Peer-To-Peer News - The Week In Review - November 12th, ’05

[JackSpratts]

Is that an iPod in your pocket or are you just excited to watch me?

Usenet Search Engine Preps Porn For Video iPod
Adam Pasick

It may not be quite what Steve Jobs had in mind, but an online search engine called Guba is set to offer vast amounts of pornography and other video files, specifically tailored for Apple's new iPods.

Guba is a subscription-only search engine that culls video files from the Usenet newsgroups, a huge repository of online content -- much of it adult, pirated, or both.

Beginning this month, Guba will convert video files from Usenet into the format used by the iPod, known as H.264. Apple Chief Executive Steve Jobs launched the video-enabled iPod last month along with deals to sell downloadable music videos and TV shows.

Although Guba offers up a wide variety of video, from the satirical news program "The Daily Show" to Japanese animation, its "erotica" section is likely to be the biggest draw.

"We can kid ourselves, but in the end it's probably porn that people want," said Guba Chief Executive Thomas McInerney. He noted that the site offers a "safe mode" to filter out adult content.

Usenet predates the World Wide Web by more than a decade, and it has developed alongside more mainstream file-sharing networks like Kazaa and BitTorrent.

Guba specifically searches through Usenet's multimedia content, which is not indexed by popular search engines such as Yahoo or Google. It also converts video into standard formats, and lets users stream small versions from its Web site.

At a time when movie studios are hyper-vigilant about online piracy, Guba's easily accessible videos could raise hackles among Hollywood's content owners.

Guba counters that it will strictly abide by the Digital Millennium Copyright Act, which requires search engines to take down any content upon request of the copyright holder. It has also blocked access to music files and videos longer than 70 minutes.

McInerney said Guba is blocking MP3 music files "because there has been so much litigation about music, and the RIAA (Recording Industry of America) has been so aggressive about it." However, Guba does offer TV files, because "the TV guys seem to understand the Internet ... they seem to be the next industry after music to go online," McInerney said.

A search of Guba revealed a wide range of TV shows, including Disney's "Lost" and "Desperate Housewives," which are both sold online at Apple's iTunes Music Store.

McInerney said that Guba, which charges $14.95 per month, is profitable and has about 15 employees.

"What we'd really like to do, and what we'll need to do, is partner with a large content company," he said. "They're getting wise to the Internet, and they're understanding that they can't litigate it away."
http://today.reuters.com/news/newsAr...RTRS&srch=porn





TDC Activates Child Porn Filter
John Tilak

Danish telco TDC has activated a nationwide filter to help fight child pornography on the internet. The filter, which covers TDC customers, has been developed in cooperation with the national police and Save the Children.

The filter works by blocking internet access for internet addresses containing illegal child pornographic material. The national police prepare the list of addresses for TDC. The national police assess the addresses and the content in cooperation with Save the Children, an organization that identifies and gathers information on where there is child porn on the internet at an international level.

The amount of child pornographic material as well as traffic to the illegal web pages on the internet is increasing. In Norway the internet filter daily blocks 10,000–12,000 attempts to get access to addresses with child porn, and in Sweden, 20,000– 30,000 attempts are blocked.
http://www.dmeurope.com/default.asp?ArticleID=10886





Chicago Judge Refuses To Drop R. Kelly Porn Case

A judge on Friday refused to dismiss child pornography charges against Grammy Award-winning vocalist R. Kelly, rejecting arguments that the period in which the offenses were supposed to have occurred was too vague.

Judge Vincent Gaughan of the Cook County Criminal Court said the 14-count indictment against the 36-year-old entertainer would stand and "the evidence is sufficient for Mr. Kelly to prepare a defense."

Prosecutors have a tape showing Kelly having sex with a girl they claim was underage at the time it was recorded, which they say was sometime between January 1998 and November 1, 2000.

Kelly's lawyers had sought to have the charges dismissed, saying the length of the period in which the tape was supposed to be recorded made it impossible for him to defend against because he could not provide an alibi for any specific date.

Kelly, whose 1996 single "I Believe I Can Fly" won three Grammies, was originally indicted on 21 counts of child pornography in 2002. Some of the charges were later dismissed.

Prosecutors contend the girl on the tape was 14 years old at the time of the filming. Kelly, who was not in court on Friday, has pleaded not guilty to the charges and his lawyers have said the girl on the tape will not testify against him.
http://today.reuters.com/news/newsAr...RTRS&srch=porn





Child-Porn Bill Might Get Rewrite
Brooks Boliek

The chief author of legislation that would treat steamy Hollywood films the same as hard-core pornography said Tuesday that he is willing to alter his bill in an effort to get at child pornographers but leave the mainstream film industry alone.

Rep. Mike Pence, R-Ind., said the legislation wasn't intended to target the mainstream movie and television industry but to catch pedophiles who make pornographic visual material at home using underage children.

"I do know there are some concerns in the entertainment industry about reporting requirements being extended," Pence said. "We're in conversations now with the legitimate entertainment industry."

The provision added to the Children's Safety Act of 2005 would require any film, TV show or digital image that contains a sex scene to come under the same government filing requirements that adult films have to meet today.

"We are working with Rep. Pence on keeping the focus on preventing child pornography and eliminating any unintended consequences," MPAA spokeswoman Gayle Osterberg said.

The Senate Judiciary Committee is hoping to vote on the bill Thursday (October 20), industry sources said, but it's unclear whether the Pence amendment is included in the current draft of that bill.

Sen. Orrin Hatch, R-Utah, the primary author of the Senate version, wants to leave controversial items out of the bill to ensure its swift passage, sources said.

But that doesn't spell the end of the Pence amendment because the House and Senate will have to work out differences in the two versions of the bill in a conference committee later.

Documenting Details

At present, any filmed sexual activity requires an affidavit that lists the names and ages of the actors who engage in the act. The film is required to have a video label that claims compliance with the law and lists where the custodian of the records can be found. The record-keeping requirement is known as Section 2257 for its citation in federal law. Violators could spend five years in jail.

Under the provision inserted into the Children's Safety Act, the definition of sexual activity is expanded to include simulated sex acts like those that appear in many movies and TV shows.

The bill, with the Section 2257 provision included, already has been approved by the House and is waiting consideration by the Senate Judiciary Committee.

Industry executives worry that the provision, which is retroactive to 1995, will have a chilling effect on filmmakers. Faced with the choice of filing a 2257 certificate or editing out a scene, a filmmaker might decide it's not worth getting entangled with the federal government and let the scene fall to the cutting-room floor.

It was unclear what changes could be made to the language to catch pedophiles who videotape children and put the illicit films on the Internet. The studios fear that enacting the provision, in effect, puts them in the same legal position as the adult film industry.

While Pence said he wanted to ensure that "children are protected in the creation of entertainment products," studio executives argue that their industry and state laws, particularly in California, already create a safe-child environment.
http://today.reuters.com/news/newsAr...RTRS&srch=porn





Can Hollywood Evade the Death Eaters?
Laura M. Holson

BY all outward appearances, Warner Brothers Entertainment should be having one of its best years ever. For the 21st year in a row, it is expected to show a profit, propelled by a string of television hits like "ER," "The O.C." and "Friends," which is a hot seller on DVD. Warner has also revitalized its DC Comics movie franchise with the summer hit "Batman Begins." And later this month, it will release "Harry Potter and the Goblet of Fire," the fourth installment of a juggernaut that has already brought in $3.7 billion.

But instead of the popping of Champagne corks, the sound you are likely to hear on the Warner lot is that of a cleaver falling. Executives have been poring over thick binders filled with next year's budget, hoping to cut hundreds of millions in studio expenses. Warner Brothers, the television and film production unit of Time Warner, is anticipating a slowdown in growth in its lucrative home video division. And that, combined with rising costs and uncertainty about new forms of digital distribution, has the studio fretting about its growth prospects.

On Tuesday, Warner laid off 260 employees, or about 6 percent of its staff of 4,500 in Burbank, Calif., with more job cuts expected in its overseas offices. And the studio is starting to re-evaluate everything from when and where it markets movies to how and what it pays its stars. Indeed, Warner executives met recently with agents at Creative Artists Agency and warned that top-tier actors, directors and producers would have to be flexible on upfront fees or else movies would be harder to make.

What makes the upheaval so remarkable is that it is happening at a studio that has long been considered one of the most stable television and movie businesses around. But the challenges facing the division, particularly its movie production unit, Warner Brothers Pictures, reflect a bleak new reality in Hollywood. Film lovers are starting to shun theaters, the threat of digital piracy is growing, and the industry is only beginning to grapple with how to deliver new content for cellphones, video games and other portable devices, like the new video iPod.

George Clooney, the actor who has a longtime production deal at Warner Brothers Pictures with the director Steven Soderbergh, put it this way: "If Warner is having its best year and they are going to have cutbacks, what does it mean for the rest of Hollywood?"

Of course, it doesn't help Warner Brothers that Carl C. Icahn, the billionaire investor, has increased his stake in Time Warner and is pressuring the company's management to bolster the stock price by cutting costs.

But the most likely answer to Mr. Clooney's question is this: more trouble for an industry that has had its share. NBC Universal, a part of General Electric, said this summer that it would cut $400 million in its film and ailing television businesses. Two other media companies - Sony and Walt Disney - recently announced losses in their film divisions. A third, Paramount Pictures, which is owned by Viacom, is still trying to find its way after a management shakeup almost a year ago. And earlier this year, DreamWorks Animation and Pixar Animation Studios reported higher-than-expected DVD movie returns from retailers.

Both Barry Meyer, the chief executive of Warner Brothers Entertainment, and Alan Horn, its president, said the division's cuts were not mandated by Time Warner in New York. "We have done it more quietly in the past," Mr. Horn said. "But this time Barry and I said, 'Let's be a little tougher about this.' "

Besides, Mr. Horn said that there was a practical side to the studio's recent corporate soul-scrubbing. "I don't lose sleep over this, and I'm not nervous," he said. "But the challenge to growth is really daunting. If we grew 10 percent that would be great, but we haven't said we expect a certain rate. It is a healthy exercise to stop and look at what is going out the door."

Mainstream, With a Twist

Jeff Robinov has to deal with his share of divas and disasters.

Last year, Mr. Robinov, the Warner Brothers Pictures head of production, replaced the director of "Superman Returns" after he refused to board a plane to Australia days before filming was to start. A year earlier, Warner took a $25 million hit when it moved the set of "Troy" to Mexico from Morocco after studio executives feared that unrest in the Middle East would endanger the cast and crew.

But that's not what is giving Mr. Robinov fits. It's the amount of time he spends trying to figure out which films will attract moviegoers. The industry is in the midst of a major shift as people increasingly turn to video games, big-screen televisions and the Internet for entertainment; movie attendance in the United States is down 8 percent for the year.

"Something is changing in the movie experience," Mr. Robinov said in an interview at his office on the Warner lot last month. "Is it piracy? Is it commercials? Is it the availability of movies? Or are we not creating enough things to drive people out of the home? My biggest fear is having a movie that deserves to be seen, but is not."

Three years ago, Mr. Robinov and Mr. Horn, who oversees the movie division, said they would make about 25 movies a year, including at least four so-called event movies with global appeal. The strategy has largely worked. In 2004, the movie division brought in a record $3.41 billion at the worldwide box office, powered by the likes of "Troy," "Ocean's Twelve" and "Harry Potter and the Prisoner of Azkaban." Last summer, it scored again with "Charlie and the Chocolate Factory" and "Batman Returns." What's more, the studio's two-year-old independent-movie arm also had its first bona fide hit, "March of the Penguins," for which it paid $1.6 million for distribution rights and some voice-overs; the film has brought in $77 million at the domestic box office.

Mr. Robinov attributed some of Warner's recent success to pairing familiar stories with unexpected choices in directors and actors who, not coincidentally, can be cheaper to hire. With 483 movies released in theaters in 2004, many with similar specials effects and tapping a limited pool of big-name stars, he worried that the industry suffers from too much sameness. As DVD sales growth slows, Warner has begun seeking more partners to help finance films, he said. And Mr. Robinov suggested that the studio might make one or two fewer films each year. "When revenue projections change, it puts more pressure on a movie," he said. "With profit margins smaller, the movie becomes harder to justify making."

Mr. Robinov and Mr. Horn were among the studio's executives who took part in the breakfast meeting at Creative Artists Agency and told agents that, in some cases, it could not afford to pay top talent what they had grown accustomed to. "My message was, 'Look, we may be asking people to understand the pressures we are under and that it may have implications to what we can pay,' " Mr. Horn said.

For any studio looking for cuts, that is a logical place to start: a $30 million movie can quickly become a $50 million movie or more if a studio hires someone like Julia Roberts.

As a result, the kind of deal Warner recently struck with Brad Pitt is starting to become more commonplace. Mr. Pitt agreed to take less money upfront for "The Assassination of Jesse James," a $32 million Western that the actor wanted to make.

"We needed help," Mr. Robinov said. "We had to sit down and say, 'To make this movie you have to make financial concessions.' "

Of course, those deals can also limit the studio's rewards because they often include profit-sharing. Mr. Clooney and Mr. Pitt earned more cash on "Ocean's Eleven" by agreeing to take a percentage of the profits than they would have by getting a big upfront fee.

Mr. Clooney said he was willing to take a gamble on roles that interested him. His "Good Night, and Good Luck" cost $7.5 million and wouldn't have been made if he had demanded a $20 million salary for acting in and directing the movie.

"Economically, it is getting harder and harder," Mr. Clooney said. "If studios are forced to pay top dollar, the film gets compromised. You can't get the other actors you want. The edges get knocked off. It is better to participate, because then you get to do the films you want."

Sell, Sell, Sell

"Marketing costs are just skyrocketing, and if we don't address this we are going to put ourselves out of business," said Dawn Taubin, the president of Warner Brothers Pictures' domestic theatrical marketing, speaking about the industry.

Consider this: the average cost to market a film domestically in 2004 was $34 million, roughly half the $64 million average price tag to make one, according to the Motion Picture Association of America. Blockbusters cost even more to market: as much as $60 million domestically and $125 million worldwide.

On Wednesday, Time Warner announced that operating income before depreciation and amortization for filmed entertainment - which includes New Line Cinema, Warner's sister company - was down 30 percent, in part because of movie marketing costs.

These are confusing times for marketers like Ms. Taubin, who have found that spending buckets of money on traditional advertising - including newspapers and television - doesn't corral moviegoers the way it used to. Teenagers are now more spontaneous about their movie choices, which means that studios have a harder time reaching them through magazines and television. Not surprisingly, more and more young people are relying on the Internet to help them decide what to see; according to the studio's own survey, 30 percent of teenagers said they learned about "Charlie and the Chocolate Factory" online. It is conceivable that studios could forsake newspapers altogether someday.

"It's a possibility," Ms. Taubin said. "But it depends on whether there are other forms of advertising to replace it."

A shift has already taken place at major studios: last year, their spending fell for newspaper and television ads in the United States and increased for the Internet and trailers. For Warner's part, it combined its domestic home video and theatrical media buying - which includes television, radio and newspapers - so it would have the flexibility to adjust marketing campaigns and negotiate better rates. The studio has adopted a similar strategy in Britain and Germany, said Sue Kroll, president of international theatrical marketing.

But perhaps the biggest driver of changes in marketing is the speed at which DVD's are coming to store shelves. Some DVD's are now arriving in stores less than four months after a movie hits theaters. Instead of creating two campaigns - one for the theater and another for home video - Warner is considering whether to consolidate its marketing operations under one umbrella.

"Clearly, it makes a lot of sense to create a cohesive marketing plan," said Mr. Meyer, the chief executive.

Many analysts tend to agree. "Warner has to come to grips on its spending," said Richard Bilotti, a media analyst at Morgan Stanley. "They don't need all that to open a film when Wal-Mart is more important."

Indeed, Ms. Taubin said the studio was reviewing costs, even those for the oh-so-important awards season. But that also poses a challenge as competitors are more than willing to foot the bill for an Oscar campaign to snag a favored actor or director away from Warner Brothers.

"The first phase of a campaign can be helpful because it can bring people's attention to a movie," Ms. Taubin said. "But we've all looked at an ad and said, 'What? Are they kidding?' I've even done that."

Just Staying Home

Here is a statistic from Time Warner's Web site that shows the force of Warner Brothers in the home video market: for six of the last eight years, the studio has been No. 1 in DVD and VHS sales and rentals, with a market share of 19.7 percent in 2004.

That is why Hollywood was stunned when Warner Brothers ousted the president of its home video unit two weeks ago and folded it into a newly reconfigured digital distribution division along with online operations, wireless and video games, and emerging technology. For many analysts, it signaled a radical shift - that in an increasingly digital world, DVD's would no longer be the dominant way the studio distributed content.

In the 1990's, Warner was credited with invigorating the DVD format, forcefully marketing its vast library of already released movies and, later, popular television shows to bolster the studio's bottom line. Days before he was replaced, James Cardwell, the president of the home video unit, said, "We've grown accustomed to sales growth rates of 20 percent a year."

The future does not look so promising. Warner's DVD sales growth is expected to slip to a single digit in 2006, Mr. Cardwell said. But even then Mr. Horn is cautious about how high - or low - that number will be. "Much of this is related to new releases and I can't tell," he said.

So why the slowdown now? Some analysts suggest that studios should have been better at forecasting demand. Late adopters of the DVD technology are more likely to rent than buy DVD's, while consumers who bought DVD players early on already own many of the discs they want. The market is flooded with products. According to the DVD Release Report, an industry newsletter, 50,936 titles have already been released on DVD, with an additional 1,055 to be released by the end of next March.

"Home video gave us a cushion that made it easier to grow," Mr. Horn said. "Now that it has leveled off, we don't have the cushion. It's very hard to grow profitability when you are at capacity."

Kevin Tsujihara, the new president of Warner's Home Entertainment Group, said one reason home video is now a part of the new digital group is that the interests of established clients, like Wal-Mart or movie theater owners, need to be balanced with those of consumers, who want content on demand. "There are certain constituencies that need to be part of the discussions," he said. "It needs to be managed and explained to established clients like Wal-Mart to preserve the ecosystem."

Chasing a Moving Target

Don't tell Dan Fellman, Warner's president of domestic theatrical distribution, that moviegoers are fed up with high ticket prices, jammed parking lots or too-long commercials at theaters. "The situation works just fine; it's really not broken," said Mr. Fellman, swatting at the air in his office as if shooing away invisible critics. "I hate to use the old cliché; but every household has a kitchen, yet on Saturday night it's still hard to get a restaurant reservation."

But clichés are clichés for a reason. Hollywood's image of Saturday date night or the family piling into the car for an evening at the multiplex is quickly changing in a wired world. Flat-screen high-definition televisions offer a first-rate theater experience. And consumers are already watching movies or television shows on hand-held devices, like the PlayStation Portable or the video iPod, which can play past episodes of Disney shows including "Desperate Housewives."

Indeed, consumers' quick adoption of new technology has much of Hollywood scrambling to stay ahead in a digital universe. In consolidating Warner's digital distribution efforts into one division, Mr. Meyer, the chief executive, hopes that the studio can exploit opportunities that offer the greatest growth potential, including online games and wireless content.

Still, the studio's first order of business is to protect Warner's theatrical releases, despite pressure from some filmmakers and consumers to offer movies simultaneously over the Internet, on DVD or through video-on-demand.

Movies earn money in several ways: first at the theater, then on DVD and later through sales to network and cable television. But with digital downloads or video-on-demand, studios increase their ability to offer consumers a menu of movies, television shows and games at different times and for a variety of prices. The trick is to explore new, potentially lucrative ways of digital delivery while keeping theater owners and DVD retailers happy.

"The business is made much more complex by windows and audiences that are fragmenting," Mr. Meyer said. "The story for the next 10 years is how content is going to adapt. You won't find your audience in any one place anymore."

Warner is already developing a short animated program based on "The O.C." for cellphones. It has been quietly producing video games for more than a year, although the business has yet to take off. And Mr. Tsujihara, who is overseeing Warner's digital efforts, said international television clients and traditional retailers alike are already asking to extend rights on programming to video-on-demand, pay-per-view and digital downloads in one package.

But Warner, unlike Disney, is still skeptical about offering its movies and television shows for the video iPod or other portable devices. One concern is that the content will be easier to copy and share, compounding the problems the studio is already experiencing with piracy.

"I don't know if we are ready to do that," Mr. Meyer said. "I want to see how the Disney experiment works, how it affects the television affiliates and video retailers. A lot of people are affected by it. We want to be responsive, but everything has the overlay that we don't want to put anything out that has a negative effect on how we manage our digital rights."
http://www.nytimes.com/2005/11/06/bu.../06warner.html





Local news

Movie Theaters Plug Into Passion For Music Concerts
Heather Barr

Nineteen-year-old Danielle Hagstrand has seen the band Green Day in concert eight times.

"It's an obsession," she said.

That's why she was excited about a new opportunity to see Green Day.

On Tuesday, National CineMedia's Branford 12 Theatre held a premiere for the band's latest DVD, "Bullet In A Bible," which is not due in stores until Nov. 15.

The DVD was shown at 68 theaters nationwide. Fans got tantalizing pieces of what they would see when the DVD hits shelves. The show had footage of two of the band's largest live concerts as well as interviews with the band's members and backstage footage.

A couple of theaters in Los Angeles sold out of tickets. In New York City, there was such a strong demand for the event that it was moved a bigger venue.

Hagstrand, a Naugatuck Valley Community College student, had to work at her job at Strawberries Music & Video in Southbury on Tuesday, but said the DVD premiere "is an interesting idea. It is almost like a sneak preview."

Since hatching the idea of showing music events in theaters, National CineMedia has shown a series of concerts, including DVD premieres and live shows. It calls them "Big Screen Concerts."

National CineMedia's theater circuit is made up of Regal Cinemas, United Artists Theatres and Edwards Theatres. About 100 of those movie theaters are equipped for the concert events.

The Branford theater, about an hour away from Danbury, is the only theater in Connecticut equipped to show the concerts.

It might explain why many music fans don't even know the concert events exist.

Danbury High School junior Erin Tarsi loves Green Day, but she didn't know about the Big Screen Concert.

University of Connecticut freshman Jeff Halliwell was also in the dark.

The New Milford resident thinks the idea of a concert or a DVD premiere at a movie theater is "pretty cool. I would definitely see one of those."

And the price for the screening — $10 to $15 — is "a great deal," said Halliwell.

The 18-year-old usually attends a concert every six months. He said while the theater event "would not have the same energy" as a concert, "it would have more of a relaxed feeling."

His friend, Joey Palmisani, 18, who is in the Coast Guard, wasn't aware of the Big Screen Concerts, either, but said "it is the closest thing to being at a concert. It is more life size."

Some, though, want the real deal, not the "reel" deal.

Fifteen-year-old Paige Groski, a Danbury High School sophomore, would rather road-trip 45 minutes to Hartford's Webster Theatre to see a "real concert" than see a concert on the big screen.

"It's stupid," she said.

Seconding Groski, Dustin Macuirzynski, 17, a Danbury High School junior, said he wouldn't waste his time.

"It's weak," he said. "You've got to go and experience it."

National CineMedia's premiere events include a live simulcast of Prince's first show on his Musicology Tour in March 2004.

Some 25,000 fans watched the simulcast in 43 cities across the country.

In February, the first show of Phish's 2004 summer tour "Phish: Live at Coney Island" was shown in theaters. Some 30,000 watched it in 47 cities.

Even dead rockers can have their concerts featured at a Big Screen Concert event — Elvis Presley's '68 Comeback Special DVD premiere was shown in February.

"We tend to attract really good crowds," said Dan Diamond, vice president of digital programming with National CineMedia. "They find it convenient, affordable and fun."

At last summer's "Phish — Live at Coventry" Big Screen Concert event, "fans were streaming out of the theaters literally hugging me," he said. "They said it was the most amazing experience."

Many Phish fans said they didn't get to see their favorite band in person for one reason or another and "it was so cool to have an opportunity to see them on the big screen," Diamond said.

The Big Screen Concert events are not the typical movie environment where people are told to be quiet and sit in their seats.

At country singer Keith Urban's Big Screen Concert event in September, after the first song, fans stood, held up their cell phones and sang and danced, Diamond said.

When the band Kiss had a Big Screen Concert event at a theater in New York City, people threw confetti off the balcony during the band's hit "Rock and Roll All Night," as fans do at Kiss concerts.

"Suddenly it was not a movie theater," said Diamond.

On average, National CineMedia has about two Big Screen Concert events per month.

Diamond said the company is looking into providing more top-level music artists and hopes to expand the Big Screen Concert events.

Danbury High School senior Kim Swenson, 17, thinks "a lot of people would go" if the series were expanded.

Alicia Paliotti, 13, a Newtown Middle School seventh-grader, would enjoy taking in a show: "That's hot," she said.

For concert dates and information log onto www.BigScreenConcerts.com.
http://leisure.newstimeslive.com/story.php?id=76360





Hollywood Finds New Ways To Battle Piracy
Peter Gotting

Pete Morison, a film studies graduate living in Cambridge, England, cannot wait for new episodes of "The Simpsons" to be broadcast on British TV months after their U.S. premieres.

Thanks to file-sharing sites with names such as The Pirate Bay and TVTorrents, he doesn't have to.

"Downloading is pretty common among my friends," said Morison, 23, who has used the Internet to build a video library that includes almost every episode of the cartoon series.

"It's really becoming quite mainstream. You don't have to pay outrageous prices for DVDs."

Morison and millions of others are downloading free, unauthorized copies of the world's most popular TV shows and movies long before they are released on DVD. It is a practice entertainment companies such as Walt Disney Co., Viacom Inc. and News Corp.'s Fox say will cost them $5 billion in revenue this year.

They are fighting back by prosecuting file-swappers and selling content on the Internet.

"There is a recognition they don't want to follow the path that was trodden by the music industry," says Paul Stevens, a law partner specializing in media at Olswang.

"They are looking to stop it in its tracks."

On Oct. 12, Disney said it would offer TV programs such as "Desperate Housewives" and "Lost" for sale on Apple Computer Inc.'s iTunes online store. Files sell for $1.99 and can be viewed on computers or on a video iPod.

"This is the first giant step in making content available to more people in more places more often," Disney Chief Executive Officer Robert Iger said. "It is the future."

Apple says more than 1 million video downloads were bought in the service's first three weeks. With only about 2,000 video files available, the venture will not be a big source of revenue for either company, says Roger Kay, president of market researcher Endpoint Technologies.

"The purpose of it is to put video functionality out there," Kay said. "It's a serious experiment but not a serious business."

Apple spokeswoman Amy Gardner declined to comment on the company's online video sales.

Viacom lets Internet users download free clips and episodes of shows from its Nick youth network and MTV music channels. Visitors to the company's Web site can download games and videos, with ads inserted between segments.

The threat to revenue from free Web file-sharing comes at a time when studios and major TV networks are feeling the pinch. Broadcasters are trying to avoid the fate of record companies, which blame unauthorized downloading for contributing to a decline in revenue.

"Piracy is obviously a growing problem because broadband is growing and peer-to-peer systems are becoming more efficient," said John Malcolm, director of worldwide anti- piracy operations at the Motion Picture Association of America. "Online pirates are proving very resourceful, but so are we."

The MPAA said losses from Internet downloading will grow to $5.4 billion this year from $3.5 billion in 2004.

While U.S. companies continue to search for an Internet-sales strategy, the British Broadcasting Corp. is introducing ways for viewers to watch content online.

The BBC is testing an early version of MyBBCPlayer, which will let U.K.-based Web users download free radio and TV programs for as long as a week after they are broadcast. The software will restrict content to British users.

For now, though, the efforts to close down Internet file-sharing sites will not deter Morison.

"People will just shift to another one that pops up," he said.
http://www.nwherald.com/BusinessSect...3719909722.php





TiVo, Yahoo Collaborate On TV Recording

TiVo Inc. and Yahoo Inc. on Monday launched a service that allows TiVo users to program their digital video recorders remotely using Yahoo's television information Web sites.

While terms of the deal were not disclosed, the companies said that in the coming months TiVo and Yahoo would also offer Yahoo services like photos, traffic, and weather as part of their collaboration.

Shares of TiVo rose 6 percent on Nasdaq, but some analysts questioned whether the deal would drive subscriptions for TiVo, whose DVR service lets users pause live TV and save massive amounts of programming.

Cable and satellite companies are increasingly offering their own video recording services, leading to concerns about TiVo's growth prospects.

"I don't see how it's going to drive new incremental subscribers for TiVo. I don't see how it's going to drive incremental revenue for TiVo," said analyst April Horace of Hoefer & Arnett, who added that the deal still appeared "incrementally positive" for the company.

TiVo's latest results in August showed that additions to its fee-based TV recording service in the second quarter fell to 254,000 subscribers from 288,000 a year earlier.

Key to that drop was a 5 percent decline in new customers from DirecTV Inc., its biggest source of new customers, which has said it plans to cease marketing TiVo's product.

In the Yahoo deal, TiVo hopes it can keep new subscribers and win over more by increasing its offerings and making the service more convenient for users.

Starting Monday, users can log onto any computer and use the Yahoo site to set TiVo to record TV programs and events.

Subscribers with a TiVo Series2 box and a standard Yahoo ID may use the service, the companies said.

Yahoo TV offers such information as show times, program descriptions and cast photographs as well as exclusive content like information from the "Entertainment Tonight" TV program and Mark Burnett Productions, which produces "The Apprentice,"

TiVo shares were up 29 cents at $5.41 on Nasdaq. Yahoo was down 31 cents at $37.56.
http://today.reuters.com/news/newsAr...archived=False





A Journey to the Center of Yahoo
James Fallows

I have never known how to think about Yahoo. I often turn to it for movie listings and driving maps. I have joined numerous Yahoo-based discussion groups, in which I read and occasionally write messages about various recreational interests. Of the more than 400 million Yahoo e-mail accounts worldwide, one belongs to me.

But while I know that eBay is at heart an auction site and Amazon.com a retailer, I have not been sure what Yahoo "is" - apart, of course, from a company with a $53 billion market value and weekly revenue of more than $90 million, whose sites make up the largest single presence on the Internet and, according to company officials, account for 13 percent of all page views.

Last month, I spent a day at the company's headquarters in Sunnyvale, Calif., asking officials what they had in mind. My visit was prompted by the accelerating stream of new Yahoo offerings, often based on acquisitions. Two years ago, Yahoo had no search engine of its own and licensed Google for its searches. One after another, it bought other leading search companies - notably Inktomi, AltaVista and Overture - and built its own new Web search system, which now rivals Google's in speed and accuracy.

Late last year, Yahoo made a deal with the tiny X1 Technologies company, which had created the best desktop search system for files on Windows computers. (X1 rivals the Spotlight desktop search, which is built into the latest Macintosh operating system.) As a stand-alone product, X1 sells for $75 and up; under the name Yahoo Desktop Search, Yahoo's Web site offers its version free.

This year, Yahoo also bought Flickr, a system for storing, sharing and commenting on photographs; a scheduling application called Upcoming; and the mail utility Oddpost, on which it is basing a new e-mail system. Last year, Yahoo overtook Hotmail to become the world's most-used free e-mail service. Its new e-mail system, now running in a limited beta version and scheduled for release next year, applies technology called Ajax, discussed in a previous column, to mimic the speed and power of a normal desktop program.

When I tried the beta release of the new mail program, I was amazed that I could, for instance, quickly view the contents of an e-mail message without opening it, via a "preview pane" like Outlook's - while operating over a normal Web browser. Yahoo, meanwhile, has intensified operations in its offices in Santa Monica, Calif., to bring more music, video and news content to its sites.

What's this all about? After talking with the chief executive, Terry S. Semel, and other officials, I came away with two big impressions. One is that while Yahoo is ever conscious of Google and determined to match it head to head in familiar keyword search, in the long run its plans for search seem quite different from Google's. The other is that Yahoo views the very scale and sprawl of its operations - the seemingly random assemblage of sites and functions, the 200 million active users in more than 20 countries - as a crucial competitive advantage.

The awareness of Google came through in nearly every conversation. I was reminded repeatedly that blind-test panels had found no difference in speed or accuracy between Yahoo's results and those of "another leading company." The chief technology officer, Farzad Nazem, said that Google now had the exciting sheen of being "the newest kid on the block" and the fastest-growing company. "I know all about that, because that's how it was for us back in '99, 2000," he said. "We sneezed; it was like it was from God. I understand the whole thing."

But Mr. Nazem and everyone else really wanted to discuss what lay beyond these keyword searches of the entire Web. "You can look at the evolution of search as a play in three acts," said Jeff Weiner, the senior vice president for search and marketing. "The first is the 'public' Web, where if different people type the same query they'll all get the same results." The second, he said, was purely personal search - finding a file or photo, usually on your own machine.

"The third is the one that we are very interested in," Mr. Weiner said. This is "social" or "community" searching, in which each attempt to find the right restaurant listing, medical advice site, vacation tip or other bit of information takes advantage of other people's successes and failures in locating the same information.

The idea that human judgment can improve a search engine's automatic findings is hardly new. From the dawn of the Web's history - that is, over the last 15 years - companies have invented tools to help users assess the quality and relevance of information, often by relying on others' opinions. Examples include Amazon's user reviews, eBay's feedback ratings and "trusted networks" created on many sites.

What is different is Yahoo's systematic plan to build "community intelligence" into nearly all aspects of its operation - and in turn, to entice users to spend more and more of their time on Yahoo sites, where they can see Yahoo ads. The clearest example, of many I heard about, can be seen at http://myweb2.search.yahoo.com, the beta version of a new search site.

A query from this page will return results from three sources. One is "My Web," or pages each user has marked and asked Yahoo to save for later reference. (These pages are saved by Yahoo itself, on its servers, and don't gum up your own machine.) Another is "Everyone's Web," the general Internet. Finally, there is "My Community's Web," pages marked as interesting or valuable by members of a social network. Thus, a search for information on new cars would bring up normal Web results, but also listings you had seen and wanted to retain, as well as friends' advice on brands and dealers they had tried.

Setting up a social network to provide advice can take time. But Caterina Fake, one of the founders of Flickr and now a Yahoo executive, pointed out that virtually everyone under 30 had already created such networks. What about those not young or hip enough to have done so yet? Eventually, according to Ms. Fake, more users would create networks as the process became easier and more worthwhile. Mr. Nazem said, "We're really about getting the average consumer to move their lives online."

Why should Yahoo's community intelligence be better than others' half-successful earlier attempts? This is where its argument about scale comes in. "It is a key strength that our community is so large," said Mr. Semel, who has seen Yahoo's user base double in his four years as chief executive. With hundreds of millions of users, there is critical mass to create social networks that cover most locations and interests - for instance, a large and active user group among women in the United Arab Emirates.

VAST scale presents its challenges. "You can think about the way people will interact, as you sit in the usability lab, but until you put it in front of very large numbers of real people, you don't really know," Ms. Fake said. "So you have to release products early and often, like perpetual beta."

But the advantages, she said, are greater. More than one billion photos are now available for public view on Flickr. "The value of the system is in the aggregate," she said.

When millions of people place their comments on a billion-plus photos, surprising patterns emerge: what is interesting, what is offensive, what information people want to share about themselves.

I still am not sure how to think about Yahoo. But I will think about it more than I used to.
http://www.nytimes.com/2005/11/06/bu.../06techno.html





Copernicus Remains Believed Found In Poland

Polish archaeologists are all but certain they have located the skeletal remains of Nicholas Copernicus, the 16th-century cleric whose heliocentric theory was to revolutionize astronomy.

Professor Jerzy Gassowski, whose team of archaeologists had been searching for the astronomer's final resting place for over a year, told a symposium on Thursday he believed the remains found beneath an altar of medieval Frombork Cathedral on Poland's Baltic coast were those of Copernicus.

The age of the skull and bones, the place of burial reserved for canons like Copernicus, as well as certain facial features prompted Gassowski to declare he was "97 percent certain these are Copernicus' remains, but only DNA testing could fully authenticate the find."

A computer reconstruction of the skull carried out in cooperation with police forensic experts showed the head of a grey-haired man of 70, the age Copernicus died. It matched the scar above the left eye and broken nose seen in the astronomer's contemporary portraits.

A Catholic priest, he left no known descendants, but a search for the burial sites of his relatives, including his uncle Lukasz Watzenrode, may provide the necessary DNA samples.

In his treatise "On the Revolution of Celestial Bodies," Copernicus asserted that the earth and the other planets revolved around the sun, toppling the then widespread belief that the world was the center of the universe.

The astronomer did not announce his heliocentric theory during his lifetime for fear of antagonizing his Church.
http://today.reuters.com/news/newsAr...rch=Copernicus





DoCoMo To Buy Top Stake In Tower Records

NTT DoCoMo Inc., Japan's largest mobile operator, has agreed with Tower Records Japan Inc. to become the main shareholder in the privately held music retail chain, the two companies said on Monday.

DoCoMo said it will invest 12.8 billion yen for a 42 percent stake, marking its first acquisition of a non-mobile-related retailer.

"We thought this would be the best way to provide users with a convenient and fun service while contributing to revenues," said Takeshi Natsuno, senior vice president and managing director of DoCoMo's multimedia services department.

The deal, which is expected to close by late November, will allow the two companies to integrate in-store promotions with marketing efforts via mobile phones.

Tower Records will also install equipment in all its stores allowing DoCoMo users to make purchases by using their "wallet" phone like a debit card.

In addition, the companies are considering a partnership to offer a music download service.

Tower Records Japan, which has more than 100 outlets in Japan, is independently run and separate from U.S.-based Tower Records, which emerged from Chapter 11 bankruptcy protection in March 2004.

Tower Records Japan said it plans to spend the proceeds of the deal on installing scanners in its stores for DoCoMo's wallet phones and on new businesses.

After the deal is closed, Nikko Principal Investments, the former lead shareholder, will have a 16.5 percent stake. Itochu Corp. <8001.T> and Dwango Co. Ltd. <3715.T> will each hold an 8.1 percent stake.
http://today.reuters.com/news/newsAr...archived=False





US FCC Says No Cutoff For Internet Phone Customers
Jeremy Pelofsky

Internet telephone providers do not have to cut off U.S. subscribers even if they are not provided enhanced 911 emergency service which gives dispatchers their location and phone number, U.S. communications regulators said on Monday.

Internet telephone providers like Nuvio Corp. had worried that the Federal Communications Commission rules adopted in May had required them to suspend by November 28 service for subscribers who cannot receive enhanced 911 (E911) service.

Existing customers did not have to be disconnected, but the FCC said Internet telephone providers would have to cease marketing and accepting new customers in areas where they are not connecting 911 calls with the person's location and phone number, according to guidance issued on Monday.

Nuvio and other providers of Internet phone service, known as Voice over Internet Protocol (VOIP), last week filed challenges with the U.S. Court of Appeals for the D.C. Circuit seeking to stay the November 28 date pending their challenge.

VOIP providers have complained that they face numerous hurdles to offering enhanced 911 service, including accessing the necessary databases operated by other telecommunications providers.

"Our concern is that this marketing restriction will slow down our deployment of E911 because it gives clear incentives to some of our competitors, who control access to the 911 systems, to delay every way possible," said Chris Murray, vice president for government affairs at Vonage Holdings Corp., the biggest U.S. VOIP provider.

The FCC adopted several E911 rules for VOIP in May, including requiring 911 calls be routed to live dispatchers and the caller's location and number be identified. The move followed instances in which customers had trouble reaching help when they dialed 911.

The FCC had eased an earlier requirement that VOIP providers suspend service for those customers who failed to acknowledge the limitations of 911 capability with it.

The Voice On the Net Coalition, which represents many VOIP providers, said that roughly 750,000 customers could be affected if they had to suspend service to those who did not have enhanced 911 service available.

Less than half of the dozen VOIP providers surveyed by the coalition, 42 percent, said they would be able to provide enhanced 911 service to 100 percent of their customers with a primary fixed location by November 28.
http://today.reuters.com/news/newsAr...ECOMS-VOIP.xml





Yak Launches Free Peer-to-Peer VoIP
Press release

Yak Communications Inc. is offering free peer-to-peer VoIP services with the help of CounterPath Solutions Inc., formerly Xten Networks Inc.

Yak says it expects to launch “yakForFree” VoIP service, which will use CounterPath’s eyeBeam SIP softphones, in mid November.

CounterPath says when one of its softphones is connected to a service provider's network, the user can make and receive calls to and from other "on-net" callers or "off-net" callers with the same quality of service as an IP handset.

Calling to landline phones requires a package upgrade, which incurs a subscription fee.
http://www.newtelephony.com/news/5bh8101036.html





Sony's Anti-File-Sharing CD Causes A Firestorm Of Anger
Dwight Silverman

Since the dawn of file-sharing in the late 1990s, the music industry has struggled with keeping its wares from being traded freely.

Recording labels have tried all kinds of approaches, from suing their own customers to Draconian copy protection to changing formats. The one that has worked the best — surprise! — has been to offer a low-cost way to buy music that allows users to do pretty much what they want to do with the tunes they purchase.

It's almost as though there's a Good Side and a Dark Side to the musical force. Over time, you'd think the business would get that the Good Side will win more converts.

That is, until you see something like the strange case of the Sony rootkit.

On Halloween, a developer with an Austin-based software company posted on his blog a detailed report on a troubling discovery — a CD from Sony BMG had installed software on his PC that uses the same technique for hiding itself as the most pernicious type of spyware.

Mark Russinovich of Sysinternals also discovered that the software, known as a rootkit, could then be used by the creators of viruses and worms to hide their own malicious payloads.

A rootkit works at the very lowest levels of the Windows operating system to cloak files. Spyware purveyors use the technique to hide their code from programs designed to find and remove it.

In Sony's case, the rootkit was part of a media player designed to restrict how a CD's tunes are played, stored to a computer's hard drive or copied, and was used to hide those files, making it difficult to get around the protection.

The software was installed when the CD's buyers — in Russinovich's case, Van Zant's Get Right with the Man — first tried to play the disc on a PC. The disc can't be used in a PC without Sony's player.

The rootkit hid the software by looking for a particular sequence of characters in the name. Any files that included the sequence were cloaked.

Russinovich had to jump through hoops to find the software, trace its source and remove it. When he did, he found the process disabled his CD drives, which were no longer visible in Windows Explorer.

His report, at http://www.sysinternals.com/blog/200...al-rights.html, concluded:

"The entire experience was frustrating and irritating. Not only had Sony put software on my system that uses techniques commonly used by malware to mask its presence, the software is poorly written and provides no means for uninstall. Worse, most users that stumble across the cloaked files ... will cripple their computer if they attempt the obvious step of deleting the cloaked files.

"While I believe in the media industry's right to use copy protection mechanisms to prevent illegal copying, I don't think that we've found the right balance of fair use and copy protection, yet. This is a clear case of Sony taking DRM (Digital Rights Management) too far."

Russinovich later discovered the software also phoned home, sending a CD identification number back to Sony as it requested update album art and lyrics for the player.

The report resulted in an online firestorm. Russinovich's post drew a strong reaction, with the words "I'm never buying a Sony product again" popping up on blogs and message boards across the Net.

A poor response

Sony tried to quell the furor. Its representatives pointed out that only about 20 CDs have this particular type of copy protection, designed by England-based First 4 Internet, and that newer CDs would have a different way of cloaking the copy protection.

First 4 Internet Chief Executive Mathew Gilliat-Smith in an interview called fears of spyware makers exploiting the rootkit "theoretical," although Russinovich in his report had shown how easy it was to do.

Sony and First 4 Internet issued a new version of the software to remove the cloaking qualities. Initially it was available only if you agreed to install a browser plug-in; First 4 later posted a version that did not require the plug-in.

But it did not remove the Digital Rights Management software itself . To do that without damaging the computer, users had to file a request through Sony's tech support. The software does not include an uninstaller, considered by Microsoft to be a fundamental part of any Windows program.

John Wagner, a Houston-based public relations executive who authors a blog about customer relationships in the online world, wagnercomm.blogspot.com, said Sony's making a classic mistake — doing the minimum and hoping the story will just go away.

"Twenty years ago, it would just go away," Wagner said. "But today, that is just not going to happen. The consumer has a more powerful voice through blogs, the Internet and the sharing of information in a way that spreads that information like wildfire."

A textbook case

And it's a lesson the technology industry should have learned long ago. It has a textbook case to draw from.

In 1994, Intel became an Internet laughingstock after it was announced that the initial version of the Pentium chip had a flaw in the way it handled numbers. The flaw was minor, and Intel felt its effects would not be felt by most users. But the folks who it would have been affected — software developers, scientific users and other hardcore techies — were the ones who cared the most, and they had access to the megaphone that is the Internet.

Intel initially refused to replace the chips, a fact picked up by the mainstream media. The company became the butt of jokes, such as: "At Intel, quality is job 0.999999998."

Intel eventually saw the light, offering to replace the defective chips.

That's what Sony should have done immediately — offered buyers of the copy-protected CDs a non- protected replacement disc. And it should immediately have posted software that removed the DRM software without making users jump through hoops to get it.

Don't hold your breath. Gilliat-Smith said he believes Sony and First 4 did the right thing by issuing a patch to fix the "theoretical" problem. And Sony spokesman John McKay said to combat music piracy, Sony BMG eventually hopes to copy-protect all its CDs.

"This is about saving jobs," McKay said.

Of course, customers will ultimately decide whether to put up with it — and if they reject ham-handed schemes like this one, it could cost Sony even more jobs than casual ripping and burning.

With the CD format on the decline in favor of digitally distributed music, in the end it may be moot.
http://www.chron.com/cs/CDA/ssistory...siness/3445666





For instance…

Italian Police Asked to Investigate Sony DRM Code

Also, Computer Associates brands Sony code 'spyware.'
Robert McMillan

The fallout continues over Sony BMG Music Entertainment's controversial XCP copy protection software, with an Italian digital rights organization now taking the first step toward possible criminal charges in the matter.

Separately, security vendor Computer Associates International said today it is now classifying Sony's software as spyware and will begin searching for and removing XCP with its antispyware software, starting on November 12.

A group based in Milan called the ALCEI-EFI (Association for Freedom in Electronic Interactive Communications - Electronic Frontiers Italy) filed a complaint Friday about Sony's software with the head of Italy's cyber- crime investigation unit, Colonel Umberto Rapetto of the Guardia di Finanza.

Complaint Details
The complaint alleges that XCP violates a number of Italy's computer security laws by causing damage to users' systems and by acting in the same way as malicious software, according to Andrea Monti, chair of the ALCEI-EFI. "What Sony did qualifies as a criminal offense under Italian law," he said in an e-mail interview.

Should police determine that a crime has been committed, prosecutors will be required to begin criminal proceedings against Sony, Monti said.

Sony declined to comment on the story. XCP, used on about 20 of the company's music titles, according to Sony, prohibits Windows users from making more than three copies of any XCP-protected CD. The software does not run on non-Windows operating systems such as Mac OS or Linux.

Within the next seven days, ALCEI-EFI also plans to ask the European Union to investigate the matter, Monti said. "The irony of the case is that pressure from industry lobbies ... have led to weird legislation in Italy that treats copying as a criminal offense," he said. "By spreading a virus-like anticopy device (entertainment companies such as Sony) become the criminals under another, more reasonable, law."

Awash in Criticism

Sony's use of XCP has been widely criticized over the past week, since it was first revealed that the software uses many of the same techniques as spyware and computer viruses to disguise its existence. XCP's developer, a U.K. company called First 4 Internet, has said these techniques were necessary in order to prevent illegal copiers from circumventing the digital rights management (DRM) software, but critics say First 4 has gone too far and that the product may be a security risk.

Sam Curry, vice president of eTrust security management with Computer Associates, said the company will direct its eTrust PestPatrol product to remove XCP from customers' PCs. "We have a scorecard, and there are 22 points that we go through examining how the software behaves," he said. "In this case, XCP is falling down."

Search and Remove

XCP installs itself without adequately notifying users of what it will do to their computers, it is too difficult to uninstall, and it also appears to be in secret communication with Sony servers, Curry said.

Even a software patch released by Sony last week to decloak the hidden digital rights management software counts as spyware, Curry added. "Unfortunately the patch also fails our scorecard," he said. "It fails to notify you about what it's doing, and it can cause the system to crash."

Though XCP uses sophisticated tricks to hide itself from system tools, it can actually be circumvented by disabling the Windows Autorun feature, which launches XCP as soon as the CD is placed into a drive, Curry said.

Autorun can be turned off using Windows system tools, but Curry also suggested a much simpler technique to temporarily disable the feature: Holding down the left shift key when installing an XCP-protected CD.

However, CA has instructions on how to disable the Autorun function here.
http://www.pcworld.com/news/article/0,aid,123454,00.asp





Sony's Antipiracy May End Up On Antivirus Hit Lists
Matt Loney

Antivirus companies are considering protecting their customers from the digital rights management software used by Sony on some CDs.

Kaspersky Lab has classed Sony's DRM software as spyware because, among other things, it can cause crashes and loss of data, and it can compromise system integrity and security.

Explaining its decision, Kaspersky said it used the definition of spyware provided by the Anti-Spyware Coalition. Sophos, another security company, is similarly scathing of Sony and is calling the software "ineptware."

The issue reaches much further than the individual PCs of those users who buy particular Sony CDs, the antivirus companies say. The DRM software uses what is known as a "rootkit," which means that it is invisible to the operating system, to most antivirus and security software and to IT departments trying to cope with security on desktop and notebook computers.

Furthermore, say the antivirus companies, the rootkit software can be exploited by hackers and viruses and used to cloak any file from the operating system. A rootkit takes partial control of a computer's operating system at a very deep level in order to hide the presence of files or ongoing processes.

"The Sony rootkit can be used to hide any files from the operating system, so we think the way that Sony has implemented this is somewhat flawed," said Graham Cluley, the senior technology consultant at Sophos. "The danger is that other malware (malicious hardware) may come along which exploits the Sony rootkit."

Due to what Cluley said is a lack of malicious intent on Sony's part, Sophos is not defining the rootkit itself as malicious software, preferring instead to refer to it as "ineptware."

"We don't really believe this is malware, and so we don't currently detect it," Cluley said. However, he said detection for rootkits like that used by Sony will be built into Sophos Antivirus version 6, due out in 2006.

"This is potentially unwanted software, and we will add the capability to detect the bad stuff and give the enterprise more control over what is on their PCs," he said. "This software is the sort of thing we will consider adding."

David Emm, a senior technology consultant at Kaspersky Lab, said he was also dismayed to see Sony using rootkits. "We don't have an issue with Sony taking steps to protect its legal rights and licensing," he said. "But given that over the past 12 to 18 months we have seen an increasing use of rootkits (by criminals), to see similar technology being implemented from someone supposedly on the good side is particularly worrying."

Use of techniques that are usually the preserve of criminals by companies such as Sony are causing problems to antivirus and security companies. "Previously it has been possible to say a rootkit equals a bad thing, but now we're having to deal with things that are not so clear cut," he said.

Kaspersky uses the term "riskware" to define programs that behave like malicious software but may not have malicious intent behind them. Although it attempts to detect riskware, so that users can be asked what they would like to do with it and so that policies can be created, it does not currently detect the rootkit used by Sony's DRM. "At the moment this is still under discussion and no final decision has been made," Emm added.

Sony's use of techniques usually employed by hackers and virus writers makes it much more difficult to differentiate between malicious and benign software, said Kaspersky on its viruslist.com blog. "Rootkits are rapidly becoming one of the biggest issues in cybersecurity. Vendors are making more and more of an effort to detect this kind of threat. So why is Sony opting to use this dubious technology?" the Kaspersky posting said.

"Naturally, we're strongly against this development," it continued. "We can only hope that this message comes across loud and clear to the people who have a say in this at Sony and elsewhere. We'd hate to see the use of rootkits becoming a habit among mainstream software manufacturers when there are so many security and ethical arguments against such use."
http://news.com.com/Sonys+antipiracy...3-5933428.html





Viruses Exploit Sony CD Copy-Protection Scheme
AP

A controversial copy-protection program that automatically installs when some Sony BMG audio CDs are played on personal computers is now being exploited by malicious software that takes advantage of the antipiracy technology's ability to hide files.

The Trojan horse programs -- three have so far been identified by antivirus companies -- are named so as to trigger the cloaking feature of Sony's XCP2 antipiracy technology. By piggybacking on that function, the malicious programs can enter undetected, security experts said Thursday.

``This could be the advanced guard,'' said Graham Cluley, senior technology consultant at the security firm Sophos. ``We wouldn't be surprised at all if we saw more malware that exploits what Sony has introduced.''

The copy protection program is included on about 20 popular music titles, including releases by Van Zant and The Bad Plus, and disclosure of its existence has raised the ire of many in the computing community, who consider it to constitute spyware.

Sony BMG Music Entertainment and the company that developed the software, First 4 Internet, have claimed that the technology poses no security threat. Still, Sony posted a patch last week that uncloaks files hidden by the software.

On Thursday, Sony released a statement ``deeply regretting any disruption that this may have caused.'' It also said it was working with Symantec and other firms to ensure any content-protection technology ``continues to be safe.''

Neither Sony spokesman John McKay nor First 4 Internet CEO Mathew Gilliat-Smith returned messages seeking additional comment.

Windows expert Mark Russinovich discovered the hidden copy-protection technology on Oct. 31 and posted his findings on his Web log. He noted that the license agreement that pops up said a small program would be installed, but it did not specify it would be hidden.

Manual attempts to remove the software can disable the PC's CD drive. Sony offers an uninstallation program, but consumers must request it by filling out two forms on the Internet.

``What they did was not intentionally malicious,'' Cluley said. ``If anything, it was slightly inept.''

The copy-protection software, which Sony says is a necessary ``speed bump'' to limit how many times a CD is copied, only works on Windows-based PCs. Users of Macintosh and Linux computers are not restricted.

The viruses also only target Windows-based machines.

The infection opens up a backdoor, which could be used to steal personal information, launch attacks on other computers and send spam, antivirus companies said.

Sony also is facing legal headaches. On Nov. 1, Alexander Guevara filed suit in Los Angeles County Superior Court seeking class action staus. He claims Sony's actions constituted fraud, false advertising, trespass and violated state and federal laws barring malware and computer tampering.

His attorney, Alan Himmelfarb, did not immediately return calls seeking comment.

The Electronic Frontier Foundation, an online civil liberty group, said it is hearing from people who have run into problems with the copy protection software. It is considering filing its own lawsuit, said EFF staff attorney Jason Schultz.

``You can't uninstall it, you can't find it, and it's vastly more invasive in terms of privacy and personal property than any other (digital rights management) program to date,'' he said.
http://www.siliconvalley.com/mld/sil...y/13134753.htm





DRM - Digital Rights Minimization
Mike Evangelist

The latest episode in the war between music companies and their paying customers (the one where Sony decides it’s OK to surreptitiously take over your PC so you can’t make a copy of the music you thought you bought from them) has finally pushed me over the edge.

I’ve been a big buyer of prerecorded ‘media’ for over 35 years. I have two or three hundred vinyl LPs, several dozen 45’s, a hundred or so audio cassettes, and roughly 60 prerecorded reel-to-reel tapes. They are jammed in my closet with a couple hundred VHS tapes, 450 CDs, and 500-odd DVDs. (Mercifully, I skipped the 8-track, Betamax and laserdisc formats.)

I have to believe the record companies and movie studios would consider me a good customer. But with every day that passes it becomes more and more obvious that the greedy bastards who run these media companies prefer to treat me (and all their customers) like criminals. They continually expect us to pay more for less, and even then they are not satisfied. They want to pretend to ‘sell’ us their product, but they don’t want us to actually have it. Well I’ve had enough.

From this day forward I will never spend a another dime on content that I can’t use the way I please. If I can’t copy it to my hard drive and play it using the devices I want, when and where I want, I won’t be buying it. Period.

They can all take their DRM, and their broadcast flags, and their rootkits, and their Compact Discs that aren’t really compact discs and shove them up their bottom-lines.
http://writersblocklive.com/?p=62





Insurer Launches $10 Million Open-Source Policy
Martin LaMonica

Three organizations have partnered to offer corporate customers some insurance against the legal risks that can stem from the use of open-source software.

Insurance underwriter Kiln, which is a Lloyd's of London division, and Miller Insurance Services on Monday said they will offer open-source compliance insurance. New York-based Open Source Risk Management will be the exclusive risk assessor.

The insurance will cover up to $10 million in damages, including profit losses related to noncompliance with an open-source software license. The policy could, in some cases, cover the cost of repairing code that was found to infringe on open-source licenses such as the General Public License, which is used with the Linux operating system.

The insurers said more than 30 legal claims in the last two years have involved infringements on open-source licenses. In each case, the plaintiffs were able to restrict the use of their code.

"The emerging open-source model of worldwide collaborative technology development introduces novel business risks that traditional insurance products can, but have not, addressed," said Matthew Hogg, an underwriter for Kiln Risk Solutions.

Daniel Egger, CEO of Open Source Risk Management, said many companies inadvertently expose themselves to legal risks when they use open- source software.

In particular, companies may infringe on copyright laws when distributing their own software--which could include open-source products--to business partners or customers, Egger said.

"Allowing people to log on to your database is not distribution. But sending them a CD-ROM with a copy of software that lets them do data analysis on that database would be," he said.

Egger said his firm advises clients how to sidestep violations, which are infrequent. However, more and more corporations are using open-source software. "Open source itself is not separable," he said. "It's hard to imagine an enterprise system without tight links to open-source components."
http://news.com.com/Insurer+launches...3-5924112.html





Breathalyzer Source Code Must Be Disclosed
Declan McCullagh

Florida police can't use electronic breathalyzers as courtroom evidence against drivers unless the innards are disclosed, a state court ruled Wednesday.

A three-judge panel in Sarasota County said that a defense expert must have access to the source code--the secret step-by-step software instructions- -used by the Intoxilyzer 5000. It's a simple computer with 168KB of RAM (random access memory) that's manufactured by CMI of Owensboro, Ky.

"Unless the defense can see how the breathalyzer works," the judges wrote, the device amounts to "nothing more than a 'mystical machine' used to establish an accused's guilt."

The case, one of the first to test whether source code used in such devices will be divulged, could influence the outcome of hundreds of drunk-driving prosecutions in the state. So far, Florida courts have been split on the topic, with some tossing out cases involving breath alcohol tests and others concluding that the information about the machine's workings should remain a trade secret.

In one similar 1988 case, Florida defense attorneys discovered that the police had mechanically modified a breath test machine so much that its results were no longer valid and could not be admitted as evidence in a prosecution.

The Sarasota judges didn't require the public disclosure of the source code. Rather, they ordered that it must be given to a defense expert who will keep it in confidence and return it when his analysis is complete. That analysis could show bugs or reveal that the code was modified after the Intoxilyzer was certified for use by the state--meaning the device's output could not be used in court.
http://news.com.com/Breathalyzer+sou...3-5931553.html


















Until next week,

- js.


















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