea has addressed it," she said.

Mr. Blaze, a former security researcher at AT&T Labs, said he shared the information with the F.B.I. His team's research is financed by the National Science Foundation's Cyber Trust program, which is intended to promote computer network security.

The security researchers discovered the new flaw, he said, while doing research on new generations of telephone-tapping equipment.

In their paper, the researchers recommended that the F.B.I. conduct a thorough analysis of its wiretapping technologies, old and new, from the perspective of possible security threats, since the countermeasures could "threaten law enforcement's access to the entire spectrum of intercepted communications."

There is some indirect evidence that criminals might already know about the vulnerabilities in the systems, Mr. Blaze said, because of "unexplained gaps" in some wiretap records presented in trials.

Vulnerabilities like the researchers describe are widely known to engineers creating countersurveillance systems, said Jude Daggett, an executive at Security Concepts, a surveillance firm in Millbrae, Calif.

"The people in the countersurveillance industry come from the surveillance community," Mr. Daggett said. "They know what is possible, and their equipment needs to be comprehensive and needs to counteract any form of surveillance."
http://www.nytimes.com/2005/11/30/national/30tap.html





CDC Plans Flight e-Tracking
Bob Brewin

Battling a pandemic disease such as avian flu requires the ability to quickly track sick people and anyone they have contacted.

In response, Centers for Disease Control and Prevention officials have proposed new federal regulations to electronically track more than 600 million U.S. airline passengers a year traveling on more than 7 million flights through 67 hub airports.

The new regulations, which are available on the CDC's Web site and will be posted for a 60-day comment period in the Federal Register starting Nov. 30, would require airlines, travel agents and global reservations systems to collect personal information that exceeds the quantity of information currently collected by the Transportation Security Administration or the Homeland Security Department.

The regulations will require airlines to collect and maintain in an electronic database the following passenger information:

* First, last and middle names, in addition to suffixes.

* Current home address, including street, apartment number, city, state/province and ZIP code.

* Mobile, home or pager phone numbers.

* E-mail address.

* Passport or travel document, including the issuing country or organization.

* Traveling companions or group.

* Flight information, including date, airline, flight number and return flight details.

* Name, address and phone number of an emergency contact.

The same rules would also apply to passengers on international cruise lines and international ferry companies at U.S. ports, which the CDC estimated carry about 75 million passengers a year.

Dr. Marty Cetron, deputy director of the CDC’s Division of Global Migration and Quarantine, told a press briefing yesterday that the CDC’s push for the new regulations grew out of the agency’s frustrating manual data collection efforts during the SARS crisis in 2003.

Lack of detailed electronic passenger manifests “completely paralyzed our ability to notify people who were onboard together with suspect SARS cases during this epidemic in a timely way,” Cetron said.

The Government Accountability Office, in an April 2004 report, “Emerging Infectious Diseases,” detailed the CDC’s struggle in collecting passenger manifest data during the SARS crisis and recommended that the Department of Health and Human Services’ secretary take steps “to obtain passenger information in a timely manner, including, if necessary, the promulgation of specific regulations.”

In its proposed rule, which has eight sections, the CDC said it also decided to impose the new electronic manifest rules because the airline industry often would only respond to data requests submitted in writing.

The CDC acknowledged the heavy costs the electronic passenger manifest requirements would impose on the struggling airline industry. The CDC plans to collect data at what it calls the point of sales(POS) and estimates this would spread the cost among airlines, travel agents and global reservation systems used by airlines, hotels and travel agents.

But the CDC estimated that even under this scenario, it would cost the airline industry $108.2 million to collect and retain the passenger manifest data. It would cost global reservation systems $2.97 million under the preferred CDC POS plan and travel agents $50.8 million.

The CDC said in its rule that data collection can be streamlined by tapping into passenger data collected by DHS and TSA. But Eastern Research Group, in a regulatory analysis conducted for the CDC said TSA, intends to protect passenger privacy by using any personal information it collects only for counterterrorism.

The Eastern Research Group analysis added that CDC is working to obtain international passenger data from the DHS Advance Passenger Information System, but if it cannot reach an agreement to obtain that data, costs for the CDC data collection effort will increase.

The Eastern Research Group said the CDC may also have trouble obtaining data from Amadeus, one of the largest global reservation systems, because it is foreign-owned and stores passenger information in Germany. This information is covered by German laws on data privacy, and it would require changes in international law to obtain data from Amadeus, the Eastern Research Group analysis said.

Cetron said the CDC would employ rigorous standards of privacy to protect the passenger manifest data it collects, and the proposed rule calls for a one-year retention period instead of 10 years, which is the CDC’s normal practice for data retention. He added that a survey conducted by the Harvard School of Public Health found that 90 percent of the public wants health officials to have the ability to contact them in case of exposure to an infectious disease.

The CDC estimates it will take months to complete the proposed rule making. But CDC director Dr. Julie Gerberding made it clear at the press briefing the new regulations are necessary to “respond to global emerging infectious disease threats and the globalization of infectious diseases and its translocation across borders.”
http://govhealthit.com/article91532-11-23-05-





What Google Should Roll Out Next: A Privacy Upgrade
Adam Cohen

At a North Carolina strangulation-murder trial this month, prosecutors announced an unusual piece of evidence: Google searches allegedly done by the defendant that included the words "neck" and "snap." The data were taken from the defendant's computer, prosecutors say. But it might have come directly from Google, which - unbeknownst to many users - keeps records of every search on its site, in ways that can be traced back to individuals.

Google is rolling out revolutionary new features at a blistering rate, most recently Google Base, which could evolve into a classified ad service, and the Google Book Search Library Project, which aims to put a vast number of books online. Google's stock recently soared past $400 a share, putting its market capitalization ahead of Time Warner and Gannett combined, and the personal fortunes of its founders, Sergey Brin and Larry Page, above $14 billion.

Google is the subject of a new book, "The Google Story," by David Vise and Mark Malseed, that tracks the company's rise from a student project at Stanford through its success in outmaneuvering Microsoft, Yahoo, AOL and other behemoths for Internet dominance. Google has long presented itself as the anti-Microsoft, a company that the digerati regard as a force for good in the technology world.

In many ways, it has lived up to that reputation. But if it wants to hold on to its corporate halo, Google should do a better job of including users in decisions about how their personal information is collected, stored, and shared.

Google has succeeded so extraordinarily because its founders were able to see the future of the Internet more clearly than the rest of Silicon Valley. At a time when "Web portals" - sites that directed users to online services - were seen as the future, Mr. Brin and Mr. Page were convinced Internet searches would be pivotal. They developed technology that was far better than other search engines at sifting through the galaxy of information online. They slapped a typo of a name on their project - a misspelling of "googol," the number represented by a 1 followed by 100 zeroes - got venture capital, and quickly built a company.

Mr. Brin and Mr. Page believed companies should not be able to get better placement on the results page by paying money, something their competitors allowed. Google strictly separated out "sponsored" results, or ads, from search results, and gave up untold millions of dollars in revenue by keeping Google's home page ad free. The company has taken other idealistic positions over its short lifetime, including conducting its initial public offering by a "Dutch auction," so Wall Street would not control it.

Google operates according to two core principles. One is its mission "to organize the world's information and make it universally accessible and useful." The other is its motto, "Don't be evil," which Mr. Brin and Mr. Page take so seriously that they included it in a Securities and Exchange Commission filing. As Google grows and spreads into new areas, these two principles are turning out to be in tension. Google's book search, for example, aims to make books universally accessible in a way some authors regard as dismissive of their rights and illegal.

The biggest area where Google's principles are likely to conflict is privacy. Google has been aggressive about collecting information about its users' activities online. It stores their search data, possibly forever, and puts "cookies" on their computers that make it possible to track those searches in a personally identifiable way - cookies that do not expire until 2038. Its e-mail system, Gmail, scans the content of e-mail messages so relevant ads can be posted. Google's written privacy policy reserves the right to pool what it learns about users from their searches with what it learns from their e-mail messages, though Google says it won't do so. It also warns that users' personal information may be processed on computers located in other countries.

The government can gain access to Google's data storehouse simply by presenting a valid warrant or subpoena. Under the Patriot Act, Google may not be able to tell users when it hands over their searches or e-mail messages. If the federal government announced plans to directly collect the sort of data Google does, there would be an uproar - in fact there was in 2003, when the Pentagon announced its Total Information Awareness program, which was quickly shut down.

In the early days of the Internet, privacy advocates argued that data should be collected on individuals only if they affirmatively agreed. But businesses like Google have largely succeeded in reversing the presumption. There is a privacy policy on the site, but many people don't read privacy policies. It is hard to believe most Google users know they have a cookie that expires in 2038, or have thought much about the government's ability to read their search history and stored e-mail messages without them knowing it.

Google says it needs the data it keeps to improve its technology, but it is doubtful it needs so much personally identifiable information. Of course, this sort of data is enormously valuable for marketing. The whole idea of "Don't be evil," though, is resisting lucrative business opportunities when they are wrong. Google should develop an overarching privacy theory that is as bold as its mission to make the world's information accessible - one that can become a model for the online world. Google is not necessarily worse than other Internet companies when it comes to privacy. But it should be doing better.
http://www.nytimes.com/2005/11/28/op...2fE ditorials





New FCC Report Advocates A La Carte TV Pricing
Marguerite Reardon

Viewers of cable and satellite TV may soon have the option of subscribing to only the channels they want to watch, if the Federal Communications Commission gets its way.

On Tuesday FCC chairman Kevin Martin spoke to a forum, sponsored by the U.S. Senate Commerce Committee in Washington, which has been examining indecency on radio and television. Martin told the forum that the FCC will soon release a report that concludes that offering TV programming a la carte is economically feasible and in the best interest of consumers.

Today, instead of subscribing to the channels they want to watch, cable and satellite TV consumers must buy packages that include a standard set of channels.

The new report, not yet released, contradicts an FCC report published in November 2004, under then Chairman Michael Powell. The earlier report concluded that a la carte and tiered pricing models, such as a family tier, would result in higher cable prices.

"I had many concerns with this (earlier) report, including the logic and some of the assumptions used," Martin said during his testimony to the Senate forum. "I asked the media bureau, as well as our chief economist, to take a more thorough look at the issue. The staff is now finalizing a report that concludes that the earlier report relied on problematic assumptions and presented incorrect and incomplete analysis."

Several parent and consumer advocacy groups, including the Parents Television Council and the Consumers Union, have urged Congress to consider legislation that would require a la carte options for television. These groups believe that allowing consumers to subscribe to individual channels instead of purchasing entire packages would lower costs and provide parents with more control over what programs their children watch.

But cable TV companies have argued that pricing individual channels would result in fewer choices for all consumers. They believe that a la carte pricing would make it too expensive to offer less-popular channels that presently are bundled with popular channels.

Martin said he doesn't plan to push the industry to adopt a new business model, but he suggested that more restrictions on basic cable programming be added if the industry doesn't offer consumers more choice.

"I share your concern about the increase in coarse programming on television and radio today," he told the forum. "I also share your belief that the best solution would be for the industry to voluntarily take action to address the issue. But I do believe that something needs to be done."
http://news.com.com/New+FCC+report+a...3-5975559.html





Hard-Disk Jockey Turns Electricity Into Music
Elinor Mills

SAN FRANCISCO--It's the wee hours on an unseasonably balmy November morning.

Inside the DNA Lounge in the hip South of Market neighborhood, the festively attired crowd attending the annual Scorpio Ball is bouncing and gyrating to thick bass beats. In front of the sweaty bodies and bathed in the bright stage lights is Bassnectar--otherwise known as Lorin Ashton or, perhaps most commonly, just plain Lorin--twisting knobs, pushing buttons and moving sliders to pump out a synthetic symphony.

It's another long session on the stage for a disc jockey pushing the boundaries on computer technology and music composition. In his studio, Lorin--who tours full-time as a DJ and composes, produces and remixes music under the Bassnectar alias--works with specialized software that enables him to replicate any musical instrument, use special effects on voices and modulate and filter sounds beyond recognition.

Like more than a few DJs in the increasingly mainstream techno music scene, Lorin channels his creativity through a computer to create a mishmash of sounds. Just a few years ago, it would have been near-impossible for just one person to do what he's doing in this hot club. But improved computing power and increasingly sophisticated software lets Lorin "cut through" the technology to focus on his music, and to do it without spending tens of thousands of dollars on equipment.

If he were still alive, big band maestro Duke Ellington would no doubt be surprised to see what the young DJ can do with nothing but a computer.

Displayed on Lorin's monitor is music production software called Reason, a virtual studio that lets a composer create a software replica of the kind of hardware that's used for composing: mixers, synthesizers, samplers, drum machines, effects processors and other gear. As Lorin uses his mouse and keyboard, the "knobs" and "buttons" on his virtual gear turn and move. He hits a button and the backside of the virtual units, stacked one on top of the other in an array of "patch bays," shows interlocking colored cable, just like the real cables that connect hardware in physical studios. He can use his mouse to connect and disconnect components.

He puts a vocal track through the system, and an oscillator shows waves representing the sound. He copies, cuts and pastes to create repeating patterns. In another window, he shortens and elongates a series of different colored blocks on a grid to create tracks, much as a conductor instructs different sections of an orchestra to play and stop.

The software lets Lorin automate a historically manual process. "I can have 500 automations happening simultaneously if I want to," he said.

"The technology completely facilitates my creativity," Lorin said. "When I have a sound (in my head) and want to create that, I just make that sound (with the software). I'm able to cut through all the (hassles) and the delays and streamline my creative vision."

He uses Reason like a sketch pad to make an arrangement or sequence and uses Cubase music production software for mixing the music, determining how loud the drums will be, for instance.

"The reason this (composing) is a revolution, musically speaking, is that in the past you had to rent these studios by the hour, or spend tens of thousands of dollars to build your own studio," he said.

"But with Reason you have a veritably unlimited amount of equipment that can be imported into each unique song file, kind of like a virtual shopping spree for virtual gear....Each of these virtual instruments would run anywhere from $200 to $1,000 a piece. This synthesizer, with all the features it has, would be about $1,200," he said. Now "if I want to make a new one, say I want to make a synthesizer, I go to 'create' and click on it and boom, it pops up."

His hardware consists of a Dell 2.6 gigahertz Pentium 4 computer with one gigabyte of memory, five Maxtor 300GB hard drives, Mackie H24 speakers, a Yamaha 01V digital mixer, Technics CD turntables, CDJ-100S Pioneer record turntables, an M-Audio MIDI controller keyboard and an M-Audio Delta 1010 sound card. He also works on a laptop when he's on the road.

"I couldn't make rock 'n' roll without guitars, and I couldn't produce music without at least synthesizers and samplers. But to be as prolific and detailed as I am I must have computers, smoking fast computers," Lorin said. "Yes, I sample humans, like the guy beat-boxing or the vocalist. But all the beats, all the bass, and a huge majority of the sounds are synthesized, even if they sound like an electric guitar or a cello or a violin or a flute....It's all on my computer."

At the University of California, Santa Cruz, Lorin received dual minors in electronic music and education, and majored in community studies, for which he started a music therapy program at a juvenile detention center.

Though he has concentrated on electronic music for the last 10 years, Lorin's influences run the gamut from heavy metal and rock to hip-hop and classical. At the impressionable age of 16, he was banging heads and moshing to "churning" death metal at private parties in the basement of a public library in San Jose, Calif., where he grew up. At 27 years old, that intensity is reflected in his current music, albeit in a more sophisticated way.

"I got attracted to electronic music because it is so much more inherently positive than death metal....And it is grinding and it is sexy. That's the bass," he said. "Nothing sounds fatter than electronically produced beats and bass. No drum set or bass guitar is going to make that perfect blended sound."

"I'm creating songs that mesmerize me....I'm playing music that twists me into a dervish."

Twist he does, and not just his knobs. He bobs in full-body moves and chops the air with his hand to the beat, his long dark hair flying around him like a fine silk scarf.

In Lorin's world, no sound goes unnoticed--including birds chirping in his Berkeley, Calif., neighborhood, a cash register and wind chimes down the street--which makes for music that is multitextured, or "omnitempo maximalism," as he puts it.

Though he doesn't create his music live in performances as some musicians do, Lorin works live with customized songs and mixes them in a fluid way for a spontaneous show that some feel is much more involved and engaging than what typical DJs do.

"DJing inevitably is becoming obsolete, partly because of oversaturation," he said. "It was impressive in the early '90s, but now it's like 'big deal. He's playing two records.' I think a lot of people are concerned more with how to be a DJ than with how to make music and that, I think, is a problem."
http://news.com.com/Hard-disk+jockey...3-5969547.html





Bigger files the better to fight piracy?

New High-Definition DVDs To Use Old Video Technology?
John Borland

As Hollywood readies its new and controversial high-definition DVDs, at least one major studio is leaving some of the most advanced parts of the new disc formats on the table in favor of technology that's more than a decade old.

That could mean disappointment for some of the tech industry's biggest names, particularly if other studios follow suit. Companies such as Microsoft and Apple Computer have been betting that their work on advanced video software formats, called "codecs," will help them sell their own products."

Alphabet soup
The lexicon of video technology often sounds like a foreign language. Here are a few key terms.

Codec A technology for squeezing audio or video into smaller packages for easier storage or transmission. The name is derived from a blend of either "coder-decoder" or "compressor-decompressor."

Moving Picture Experts Group (MPEG) An international industry organization that ratifies standards for audio and video technologies.

MPEG-2 A set of multimedia technologies finalized by the MPEG group in 1994. Typically used as shorthand for the video codec, finalized in 1994, that is used today on DVDs, cable networks and in many other places.

MPEG-4 AVC A later video standard finalized by the MPEG group. Also known as H.264 or Advanced Video Coding.

VC-1 The version of Microsoft's Windows Media 9 video codec submitted to industry standards bodies for use on DVDs and elsewhere. Was temporarily known as VC-9.
It's a little-known but equally intriguing subchapter in the yearlong fight between Blu-ray and HD DVD, two incompatible hardware technologies for high-definition DVDs, backed, respectively, by consumer-electronics manufacturers Sony and Toshiba.

Video codecs (a contraction of "coder-decoders") are important because they determine what quality of video can be squeezed into a given amount of digital storage space, or can be sent over a DSL or cable television line. The codec is an essential part of a DVD.

Microsoft surprised many two years ago when it submitted its Windows video technology, called VC-1, to technical standards bodies in hopes of seeing it appear on the new DVDs. Other technology giants hold patents in a rival advanced format called MPEG-4 AVC.

Last week, studio giant Sony Pictures quietly voted for "none of the above," and took a swipe at the new codec formats. The new advanced codecs aren't immediately necessary for discs released in Sony's high-capacity Blu-ray format, Sony Pictures executives said in an interview with CNET News.com, and the studio would instead use the 11-year-old MPEG-2 video codec used on today's DVDs.

"Advanced (formats) don't necessarily improve picture quality," said Don Eklund, Sony Pictures' senior vice president of advanced technology. "Our goal is to present the best picture quality for Blu-ray. Right now, and for the foreseeable future, that's with MPEG-2."

None of this alphabet soup of acronyms is likely to mean much to the average consumer. Once the discs come out, it will be a matter of matching a Blu-ray disc with a Blu-ray player, or an HD DVD disc with an HD DVD player. The discs should play as simply as they do today, no matter which underlying video format is being used.

But the studios' decisions could mean a great deal to companies that have invested heavily in creating or supporting the new video technologies. Microsoft has been betting that the adoption of its advanced video format by Hollywood studios, cable networks and satellite TV companies will help Windows-based devices capture a bigger share of the home entertainment market.

Correction: This story incorrectly stated the storage capacity of some new DVDs. The smallest standard Blu-ray disc will hold 25GB of data, while Warner Bros. is planning a 9GB disc.

On another side, Apple and many other multimedia companies have put considerable weight behind AVC, the advanced standard ratified by the Moving Pictures Experts Group--MPEG--which created MPEG-2 in 1994.

Why does it matter?
The new, advanced codecs are much better than MPEG-2 at squeezing high-quality pictures into small packages. As Sony Pictures notes, they don't necessarily make a picture clearer, but they allow roughly the same picture quality to be created using only about half the digital storage space.

Sony Pictures says this help simply isn't needed in the new Blu-ray disc format. The smallest standard Blu-ray disc will have 25GB of storage space, plenty of room to hold a high-definition movie and extras, even in the old video format, Sony Pictures' Eklund said.

The studio's decision represents a setback for the advanced codecs and their backers--an even greater one if other studios such as Disney, Paramount or Universal Pictures decide to follow Sony's lead, as some industry insiders predict. And that could happen, particularly in the early days of the new DVDs, when the new codecs are unfamiliar to producers and engineers who have to create the DVD files, some analysts say. Hollywood production staff know how to make a clean DVD picture using the old technology, while the newer formats remain relatively unexplored territory.

"For the first year or so, inertia and familiarity may count more than being more efficient," said Envisioneering analyst Richard Doherty. "The professionals that do this for a living at Technicolor, Disney, Fox, Warner and so on are much more comfortable with MPEG-2."

But so far, studios remain split.

Representatives for Warner Bros. and 20th Century Fox said they were planning to use the new formats. Warner is leaning toward Microsoft's VC-1 format, while Fox is leaning towards the AVC format, the studios said.

Warner has agreed to release movies in Sony's Blu-ray format next year, and plans to use a modified disc that is actually constructed more like an old DVD and is cheaper to produce, holding about 9GB instead of the standard 25GB disc that Sony Pictures and other studios will use. Translation: That could mean cheaper prices for consumers, if the savings in manufacturing costs are passed along.

Nine gigabytes is not nearly enough space to hold a high-definition movie and extras using the old MPEG-2 format. But it will be enough space for a movie encoded with Microsoft's VC-1, or the rival AVC.

"For a lot of video, you could get the same content on media that is much cheaper to manufacture this way," said Ben Waggoner, a video technology consultant.

Warner, like other studios, has not yet put a consumer price tag on its high-definition movies, however.

Satellite TV companies Echostar and DirecTV are close to upgrading their high-definition subscribers to equipment that supports the MPEG-4 AVC codec. For the satellite companies, this will allow them to broadcast more channels in the same space they use today.

Insiders like Waggoner say they expect most of Hollywood to move to the advanced codecs over time, too, as studios adapt to the new production tools, and start putting even more high-definition content on discs to set them apart from their DVD predecessors.

But Sony Pictures made it clear that day is still a ways off.

"We're really trying to set this apart from DVD," Eklund said. "Sony Pictures' belief is that in order to launch the HD format, it should be done without compromises."
http://news.com.com/New+high-definit...3-5974348.html





Service Lets Users Store Music on Internet
Alex Veiga

The founder of the original MP3.com Web site for downloading music has launched a service that lets computer users store their music files on the Internet and retrieve from pretty much anywhere.

Users can synch up their files and playlists to multiple computers, personal digital assistants and, eventually, mobile phones and other devices, said Michael Robertson, chief executive of San Diego-based MP3tunes. It's also a way for music lovers to safeguard their musical collections, in case their computers crash.

"For iTunes (Music Store) users, for example, ... if your computer gets broken or stolen, you can't download that music again," Robertson said.

Oboe costs $39.95 a year and includes unlimited storage and bandwidth. A free version lets users to upload content and stream it to other computers but does not allow for downloading and offline play.

The venture is Robertson's second attempt at bringing to market a digital "music locker" service. In 1999, he bought hundreds of thousands of CDs and made them accessible through MP3.com to people who already owned that CD.

But recording companies sued, and MP3.com ultimately went to the parent of Universal Music. (More recently, CNET Networks Inc. acquired the domain name.)

The Recording Industry Association of America declined to comment Wednesday on the new venture.

Exploiting the Oboe service for piracy might prove cumbersome. Any audio tracks wrapped in copy protection schemes will retain their playback restrictions, and the company says it will try to flag accounts shared by multiple users.
http://hosted.ap.org/dynamic/stories...CTION=BUSINESS





Choosey Kids Choose Illegal File Sharing
John Stith

The scourge of record companies remains file sharing. It comes as no surprise free songs are better than the ones people pay for, particularly to teenagers. A recent study by Jupiter Research confirmed that fact and that it's unlikely to change anytime in the near future. This doesn't bode well for the future of record companies.

The study, done in Europe, showed consumers are three times more likely to go for the illegal downloads instead of the paid ones with about 15% going for the peer-to-peer downloads and 5% digging the legal stuff.

Also not surprising are teenagers doing the p2p downloads more. 34% of the 15-24 age group admitted to sharing music online without paying for it. Not good for record companies.

Mark Mulligan, an analyst from Jupiter said, "The digital youth of today are being brought up on a near limitless diet of free and disposable music from file-sharing networks.

"When these consumers age and increase in spending power they should be come key music buying consumers. Unless the music industry can transition these consumers whilst they are young away from free consumption to paid music formats, be they digital or CDs, they may never develop music purchasing behavior and the recording industry could suffer long term harm."

In the end, it's becoming apparent the music companies need to develop another business model. While the file sharing may be illegal, people will continue to do it. There's little chance of getting caught and the payoff is immediate. While it may be a crime, authorities can't stop major virus attacks or denials-of service. How can they stop millions of young adults from downloading?

Also it's tough to have sympathy for the music industry when giants like Sony BMG spread rootkits with their CDs. When word got out about this, many people wanted to see the big company suffer painfully.

A recent Pew Foundation study noted the same patterns of behavior in the U.S. Young people downloaded a lot of content and most felt that even though it's illegal they felt it was unreasonable to expect people not to do it since it's so easy and that they would continue to do it.

It's a simple fact. It's easier to download a song from a p2p network than any of the options presented. If you want the disc, you either get dressed and head to your favorite retailer or you fish out your wallet for your credit card online. With the p2p, you just type in what you want, wait until it appears, click on it and that's it. You may get a virus occasionally, but with Sony, buying the disc doesn't prevent that either, considering they opened the door for it.
http://www.securitypronews.com/news/...leSharing.html





The End Of Copyright
Ernest Adams

I think we are witnessing the beginning of the end of a major era in world history. It may take fifty years, it may take a hundred, but the age of copyright is drawing to a close. I don’t know if this is a good thing or a bad thing, but it’s inevitable. And I say this as the author of two books and over 75 columns like this one, all copyrighted.

Just 550 years ago this year, a guy named Johann Gutenberg figured out how to make large quantities of metal type in a hurry. He didn’t invent printing—the Chinese had been doing that with wooden blocks for centuries—but he did find a way to make it fast and efficient. Gutenberg changed the world and helped to bring on the Renaissance.

There were no copyright laws at that point. Before the printing press, books in Europe were copied by hand, and having someone go to the trouble of copying your book was about the highest praise an author could get. But with the printing press, the concept of intellectual property was born. Over the next two centuries or so, copying books went from being high praise to being a crime. As printing presses were large and heavy— i.e. difficult to conceal and difficult to move—it wasn’t all that hard to prosecute the offenders. The smaller and faster they got, though, the tougher it became.

I’m old enough to remember when photocopiers became commonplace. At first, there used to be signs in libraries, warning the users against duplicating copyrighted material— any copyrighted material, ever. But people did it anyway. They didn’t think they were doing any harm, and they weren’t planning to sell the copy, they just needed it for their own use.

When enough people feel that it’s OK to do a thing, that thing ceases to be wrong in their own cultural context. You can complain about moral relativism all you like, but the facts are inescapable: that’s how people behave. When the photocopier came along, people simply didn’t think it was wrong to copy a few pages out of a book, even though it was against the law and the authors would have preferred that they buy the whole book. So eventually, the Fair Use doctrine evolved with respect to copyright materials. The law changed. It’s now OK to photocopy parts of books for educational, non-commercial use. In effect, the authors and book publishers had to give some ground in the face of the overwhelming tide of public opinion.

You can see where this is going, can’t you?

On June 27, 2005, the US Supreme Court decided to hold companies that make file-sharing software responsible for copyright infringements perpetrated by the software’s users. Everyone expected that they would rule as they did when Universal City Studios sued Sony over the Betamax in 1984: there were legitimate uses of the technology, and it shouldn't be held responsible simply because it can be used unlawfully. Instead, however, they ruled that file-sharing software actively encourages piracy and the makers should be held accountable.

The Supreme Court's action has done the exact opposite of what MGM and the other content distributors who brought the suit hoped it would. File-sharing software will become open-source and public domain. File-sharing will continue to grow ever more popular, but now there will be no one to sue. The Supreme Court's ruling hasn't even delayed the inevitable; it has actually brought it closer.

There’s no intrinsic reason why someone should continue to get paid for something long, long after the labor they expended on it is complete. Architects don’t get paid every time someone steps into one of their buildings. They’re paid to design the building, and that’s that. The ostensible reason we have patent and copyright law is, as the US Constitution says, “to promote the Progress of Science and useful Arts.” But travesties like the Digital Millennium Copyright Act don’t promote the progress of science; they actively discourage it. So do software and biotechnology patents. The patent system was intended to allow inventors to profit for a limited time on particular inventions, not to allow huge technology companies to put a stranglehold on innovation by patenting every tiny advance they make.

Right now, the music and movie industries are howling and beating their breasts and doing their best to go after anybody who violates their copyrights on a large scale. The fury with which they’re doing it is a measure of their desperation. The Sony rootkit debacle is a perfect example: in an effort to prevent piracy, they secretly installed dangerous spyware into people’s PCs, which itself may have been a criminal act. This was about the dumbest public-relations move since Take-Two lied about the Hot Coffee content, and as with Take-Two, it will cost them vastly more than they could hope to gain from it. Did they really think nobody would find out?

The lawsuits, the spyware, the DMCA: these are the death struggles of an outdated business model. It’s the modern-day equivalent of throwing the Christians to the lions in an effort to discourage Christianity. It didn’t work for the ancient Romans and it won’t work now.

Part of the issue is related to the question of how much money it took to create a copyrighted work in the first place. With books and music, the answer is simply, “not that much.” Forget notions of what their rights may be in law; the idea that a band or an author should be paid millions upon millions over the next several decades for something that it cost them at most a few thousand dollars to make, just feels silly to most people. You’ll notice that it’s the megastars who are fighting the hardest over this in music—Madonna, Metallica, and so on. They’re the ones who stand to lose the most. But the smaller, less well-known groups are embracing new business models for distributing their music. They’re like authors back before the printing press: “Copy my music and listen to it! Please!”

Movies and video games are more problematic. They take millions to make in the first place and a good many of them don’t earn back their investment, even with full copyright protection in place. If we’re going to go on making video games, the publishers have to find a way to make them pay for themselves. One approach is an advertising model, although I’m reluctant to say it because I hate the idea of ads in games. Another is to treat games as a service rather than a product. With broadband distribution, I think this is increasingly likely: you won’t ever have a durable copy of a game, you’ll download it every time you play it. Each instantiation will be unique, personalized for a particular machine and Internet address; encrypted to discourage hacking; and expires after a few hours. After that you’ll have to download a new copy.

Yet another model is the donor model: somebody who is known for creating great work can collect up donations in advance; when he has collected enough to fund the work, he builds it, and releases the game copyright-free when it’s finished. The donors will have paid and everyone else gets it for nothing, but they get it first and perhaps some special recognition for their contribution. I’d be happy to put down $40 two years in advance for a new Sid Meier game, particularly if I knew it would be released copyright- free when it came out. And I bet a lot of other fans of Sid’s work would say the same.

The donors have to trust that the developer will finish it, of course; but this is effectively how freeware development works now. Somebody makes a name for themselves with a piece of freeware; they ask for donations; the donations help to fund further work on a new version. So far it has only been tried on a small scale, but—as the mobile and casual games are showing us—there’s still plenty of demand for small scale games in the world.

(A variant of this system, pioneered by cyberspace engineer Crosbie Fitch, is already in place for music, except that people give pledges rather than donations. When the musician releases the work, she collects all the pledges made towards it. See www.quidmusic.com for details. Credit where it’s due: I first heard about this whole idea from Crosbie.)

In short, there are a heck of a lot of ways to recover the development and marketing costs of video games besides trying to sell individual physical copies and prevent their duplication. That system is awkward, wasteful, and theft-prone. It supports too many middlemen and, like Prohibition, puts money in the pockets of some very nasty gangsters.

Of course, some alternative distribution models still rely on copyright, and publishers will still be trying to prevent people from redistributing their content. But sooner or later that model is doomed. The perceived value of a thing is inversely proportional to the ease with which it can be duplicated. If the public simply refuse to acknowledge that copying books or movies or software is wrong, then in a democracy, it will eventually cease to be wrong. People elect the legislators, and legislators make the laws.

Does the end of copyright mean that books or music or movies or games will die? Of course not. The urge to create is too strong in all of us, and consumers will always be willing to pay for novelty and for excellence. It may mean that nobody gets mega-wealthy any more. What it does mean for sure is that the giant dinosaurs that currently dominate the distribution channels had better learn to adapt or die. There are a lot of fast-moving little mammals in the underbrush eating the dinosaurs’ eggs.

And fifty years from now, kids will be asking, “What does that © symbol mean in this old book, Grandpa?”
http://www.gamasutra.com/features/20...adams_01.shtml


















Until next week,

- js.

















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