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Mediatechnics and The Amergence Group have entered the copy protection business.
http://biz.yahoo.com/iw/080610/0405236.html
http://biz.yahoo.com/iw/080616/0407070.html
Macrovision has left the copy protection business.
http://www.macrovision.com/company/newscenter/pressreleases/1434_8469.htm
Felten (with help from the Electronic Frontier Foundation) sued the groups, requesting a declaratory judgement ruling that their publication of the paper would be legal. The case was dismissed for a lack of standing with the judge noting that:
"The irony is that the defendants having said we're not going to sue you, the plaintiffs decided apparently to catalyze this action by bringing a suit themselves...
The plaintiffs liken themselves to modern Galileos persecuted by authorities. I fear that a more apt analogy would be to modern day Don Quixotes feeling threatened by windmills which they perceive as giants. There is no real controversy here.[1]
http://www.slysoft.com/en/
This is a link to another innovative private sector solution! DRM removal tools. Don't like the DRM that came with your digital content? Simply remove it. You still have the right to it because you bought it, the producer has their (was your) cash and the DRM vendor is getting paid. Now everyone is happy, right???
Mr. Fence
9/8 - Major Software Pirate Receives Record Prison Sentence
http://www.siia.net/press/releases/iBackups_sentencing.pdf
The following commentary appears courtesy of Billboard Magazine
Setting the record straight on DRM
Commentary by Dr Richard Gooch, Deputy Director, Technology IFPI
February 3rd
As IFPI's recently-published Digital Music Report shows, these are incredibly exciting times to be in the digital music business. New services are burgeoning on the internet and on mobile. Everywhere you look there are operators springing up with different products and different kinds of deals on offer. A plethora of mobile services is emerging. There are subscriptions, previews and downloads. And a new generation of licensed P2P is beginning to appear.
Music services are proliferating, More than 300 services worldwide; 2 million tracks available; 420 million single tracks downloaded in 2005, twenty times more than two years ago.
Something crucial is underpinning this wave of activity. It has an unlovable title, and an even more unlovable acronym; Digital Rights Management (DRM). Getting it to work in the marketplace is probably the most pressing issue today in the development of today's flourishing digital music business.
DRM is driving new flexible music services for consumers in the digital market. It has proved to be the framework that has allowed today's thriving legal music scene to flourish, making more music available to the public than ever before in more formats and distribution channels.
It is DRM that gives consumers different options and helps different kinds of services compete. Look at the differences between the services on offer today. The biggest - like iTunes - are taking digital music to the mainstream, but there are hundreds of smaller services too. Some are deliberately small and cater to a niche audience. Some are small because they are just starting out. Mobile is huge with ringtones but mobile music and video is just starting out. This diversity is great for the market and for consumers.
Take away DRM and you take away these options. There could be no subscription services. No iTunes. No Napster to Go. No super-distribution models to look forward to. Without DRM it would be very difficult to monetise digital music, and to invest in the creation of future music.
Some artists and record companies don't want to use DRM - and that is fine if it is their choice and they think they can get value from their music that way. In some circumstances I can see that it is possible to gain promotional value by giving MP3s away or to have paying customers for unprotected files. That should be a matter of choice to suit the circumstances.
The digital age has broken the mould and DRM is driving it forward. Many people want to cherry pick individual tracks, burn CD-Rs, rent tunes, subscribe to a service, download and keep music on their PC or buy ringtones for their mobile phone. DRM allows all this to happen while ensuring that the fundamentals of the music industry remain sound.
Contrary to what some may think, DRM is not a new idea. It has been around for more than a decade. For software and games it was the early 1980s, on computers like the original IBM PC and the Commodore-64. Apparently Macrovision started with protecting VHS video tapes in 1985. They protected billions of tapes. DVD was launched in 1996 (with copy protection) and became - according to the Consumer Electronics Association - the most successful electronics product ever. Today, DRM has already been widely accepted in the marketplace.
DRM is sometimes misunderstood and sometimes misrepresented. Let's look at the some of the myths put around.
First, no record company is in the business of blocking access to content - that way leads to commercial suicide. DRM protected content, like everything else made available to the public, is subject to the laws of supply and demand; if DRM is badly implemented consumers will vote with their feet and reject it. This means that record companies and others will have to deploy DRM in commercially sensible ways.
Second, the record industry does not use DRM as a 'Big Brother' tool to inappropriately gather personally identifying information on consumers. The use of DRM to ensure that the right people get paid for consumption of music does not over-ride laws about privacy and consumer protection. Indeed, DRM can ensure that they are obeyed.
Third, while lack of 'interoperability' between services and devices is currently a frustration for consumers, this is primarily an issue for technology companies. Users should be free to select among a wide range of devices and services from different suppliers while being safe in the knowledge that these will work properly together. The fact that this is not always the case is dependent on technology providers who must act in order for their systems to work together.
DRM has a crucial role in protecting music as well. It can prevent a download becoming an upload to the rest of the world. Without taking away from the rights of the consumer, it ensures the flow of payment to rights holders that feeds the virtuous circle of investment and creativity that is at the core of the music business.
The theme of a recent forum I spoke at was entitled - Digital Rights Management: "Copy Protection vs. Consumer Frustration". Nothing better illustrates the misguided notions about DRM, nor neglects its key role as an enabler of great music services, than this completely false dichotomy.
The real issue is just getting DRM to work properly; to work for rights holders, technology firms and consumers. It should continue to serve quietly and unseen as a trustworthy, reliable backroom worker - working in the background to support the music services that are centre stage in the marketplace.
DRM is the key to our successful digital music business. It enables consumers to get exactly what they pay for, and to pay for exactly for what they get. But to work in the future DRM will need support from our technology partners and from governments. It's time to get beyond the unlovable acronym and recognise the integral role DRM has to play in a flourishing future digital music market.
© IFPI. All rights reserved.
Macrovision recognized as having best DRM and eCommerce solutions by S/W Industry
Macrovision’s FLEXnet Publisher and RightCommerce Recognized with SIIA Codie Awards for Best Digital Rights Management Solution and Best eCommerce Solution
Macrovision’s FLEXnet Publisher and RightCommerce solutions scored highly in the Software & Information Industry Association's 21st Annual CODiE Awards. The Codie Awards holds the distinction of being the only peer-recognition awards program of its kind in the industry, providing a unique opportunity for companies to earn praise from their competitors.
Judged the best digital rights management (DRM) solution in the industry—by representatives from the software and information industry trade press, mainstream technology writers, analysts, consultants, and subject-matter experts—Macrovision’s FLEXnet Publisher enables software and hardware vendors to increase revenue and reduce operational costs by flexibly pricing, packaging, protecting, and updating their product offerings. With FLEXnet Publisher, software producers can minimize piracy and recapture revenue lost to unintentional, unauthorized use. The FLEXnet Operations module saves software producers money by streamlining their back office operations and effectively managing the entire software licensing lifecycle. With FLEXnet Operations, software companies can increase their renewal revenue while lowering costs by creating automated, repeatable processes with fewer errors and minimal need for manual intervention.
RightCommerce—judged the best eCommerce solution in the industry—allows media, entertainment, and software companies to license and sell digital goods and services including text, audio, video, streaming media, games, and applications. It also offers out-of-the-box reports for business intelligence, as well as a robust customer-care system.
“This 21st Annual CODiE Awards continues our tradition of celebrating the best products in the software and information industry.” said Ken Wasch, President of SIIA, “Being a winner among so many fine nominees is a solid achievement. I congratulate all of the companies.”
About Macrovision
Macrovision provides distribution, commerce, and consumption solutions for software and entertainment content to the home video, PC games, music, cable/satellite, consumer software, and enterprise software industries. Macrovision holds a total of 236 issued or pending United States patents and 1,239 issued or pending international patents, and continues to increase its patent portfolio with new and innovative technologies in related fields. Macrovision is headquartered in Santa Clara, California, with other offices across the United States and globally.
For more information about Macrovision visit www.macrovision.com.
About SIIA
The Software & Information Industry Association (SIAA) is the principal trade association for the software and digital content industry. SIIA provides global services in government relations, business development, corporate education, and intellectual property protection to the leading companies that are setting the pace for the digital age. Its Codie Awards program, now in its twenty-first year, remains the industry standard for celebrating outstanding achievement and vision. For more information about SIIA visit http://www.macrovision.com/company/news/awards/SIIA_Codie_Award.html
MMXT/SCMI Product Idea... copy protection for phones to protect people from wiretaps????? I mean, the music protection idea sure isnt panning out, its time to look at things that people would actually want to buy, maybe if the products benefit the enduser instead of harming them?, revenue can at least keep pace with lucritive compensation the management/directors/"consultants" seems to like to lavish themselve with.
This is big!!!!! DRM flexess it's arm!!!
http://news.com.com/Congress+readies+broad+new+digital+copyright+bill/2100-1028-6064016.html?part=dh....
Mr. Fence
I've never noticed anything "usual" about SCMI/MMXT and I'd be very bored and uninterested if they were "usual". How many "usual pinks" have 2 symbols, visited congress and gained so much notoriety and resistance from passionate groups and individuals? Certainly, DRM solutions, have been anything but "usual" as they are in the defining process while we post.
Let's just say "the usual" does not exist in this realm. When it does, I'll be taking this archaic board down and looking for something more stimulating.
Mr. Fence
Regarding SCMI/MMXT, what usually happens when pinks reach this rung of the Pink Sheet Business cycle is that they remain very quiet, then they perform a reverse split of some proportion to give them some headroom under the authorized max, then pop out some new products, sell some of the newly freed stock to cover marketing costs of these new products as well as insider and "consultant" compensation, basically starting the cycle all over, many pink companies have this same pattern repeated many times if you look back in their history.
Looks like solid $$$ potential for anyone in DRM today and tomorrow.
Mr. Fence
DRM and CA to grow to US$4.7 billion by 2010, says research firm
Press release; Eric Mah, DigiTimes.com [Wednesday 19 April 2006]
Digital rights management (DRM) and conditional access (CA) together represents a worldwide market that will expand to US$4.7 billion by 2010, up from US$1.5 billion in 2005, according to research firm iSuppli.
iSuppli defines CA as a system that controls consumer access to content on a service-provider network. CA protects the pipe and prevents theft of service but it does not determine what happens to content once delivered to users, according to iSuppli.
In contrast, DRM is focused on protecting the content itself. DRM features a more complex set of rights than CA does, and defines permissible uses, stated the research firm.
As DRM and CA come together, the term DRM increasingly is used to describe the superset of content protection, which includes CA, content protection and content rights.
The market for DRM/CA comprises a complex mix of Intellectual Property (IP) royalties, client software and server/subscriber software, according to Mark Kirstein, vice president, multimedia content and services for iSuppli.
Traditional CA technologies deployed on cable and satellite television networks and their associated set-top boxes (STBs) represent the bulk of the DRM/CA market, with revenue of under US$1 billion in 2005. This market will more than double, exceeding US$2 billion by 2010, with growth across all segments. Meanwhile, DRM technologies will supplement STB conditional access implementations, expanding to more than US$600 million by 2010.
While these technologies will generate major revenue on their own, the real impact of DRM/CA will be their revolutionary effect on the digital entertainment business.
“Not only do DRM/CA represent the primary content protection mechanism, but based on the rights rules, they define the viable business models,” Kirstein said. “As a convergence point, there are many competitive interests at stake in the DRM world, both among industries and among companies.”
Industries and companies interested in DRM/CA technology include content providers, such as studios, networks and advertisers; the platform community, including equipment manufacturers and retailers; and service providers, such as telecom/wireless and cable/satellite/terrestrial carriers.
“DRM is a crucial technology on a number of fronts,” Kirstein said. “Its role as the arbitrator of business models and revenue flow positions proprietary DRM systems in line with cash flow for service providers and content owners. Furthermore, DRM lends itself to integration in service offerings, media players and content/transaction management software. Thus, proprietary DRMs have the potential for backward integration into other software applications and have a direct impact on service-provider and content-owner revenue streams.”
A variety of companies are offering both standardized and proprietary DRM and CA solutions to both address and enable the emerging opportunity. However, a lack of interoperability between various DRM/CA technologies and battles over royalty rates are hampering not only the utility of DRM/CA, but also the development of the underlying digital content markets, Kirstein warned
http://www.digitimes.com/systems/a20060419PR203.html
Yes, "Legislation begets legislation" and "Only attorneys win in court".
Unintended Consequences: Seven Years under the DMCA...
-excerpt-
"SunnComm Threatens Grad Student
In October 2003, a Princeton graduate student named J. Alex Halderman was threatened with a DMCA lawsuit after publishing a report documenting weaknesses in a CD copy-protection technology developed by SunnComm. Halderman revealed that merely holding down the shift key on a Windows PC would render SunnComm's copy protection technology ineffective. Furious company executives then threatened legal action.
The company quickly retreated from its threats in the face of public outcry and negative press attention. Although Halderman was spared, the controversy again reminded security researchers of their vulnerability to DMCA threats for simply publishing the results of their research.9"
http://www.eff.org/IP/DMCA/?f=unintended_consequences.html#31
Your Response, Mustafa
http://www.sunncomm.com/asktheprez/asktheprez.asp
Mr. Fence
The patent application on which MediaMax V3/V5 and V6 is based on has been abandoned by SunnComm. After applying for a 3 month extension to respond to the first rejection by the USPTO, they failed to respond within the extended time period, thus abandoning the patent application.
Status: Abandoned -- Failure to Respond to an Office Action
Status Date: 04-03-2006
Title of Invention: System and method of protecting digital content
Abstract
A method of operating a personal computer includes steps of determining whether a digital recordation of content that is readable by a hardware device in the personal computer is protected; and responsive to a determination that the digital recordation of content is protected, selectively limiting which software programs are permitted to access digital information from the digital recordation of content. Programs that are authorized to access the digital information may include a conversion program for converting the digital work to a compressed file format that will be stored on the hard drive of the personal computer in a format that is governed by a digital rights management protocol, secure player software that is enabled to play the digital work directly from the digital recordation of content and controlled copy software that permits copies to be made under specified licensing conditions.
http://portal.uspto.gov/external/portal/!ut/p/_s.7_0_A/7_0_CH/.cmd/ad/.ar/sa.getBib/.c/6_0_69/.ce/7_...
P.H.D. - Piled Higher and Deeper. I've stayed above all that. Obviously, your head is in it.
M.F.
"The evidence shows that when firms take anti-shorting actions, their stock returns are
extraordinarily low over the subsequent months and years. The evidence confirms the hypothesis
that short sale constraints allow stocks to become overpriced. While the underperformance of -2
per month is very large, it is similar in magnitude to the -1 to -10 range found in other studies of
stocks with very high short sale constraints."
http://www.mba.yale.edu/pdf/godownfighting.pdf
I hope that this study isnt too far over your head
Thanx for that post.
I would have to concur with the notion that excluding DRM would hurt Linux and relegate it's use to a smaller niche market. Even in light of symbolic choice of Brazil. Maybe I'm just cynical but 20 years ago it was known that the pc (IBM) would always dominate incestously. Even in J.C. we were taught that writing software for the largest market paid the best and they would stay the largest because you could do more with their machines with all the software available. The game was entrenched even before the internet was spawned. No new threshold here.
The only way DRM is going away is if everyone with content of value jumps up and says "I'm opening a free store! Steal this content!". Didn't work for Abbey Hoffman, aka Barry Freed. Probably ain't ever gonna happen on this planet.
Geez, I am cynical.
M.F.
Ever hear of the stock market crash of 1929??? That's when the old sayin "He who sells what isn't his'n must buy it back or go to pris'n". was coined. Before that, there wasn't much regulation on short selling. There has been little regulation on the pinks until now. I believe an arena such as DRM with the huge risk/reward potentials is prime for short activity. Especially since it's easier to derail a train than it is to build one. And no criminally false stories are required like in the stockholm story. Instead ya just tout the downside and play on everyone's fear. Who's to know???
M.F.
Linux 'needs DRM support' for consumer success
Ingrid Marson
ZDNet UK
April 07, 2006, 10:10 BST
A RealNetworks executive has claimed that Linux risks being excluded from the consumer market if it does not add support for copy-restriction technologies.
But the Free Software Foundation Europe countered this claim on Thursday, saying that consumers have made it clear that they do not want DRM restricting their use of digital media.
Jeff Ayars, a vice-president at Real Networks, said in a talk at LinuxWorld in Boston on Tuesday that if Linux does not offer support for DRM, people will not be able to run restricted digital content on the operating system, which will damage its success in the consumer market.
"The consequences of Linux not supporting DRM would be that fixed-purpose consumer electronics and Windows PC's would be the sole entertainment platforms available," he said. "Linux would be further relegated to use in servers and business computers, since it would not be providing the multimedia technologies demanded by consumers."
He pointed out that Microsoft Vista is implementing a number of digital rights technologies, such as Protected Media Path, Protected Video Path and Protected User Mode Audio. "I would like Linux to be able to do that as well," he said. The support must be included in the Linux operating system, as a DRM system would not be able to trust drivers that were separately installed, according to Ayars.
But Georg Greve, the president of the Free Software Foundation Europe (FSFE), disagreed with Ayars claim that Linux risks being excluded from the consumer market, arguing that users dislike DRM.
"The Sony rootkit case made it quite clear why DRM is not accepted by consumers, and why there is no successful business case for DRM," he said in an email. "Apple iTunes allows people to burn their tracks on regular CDs, which can then be re-encoded and file-shared easily — so is better described as 'digital inconvenience management' only. Emusic.com offers clean audio tracks without any restrictions. No DRM platform comes close to either of these in popularity."
"So fortunately it is up to the consumer to decide what the consumer market wants. And its answer is clear: It does not want DRM!" he said. "The sooner we bury the foolish notion of putting each and every use of a computer under control of the media industry, the sooner we can start looking for real alternatives."
Although Ayars refused to discuss what he termed the "philosophical" objections to using DRM, he admitted that there were "potential" negative consequences of supporting DRM in Linux, such as the risk of innovation being stifled.
"There are limits on the innovation that is possible around protected media," he said. "With protected content you wouldn't be able to create a new business model like Tivo did with time-shifting television — it was able to do that because there was no protection on signal," he said.
Although much of the open source community is likely to object to the addition of DRM to Linux, commercial Linux vendors may be more willing.
"When I talk with Red Hat, Novell, or Linspire — these distributions are in the business of creating software for consumers — they are interested in people who buy their products being able to [view DRM-protected multimedia]," he said.
Linspire's chief technical officer, Tom Welch, agreed that his company would definitely consider DRM.
"Linspire has not added DRM into our distro yet, but would like to add it if we are given the opportunity, provided it is a DRM that is being used by consumer products (such as Apple's FairPlay or Microsoft's PlaysForSure). If someone comes out with an open source DRM, we'd be behind it, but we need major content providers to support it as well," said Welch.
Novell said it is keen to support more media formats, but did not mention support for DRM.
"We are looking forward to the time when Linux users will have access to media in all formats. We obviously support open media formats in our offerings now, and we're currently in discussions with vendors who control proprietary formats to include support for them, as well," said Greg Mancusi-Ungaro, Novell's director of Linux product marketing.
Red Hat was unable to provide comment at the time of writing.
http://news.zdnet.co.uk/software/linuxunix/0,39020390,39261913,00.htm
mrfence, Im sure there are, but SEC and NASD enforcement records, some going back almost 100 years, clearly indicate that the majority of fraud involves selling securities TO investors using false or misleading sales tactics, false PRs for example.
OT or not?
Gee, I thought nobody bought or sold stock based on message board posts and everyone did their own DD. Can you think of any organized bashing groups that could be running the same scam in reverse? ie.. Selling a stock short after a run up and then bashing it down, settling and pocketing the diff. I wonder if alot of DRM antagonists are posers???
Nahh, Who could conciously concoct such a scheme and risk getting hosed twice over while believing no one will ever figure it out. Sometimes I'm just silly.
M.F.
OT: SEC Brings Emergency Action in Federal Court to Stop Fraudulent Manipulation of Microcap Stocks
Litigation Release No. 19642 / April 6, 2006
SEC v. Faisal Zafar and Sameer Thawani, 06 CV 06 1578 (GLEESON)(EDNY)
SEC Brings Emergency Action in Federal Court to Stop Fraudulent Manipulation of Microcap Stocks
On April 6, 2006, the Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the Eastern District of New York charging Faisal Zafar and Sameer Thawani with perpetrating an ongoing securities fraud over the internet. The complaint alleges that since late 2004 and as recently as March 2006, Zafar and Thawani have engaged in a "pump and dump" scheme to manipulate the market for at least 24 thinly traded "microcap" or "smallcap" stocks. The defendants have made over $873,000 by purchasing the stocks, anonymously disseminating false information about the companies on popular internet message boards, and then selling the stocks at artificially inflated prices.
Acting on the Commission's application for emergency relief, the Court issued a temporary restraining order that, among other things, froze the defendants' assets and set a date for a hearing on the Commission's motion for entry of a preliminary injunction against further violations and other relief while the action is pending.
The Commission's complaint identifies the defendants as follows:
* Faisal Zafar, age 32, resides in Yaphank, New York, and is listed on the website of a company called Secure-Minds, Inc. ("Secure-Minds") as its President and CEO.
* Sameer Thawani, age 27, resides in Lake Grove, New York, and is listed on the Secure Minds website as its Vice President.
The complaint further alleges the following facts:
After buying shares at prevailing market prices, Zafar and Thawani used online aliases to post messages touting the stock and containing phony press release excerpts or other fake "news" about the issuer to deceive investors. The phony headlines concocted by the defendants include huge business contracts, mergers and strategic alliances between these little-known issuers and an array of major corporations -- such as Google, Kmart and Sun Microsystems -- and other dramatic developments designed to make the targeted stocks appear to be surefire investment opportunities. The defendants have also preyed on fears about terrorism and international health epidemics to deceive investors. After the London subway bombings and reports concerning a deadly "bird flu" virus, Zafar posted messages falsely stating that one issuer was receiving a contract from the Department of Homeland Security to improve security on New York City subways, and that another issuer was acquiring a company that produces "bird flu" vaccine.
Zafar and Thawani are engaged in a classic internet "pump and dump" manipulation scheme whose basic structure is as follows: (1) one or both of the defendants purchase shares of the issuer's stock in their online brokerage accounts; (2) the defendants register multiple online identities ("User IDs") with internet message board services; (3) the defendants post multiple messages attributed to their User IDs on internet message boards devoted either to the touted stock or to other, more widely followed stocks; (4) the messages contain materially false statements about the issuer and urge other investors to buy the stock; and (5) as soon as the stock price increases due to purchases spurred by the false statements, the defendants sell their shares at the inflated price for a quick profit. After their sales, the price of the stock quickly returns to its pre-manipulation level. These events sometimes all occur within the span of a single day.
The defendants have created at least 300 different User IDs and have used them to post well over one thousand messages fraudulently touting the stock of at least 24 small-cap issuers, some of them on multiple occasions. The defendants created these multiple online aliases in order to conceal their identities from investors and make it appear as if the same breaking "news" is coming from multiple independent sources. More recently, the defendants have also targeted specific investors by posing as moderators of internet user groups devoted to low-priced stocks and sending emails to the group members while simultaneously posting false messages on different internet message boards about the same stock under different user names. The emails have been sent out under user names such as "marketgeneral" and "danielbknight," among others. These emails purport to alert investors to imminent news about the stock and urge them to capitalize by buying the stock before the "news" is made public.
The complaint alleges that by engaging in this conduct, the defendants violated antifraud provisions of the federal securities laws. Specifically, the complaint alleges that Zafar and Thawani violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Act of 1934 ("Exchange Act") and Rule 10b-5. The complaint seeks a final judgment (i) enjoining the defendants from violations of these provisions of the federal securities laws; (ii) ordering them to disgorge all their ill-gotten gains; and (iii) and imposing civil money penalties. Pending a final determination of this action, the complaint also seeks a preliminary injunction against the foregoing violations and continuation of the emergency relief ordered today.
The Commission acknowledges the cooperation of the United States Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation in this matter.
SEC Complaint in this matter
http://www.sec.gov/litigation/complaints/2006/comp19642.pdf
http://www.sec.gov/litigation/litreleases/2006/lr19642.htm
DRM costs revealed by Korean music service
2:54PM
A Korean digital music service has worked out the monetary 'value' of its DRM technology: about 12p per track.
Soribada has agreed a two-tiered pricing structure with the Korea Music Producers' Association (KMPA); tracks with DRM will cost 700 won, 41.4p, while unencumbered songs will be sold for 500 won, 29.6p.
As DRM Watch reports: 'The above figures can be read in a number of ways. Most importantly, they reflect the idea that users can do less with DRM-protected tracks than with unprotected ones, including some things that provide a better user experience....'
Freedom to Tinker notes that you could conclude, as DRM Watch implies, that because DRM-free tracks are 40 per cent cheaper, then they must be 40 per cent less useful. That would, however, be too simplistic.
'All we can conclude from the KMPA's pricing strategy is that DRM reduces customer value,' writes Freedom to Tinker's Ed Felten. 'But we knew that already.'
Simon Aughton
http://www.pcpro.co.uk/news/85840/drm-costs-revealed-by-korean-music-service.html
Hollywood studios pull plug on Sony Universal Media Disc
10:31AM
It looks as though the Universal Media Disc format on the PlayStation Portable is a dead duck as far as a media for playing movies. It is yet another blow to Sony which has seen a number of setbacks in the past year, leaving some to wonder if the electronics giant can recover its former glory.
Universal Studios and Paramount Pictures Home Entertainment have called a halt to releasing any more movies on the UMD format. Other studios such as 20th Century Fox Home Entertainment and Buena Vista Home Entertainment are considering drastically cutting back their support for the format.
A Paramount Pictures Home Entertainment exec told the Hollywood Reporter. 'Releasing titles on UMD is the exception rather than the rule. No one's even breaking even on them.' Likewise, an executive at Universal Studios Home Entertainment was heard to say `It's awful. Sales are near zilch. It's another Sony bomb, like Blu-Ray.'
The problem is that while the PlayStation Portable is selling in large amounts, the buyers just seem to want to use it as a handheld games console and are not interested in using it as a way of watching films. And US consumers certainly do not want to be paying more than $20 for a movie to watch it only on a small screen.
Sony has been criticised for not equipping the PSP with an S-video jack to allow it to play back on a standard television. It is now rumoured that the PSP division is talking to Sony Studios about the ramifications if such an accessory were offered for the device.
The last thing Sony needs right now is yet another blow to its credibility as it gears up for the crucial release of the Blu-Ray high definition DVD format later this year. The mood at Sony headquarters will not have been improved by the news that rival Toshiba has launched its first HD-DVD play in Japan. The HD-XA1 costs 110,000 yen, or $940 - somewhat more than the $800 price point promised for the US release due later this month.
The news that the major Hollywood Studios are cutting back their commitment to UMD follows the announcement of the delay in the PlayStation 3 launch until November, following disagreement in the Blu-Ray Consortium over the specification of the DRM. Last year, Sony also faced a public relations disaster when it was revealed that its CD copy protection relied on rootkit code, more commonly associated with virus and spyware writers.
Steve Malone
http://www.pcpro.co.uk/news/85761/hollywood-studios-pull-plug-on-sony-universal-media-disc.html
Live at the Witch Trials
Mon:04-03-06
Story by J T. Ramsay
It's hard to believe that more than six years since Shawn Fanning's tête-à-tête with the RIAA introduced the American legal system to peer-to-peer filesharing, so much still remains unclear. While the RIAA v. Napster proceedings polarized the industry and consumers, it also brought to light the tensions inherent in the development of these new technologies and their applications. In some respects, the Napster case revealed that beneath the democratization of new technologies lie complicated legal questions, and the sprawling, powerful tendrils of copyrights, patents, and intellectual property.
Little has been done in the interceding years to change perceptions of the industry. To many, the RIAA is a faceless corporate monolith dedicated to criminalizing consumers and closing black market loopholes. Accordingly, the RIAA rethought its legal strategy and began prosecuting cases very quietly against unsuspecting victims, rather than suffer further public relations disasters in high-profile cases. Last November, defense attorney Ray Beckerman started documenting these cases at his blog Recording Industry vs. The People in an effort to make public the ongoing legal drama as it unfolds.
Steve Gordon, an entertainment lawyer and contributor to Digital Music News, contends that the RIAA needs to make creative concessions and re-imagine its business model to survive in an evolving legal and technological environment. He introduced us to the players behind the lawsuits and what the battle over digital music means for consumers, labels, and artists.
Pitchfork: How many companies own music publishing and production rights?
Steve Gordon: Recorded music consists of two things: musical recordings and songs. The record companies generally control the recordings. The major labels, Universal, Sony BMG, EMI, and Warner, collectively control and distribute more than 80% of the world's recorded music.
There is not as much consolidation with regard to the songs although the major publishers including EMI Music, Warner Chappell, Universal and Sony ATV, BMG, and a handful of others control the majority of popular songs.
Pitchfork: What profits do they earn annually? How have they changed, and what explanation does the industry give for these changes?
Gordon: In terms of record sales, profits have declined precipitously in the last several years. Many people in, and who study, the music industry blame this on the impact of peer-to-peer (P2P) music file sharing and CD burning. They argue that these technologies have dramatically diminished CD sales. In fact, the major labels are currently making little if any profits, and in the past five years CD sales have suffered serious declines. Recorded music sales worldwide have dropped by more than 15% since peaking at nearly $40 billion in 2000. Final figures for 2005 have not been released yet, but 2004 sales totaled only 33.6 billion, according to the International Federation of the Phonographic Industry. And although sales of digital singles on iTunes and other authorized digital services have multiplied in volume, they have not earned nearly enough income to offset lost income from declining CD sales.
The music publishing business has not suffered as much since a great deal of their income has come from sources other than mechanical royalties from record sales. These other sources of income include public performance on radio, TV, and the internet, and licensing "synch" rights to use songs in TV shows and movies. The income from these sources has actually increased in the psst several years.
Pitchfork: What is the RIAA, and what is their function?
Gordon: RIAA stands for the Recording Industry Association of America, a trade group that represents the interests of the major record companies (Sony BMG, EMI Universal and Warner), plus many of the bigger indies. According to their website, RIAA members create, manufacture, and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.
The RIAA's mission "is to foster a business and legal climate that supports and promotes our members' creative and financial vitality." In the past they were primarily known as the people who certified Gold and Platinum sales awards. But more recently they've become known for suing thousands of people, including parents, children, and even grandparents for unauthorized music file sharing.
Pitchfork: What is ASCAP? Where do they stand on this issue?
Gordon: ASCAP is a "performing rights organization" (PRO). There are two other PRO's in the U.S. They are BMI and SESAC. And there are PRO's operating in almost every country in the industrialized world. Their function is to license the songs, not the recordings, for public performance on radio, TV, the internet and physical venues including nightclubs, stadiums, restaurants, and every other place where music is publicly performed.
There is no public performance right for musical recording except for digital transmission such as internet radio. In the United States an organization called SoundExchange provides licenses to internet radio stations to play records.
Pitchfork: Have they been involved in these cases? If so, what has been their role?
Gordon: ASCAP, BMI, and SESAC do not approve of unauthorized P2P music file sharing, but they have less to lose from it. Even if P2P does displace record sales, these organizations do not make income from sales of records anyway. They only make money from the public performance of music. And no one has seriously argued that P2P somehow reduces the number of performances of music on radio, TV or at live events.
In fact, in contrast with the record labels, the PROs have taken a relatively enlightened point of view about digital music. They will license any website that requests one and their fees, between 1-3% of income, are reasonable. I recently secured licenses for an internet radio channel client. Altogether the PROs' only wanted about 5% of income for use of all their songs. And by "all their songs" I mean about 99% of recorded music. On the other hand, I recently tried to clear music for an online record store from the labels, and they wanted six figures upfront.
Pitchfork: To what extent has piracy endangered the music industry's commercial viability?
Gordon: A lot! It is estimated that tens of millions of illegally pressed CDs are distributed each year. In China and South America, counterfeit pressings are especially rampant. Although you can say that this form of piracy is old-fashioned as it is not web-based, it has flourished due to the increased availability of low-cost, high-quality digital copying machines.
P2P and CD burning are relatively recent threats to the record business. In 1999, income from sales of recorded music was approximately 15 billion in the U.S. Since then, income has continually declined and in 2004 it amounted to approximately only $11 billion (PDF file).
Although the RIAA has not published the sales and income report for 2005, experts advise that both fell again in 2005. In an article called "Music Biz Laments 'Worst Year Ever'" Rolling Stone reported that:
"It was yet another unhappy New Year for the music industry: Despite hits by Mariah Carey, 50 Cent, and Green Day, 2005 saw album sales drop 7.2% as labels continued to struggle with adapting to the age of the iPod and the internet. Overall, consumers bought 48 million fewer albums than in 2004, marking a disastrous 21% slide from the industry's peak in 2000, according to Nielsen SoundScan. 'It was arguably the worst in the music business's history,' says Steve Bartels, Island Records president."
Although digital-song downloads jumped 150% in 2005-- consumers bought 352 million of them-- since labels only make about 60 cents off a 99-cent download, digital downloads fall far short of compensating the labels for the loss of 48 million albums at about $12 wholesale. In fact some experts think that by allowing music lovers to "cherry pick" popular singles, the labels may be losing album sales because of iTunes and other digital services offering single track downloads.
Pitchfork: Is there a definite link between P2P and declining CD sales and recording industry income?
Gordon: In 1999, the first generation of peer-to-peer music file-sharing (the original Napster) was becoming terrifically popular. P2P has grown every year since and the recording business has been on the decline. Some experts argue that P2P is not to blame. They point to reasons such as the music is not as good as it used to be, that the public is increasingly distracted by other forms of entertainment such as video games and a bad economy. But others argue that the ascendancy of P2P and the decline of the recording business are not coincidental. I tend to believe there is a cause and effect between P2P and declining music sales-- but that the record companies exacerbated the impact of P2P by (a) Overpricing CDs, and (b) Failing to give music lovers a high quality low priced alternative to P2P.
In addition, CD burning's popularity has been spurred by the increased availability of burning software, which is now pre-packaged in most personal computers. Although this software may enhance the value of the computer to consumers, it also enhances the possibility that people will make CDs for their friends and this, I think, does displace record sales. (This is consistent with our discussion later that certain companies, although not the record labels, are making a lot of money from "free" music.)
Pitchfork: So, is this a recapitulation of the "home taping is killing music" scare? If not, how is it different legally speaking?
Gordon: No. Copying tapes was cumbersome and second generation tapes were inferior in quality. Digital provides random access for easy picking of the best songs to make compilations, and the copies are generally as good as the originals.
Legally, they're more or less the same. Making a copy of recorded music for your own personal use, whether a tape or CD, is generally legally acceptable. But new technology makes it very easy to share music with friends or strangers online.
Pitchfork: What does the law actually say in these matters? What precedents exist? Describe the legal/political landscape, giving a brief chronology of the P2P phenomenon.
Gordon: On June 27, 2005, the Supreme Court in MGM Vs. Grokster ruled against the unauthorized P2P services Grokster and Streamcast Networks. The Court noted that file-sharing services violate federal copyright law when they promote and encourage swapping copyrighted songs and movies illegally. "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties," Justice David H. Souter opined.
Although the decision was a victory for the RIAA, it actually confirmed that P2P technology itself is legal so long as it's not marketed and promoted in such a way as to encourage copyright infringement. This could be very bad news for the recording business. There are new file-sharing programs such as BitTorrent, which is even faster than Grokster; its founder, Bram Cohen, doesn't promote the technology in such ways as to violate the ruling in Grokster. BitTorrent is also free and can be used without ads. It is therefore unlikely that the record companies can ever shut down P2P using the courts.
RIAA started suing individual music file traders several years ago. They realize that many of these defendants are their own customers, but they have become somewhat desperate as CD sales and income continues to fall.
Pitchfork: Describe the original case against Napster and its impact on P2P.
Gordon: The Napster case preceded the Grokster case by several years. Napster controlled a central database from which all the users took music. Napster could have filtered out copyrighted songs, but they didn't. The courts had no problem finding Napster to be illegal. But the new file sharing services do not control a central database. They merely allow you to download software that enables you to share music with others. The Grokster case stands for the proposition that so as long as these services do not actively promote that you can use it to get copyrighted music for free, the technology itself seems to be legal!
Pitchfork: Define intellectual property law's application to the music business, and, if you can, explain in plain language the rules of ownership and copyright when it comes to music. Also, is there a distinction between file sharing and P2P downloading?
Gordon: The copyright law provides protection for music-- both for the songs (musical composition) and the musical recordings (sound recordings). Under copyright law no one but the copyright owners can make copies of either songs or recordings and distribute those copies to others. Without the copyright law the record companies, which own the recordings, and the songwriters and music publishers, which control the songs, could not make a living. The copyright law also affords other exclusive rights, including making derivative works or variations, and public performance. These rights also contribute directly to the income of those who create music.
The distinction to be made is that if you wrote and recorded your own music, rather than other people's music, you don't need permission to share it. So a band that allows people to download their music from their blog or website is not violating any copyrights so long they wrote and recorded the music and did not enter into an exclusive recording contract that gives labels the right to distribute the music.
Pitchfork: Tell us about the RIAA's lawsuits.
Gordon: They are suing people for sharing recordings without the permission of the copyright owners. Generally, they demand several thousand dollars and refuse to negotiate. Many defendants are dissuaded from fighting the cases because hiring a lawyer can quickly add up to more than what the RIAA will accept to settle.
Pitchfork: Of what consequence are these sums? How are they to be distributed to all concerned parties? Is this really about the artists?
Gordon: That's a great question! The lawyers are definitely getting some of it because the RIAA farms the cases out to private firms. Of course, some it has to pay as salaries to all those new lawyers the RIAA has hired in the past several years. What's left is possibly distributed to the record company members of the RIAA. It is not clear whether the artists share in any of these monies.
Pitchfork: Explain the subpoena power in these cases, and how it has been used to identify alleged downloaders, heretofore referred to as John/Jane Does.
Gordon: The RIAA initially used a provision in the Copyright Act they thought allowed them to demand names of ISP subscribers who uploaded files in unauthorized P2P services. But the ISPs-- specifically Verizon-- resisted, arguing that the record companies did not have the right to their subscribers' names. The federal court agreed. Although this made it harder and more expensive to initiate law suits, the RIAA forged on and are now suing more individuals than ever.
Pitchfork: Why are children being targeted in these cases?
Gordon: If the ISP addresses belong to children they can be the defendants. This is due to the fact that RIAA can only get limited info on its targets. In addition to children they are suing soccer moms and grandmothers who may not even know what file sharing is. Their children or their children's friends are maybe using their ISP addresses to grab free music. So a lot of innocent people are being targeted.
Pitchfork: Is a political message being sent with these cases? Are they a witch hunt?
Gordon: The RIAA hopes to send the message that there are negative consequences for unauthorized music file sharing. One problem is that they may be targeting the wrong people and there may be backlash by the public. Music fans are turned off to the labels for life.
In addition to this negative publicity, it does not help that Sony recently released anti-copying code on millions of their CDs that allegedly contained spyware that allows them to look at what you are doing online. The code also subjected many computers to hacking. Sony had to recall the CDs and are still fighting court battles, including one with the state of Texas, for allegedly violating their anti-spyware statute!
Pitchfork: How effective have these cases been for the RIAA?
Gordon: There is some disagreement here. The RIAA has stated that music file sharing has, if not declined, at least has not gone up since they started suing people. But independent monitoring firms such as Big Champagne asset that music file sharing has continued to increase.
Pitchfork: Why do you think "illegal downloading" has proliferated since these cases began?
Gordon: P2P proliferated before the suits started. However, the suits do not seem to have a clear effect in reducing P2P.
Pitchfork: What is the industry doing right and wrong?
Gordon: On the wrong side, I think suing their own customers will backfire. Not only is it terrible publicity, it will also lead people to download more free music out of revenge. It is a well-known secret that if you download without offering your collection to others, you can avoid detection. Therefore people can rely on the more adventurous to feed them music without risking detection.
Another wrong is Sony's placing spyware on their CDs. Not only was that bad PR, it was probably illegal.
Another depressing event was Sprint's recent introduction of Over the Air Downloads of single songs for $2.50 each. Presumably this was done with the record company's collaboration on pricing. It's just stupid to think people would pay 2.5 times more for a song that they could get legally for $1 (or for nothing on P2P) just because it's more "convenient" to buy from the phone directly. Consumers can almost just as easily "sideload" all the music they want into their cell phone from their existing desktop music collection. Verizon's introduction of $2.00 for OTA songs a few weeks ago is almost as depressing. By the way, both services require you to pay an additional $15 per month to access the music service. Plus you need to pay money to upgrade to a special phone. And then you have pay up to $100 or more on a memory card that will hold only a few hundred songs!
Another wrong: some of the labels want to increase the price of front line product on iTunes. Even the labels agree that iTunes is one of the few bright spots for the business in the last several years. Increasing the price might well end that success.
On the right side? At least the labels are actively seeking deals for digital distribution. I just think the deals are being priced wrong and do not provide what the public really wants-- abundant music, reasonably priced.
Pitchfork: Are the artists making money from iTunes and other sources of digital revenue?
Gordon: The artists with the big labels are not seeing much revenue. Although sales of digital music have multiplied in the last year, they still only represent a fraction of the income from CD sales. And the artists are paid on digital sales basically the same way as they are paid for ordinary record sales. Artists usually only receive any recording royalties after "recoupment" of their "unearned balances," that is, production and marketing costs. But only the most successful artists recoup production and marketing costs. Under the standard recording agreements artists only "recoup" at their royalty rate. After deductions, the artists' royalty usually is well less than a dollar per album. So if production and marketing costs (including music videos) are $250,000 (modest in terms of big labels) then they most sell more than 250,000 records to earn any recording royalties. In addition many agreements reduce the artists normal royalty rate for digital sales.
Now compare this to an artist who records and sells an album without a record company. Say an artist records an album for $10,000 and sells the CD for $14 on CD Baby. CD Baby takes only $4. If the artist sold 10,000 units, he or she would make 10,000 x $10 = $100,000 minus $10,000 and gets to keep $90,000. If the artist recorded the same album for a record company and sold the same number of units they would probably receive no recording royalties at all. If the record company produced the album for $10,000 and spent $10,000 on recoupable marketing costs, and the artist's royalty was a dollar, the artist would in fact still owe the record company $10,000.
Pitchfork: Next steps: Is there a compromise that can be reached between the industry and the consumer? If so, what is it?
Gordon: I am in favor of a levy on those who truly profit from "free music," that is the electronics business and the ISPs. In exchange, all music file sharing would be legal. This plan would a. compensate the labels and the artists; b. provide music lovers with access to any music ever recorded any time they wish to hear it; c. eliminate the RIAA's lawsuits against consumers
In order to get "free music" you need a computer. You also need a fast internet connection. In addition, if you want to hear your free music at the gym or on the subway you need to buy an iPod or other mp3 player. So you are paying a lot for "free" music. But the money is going to computer and mp3 player manufacturers, and ISPs rather than music content companies. If we imposed a very small tax on sales of computers, mp3 players, and broadband subscription, we could compensate the record companies and the artists. And the RIAA could stop suing their own customers!
Yet the major labels continue to reject this position. Why? At least one of the majors, Sony BMG is partially controlled by a major electronics company. Another reason is that under this scheme the record companies would have to split 50/50 with the artists. The labels rarely pay artists any royalties now because the artists only generally get 10% to 20% royalty after they recoup production and certain marketing costs.
The record companies are desperately still trying to shut down the free digital flow of music and recapture control over pricing so they can sell music for whatever price they want and people will be forced to buy it. Unfortunately, huge economic forces-- the interests of the electronics and broadband industries-- are allied against them. In addition, the technology itself makes it so easy and fast to share music, that sooner than later the labels may become sufficiently enough to embrace this solution -- even if it means the artist would make some of the profits!
Pitchfork: What is the future of the major labels?
Gordon: When Napster came on the scene in the late-90s, the majors were making money hand over fist selling CDs, including back catalogue replacing all those vinyl and cassette collections. They could have built a low-cost, high-quality alternative to Napster, or as Fanning wanted, licensed Napster and made money from it. But they were desperate to preserve the old and incredibly profitable $18.99 CD business model. By the time they were able to kill Napster in court, faster and ever more popular forms of P2P such as Kazaa and Grokster were thriving.
I think the culture of the labels have been unable to adapt to the impact that new technology, particularly the web, has had on the recorded music. The labels, for many years, combined two basic characters-- Ivy League-trained lawyers and savvy music business types with "ears." Sometimes one executive was both-- Clive Davis, for instance. But the one culture that was never present were techies. They are there now. But they do not call the shots.
The Sony DRM debacle shows they still have no clue. That is why I think that in the foreseeable future, companies such as Yahoo!, Google, and Microsoft may buy or become labels-- because knowledge of technology is so important to the new music business.
The recording industry and the great music moguls (such as Clive, Doug Morris, and my old boss Tommy Mottola) have and continue to develop great talent and launch careers. It would be a shame if they folded their tents. But they are running out of time and need a jumpstart into the digital age. One promising sign is that all the majors have now signed on with Shawn Fanning to launch SNOCAP, an authorized P2P service. SNOCAP plans to launch soon. Let's hope the labels can get it right before they run out of time!
Steve Gordon is an entertainment attorney, author, educator and Fulbright Scholar based in New York City. His book, The Future of the Music Business: How to Succeed with the New Technologies, A Guide for Artists and Entrepreneurs, is available on Backbeat Books. For more information visit Steve Gordon Law.
http://www.pitchforkmedia.com/features/weekly/06-04-03-live-at-the-witch-trials.shtml
http://msn.wired.com/news/columns/2,70548-0.html?tw=rss.partnerfeed This link is another interesting article with a whole new twist on called Open Source DRM. Seems like you have to click on it twice and it finds the story on the 2nd try. Wierd. Maybe my computer has hic ups???
M.F.
MUSICUNITED.ORG is a site addressing copyrights specific to DRM. More "Food for thought".
M.F.
So what is everyone else upto in the DRM arena? ,Macrovision?, the E.F.F.? Obviously Mediamax is not making money now. The E.F.F. doesn't agree with the wisdom of DRM. Do you think content providers will give up? How about France? Will they be the bootleg capitol of the New World Disorder? Could copyright infringement become a bigger issue at the level of the WTO? Will consumers boycott? Where is it all going settle??? Or will it ever?
M.F.
Here we are in 2006, no merger and the audit ?disappeared???.
2002 Sunncomm Merger News from Peter Jacobs...
From the "Ask the Prez" page on the Sunncomm web site...
Q: When will you file a 10-K. It has been way too long.
A: Tell me about it! What we have tried in the past to file...this time, a Form 10 will probably be replaced by an S-4 since we have merged with fully reporting Fan Energy (FENY:OTC:BB). It will be filed as soon after our audit is completed. The audit is projected to be completed before Labor Day. Yes, it´s been a long, strange trip to get here, but not quitting - no matter what obstacles are in our way - is what I feel SunnComm does best. Thanks for your support. Peter
Q: When will SunnComm be filing the 10SB?? When do you expect the Company to graduate from the Pink Sheets??
A: Sorry for the delay in answering, Bill. SUNX will file what will probably be an S-4 merger and proxy document as soon as the full 2-year audit is complete. It is underway now, and has a completion date of Labor Day. Thanks for your ongoing support. Peter
Anything to do with bean counting seems retarded and comical to me. I've just become so cynical that all I want is to catch a big sack of spilled beans. They could be Pinto Beans, Split Peas... DRM neuclear fallout. I don't care anymore. However, I would like to guide the New World Order or New World Disorder as it stands.
M.F.
burnt out
megalomaniac
Excellent roar Kenco, It's time for you to take a bow.
M.F.
As anticipated, MMXT filed a time extension on the 10K, youd think that with them telling their investors, for over 4 years now, that they are just in the process of wrapping up their 2 year audit, that the majority of the work would already be done, couple that with the fact that they are in all respects a small business, its almost comical that this happens almost every filing time.
DRM, 'Trusted Computing', and the future of our children
shane
Tuesday 28 March 2006
There is a war being fought over the future of digital technology, and there is a serious reason for conflict. You see, Computers allow people to copy things, and digital copies are always perfect, and you can make as many of them as you want. In the past you would buy a high quality version of something like a DVD. Only one person could use this DVD at a time. You could lend the DVD to another person and get it back a week later, but that would mean you would not have it. Copying, by necessity, was limited. But this has changed. With digital technology you can give a perfect digital copy of a movie to ten million people at zero cost, and still keep the original for yourself.
If people can share an infinite amount of digital products with a minimal cost, there is very little reason for people to pay for such products. This has the potential to turn the economic foundation of publishing on its head. Sharing information takes on a whole new meaning in the digital realm.
The traditional publishers want to prevent people using technology to copy things, and are promoting a restrictive system called Digital Rights Management (DRM). These people believe that the Internet and the PC are a threat to the economic foundation of publishing media. They believe that if they don't find a way to regulate how people use computers, the revenue streams that used to exist will cease to exist. They say that they need to be able to regulate the copying of copyrighted work.
Another group of people insist that sharing is important, and rejects DRM because it means allowing companies to have control over personal computers. These people believe that networked, free communication is empowering the disenfranchised. They believe that people will pay for things legitimately most of the time, and that the traditional publishers want to encroach on an area of personal freedom that goes against both the precedent of law and of copyright history. They say that people have always had the choice to obey or disobey copyright law, and the onus is on the publisher to prove breaches of copyright.
Microsoft, Intel, Apple and the entire music and movie industry of the USA stand on one side, and thousands of programmers, technology organisations and academics on the other. Both sides have something important to say, and both sides are refusing to listen to each other.
Over 500 million people use the Internet, and over a billion computers are deployed around the world. It has become impossible to ignore the issue of content management and access. Call it Digital Rights Management (DRM) if you will, or call it working out how to manage copying in the digital realm. We need to solve the problem of how digital information will be shared, and an equally important need to set open and wide reaching standards. It has been more than ten years since computers and the Internet really started to take off, and there is still no coherent approach to restricted (or unrestricted) information sharing. This is a serious problem.
Let's have a look at the history.
In 1994 there was a new buzzword in computer magazines. It was “multimedia.” Users were told a revolution was coming, when we would have pictures, video and sound on every desktop. Microsoft heralded this revolution with the introduce of their advanced new operating system called Windows 95, IBM pointed out that they already had a great 32bit system that could do multimedia with OS/2, and Apple cheerfully reminded everyone that they had a multimedia machine in deployment since the mid-eighties.
By 1995 there Internet was beginning to take off. Modems were falling to price levels that made sense, and more websites started to appear. By 1996 the tech crowd were pretty advanced, and by 1997 the web was finally entering the lives of everyone. Companies like Amazon.com appeared, and everything changed.
No one expected the Internet to become so big so quickly. No one could have predicted the extent to which digital technology would enter the fabric of everyday life, especially in the economic sphere. Far from proving to be an extension of the existing market space, the digital world became an economy in its own right. Computers became an inescapable and essential part of everyday life. Costs plummeted and power soared. Multimedia changed from being a novelty to being part of every gray box in every house.
By around 1998 there were millions of people with the ability to view and share many different forms of digital content. The only major problem was a lack of content to actually share. DVDs were too big to squeeze down modem lines, and music files were still substantial in size. Pictures were about the only thing that most people could share.
Technology advanced. Real Networks developed a good way to make small sound files with high quality, and then MP3 appeared and gave everyone the ability to share as much music as they wanted. Even over a modem it was possible to download an entire album in a couple of hours. File sharing networks appeared, and a new social networking groups formed around them. Napster created software that literally allowed anyone to find the music they liked, and download it with one click.
A floodgate of community sharing was opened. New networks appeared, new methodologies were introduced, but the essential idea remained the same: to create a simple network that allowed lots of people to share lots of files. This innovation apparently caught the publishing industry completely by surprise. No major publishing house had invested in the development of a commercial digital distribution network, and the first one to appear with a usable interface was Apple's iTunes in 2001. It is ironic that when millions of people wanted to share information, the only way they could do so easily was through free file sharing networks.
By the time the music, movie and text publishing industry began to actively engage with the emerging technology, file sharing was already an accepted method of providing multimedia information. It might have been a free method, and it might have been a method that largely ignored copyright, but file sharing was the method that most people used to get most of their files. Millions of people shared billions of files. Even today file sharing accounts for over 60% of the traffic on the Internet. A significant amount of this traffic is illegitimate.
Technology allows sharing. People are sharing files. These files included copyrighted music, films, books and software. Companies say revenue is being lost because of file sharing, and that something needs to be done. The question is “what needs to be done?”
Should governments stop people sharing? They already do. It's called copyright law. According to this, only the original creator of a work has the right to determine who makes a copy of this work, and what is done with the copy. This law is applicable to books that you can hold, and books on your computer. It applies to music, movies and software. But companies say that this law is not enough. Because of the power of technology, and the ability of the user to share copies so easily and so extensively, companies say that stronger measures are required to protect their copyrighted material.
This is where we get DRM from. Digital Rights Management is about restricting how and when people can use copyrighted files. It might restrict how many times you can play something. It might restrict your ability to share something. It might restrict the method you can consume something. It is about allowing companies to determine how the end user will experience the copyrighted material that the end user purchased.
The biggest buzzword in DRM right now is 'Trusted Computing'. This is about creating a way for companies to trust your computer with their copyrighted material (rather than anything to do with consumers trusting their computers). For several years Intel have been included a 'Trusted Computing' encryption chip on motherboards, and when Windows Vista is released it will support this framework. For the first time there will be a very solid and secure way for a publisher to determine if your machine has the right to play their copyrighted material. When you try to play a movie, it will check with their server to see if your Trusted Computer has the correct permissions. If you attempt to run an illegitimate file, your computer will refuse. No matter what you do, a chip on your motherboard will refuse to cooperate.
This is a very strange approach to copyright enforcement. It means that when you buy a copyrighted file, you don't actually have the permission to use it. Your computer has the permission. The file won't work on another computer, or your mobile phone, or your PDA, or your heavily modified XBOX. It's a bit like selling a person a book, but designing it so that people cannot read it in the bath (or in the garden or in the kitchen). Instead of finding a way to stop the end user giving illegitimate copies of a work to other people, this type of DRM is about controlling the right to copy work for any purpose, and in the process it determines the end user consumption method and options as well.
Objections abound. That's where all the thousands of programmers, technology organisations and academics come in. They are saying that 'Trusted Computing' and the entire methodological approach currently being suggested by industry heavyweights is a grossly unfair attempt to extend copyright law. The proposed DRM system would control every aspect of a person's private digital life. This is unprecedented. There has never been an occasion when companies could control how people use their possessions.
There are so many voices. Some people say industries will collapse if we don't have DRM. Some people say industries are too greedy, and asking for too much. Some people say sharing data will help advance and promote culture. Some people say that finally we are getting a world where everyone can finally have access to everything that is beautiful, useful or interesting. There is a cacophony of comment, and ideas are swirling around and mixing together and creating a massively confusing mess.
The truth is that we are in an unusual situation. A completely new technology has appeared, and this technology largely obsoletes previously established technologies and the industries associated with them. Music is better digitally, and suddenly CDs and tapes and records belong to yesteryear. Films are the same. Purely digital copies on purely digital media are simply more flexible, useful and effective than those tied to traditional media. Books, magazines and newspapers are in the same boat. People with a lot of money and influence are feeling threatened, but their perception of the problem is perhaps too selfish to allow for a true understanding of what's happening.
The network for communicating certain media has shifted because of the introduction of revolutionary technology. The paradigm of media consumption has changed, and we are lacking a new discourse to explain it. Our copyright laws and processes, our market definitions and our consumer expectations were designed before this technology was conceived. To make matters worse, a formal approach to understanding the new paradigm has been effectively impossible due to the rapid changes and evolution of digital desktops and the Internet. Thus instead of a sustained worldwide academic understanding of the emerging new digital world, we have ended up with a discourse primarily conducted by interest groups, while the slower moving world of journals and research has lagged behind. The danger is that instead of seeking and finding an understanding of these new technologies, end users will find themselves permanently disenfranchised by those who wish to profit or control the digital sphere. This situation is not helped by the level of confusion that has been created and sustained on personal, governmental and international levels.
Even the legal process has become a problem regarding the issue of DRM and intellectual property. On one hand laws are meant to protect people and companies, and on the other hand law is a restrictive influence. In countries like the USA the law regarding the new communicative paradigms has been abused to provide virtual monopolies over the ideas needed to utilise technology. Wide-ranging patents have been granted on abstract ideas. Purchases are being removed from ownership (you don't own the software you buy, you just license it). Copyright infringement is being pushed from a civil infringement to a criminal action.
Fear abounds. Fear breeds compliance. Compliance breeds acceptance. Acceptance means control. Those who will be in control of the digital revolution if DRM in the form of 'Trusted Computing' will be the companies who make it (Intel, Microsoft, Apple) and the companies that own the content (EMI, Sony). Imagine a world where our computers actually belong to these multinationals. It is an unappealing thought.
Worse still, governments will be disenfranchised along with citizens. Networks will be needed, but not controlled by the nations that host them, and the content will be monitored by proxy, with companies working for private shareholders. That's not just an unappealing thought. It's untenable.
We are back to the question of “what needs to be done?” It's a tough one. DRM is not really about making sure you don't steal music. DRM is about attempting to create a completely new way of controlling how people use information, and in doing so it is about attempting to force corporate control into what was previously a very private sphere. This is the answer to the question that companies wish to have. It is not necessarily the answer your grandchildren will be glad you accepted.
We need to carefully examine how digital technology and the Internet has changed the way that people consume different types of media. We need to examine how current copyright law controls access and sharing across different nations. We need a long consultation process to discuss how we could form international standards of maintaining copyright in a reasonable way without infringing on the rights of end users or content producers. In short, we need to produce a new discourse to talk about this paradigm, and we need to do so from first principle.
That is going to be a long and difficult procedure, and to be successful, we're all going to have to talk with each other. We're going to have to share all our problems, concerns and aspirations. Businesses, legal experts, users, governments and technologists will have to work together to find a new way to approach publishing, information access and information control. No one group can be allow to hijack this consultation process. Democracy demands nothing less, and rightly so. The generations of the future will suffer or benefit from the end result of the legislation we are developing now.
http://www.fsfe.org/en/fellows/shane/communicating_freely/drm_trusted_computing_and_the_future_of_ou...
No interest in slashing or bashin DRM today. So is anyone making money off it?
M.F.
With regards to the shift key, that bypass seems to work on a particular brand of DRM called Mediamax. It may or maynot still work but my understanding is that it was originally released knowing how easy it would be to bypass the Eula and the DRM. Interestingly enough, while it does not circumvent the individual from copying and passing along copies to friends, it does hinder a bootleger from burning black market copies without DRM Drivers. Sorta goes from 'A' to 'D' paper in counterfeit finance lingo. Since Copying and passing copies to friends is really a marketing tool, it has been included as a feature in that brand of DRM. I believe it has potential if it can polish the window a little more. Time will tell.
M.F.
With or without the glass? Computers run on dirty windows. The only choice there is, Computer or No Computer. My stereo sounds better than my computer though some have their homes configured in the reverse. I've also had glitches and been bombarded by a variety of spyware and the like all via the players that seem to magically appear on my system. The only solution for a dirty window is a good glazier on the job. Or the whole world switches to linux on the same day. Not likely, am I being cynical?
M.F.
mrfence, but the music buyers dont want the glass in the 1st place, dirty or not, they just want to be able to enjoy the unencumbered music, through a player of their choosing, without having to compromise the security of their computer or worry about spyware, as they are with CDs without copy protection, they dont want to have to go through the hassle of holding down the shift key to bypass the DRM.
Newly manufactured glass comes dirty, that's a fact. It's the installers job to put a glaze on it or go out of buisness. I will conceed, everyone wants transparent windows.
M.F.
mrfence, the DRM mechanism IS the dirty window in this case.
updates to this saga will continue. Insights are welcome.
M.F.
Kenco, I see your point and agree but the window was dirty even before DRM came into the picture. I've noticed the aftermarket tends to rise in any particular niche and eventually clean their little part of the big dirty window. A prerequisite to long term survival for any DRM conclusion or exclusion may exist here.
M.F.
mrfence, the problem is that, just as people dont buy the faulty software for its music, people are not buying music CDs because they want the fauly software, they just want to enjoy the art without having to try and enjoy it through somebodys dirty window.
Seems like all software has deep flaws but it hasn't stopped anyone from developing more of it since I got my C.I.S. Diploma in 1986.
M.F.
Uh Ohh, I just bought a pavillion and am getting very familiar with the H.P. tech's after trying to upgrade from XP Media Center to XPpro S.P.#2. I had help from the microsoft techs who flashed my bios??? (my personal memory has been erased in the process). Subsequently, hardware components could not be resurected even though we successfully loaded S.P.#2. Drivers were unavailable without going to the unsupported aftermarket.
It's difficult to keep up with the details but overall there seems to be allot of confusion.
At the retail level where I posed the question 1."What is Media Center?" answer 1."It's like XP home edition with stuff for your television" Question 2. "Can I upgrade to XPpro S.P.#2.? or is it some sort of proprietary system?" answer 2. "yes, you can upgrade to the latest, highest order. Microsoft will assist you." So..... I opended the box, put her together and booted up the system. So far so good. Loaded upgrade disc and System did not like the unlock key. Called microsoft and they gave me another key... didn't work... gave me still another key... didn't work. Checked further and said there is no supported upgrade path from XPMedia Center to XPpro S.P.#2. I posed the question 3. "Does that mean I cannot have XPpro S.P.#2 on a Pavillion with XP Mediacenter on it???" Answer 3. "Of course not". question 4. "How do I get there?" Answer "follow me". I think we flashed the Bios at some point and when the dust settled I had XP Pro S.P.#2 on my Pavillion whithout any support to the sound. Since microsoft site had no drivers to be found for my new machine, they suggested I go to H.P.
So I tolded the story to H.P., more than once and each time hours were spent attempting to recover the original system. Incidently, H.P. thought I should have no problem with the upgrade to XP Pro S.P.#2 until some supervisor checked. At this point in time I have bought the extended warranty (It could take 3 years to figure it all out). H.P. sent me factory recovery discs (system insists disc #2 is not disc #2). Subsequently, H.P. decided my hard drive was corrupt and sent me a new one that was supposed to have the system burned on it. I got a blank one. Now they are sending new factory recovery disc's again. So today I'm computing on the old limping system with hopes it will last long enough hone the cutting edge.
So how is anyone going to keep up with the New World Disorder with or without DRM???
M.F.
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