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Korea's Weird Wired World
Benjamin Fulford, 07.21.03
Strange things happen when an entire country is hooked on high-speed Internet.
Dear Abby has yet to receive a letter on this one. Last September Han Sang, a 14-year-old boy in Seoul, stole $35 from his parents to buy sunglasses and other accessories. The petty thievery was bad enough, but what really irked his dad, Kim Sung Bae, was that none of the stuff he bought was real. They were for the animated character, or avatar, the boy used as a stand-in for himself on the Internet. Han was spending four hours each night hanging out online with his friends and wanted his virtual stand-in to look as cool as possible.
Kim punished his son with an Internet curfew: No more surfing after midnight. Every Sunday afternoon would be Internet-free family time, and Han Sang would have to watch TV with his parents for a few hours a week. His parents, in return, promised to visit Han's virtual worlds with him.
South Korea has gone gaga over broadband. This nation of 46 million people, packed into an area smaller than Virginia, has quickly become the world's most wired nation. Politics, entertainment, sex, mass media, crime and commerce are being reshaped by a population as online as it is offline. Some 11 million homes, or 70% of the total, have broadband accounts, and at peak times just about all of those homes are online. Nearly two-thirds of Korean mobile phone users have shifted to so-called third-generation handsets that offer speeds up to ten times that of mobiles in the U.S. Here, residential broadband isn't expected to enter 50% of homes until late 2004.
Ubiquitous, fast and cheap access to the Internet has upended Korean society in dramatically unexpected ways. Depending on whom you ask, its experience should serve as either a warning or a triumph for the rest of a world racing to deliver broadband to the masses. Korean marriages are fraying as spouses cheat on each other through video chat. Psychiatrists are swamped with patients coming in for cures to online addiction. One man even died last year from a heart attack brought on by the stress of spending days waging war in an Internet game.
Koreans realized they had entered a new era after the last presidential elections. By 11 a.m. on Dec. 19, exit poll results showed that the iconoclastic Roh Moo Hyun, 56, a 2-to-1 favorite among youth, was losing the election. His supporters hit the chat rooms to drum up support. Within minutes more than 800,000 e-mails were sent to mobiles to urge supporters to go out and vote. Traditionally apathetic young voters surged to the polls and, by 2 p.m., Roh took the lead and went on to win the election. A man with little support from either the mainstream media or the nation's conglomerates sashayed into office on an Internet on-ramp. The traditional Confucian order had been flipped upside down, and a symbolic transfer of power from elders to youth took place.
Thousands of giant online fantasy worlds are populated by real people interacting virtually, often representing themselves with animated characters in a blend of game play and chat. One online fantasy game, Lineage, features 50 worlds, each so big it takes six hours just to walk from one end to the other. At times 320,000 or more people posing as spiders, beautiful women, mighty warriors or half-snake/half-humans communicate by voice, by typing, with hand signs and by fighting, running away and even embracing.
In the U.S. the tech sector looks to broadband to rescue it from a slump. Korea makes the prospect plausible. A Korean firm called NCSoft has already become the world's largest online gaming network, with 3.2 million subscribers paying $25 per month. It has the potential to beat both Microsoft's Xbox Live and Sony's broadband PlayStation networks in the race to dominate online gaming. Last year NCSoft bought ArenaNet, a U.S. gaming company founded by the creators of the hit multiplayer games Warcraft, Starcraft and Diablo. The Korean game networks already have a head start next door in China. A new Korean game called Fortress has 35 million players there.
Hanaro, the country's top seller of broadband access, and its nemesis, Korea Telecom, are racing to build the world's most advanced wireless Internet infrastructure. Hanaro may soon approve a $1.2 billion cash infusion from a group of investors led by U.S. insurer AIG. If the deal goes through, it would be Korea's largest foreign investment to date. The idea is to have base stations everywhere beaming Net connections at 2.4 megabits per second--faster than top cable modem speeds--so that people can be connected no matter if they are in the street, in a car or at a restaurant. People could use the same e-mail and network identity everywhere, on landlines or over the air.
Firms like Samsung and LG are inventing new types of handheld devices with voice-recognition and big screens to help people defend their virtual castles no matter where they are. At least 80 foreign companies have set up research sites in Korea to tap into this gigantic broadband laboratory. Even though Microsoft gets only $200 million in yearly revenue from Korea, it has just invested $500 million in Korea Telecom, in part to test plans for ubiquitous computing. Microsoft got a glimpse of this concept two years ago, when a small Korean Internet site began to show a movie clip of a famous actress having sex with her manager. The site was overwhelmed as, within three days, the entire country accessed it by various means.
Page 2 of 2 from Korea's Weird Wired World
Benjamin Fulford, 07.21.03
When the Slammer virus shut down Internet service for several hours in Korea in January, the whole country suffered from withdrawal symptoms, says Ken Lee, chairman of Korea Telecom, the nation's biggest broadband provider. Some 10% of the general population and 40% of 13- to 18-year-olds are addicted to the Net, says Dr. Kim Hyun Soo, 37, head of Korea's professional society for psychologists specialized in treating Internet addiction. "I have seen kids who have not left the house for two years," he says.
Late last year a woman brought her 17-year-old son to see Dr. Kim. The boy was showing all the symptoms of withdrawal from amphetamines, including sleep disturbance, irritability and difficulty controlling impulses. Turned out he was addicted to the Internet. "He became violent if anyone tried to stop him from using it," says Dr. Kim. The most notorious case of overdoing it: a 24-year-old man who dropped dead after playing Internet games for 86 hours nonstop.
A whole subclass of young men without real jobs form online gangs that rage across digital landscapes, pillaging villages and robbing other virtual characters of their possessions. Most of the virtual goods such as clothes, armor or even sunglasses can be sold in online auctions for hard currency. Sales of stolen and legitimate items are brisk, with prices ranging from $1 for a diamond crown to more than $100,000 to bribe an occupying clan to move out of a castle.
Hong Chin Ho, 22, has reached the professional game-player leagues. He and his colleague Lee Yung Yeol were once physically beaten by their parents in a desperate effort to get them off the Net. Hong says that stopped once they started earning money. They each now earn $150,000 a year as professional Internet game players for a team sponsored by KTF, a mobile phone company. Like many other pros, they have fan clubs and groupies.They appear regularly on the sports pages and on the three 24-hour cable channels devoted to online gaming news.
About 10 million people use online text chatting and 1 million use video chatting in Korea, says Chun Doo Bae, president of CXP, Korea's largest video chatting service. Virtual families consisting of eight or so members meet daily for video chats. Some people are trying to become disc jockeys or entertainers, serving up music and videos to build fan clubs of regular visitors, consisting of 200 to 300 people.
More than 3.6 million Koreans have avatars, or virtual selves, representing them in chat rooms and e-mail. At Oh My Love, Korea's biggest video chat service, avatars are quickly evolving from cute cartoonlike human figures into animations of moving lips, floating dragons and shooting stars. New services have cropped up, including avatar cosmetic surgery, pets and, coming soon, houses. "There is so much to do," says Stanley Ho, president of Neowiz, the biggest avatar purveyor. Its revenue from virtual merchandise should double this year to $65 million, with $15 million in profit.
Much of the chatting is, predictably, about sex. This has led to a proliferation of teenage prostitution and infidelity by housewives. According to state officials, prostitution by young girls is now 100% Internet-based. The divorce rate is soaring as 60% of divorces caused by infidelity involve partners who met through the Net, says psychiatrist Kim.
Newer professions are also moving online, with a majority of Koreans now doing their banking, shopping, securities investment and taxes online. Last year e-commerce moved $150 billion, or 30% of Korea's gross domestic product. Close to 70% of all stock trades are now online, with banking catching up quickly. Cybercrime is following suit. In 1999 there were 572 hacking incidents. By 2002 there were 15,192. In the biggest cybercrime so far, hackers broke through security at Daewoo Securities last August and stole $22 million worth of shares.
The situation in Korea right now is like what happened when its highway system was first built and traffic fatalities soared in the absence of clear rules and norms.
Hong Jin-Bae, a senior government cybercop, promoted a bill banning addictive games, but it died in preliminary discussions. PC rooms are also being ordered to send home underage players after 10 p.m. so they can get some sleep and function in school. Parents have begun learning to play games with their children as well as set curfews. But the plans to make sure people can be online perpetually no matter where they are will make a hash of these curfews. Get used to it. Korean-Americans are al-ready hooked in Koreatown in Los Angeles. Your town may be next.
Buy.com launches digital music service
By Sandeep Junnarkar
Staff Writer, CNET News.com
July 22, 2003, 7:12 AM PT
NEW YORK--Buy.com on Tuesday launched a new digital music download service, hoping to reprise Apple Computer's early success with its iTunes music store.
The new site, BuyMusic.com, offers a catalog of more than 300,000 songs from the five major labels, including Warner Music and Universal Music Group, and from independent recording companies such as Island Records and Def Jam.
The service is charging 79 cents per downloaded song, which is one of the lowest rates for digital downloaded music, and $7.95 per album. The site caters only to people with computers running Microsoft Windows and the Windows Media Player 9 software.
The launch marks the beginning of what will likely be the entry of large e-commerce companies into the digital music world.
Much as iTunes helped drive sales of Apple's music players, Buy.com hopes to direct users of its service to its online stores.
"We have the BuyMusic store, which will have all kinds of devices for playing music, including digital music players, and CD-Rs as well," said Scott Blum, founder and CEO of Buy.com.
The company has earmarked about $40 million for an ad campaign that includes 2,050 television commercial spots over two weeks, 90 percent on national TV, Blum said. Despite the flurry of ads, he expects the service to grow slowly toward its goal of a million downloads a day. He expressed optimism about reaching that milestone by the end of the year, but also acknowledged that the service may never reach that level.
Apple, by contrast, soared in the first weeks after the iTunes launch in April, in what was widely seen as the most attractive pay-per-song music download service yet to hit the Internet. The company sold 5 million songs in iTunes' first eight weeks of operation.
Jupiter Research Reports that the Majority of U.S. Consumers are not Interested in Smartphones
(New York, NY - July 22, 2003) - Jupiter Research, a division of Jupitermedia Corporation (Nasdaq: JUPM), found that when choosing a cell phone, U.S. consumers prioritize small size and voice-related functionality over more advanced features such as integrated digital cameras, games, PDAs or music players. Given the choice of a free basic cell phone or paying for a cell phone with a built-in PDA, digital camera or MP3 player (also known as a smartphone) - a choice offered by nearly all U.S. carriers - most U.S. consumers were not willing to pay as little as $49.
These findings were released in Jupiter Research's new report, "Next Generation Handsets: How To Succeed In Wireless Without Really Converging." To make sense of the marketplace, Jupiter Research created a Handset Taxonomy, identifying key attributes that define each device category. "We explored the reasons vendors and carriers are aggressively creating and subsidizing converged devices such as cell phones with built-in cameras, music or computing capabilities. But those reasons have to be measured against actual consumer demand," said Jupiter Research Analyst Avi Greengart.
Jupiter Research conducted an independent survey to assess U.S. consumer demand for advanced cell phone features and to determine their willingness to pay for added functionality at different price points. The new report analyzes the factors that will enable or prevent a dominant mobile platform from emerging and provides actionable advice for handset manufacturers, cellular carriers and application developers. Separate action plans are provided for media, advertisers and retailers dealing with the changing landscape.
"Basic cell phones with voice and text messaging capability will continue to make up the majority of sales, followed by cell phones that can run small Java or BREW applications without overly increasing cell phone size or price," Greengart said. "But cell phones with cameras, MP3 players and/or PDAs will not be widely adopted in the U.S. over the next 12 months," Greengart added. Because interest in converged devices is low, Jupiter Research advises that carriers and handset vendors should create single purpose cell phones, PDAs and MP3 players, and allow them to function as a single unit using Bluetooth wireless technology.
The complete findings of these reports are immediately available to Jupiter Research clients online. For more information please contact Kieran Kelly at researchsales@jupitermedia.com or call 1-800-481-1212.
New gadgets offer video on the go
By Michel Marriott
NEW YORK TIMES
Posted on Sun, Jul. 20, 2003
Remember the first Walkman? It has been almost a quarter-century since Sony's portable cassette player changed the way people listen to music on the go. Now another form of entertainment is getting the Walkman treatment. Palm-size portable video players are beginning to change where and how people watch movies, cartoons and music videos.
The gadgets, which play compressed video files on a small screen, are designed to be generally less expensive and more convenient than portable DVD players, which have been available for several years. None of these new-generation players, in fact, play DVDs. Instead, using advances in storage and compression technology, most store video on hard drives or memory cards, much the way digital audio players store music files.
"It's just what happened to music," said Ulrich Neumann, director of the Integrated Media Systems Center at the University of Southern California. "We went from cassette tape to CDs to MP3 on memory chips or tiny hard drives. What is happening now is that you have digital movie files going from DVDs down to probably small micro drives."
A few of these players are already in stores. At the high end, Archos has released AV320 Cinema to Go, a hard-drive-based player that costs $600. At the low end, the toy manufacturer Hasbro unveiled a handheld player for children earlier this month called VideoNow. The $50 device plays 30-minute cartoons on a monochrome screen.
Yet it is unclear whether the public will want to watch video on a screen the size of a dollhouse window, with a resolution that is no match for even a standard TV set. After all, some handheld organizers can show video, but that function has never been a particularly strong selling point.
Watching a movie requires more attention than listening to music, so it is difficult to see how the mobile video players will be used in the on-the-go way that portable audio players are.
Industry experts also caution that providing legal content for the devices is and will continue to be a major obstacle.
Still, several other electronics manufacturers, including ViewSonic and Samsung, have announced plans to introduce video players later this year. And Sony is developing a device, the PlayStation Portable, that will play video and music in addition to games.
But it is another game company, Nintendo, that is hastening the development of these devices, calculating that they will appeal to young people, mostly boys, who are used to playing games on a small, relatively low-resolution screen. The first mass-market wave of these gadgets is likely to piggyback on the Game Boy, Nintendo's hugely popular portable video gaming device.
Nintendo estimates that more than 150 million Game Boys have been sold since the machine was introduced in 1989. Its most recent permutation, the $100 Game Boy Advance SP, released this spring, is just 3 inches on its side when folded and about 1 inch thick. Most important, it has a bright full-color screen.
With varying degrees of support from Nintendo, four electronics companies have developed technologies that use the Game Boy Advance SP's 2.4-by-1.6-inch screen to play anything from cartoon shorts to full-length movies in full-motion video. Some Game Boy video technology is expected to reach the market as early as September.
"It is a new application for the Game Boy Advance," Dan Kitchen, vice president for handheld development at Majesco, a video game publisher in Edison, N.J., said of his company's approach to augmenting the Game Boy for video playback.
Called Game Boy Video Pak, the Majesco product consists of special cartridges that appear to be no different from standard Game Boy game cartridges. But when they are inserted into the Game Boy, they transform it into a video player, complete with stereo sound, DVD-like controls and full-screen playback.
Kitchen said the cartridges could hold up to 90 minutes of video, depending on the type of material and how much compression was required. The cartridges will be made by Nintendo and are expected to cost about $20 each.
He said Majesco was negotiating with content makers for Video Pak rights to various films and expected to have five to seven cartridges ready for release by late October.
The early offerings are likely to be feature cartoons, which are far less demanding to render than live-action video, said Kitchen, noting that the initial target audience for Video Pak would be Game Boy owners, who are generally 4 to 14. Playing 24 to 30 frames a second, the Video Pak's image quality on Game Boy's small liquid crystal display is close to VHS quality.
TuneIn Entertainment, a Sherman Oaks company that already brings full-length television shows and movies to handheld digital organizers, is taking a different route to Game Boy-based video.
Rather than digitally compressing video files into memory chips in cartridges, TuneIn executives say, the company is producing a Game Boy adapter that will operate as a docking station. The battery-powered unit, roughly the size of a Game Boy Advance SP, will play 3-inch CDs encoded with video on the game machine's screen.
Darrell R. Griffin, TuneIn Entertainment's president and chief executive, said that Pocket Cinema was expected to cost about $50 and reach stores in the fall. Griffin said his company, which already has access to 2,500 film and television titles for its Pocket PC line, will offer educational programs as well as entertainment titles for the new format, which will run 24 frames a second, he said.
The content will range from classic television to Hollywood blockbusters, and each disc will cost $10 to $15, Griffin said.
He emphasized that the Pocket Cinema was strictly a playback device and could only play content provided by his company. "I don't want to find little kids sitting around playing porn on this device," Griffin said. "We are very cognizant of the fact that we have a responsibility that only family content can be played on it."
Nonetheless, he said he expected the product to expand Nintendo's core demographic market to users in their early 20s. "These devices are reasonably priced," Griffin said. "Why buy a DVD player when you can get this and it's a lot more handy?"
Acquiring content is a potential stumbling block that may slow the demand for new personal video players, said Michael Gartenberg, a research director at Jupiter Research.
Gartenberg said that when digital audio players were introduced more than a decade ago, content was hardly a problem. Users soon learned that music could easily be copied, compressed and uploaded to their portable audio players. But video, he said, is a very different matter. DVD files are larger than music files, and compressing them for storage on a portable video player would be time-consuming. He added that the picture quality would be relatively poor.
More daunting, Gartenberg said, content is not as widely available for legal distribution.
Surveys indicate that only about 20 percent of consumers said they were "interested right now" in watching video on a mobile device. In the end, said Neumann of the University of Southern California, consumers will dictate where portable digital technology goes. He noted that people have long signaled that they want their personal electronics to keep shrinking.
"It is the progression of technology ever downward in size and costs," Neumann said, "but upward in portability."
Remember the first Walkman?
Since richard left, the joke he referred to owd was the fact that you make much ado about some players being for sale on ebay at all. Much less whether those players are ipods or O1000s. Nite sweety.
And so you think they wouldn't like to replace them with a unit that didn't have an albatross around your neck??LOL
Downloads put music stores on endangered species list
Posted 7/17/2003 11:46 AM
By Jay Loomis, The (Westchester, N.Y.) Journal News
WHITE PLAINS, N.Y. — Ron Masciandaro is spending more time at a second job playing the piano for clubs and parties. He needs the extra income to help support his family.
Music stores lose sales of CDs by artists ranging from Justin Timberlake to Frank Sinatra to Internet music sites.
AP
A business he also owns, Central Compact Disc, has a selection of 50,000 CD titles by artists ranging from Madonna to Frank Sinatra. But sales have fallen at the White Plains, N.Y. store in recent years, forcing him to lay off employees.
"It is pretty gloomy in the music business," the 41-year-old Masciandaro said.
CD sales are plummeting at music stores across the country. One culprit: the growing legions of music lovers who are bypassing traditional retail outlets to download favorite tunes from the Internet for free or at reduced prices.
The Internet is fast making music stores an endangered species. The survivors worry about the implications of technology they can't control.
"We have lost a whole generation of younger customers," said Joe Merigliano, owner of Love Music in New Rochelle, N.Y. "The kids used to come here on Saturday mornings with their mom and dad. They aren't coming much any more."
The store is scrambling to make up for lost CD sales any way it can. One way is to sell speakers, amplifiers and sound equipment. Another is by offering hard-to-find imported CDs and collectibles.
"In the old days, people loved the experience of going to a store and listening to songs," Merigliano said. "Now people just stay at home, download by computer and ship songs from house to house... Technology has caught up with the music companies and they don't know how to respond."
CD shipments totaled 803.3 million last year, a decline of nearly 15% in two years, according to the Recording Industry Association of America. Industry executives blame rampant online piracy and bootlegging for accelerating the decline.
Users illegally download 2.6 billion files a month from unauthorized networks dealing in illegal music, with college campuses a focal point of the activity, the association said. Losing an estimated $300 million a year to illegal song copying and distribution, the industry has recently become aggressive at filing lawsuits against some users, including college students.
"Despite education campaigns about the illegality of file sharing, and despite numerous court decisions clearly holding that copying music, movies and other copyrighted files is against the law, there is an alarming disregard among students for Internet theft," Hilary Rosen, chairman of the Recording Industry Association of America, said in testimony before a congressional committee this year.
The impact of the Internet is evident at stores across the region. At Yellow Bird Music in Mount Vernon, N.Y., manager C. Moore complained that sales have fallen as the store faced competition from a bootleg market in the community.
"Business is slow, terribly slow," Moore said. "We have been in this community 25 years. ... September 11 and the economy also have hurt us."
And Central Compact Disc is lucky to sell 12 CDs during the first week of a new album's release. That's down from 30 CDs six years ago.
"It bothers me because I also am a musician," Masciandaro said. "One of my dreams in life was to have a song on the radio and have people buy my music. But it's dim for artists. The problem is that intellectual property got construed as being free, and it's not."
Masciandaro said the record labels deserve some of the blame. A new CD can sell for $18.98, up by $2 from five years ago. The high prices, he said, simply encouraged some to download songs for free.
"As soon as the technology came in, it should have raised a red flag for the industry to lower its prices," Masciandaro said. "But they didn't. Now they are paying for their sins. ... It costs the manufacturers less than $1 to make these things. How greedy can they get?"
Wal-Mart Cancels RFID Trial As Companies Get Realistic About The Technology
Tue Jul 15, 3:35 AM ET Add Technology - TechWeb to My Yahoo!
David M. Ewalt, InformationWeek
Wal-Mart Stores Inc. last week canceled a closely watched experiment using radio-frequency identification systems to track individual merchandise. But rather than signal waning enthusiasm for RFID, the decision shows how companies are focusing on the most realistic applications of the technology.
The proposed "smart shelf" program was to be implemented with Gillette Co., tagging razor-blade packages in a Brockton, Mass., Wal-Mart store with small radio transmitters and using receivers embedded in shelves to track the merchandise.
But Wal-Mart shelved the program, saying it wants to concentrate on installing RFID systems to track pallets of goods. The move is in line with a strategy CIO Linda Dillman laid out in June, when she revealed that the company had tested RFID tags on individual items and cases and concluded that the technology for item-level tracking wasn't ready for widespread use. Instead, Wal-Mart has told 100 top suppliers they need to be able to use RFID tags to track pallets of goods by January 2005.
Consumer-goods manufacturer Unilever Group is in the midst of its own trial programs and has similar priorities. "We're focused on cases and pallets. That's where we're spending our time and energy because that's where we see the benefit," says Simon Ellis, Unilever's supply-chain futurist. "I'm not sure we'll ever do item-level tagging, and if we do, it's not going to be for a very long time, maybe five to 10 years."
In June, Dillman cited the cost of tags as one factor in favor of concentrating on pallets, saying only pallet-level tracking could deliver returns at today's tag prices. She also noted that readers were too large and bulky for practical shelf-level use. "From the retailer perspective, it's still expensive," AMR Research analyst Paula Rosenblum says. "It's not just about the chips; it's about the readers, and they're not cheap."
A Gillette spokesman declined to comment on the canceled program but said the company expects to work with Wal-Mart on the tagging of pallets and cases. Gillette is continuing its research on item-level tagging and has trials under way with U.K. supermarket chain Tesco plc and German retailer Metro AG.
Wal-Mart isn't the first company to scale back an RFID pilot project. In April, Italian clothing manufacturer and retailer Benetton Group decided to re-evaluate a plan to deploy RFID tags in its clothing, following threats of boycotts from consumer and privacy advocacy groups. Those critics worry that tags in apparel could be used to violate individuals' privacy, such as by tracking the movements of buyers in and out of stores.
It's unlikely Wal-Mart canceled its trials primarily for privacy reasons, AMR's Rosenblum says, since privacy isn't an issue with disposable items such as razor blades.
Nonetheless, RFID advocates know they'd better take privacy concerns seriously, even on shipping containers the consumer never sees. It's a technology most people only vaguely understand, and news coverage often exaggerates its capabilities. "There's a tangible level of concern about privacy, which I completely understand," Ellis says. Supporters argue that a more efficient, RFID-enabled supply chain will benefit consumers through lower costs and better availability of goods. Says Ellis: "It would be a real shame if all this noise around item-level tagging cools down what could be a real beneficial development for the supply chain."
Nobucks, I absolutely believe that if not now then "soon", RFIID tags will tie up with headset products such as ours. I think this is the ultimate connection to retail that was alluded to in the PR.
Buy.com will attempt to differentiate itself from Apple's offering, which has been described a ``mini-mart'' for songs, in which consumers leave their cash on the counter and walk away with the desired single or CD. Buy.com will attempt to create an atmosphere where music fans will want to linger.
``My peers have been calling me to go, `Wow. Have you seen this?' '' said one record industry executive, speaking on condition of anonymity.
Buy.com representatives declined to comment.
Buy.com to start music service
RETAILER HOPES TO COPY APPLE'S ITUNES SUCCESS
By Dawn C. Chmielewski
Mercury News
Posted on Tue, Jul. 15, 2003
Buy.com will unveil a new music download service next Tuesday with a $40 million promotional campaign and launch celebration in New York's Times Square.
It will seek to emulate the success of Apple's iTunes Music Store, even as its ad campaign takes jabs at its ``simplistic'' nature, say recording industry sources who've seen the Buy.com promotion.
Like the iTunes Music Store, Buy.com will sell individual music tracks without collecting an up-front monthly subscription fee; even though it has yet to secure licensed music from all five major record labels, knowledgeable sources say.
The success of the iTunes store, which sold 5 million singles in the first two months, is proving to be a turning point in an online music business that has been dominated by obscure players. It awakened interest from giant online retailers like Amazon.com and prompted even established Internet services like America Online, MSN, RealNetworks and Yahoo to re-examine their digital music offerings.
Targeting PC users
Buy.com, the first of the mainstream Internet shopping sites, will attempt to beat its longtime rival, Amazon.com, to the punch, selling music downloads to the 97 percent of computer users who don't own a Macintosh and therefore can't use the iTunes Music Store.
Apple is working on a Windows version of its music service. No date has been set for its launch.
Buy.com will attempt to differentiate itself from Apple's offering, which has been described a ``mini-mart'' for songs, in which consumers leave their cash on the counter and walk away with the desired single or CD. Buy.com will attempt to create an atmosphere where music fans will want to linger.
``My peers have been calling me to go, `Wow. Have you seen this?' '' said one record industry executive, speaking on condition of anonymity.
Buy.com representatives declined to comment.
At the height
Buy.com has had a history of reinvention.
The site, launched in 1996 by flamboyant entrepreneur Scott Blum, made its mark selling discounted consumer electronics. In its first year it sold $125 million -- surpassing first-year sales record set by Compaq Computer in 1984. At the height of dot-com euphoria, Buy.com was valued at more than $3 billion.
But the company's deep-discount strategy nearly proved to be its undoing. Though Buy.com hoped to amass more customers than Amazon.com by selling products at a loss and making up the difference through advertising revenue, it was on the verge of bankruptcy by November 2001, when Blum bought back the company and took it private.
Blum had previously sold more than $125 million of his shares to Softbank, the Japanese conglomerate. He paid $13 million to buy back the shares back.
Last November, Blum told the New York Times about plans to launch a late-night television shopping and entertainment network dubbed BuyTV, in which authors, musicians and others would tout their products -- Home Shopping Network-style.
The debut has been postponed until this fall, according to BuyTV's Web site.
Potentially lucrative
Selling downloadable music is yet another departure for Buy.com, whose monthly audience has dwindled to 3.1 million monthly visitors, less than 10 percent of Amazon.com's 34.5 million visitors, according to Nielsen/Net- Ratings, an audience measurement firm.
Jonathan Gaw, an Internet commerce analyst for the technology research group IDC, said music downloads represent a potentially lucrative new revenue source for the discount retailer, whose profit margins have been squeezed in ongoing price wars with Amazon.com. But he expressed skepticism that such an offering would hold appeal with Buy.com's frugal customers.
``They've always drawn the value-conscious buyer. That was their stance from the get-go: `We're cheaper than Amazon,' '' Gaw said. ``Their customer base tends to be . . . more value conscious. They're more concerned about price than they are about convenience or the experience.''
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Contact Dawn C. Chmielewski at dchmielewski@mercury news.com or (800) 643-1902 .
RIAA Sues Spanish 'Net Music Service Puretunes for Copyright Infringement
Washington -- The Recording Industry Association of America (RIAA), a
trade group representing major record labels, announced that it has filed
a copyright infringement lawsuit against the parent company of Puretunes,
a Spain-based online service that offered music downloads at
highly-discounted prices. The lawsuit comes as Puretunes has encountered
other troubles, as the site has been unavailable for over a month.
Puretunes claimed that it had licensed recordings for use on its service
through several Spanish copyright societies -- licenses the RIAA says are
not valid. "Contrary to everything that Puretunes told the public -- both
on its Web site and in news reports -- they never obtained nor sought
licenses for the music that they were selling to the public," an RIAA
representative told CNET News.com. "It's bad enough that Puretunes was
selling music illegally -- it's even worse that they tried to perpetrate a
fraud on the public by claiming that they were a legitimate business." The
RIAA lawsuit against Puretunes parent Sakfield Holding SA seeks an
injunction against the company and monetary damages for copyright
infringement.
http://news.com.com/2100-1027_3-1024382.html?tag=fd_top
DivXNetworks Opens First Office in Europe
German Office Will Support Sales and Marketing Efforts for World’s Most Popular Video Technology
Dortmund, Germany and San Diego, CA—July 10, 2003—DivXNetworks, Inc., the company that created the revolutionary, patent-pending DivX® video compression technology, today announced the opening of DivXNetworks Europe, a sales and marketing office based in Dortmund, Germany. The office will be managed by Dino Mari, the newly appointed Managing Director of DivXNetworks Europe.
DivXNetworks Europe will focus on a number of business initiatives, including launching DivX software products into major European retail channels, licensing DivX video technology to major European software companies, supporting the DivX Certification™ program for consumer electronics devices, and creating video distribution solutions with major European telcos and infrastructure companies. Millions of DivX Licensed software products and DivX Certified™ consumer electronics devices are expected to hit European retail shelves in 2003.
“The DivX phenomenon has always been enormously popular in Europe, and we are very excited to officially open our European business office in Germany,” said Kevin Hell, Chief Marketing Officer and Managing Director at DivXNetworks. “With his valuable sales and marketing experience in the technology marketplace, Dino Mari is an excellent choice to help manage our growth in Europe as we work with our partners to bring officially licensed DivX software and hardware products to market.”
The opening of the European office is the latest global expansion move from DivXNetworks. Headquartered in San Diego, California, the company has satellite offices in San Jose and Los Angeles, CA, as well as Germany and Taipei, Taiwan. With over 85 million global downloads, DivX® video is the world’s most popular MPEG-4 compatible video compression technology, powering a wide range of products and applications.
“Due to the significant brand awareness and widespread consumer adoption of DivX video, there exists a tremendous opportunity for DivXNetworks to enhance its strong and thriving business in Europe,” said Dino Mari, Managing Director of DivXNetworks Europe. “The European team will focus on supporting existing partners, driving business development relationships and coordinating marketing and public relations efforts. The Europe office will also allow us stay closer to our target markets and consequently gain a better understanding of the specific requirements of the marketplace.”
For more information on DivXNetworks, visit www.divxnetworks.com.
About DivXNetworks DivXNetworks is a consumer-focused video technology company positioned at the center of multimedia convergence. The company’s core offering is the DivX ® video codec, the world’s most popular MPEG-4 compatible video compression technology with over 85 million users worldwide. Often called “the MP3 of video,” the patent-pending DivX video technology offers DVD-quality at 10 times greater compression than MPEG-2 files, enabling full length films to easily fit on a CD or be delivered over broadband connections. DivX video technology powers a range of applications that span the convergence value chain, from a secure IP-based video-on-demand solution to next-generation consumer electronics products and video software applications. DivXNetworks is headquartered in San Diego, California, with satellite offices in Los Angeles and San Jose, CA, Taipei, Taiwan, and Dortmund, Germany. For more information, visit http://www.divxnetworks.com.
Vivendi cuts losses with MP3.com
Owen Gibson
Wednesday July 9, 2003
Fourtou: forced through closure of MP3.com
Cash strapped French media giant Vivendi Universal has closed the European arm of MP3.com, the online music site that it bought for £265m two years ago.
Its decision to dump the expensive acquisition is part of its ongoing purge of the excesses of former chief executive Jean-Marie Messier.
The site, which was worth over £3bn at the height of the dotcom boom, will close on August 8 with around 20 redundancies in Europe. The US arm of the site has been placed up for sale, although analysts are doubtful whether a buyer will be found willing to operate it as a going concern.
Leanne Sharman, the vice president of sales and marketing at MP3.com Europe, said that while it was performing well operationally and had built up good relationships with advertisers and record labels, the decision was down to "corporate strategic reasons".
"We have started to generate significant revenues and now we have got to that stage it is a shame, there's general disappointment among staff and in the industry generally," she
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added.
The timing of the decision is unfortunate for MP3.com, coming just as legitimate music download services such as Apple's iTunes have finally started to take off.
The closure is part of chief executive Jean-Rene Fourtou's efforts to reduce Vivendi's debts following a huge acquisition spree by his predecessor Jean-Marie Messier, which last year drove the group to the brink of bankruptcy.
Mr Fourtou plans to wipe out the majority of Vivendi's £12bn debt by auctioning off the company's US entertainment assets, which include Universal Studios, the Sci-Fi channel and its theme parks, and concentrating on its French telecoms and broadcasting businesses.
It is understood that the Vivendi Universal board originally hoped to find a buyer for MP3.com Europe, but with few offers forthcoming have decided to close it down and sell off the domain name separately. The US version of the site will remain up for sale in the hope that a buyer can be found.
MP3.com was originally launched in 1997 as one of a number of sites that allowed music fans to download music for nothing over the internet. It later became one of the first illegal sites to reach a settlement with the major record companies and concentrate on legitimate downloads
Recently, it has been concentrating on providing marketing solutions to advertisers through its network of users and persuading record labels to use it as a promotional tool through which to push new releases.
The site was part of Vivendi Universal Net, the white elephant that was once seen as the key to Mr Messier's vision of creating an integrated media company delivering its content over the web.
"MP3.com's expertise will be a tremendous advantage, especially in the digital distribution of all Vivendi Universal content and the creation of common technology platforms," the former Vivendi chief executive said in April 2001 when he paid £265m for MP3.com.
Another key part of the unit, mobile portal Vizzavi, was sold to joint venture partner Vodafone last year for £90m.
· To give MediaGuardian a story email editor@mediaguardian.co.uk or phone 020 7239 9857
OT Takes time...Infiniti to Offer Factory-Installed Satellite Radio from XM, Sirius
New York -- Auto manufacturer Infiniti, a division of Nissan, announced on
Wednesday that it has begun offering factory-installed satellite radio
receivers from both XM Satellite Radio and Sirius Satellite Radio on its
entire vehicle line up. Additionally, the carmaker will be installing
pre-wiring in all of its vehicles that will allow installation of either
satellite radio service by its car dealerships.
http://biz.yahoo.com/prnews/030709/dcw001_1.html
http://biz.yahoo.com/prnews/030709/nyw012_1.html
http://www.xmradio.com
http://www.siriusradio.com
http://www.infiniti.com
Intel, Bell Canada and VIA Rail Canada Bring Wireless Internet Access to Trains
Wednesday July 9, 12:30 pm ET
TORONTO--(BUSINESS WIRE)--July 9, 2003--Intel Corporation, Bell Canada and VIA Rail Canada today announced plans to equip select VIA 1 train cars with wireless Internet access for passengers traveling between Montreal and Toronto.
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For the first time in North America, wireless local area network or WLAN connectivity will be available within a moving passenger train car. The four-month pilot gives business and personal travelers with Wi-Fi enabled laptops or PDA devices another convenient option to wirelessly access the Internet, check email and connect to corporate networks while traveling on the train.
The pilot service combines the technical expertise, products and services of Bell Canada in conjunction with Intel and PointShot Wireless(TM). Bell technologies include Bell ExpressVu's* satellite service, Bell Mobility's 1X* next-generation wireless network and Bell's nationwide data network. Intel's services include Intel's "Wireless Verification Program" to enhance Intel® Centrino(TM) mobile technology user experience on Bell's network. Ottawa-based PointShot Wireless provides the wireless technology within the train. A recent survey conducted by PointShot and Intel showed that 90 percent of respondents saw benefits in having the ability to access the Internet and email while on a train.
"Our research indicates that Canadian business people want to use their travel time to catch-up on email, work on presentations and do other work-related tasks. They appreciate easy and convenient access to the Internet," said Doug Cooper, general manager, Intel Canada. "Our collaboration with Bell Canada and PointShot Wireless marks another step in making wireless technology more broadly available. With Intel Centrino mobile technology, notebook PC users have the freedom and flexibility of being unwired, whether at work, in a hotel, at an airport -- even on a train."
The Bell Canada AccessZone WLAN pilot service onboard VIA Rail Canada allows an Internet connection to be transmitted to the train from Bell ExpressVu's Internet satellite service to onboard equipment and then to the end-user's notebook. Responses from the end-user's notebook are then transmitted back to the train's wireless networking equipment and then delivered over Bell Mobility's 1X wireless network to the Internet.
"Today's announcement is another example of Bell's commitment to meeting the evolving needs of mobile professionals and business travelers who are increasingly using wireless technologies for Internet access while away from home or the office," said Almis Ledas, Vice-President Corporate Development, Bell Mobility. "This service is a clear demonstration of Bell's ability to align its resources namely satellite, wireless and wired data networks, with innovative companies like Intel and PointShot Wireless to create a four-month pilot service that will provide train passengers with WLAN real-time on-board access."
The WLAN connection will allow passengers to be more productive by accessing virtual private networks (VPN), corporate intranets, sending and receiving e-mail, or browsing the Internet. On the outset of the pilot, VIA Rail express train number 53 from Montreal to Toronto and number 66 from Toronto to Montreal will have a VIA 1 car equipped with WLAN capabilities. During the pilot Bell Canada intends to rollout more VIA 1 cars with WLAN access.
Intel Wireless Verification Program (WVP)
Intel and leading wireless LAN service providers have worked together to proactively verify interoperability across their Wi-Fi hotspot network to enhance Intel® Centrino(TM) mobile technology users' wireless experience at verified hotspots.
Bell Canada AccessZone
AccessZone, a Wi-Fi hotspot pilot powered by Bell Canada, provides Canadians with a convenient way to wirelessly access Internet service. The pilot was launched in December 2002 and has grown to include more than 20 enterprise locations including: Toronto's Union Station and Mount Sinai Hospital, Montreal's Dorval Airport, Kingston, Ontario's Confederation Park and Marina and Air Canada Maple Leaf Lounges. By leveraging the widespread availability of 802.11b enabled computing devices, AccessZone is helping mobile professionals and business travelers do business where they want and access information when they need it.
Intel is working with Bell AccessZone to advance WLAN computing for mobile PC users by encouraging the deployment of public hotspots, verifying that these hotspots work with Intel Centrino mobile technology-based notebooks, and promoting the availability of hotspots to encourage use.
About Bell Canada
Bell Canada, Canada's national leader in communications, provides connectivity to residential and business customers through wired and wireless voice and data communications, local and long distance phone services, high speed and wireless Internet access, IP-broadband services, e-business solutions and satellite television services. Bell Canada is wholly owned by BCE Inc. For more information please visit www.bell.ca.
About Intel Corporation
Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.
Intel and Centrino are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries.
* Other names and brands may be claimed as the property of others.
Note: Important Information: Wireless connectivity and some features may require you to purchase or download additional software, services or external hardware. Availability of public wireless LAN access points limited. System performance measured by MobileMark* 2002. System performance, battery life, wireless performance and functionality will vary depending on your specific hardware and software configurations. See http://www.intel.com/products/centrino/more_info for more information.
------------------------------------------------------------------------
Contact:
Intel Corporation
Wendy Hafner, 408/765-5714
wendy.hafner@intel.com
Tom Potts, 503/264-6277
tom.potts@intel.com
Dan Francisco, 916/801-2265
daniel.j.francisco@intel.com
or
Bell Media Relations
Don Blair, 416/581-3311 or 888/482-0809
don.blair@bell.ca
So we can add fuel savings to the list of benefits Skyview would provide to airlines...great...
More pounds, more wires
An entertainment system adds thousands of pounds to a jet. It consists of more than 2,000 parts and, on a fully equipped wide-body jet, uses about 41/2 miles of wire, says Greg Steiner, a vice president at entertainment system manufacturer Rockwell Collins.
P2P's little secret
By Declan McCullagh
CNET News.com
July 8, 2003, 12:01 PM PT
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File swappers hoping to share music and other works online without exposing their identity to the prying eyes of copyright enforcers face a tough choice.
Popular peer-to-peer networks such as Kazaa, where the lion's share of online trading of music and other files takes place, are designed in such a way that participants who wish to remain completely anonymous must pay a severe price in terms of convenience and usability, experts warn.
"There is no good system out there for hiding identities," said Randy Saaf, president of MediaDefender, a Los Angeles-based company that investigates peer-to-peer networks for the music industry. "If they're sharing content, they're wide open, they're running the risk. It's hard to anonymize people on a big public network."
There are plenty of incentives for Web surfers to try to cloak their identity these days. Recently, the Recording Industry Association of America (RIAA) pledged to sue individuals who infringe copyrights, and it won a court order forcing Verizon Communications to divulge the identity of a Kazaa user. The RIAA has already filed suit against four university students, and some schools have disciplined students for inappropriate file-swapping.
So far the RIAA's threats of litigation have had no effect, said Wayne Rosso, president of peer-to-peer company Grokster. "As far as I can see, nobody really cares," Rosso said. "Our downloads are up, traffic is holding steady. Come on, users know they can't sue 60 million of them. Who are they kidding?"
Hiding on a file-sharing system is hard for a very simple reason: peer-to-peer networks are designed for efficiency, not anonymity. They rely on a straightforward mechanism that is ruthlessly efficient at trading files. But, by broadcasting the contents of shared folders, the system leaves users vulnerable to identification and, therefore, to possible legal action.
On a peer-to-peer network, files are directly swapped between computers, each of which has a unique Internet Protocol (IP) address that can be traced back to the Internet service provider, corporation, or university to which it belongs. Because computers on a peer-to-peer network transfer files without going through an intermediary, the IP address of one person on the network is typically available to everyone else.
Typically, a copyright holder can unmask a suspected infringer by sending a subpoena--which invokes a controversial section of the Digital Millennium Copyright Act--to the company or university providing network connectivity to the IP address in question, asking it to reveal the identity of the suspect. Once it knows the suspect's name, a copyright holder has the option of filing a lawsuit or simply sending a cease-and-desist notice.
Donning the mask
Products that offer privacy for activities such as Web surfing and e-mail have been available for some time, although most have been greeted with indifference by consumers. That attitude could change, however, with the RIAA's new policy of filing lawsuits against individuals, potentially sparking a renaissance in anonymizing tools for peer-to-peer networks.
A surge in interest in anonymizing technology could radically change the character of the Net, if strong privacy software were to become widely adopted.
In response to the possible threat to file swappers of litigation or even criminal prosecution, some companies have begun to offer products they say will make filing a lawsuit against file swappers more difficult. Last week, for instance, a peer-to-peer service named Blubster announced a new version of its software that it touted as a "new, secure, decentralized, self-assembling network that provides users with private, anonymous accounts."
Consumers hoping for a painless way to hide their identity on peer-to-peer networks may be disappointed, however. For example, Blubster does not conceal the telltale IP addresses used to connect to the file-swapping service, meaning copyright investigators can, in practice, unmask anyone on its system.
RIAA spokesman Jonathan Lamy declined to discuss the specific techniques the group employs when investigating infringement on peer-to-peer networks. But Lamy said "not only can these services be held criminally responsible, but users who try to avoid detection can face the same charge as well, in addition to the obvious civil liability."
That's not to say that there are no techniques available for savvy file swappers who wish to keep their identity secret.
One way to achieve reasonable anonymity for downloading files, experts say, is to find a free 802.11 Wi-Fi access point that does not require a password or a subscription. Because anyone can access the wireless network without identifying herself or himself first, lawyers from the RIAA would have difficulty tracking down individual users.
Scores of wireless access points exist in New York City, and some municipal governments have funded free access points with tax dollars. Last month, a working group of the Institute of Electrical and Electronics Engineers gave a boost to the growing interest in 802.11 by approving the 802.11g specification as a standard, a faster version of the early 802.11b protocol.
MediaDefender's Saaf admitted this method offers effective cover for downloaders, but said he believes it is too inconvenient to become a serious conduit for illicit music and video files. "You can go into a Kinko's and plug into your laptop too and put files up on a P2P network," he said. "But if people can't do it at home, they won't do it on a massive scale."
In addition, he predicted that wireless operators could come under fire from copyright holders if Wi-Fi file-sharing hubs become too widespread.
One file-distribution system that is trying to conceal even its users' IP addresses is the venerable Freenet, which breaks from the traditional mold of peer-to-peer networks by cloaking the identities of both the people distributing copies of a file and those downloading it. Because Freenet is intended to provide a near-uncensorable and encrypted way to communicate, its designers specified that individuals may not even know what files are stored on their hard drives. The downside: Freenet remains more difficult to search and offers less content than the most popular file-swapping networks.
Ian Clarke, the project's inventor, said in an interview that the RIAA's recent legal actions and threats of additional lawsuits have heightened interest in Freenet. "The Freenet site has seen a threefold increase in Web traffic since the RIAA announcement," Clarke said. "We've received more donations to the project in the last week than we had in the past two months before that."
"We like the attention to some degree, and we certainly appreciate the donations, but it places us in a strange position," Clarke said. "Our concern and our goal is to protect political dissidents living in repressive regimes, not to let some kid get the latest Britney Spears album. But we can't prevent that without compromising the goal of Freenet."
Freenet's Web site describes the project as "free software designed to ensure true freedom of communication over the Internet. It allows anybody to publish and read information with complete anonymity. Nobody controls Freenet, not even its creators, meaning that the system is not vulnerable to manipulation or shutdown."
MediaDefender's Saaf admits that Freenet is a "a much more compelling technology" than its rivals. "But the problem with it is that it's not very user friendly at this point," Saaf said. "It's always been more hype than practical utility. I don't know of anyone who uses Freenet."
In a recent debate, Matt Oppenheim, the RIAA's senior vice president of business and legal affairs, downplayed the problems that Freenet's anonymity may pose to lawyers for the music industry. "Other than the fact that most infringers do not like to use Freenet because it is too clunky for them to get their quick hit of free music, it is no more of a threat than any of the popular P2P services," Oppenheim wrote.
Lance Cottrell, founder and president of Anonymizer.com says one reason he has chosen not to extend his identity-cloaking service (which sells for $30 a year) to peer-to-peer networks is the threat of lawsuits from the music industry. Anonymizer provides only anonymized Web browsing and dial-up services.
"We have not enabled our service to work with the Gnutellas of the world," Cottrell said. "The problem is that the RIAA has the kind of money that, whether you're right or wrong, you're out of business. It's not whether you win or lose, but whether you survive the litigation."
Under a 1995 Supreme Court ruling, McIntyre v. Ohio Elections Commission, and other precedents going back to the pseudonymously-published Federalist Papers, Americans enjoy a broad right to anonymity, especially for political speech. But courts have also held that someone's identity can be unmasked through a Digital Millennium Copyright Act subpoena to an Internet provider or by filing a "John Doe" lawsuit.
In a ruling last week in the Aimster case, a federal appeals court went even further, suggesting that a file-swapping network that cloaks its users' activities might run afoul of copyright law precisely because it is designed to conceal illegal acts.
"Aimster hampered its search for evidence by providing encryption," wrote Judge Richard Posner, a respected economist and jurist. "It must take responsibility for that self-inflicted wound."
Posner, who serves on the 7th Circuit Court of Appeals, wrote: "A service provider that would otherwise be a contributory infringer does not obtain immunity by using encryption to shield itself from actual knowledge of the unlawful purposes for which the service is being used."
Anonymity services
If large copyright-holders begin to target privacy-protecting Internet services, advocates worry that the tiny industry may not be able to survive the eventual fusillade of laws and litigation. (In October 2001, Zero-Knowledge Systems, a pioneer in the type of identity shielding technology that would be a boon to peer-to-peer networks, closed its flagship anonymity network, Freedom.)
Marc Rotenberg, director of the Electronic Privacy Information Center, says that anonymity should remain the default condition both online and offline. "It is in many different contexts in the physical world, whether it's travel or commerce," Rotenberg said. "The burden typically falls on organizations that want your personal identity to justify their reason."
Given the RIAA's history of lawsuits, Rotenberg said he fears the worst. "To the extent that anonymity appears on the RIAA radar screen--as have P2P and other technologies that stand in the way of copyright enforcement--you can be sure that RIAA attorneys will launch a frontal assault, regardless of the constitutional implications," Rotenberg said.
The music industry might want to listen to this swappers' deal
By Hiawatha Bray, Globe Staff, 7/7/2003
hat's the country coming to? It's getting so that you can't steal music any more without being busted. That's the kind of reaction coming from Internet file-swappers now that the recording industry has vowed to file lawsuits and maybe even criminal complaints against people who trade pop tunes without paying for them. Makers of file-swap software like Morpheus are urging users to write their congressfolk in protest. One imagines some sort of form letter: ''I'm a thief and I vote.''
Actually, what the swappers want is a new deal for the music industry. Consumer file-swapping would be made legal, but all Internet users and computer buyers would pay a special tax, to be divvied up among the music producers as compensation for lost CD sales. So far, though, the Recording Industry Association of America is turning up its nose at the plan.
They may think better of it in a year or so. Only success can justify the RIAA's present hardnosed strategy, and success is far from assured. One of the big file-swapping services, Kazaa, reported a big falloff in usage right after the RIAA made its threat, but swapping rates have since bounced back. Other swap services report that usage remains strong.
Remember that many swappers still purchase at least a few CDs. Imagine them stopping altogether and getting all of their music free off the Internet, as a protest against the lawsuit blitz. Imagine the amount of swapped music actually increasing as a result of the protest. Imagine swappers contributing to a legal defense fund for their fellow felons. Now, imagine any savvy politician ignoring all of that and supporting the RIAA. Yeah, this could get ugly.
And that's just the short-term problem facing the music industry. Lurking over the horizon: file-swapping services that will make it extremely difficult, if not impossible, to track the swappers.
Today's swapping systems let people link their computers directly to one another to exchange files. As a result, a system like Kazaa makes it possible for a user to identify the Internet address of his fellow swappers. Not to worry; this isn't your home address. It's just a string of numbers such as 192.168.22.44.
But your Internet provider will know who was using that address on a given date and time. So the music company can camp on Kazaa, intercept these Internet addresses, then subpoena the relevant Internet companies to get the names and addresses of the swappers.
What the swappers need is a system that lets people exchange files without revealing their true Internet addresses. And such systems have long been under development.
The granddaddy of them all, Freenet, was born in 2001. Ian Clarke, then a grad student at the University of Edinburgh, wanted to help people in repressive countries like China to evade the Internet censors. So he came up with a complex form of file-swapping, where every piece of data is encrypted and bounced through multiple servers. As a result, it's never clear who sent the
original data request and who responded to it. ''It's actively being used in countries like China right now, as a way to distribute politically sensitive or censored information,'' said Clarke. And there's no reason it couldn't also be used to swap MP3 music files.
Well, actually there is one reason. Freenet is slow -- brutally, dreadfully slow. All of the data-hopping and encryption combine to make a Freenet session an exercise in frustration. There isn't even a simple way to search the network for files you might want, because it's so hard to create such a system and retain the pure anonymity of the network. A substitute for Kazaa? Not even close. At least, not yet.
Others are trying to layer anonymity features atop their existing file-swap programs. The Spanish service Filetopia, a fast, easy-to-use swap system, offers a piece of Java code that can be used to set up a ''bouncer.'' That's a proxy server that can reroute swapping requests to conceal their origins. But for the system to work, somebody on the Net must set up computers to act as bouncers.
Filetopia creator Enrique Martin said his firm distributes the bouncer software but doesn't know of anybody who runs it. And a Google search didn't turn up any sites offering their services as Filetopia bouncers. So it's hard to know how well Filetopia will work until the bouncer system is widely deployed. Given the threats from RIAA, we'll soon find out.
Morpheus, one of the best-known swap services, is also looking at ways to conceal users' identities.
''There's independent proxy servers out there that people could use,'' said Michael Weiss, CEO of Morpheus's parent company, StreamCast Networks. Weiss, whose company is locked in federal litigation with the record companies, wouldn't flatly say that Morpheus would help illegal file-swappers evade detection. Instead, he blandly vowed: ''We are going to provide our users with a measure of security and privacy that will let them feel comfortable on the Internet.''
Maybe so, but it sounds like a bed of nails for the music moguls. Their legal campaign may only hasten the day when people can swap files in perfect secrecy. If that day arrives, the RIAA may welcome the swappers' proposed new deal, as the only way out of the music industry's great depression.
Hiawatha Bray can be reached at bray@globe.com.
This story ran on page C2 of the Boston Globe on 7/7/2003.
OT 'Bout time...Website turns tables on government officials
By Hiawatha Bray, Globe Staff, 7/4/2003
Annoyed by the prospect of a massive new federal surveillance system, two researchers at the Massachusetts Institute of Technology are celebrating the Fourth of July with a new Internet service that will let citizens create dossiers on government officials.
The system will start by offering standard background information on politicians, but then go one bold step further, by asking Internet users to submit their own intelligence reports on government officials -- reports that will be published with no effort to verify their accuracy.
"It's sort of a citizen's intelligence agency," said Chris Csikszentmihalyi, assistant professor at the MIT Media Lab.
He and graduate student Ryan McKinley created the Government Information Awareness (GIA) project as a response to the US government's Total Information Awareness program (TIA).
Revealed last year, TIA seeks to track possible terrorist activity by analyzing vast amounts of information stored in government and private databases, such as credit card data. The system would use this information to analyze the actions of millions of people, in an effort to spot patterns that could indicate a terrorist threat.
News of the plan outraged civil libertarians and prompted Congress to set limits on the scope of such activity. The Defense Department then renamed the program Terrorist Information Awareness, to ease public concern.
But the controversy gave McKinley the idea for the GIA project. "If total information exists," he said, "really the same effort should be spent to make the same information at the leadership level at least as transparent -- in my opinion, more transparent."
McKinley worked with Csikszentmihalyi to design the GIA system. It's partly based on technology used to create Internet indexes such as Google. Software crawls around Internet sites that store large amounts of information about politicians. These include independent political sites like opensecrets.org, as well as sites run by government agencies. McKinley created software that ferrets out the useful data from these sites, and loads it into the GIA database. The result is a one-stop research site for basic information on key officials.
The site also takes advantage of round-the-clock political coverage provided by cable TV's C-Span networks. McKinley and Csikszentmihalyi use video cameras to capture images of people appearing on C-Span, which generally includes the names of people shown on screen. A computer program "reads" each name, and links it to any information about that person stored in the database. By clicking on the picture, a GIA user instantly gets a complete rundown on all available data about that person.
The GIA site constantly displays snapshots of the people appearing on C-Span at that moment. If there's a dossier on a particular person, clicking on the picture brings it up. A C-Span viewer watching a live government hearing could learn which companies have contributed to a member of Congress's reelection campaign, before the politician had even finished speaking.
All of the information currently on the site is available from public sources. But GIA will go one step further. Starting today, the site will allow the public to submit information about government officials, and this information will be made available to anyone visiting the site. No effort will be made to verify the accuracy of the data.
This approach to Internet publishing isn't new. It resembles a method known as Wiki, in which a website is constantly amended by visitors who contribute new information. The best known Wiki site, www.wikipedia.org, is an online encyclopedia created entirely by visitors who have voluntarily written nearly 140,000 articles, on subjects ranging from astronomy to Roman mythology. Any Wikipedia user who thinks he has spotted an error or wants to add information can modify the article. Unlike at a standard encyclopedia operation, there is no central authority to edit or reject articles.
The GIA approach, though, raises the possibility that people could post libelous information, or data that unreasonably compromises a person's privacy.
That troubles Barry Steinhardt, director of the Technology & Liberty Program of the American Civil Liberties Union. "We think that there should be some restrictions on the publishing of personally identifiable information, whether it involves government officials or not," he said.
But he noted that the public has a right to know some things about a politician that would be properly kept private about an ordinary citizen. For instance, voters have a right to know where a politician sends his children to school, if that politician has taken a strong stand on school vouchers.
"Do they have the right to publish every piece of data they're going to publish?" Steinhardt asked. "It's going to depend on what they publish."
In any case, Steinhardt said, McKinley and Csikszentmihalyi have a First Amendment right to set up the GIA project. And he said that it's a valuable response to the government's TIA surveillance. "I assume the point of this is, turnabout is fair play."
On a page of the GIA website, at opengov.media.mit.edu, McKinley and Csikszentmihalyi give their answer to questions about the legitimacy of their actions.
"Is it legal?" the site reads. "It should be."
Hiawatha Bray can be reached at bray@globe.com.
Bluetooth Hits The Streets
Amy Wu, 07.07.03, 10:00 AM ET
Ten O'Clock Tech
NEW YORK - So far, the most interesting use for Bluetooth wireless technology to catch on among consumers has been the wireless hands-free headset for mobile phones. But the potential the technology holds is so much greater than that.
The folks at the Bluetooth Special Interest Group are hoping to spread the religion of Bluetooth much further in the coming months, and the place they've chosen to focus on next is in the car.
Sony Ericsson's Bluetooth car kit
It's the next logical step, says Mike McCamon, the industry group's executive director. "70% of all mobile-phone calls are taken inside the vehicle, so I'd think the most natural place for these car kits would be in your automobile," he says. "We see car kits as a key to mainstream consumers."
In case you missed it, Bluetooth is a wireless technology that connects electronic devices to each other over short distances. It's a great way to eliminate data cords that would otherwise make the connection between them. It officially launched in 2001 and the latest revision, version 1.2, debuted in June.
McCamon has his finger on something: There are currently an estimated 147 million mobile-phone users in America and 38% of them gab behind the wheel, according to a survey by Sony Ericsson, the joint mobile-phone venture of Sony (nyse: SNE - news - people ) and Ericsson (nasdaq: ERICY - news - people ). In other words, kit manufacturers have to make a case for Bluetooth not just to mobile professionals and gadget fanatics but to soccer moms and the average Joe on the street.
Safety will likely play a key part of the message. In recent years, a growing number of legislators have been lobbying to ban cell-phone talking while driving, according to the National Conference of State Legislatures, a Washington, D.C.-based nonprofit that helps citizens lobby. Already, driving and talking on the cell phone is illegal in New York, and currently seven states including California have similar laws in the pipeline.
The American Automobile Association also argues that cell phones and cars don't mix. According to a 2001 AAA survey cell phones triggered 1.5% of accidents, said AAA's Mantill Williams. "It's the one thing that bothers people because it's the one distraction that people can see," Williams says.
Enter Sony-Ericsson's Bluetooth car kit. Playing on pending legislation and the start of the road trip-heavy summer vacation season, Sony Ericsson recently demoed its HCB-30 kit in a vanilla-colored Hummer. Here's how it works.
The minute Allen Mani, Sony Ericsson's regional training manager, climbed into the Hummer, a light on a matchbox-sized device installed near the ignition turned green, indicating that his Sony Ericsson T616 mobile phone (which itself was released on July 1) and the car kit had bonded. In Bluetooth lingo, this is called pairing the devices.
And because the address book and the device had been paired, the Bluetooth kit can automatically dial a phone call with a single voice command. The device can store up to 50 voice tags and--at the single press of a button--a call can be commanded to go directly into voicemail.
Nicky Csellak-Claeys, Sony Ericsson's North American marketing head, pointed out that in the future many other Bluetooth-enabled items such as the PDA and laptop computer could jive with the car kit too. The kit, launched in May 2003, sells for $249 and costs anywhere from $100 to $200 to install.
Sony Ericsson isn't the only one entering the new car-kit arena. Since March 2002, MobileAria, Delphi (nyse: DPH - news - people ), Motorola (nyse: MOT - news - people ), Nokia (nyse: NOK - news - people ), Parrot and Visteon (nyse: VC - news - people ) have made Bluetooth car kits.
The number of manufacturers making Bluetooth-enabled phones is going up too. According to SIG by early fall all cell-phone manufacturers in the U.S. will have a Bluetooth-enabled phone on the market.
Manufacturers won't reveal how many car kits have been sold. However, a Zelos Group June 2002 report estimates that there will be 750,000 car-kit shipments in 2003--and approximately 5 million by 2006.
Ah I was the most recent one to bring up the "museum" thing with an article I posted a couple of days ago from the Boston Globe.
I'm not into sailing except as a passenger.
I'm sorry, did you have something to add other than sarcasm?
NEWe.LONG, it would be possible for
her to call RP because he couldn't tape the conversation without her permission "that would be illegal". However RP might have caller ID and actually find out the true identity of our anonymous message board bomb thrower. And email to the company would leave a trail that could be easily followed LOL.
Ecast Shuts Online Music Store Service
By Jon Healey, Times Staff Writer
Online music distributor Ecast Inc. has closed its downloadable music operations, saying it couldn't afford to spend the marketing dollars needed to compete with Apple Computer Inc. and other suppliers of songs online.
The move comes two months after Apple launched its much-ballyhooed iTunes Music Store, whose success has spurred Amazon.com Inc., Yahoo Inc., Wal-Mart Stores Inc. and other major players to explore competing offerings.
Many music-industry executives expect more downloadable music stores to open by Christmas. San Francisco-based Ecast's Rioport division, which employed 25 people in San Jose, appeared to have been in a position to supply those stores with music and technology.
But Ecast Chief Executive Robbie Vann-Adibe said the situation wasn't as promising as it seemed.
"There's a lot of conversations going on, there's not a lot of check-writing going on right now," he said.
"We're a relatively small organization, we're a private company with limited resources," he added. "We cannot at this point continue to invest in this part of our business and wait for these organizations to get around to make decisions to go on this stuff."
Instead, the company plans to focus on the other half of its business: supplying restaurants, bars and other gathering places with jukeboxes stocked with music and other digital media from the Internet. That operation is growing significantly, Vann-Adibe said, noting that the number of songs played in the last quarter was more than three times as great as the same period last year.
Even in that division, however, Ecast has cut expenses significantly. Last month the company quietly closed its customer-support offices in San Diego and laid off some workers in its jukebox division.
Rioport was a leading supplier of downloadable music before Apple entered the market, providing the online stores for such retailers as BestBuy and Sam Goody. Ecast bought Rioport in October for an undisclosed price, hoping to combine the companies' technologies into a far-reaching distribution platform for music, video, games and other digital media.
But Vann-Adibe said the downloadable music market is being driven by companies including Apple that control the technology and have a direct relationship with music buyers, giving them an incentive to spend heavily on marketing. Ecast, on the other hand, relied on its retail partners to promote downloadable music and generate sales. "These guns are lining up to fight a war, and big marketing dollars are going to play a role," he said.
Analyst Phil Leigh of Raymond James & Associates, an investment bank, said Ecast was "kind of lost in the crowd" because it didn't have a name that consumers recognized.
Cool..New product runs on one battery
Posted on Thu, Jul. 03, 2003
TECH TOYS
DRIVES
Keychain-size thumb drives are getting even more versatile. Next week a new Mountain View-based company called Cirago is set to introduce a 128-megabyte USB drive that plays music, records audio and stores files, for $130. The device runs on a single AAA battery. The drive, called the WeWa Marvel MP3 player, can hold about 32 MP3 files encoded at near-CD quality, which is just over 2 hours of music. Voice recording does not require such large files, so the device can hold up to 10 hours of spoken audio. Information can be found at
www.cirago.com.
-- Jon Fortt
OT New RF iPod remote, USB FM transmitter debut
53 minutes ago
Add Technology - MacCentral to My Yahoo!
By Peter Cohen MacCentral
Engineered Audio LLC introduced itself this week with the introduction of two new products aimed at audio enthusiasts -- the Aurius, an FM transmitter designed to work through USB, and the RemoteRemote, an RF (Radio Frequency)-operated remote control for Apple's iPod.
Missed Tech Tuesday?
You can still learn to guard against spyware with software and surfing tips.
Aurius sports a USB audio interface that connects to a Macintosh (news - web sites) or PC. Equipped with an FM transmitter, the device enables users to play back the audio on their computer through any FM receiver or radio. It's USB Audio compliant, according to the company, so it'll work with any audio software -- iTunes, for example, or DVD Player. System requirements call for Mac OS X (news - web sites) 10.1.5 or higher.
Aurius also features a separate stereo mini-jack (1/8th-inch) line out connector so you can connect it to powered speakers, if you prefer. A discrete mute control lets you quiet the FM transmitter if necessary. The device is powered from the USB bus, and features user-adjustable output frequencies from 88.1MHz to 107.9MHz. You can output mono or stereo signals, as well. Aurius' operating range is 30-50 feet, according to the developer.
Engineered Audio plans to ship Aurius late this summer and expects to fetch a retail price of US$54.99.
What's more, Engineered Audio also announced the RemoteRemote, a wireless (news - web sites) remote control designed especially for Apple's iPod. The device eschews Infrared (IR) signals, opting instead to work through Radio Frequency (RF). This means that the RemoteRemote can work around corners and through walls -- it doesn't require line-of-sight like IR products do.
The RemoteRemote transmitter sports a five-button array and measures 2.25 x 1.5 x 0.5 inches. It can operate up to approximately 100 feet away from the iPod, and is powered using a 3v Lithium battery. The receiver, which attaches to the iPod, requires no power of its own; it draws juice off the iPod instead. Engineered Audio notes that the initial version of the RemoteRemote is designed specifically to support Apple's third-generation iPod, the new 10, 15 and 30GB models designed with the dock connector on the bottom. The company noted plans to support first- and second-generation iPods "very soon," however.
Like Aurius, RemoteRemote is expected to ship in late summer, and will carry a suggested retail price of $34.99.
Electronics Giants Love Linux
Arik Hesseldahl, 07.02.03, 1:45 PM ET
NEW YORK - If there's ever going to be a great galaxy of consumer electronics devices that are all connected by a home network and through that network to the Internet itself, it's going to run Linux.
Why You Won't Be Getting A Linux PC
The Limitations Of Linux
Boies' Take On Linux
PeopleSoft Jumps On The Linux Train
Oracle's Linux Lineup
The Cult Of LinuxAt least that's what some of the world's most prominent manufacturers have said with the formation of an industry group--the CE Linux Forum-- that will promote Linux in future products.
The companies involved aren't some small batch of die-hards. They make up the crux of the consumer electronics industry: Japanese firms Sony (nyse: SNE - news - people ); Matsushita (nyse: MC - news - people ), parent of Panasonic; NEC (nasdaq: NIPNY - news - people ); Sharp; Toshiba; and Hitachi (nyse: HIT - news - people ); Royal Philips Electronics (nyse: PHG - news - people ) from The Netherlands; and Samsung from South Korea. IBM (nyse: IBM - news - people ) reportedly wants to join too.
Certainly the creation of the group is a warning shot at PC software juggernaut Microsoft (nasdaq: MSFT - news - people ), which thinks home networks, PCs and consumer electronics should interact without involving a penguin, the Linux mascot.
It's clear is what electronics manufacturers don't want: A royalty bill from Microsoft. Already used to operating on razor-thin profit margins with the products they make, using Linux software, which is freely available, should save them all money on developing future products.
For Sony in particular, taking part in the forum is the latest step in its duel with Microsoft. Linux is already the basis for Sony's CoCoon initiative, which involves giving TV sets and other entertainment devices a network connection, a hard drive and the ability to connect to broadband Internet connections.
If Sony's plans are an indication of what to expect from its new partners, that means an increase in security for copyrighted digital content such as movies and music.
Of course, central to all that is a PC running Windows. And Microsoft has its own ideas for connecting the home and all the electronic devices in it. It has been promoting the Media Center PC version of the Windows operating system for more than a year now with some success. The software turns a PC into a TV, jukebox and a video recorder among other things.
Its Smart Display technology allows portable flat-panel displays access to PCs elsewhere in the home for surfing the Web and accessing PC files. And its Windows CE .NET software for embedded devices has been demonstrated on household appliances as diverse as an exercise bike, a DVD player, a portable digital media player that can handle music and video, and a sewing machine. Obviously, there's a battle brewing.
OT Vivendi drops Davis, music group from asset auction
Tuesday July 1, 8:25 pm ET
By Tim Hepher and Merissa Marr
(Adds details, paragraphs 2, 7-12, 14, 18)
PARIS, July 1 (Reuters) - Vivendi Universal on Tuesday axed oil tycoon Marvin Davis from a list of suitors for its U.S. media empire, paving the way for talks with five media bidders still in the race, sources familiar with the talks said.
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The Paris-based company also took the world's No. 1 music company, Universal Music Group, off the auction block, for now, telling interested parties to revise their offers to exclude the group, a bidder said.
Vivendi's decision to narrow the contenders for its Universal Studios film, cable TV and theme park divisions creates an open fight between some of America's top media moguls including Liberty (NYSE:L - News) cable king John Malone.
In a statement after a board meeting in Paris to discuss the bids, Vivendi (Paris:EAUG.PA - News) declined to name those parties in a new, second round of an auction expected to raise at least $10 billion to help cut debt.
But the French-American firm said it had drawn up a list of "selected bidders" to take part in "in-depth negotiations." Sources said five bidding groups would be involved in the talks which Vivendi hopes to wrap up between end-July and September.
The sources, who are familiar with the auction process, said the five remaining contenders were: Malone's Liberty Media, General Electric's (NYSE:GE - News) TV broadcasting network NBC, Metro-Goldwyn Mayer (NYSE:MGM - News), CBS owner Viacom (NYSE:VIAb - News) and Edgar Bronfman Jr, who is seeking to buy back the businesses his family's Seagram Co. Ltd. once owned.
MUSIC TO THEIR EARS?
Late Tuesday, a Bronfman spokesman confirmed the investor's continuing pursuit and said at Vivendi's request, the Bronfman group will drop its bid to acquire Universal Music Group.
"While we believe these assets belong together, we will structure our bid consistent with Vivendi's request," said Tod Hullin, a spokesman for Bronfman. "We are pleased to go into the next round."
One source said Vivendi wants to hold onto the music group, home to acts like Eminem, believing that that the depressed industry that blames a three-year sales slump on digital piracy can return to growth.
Representatives for Vivendi, Viacom, NBC and Davis declined comment. Liberty and MGM were not available.
While several sources insisted the investment group led by the 77-year-old Davis was dropped by Vivendi, others said Vivendi simply was looking for a better and higher bid.
"They have been told that if they want to continue they have to raise the bid, and they are thinking it over," said one source familiar with the talks.
Seeking to slash debts of $14 billion and restore its credit status, Vivendi is selling its U.S. unit Vivendi Universal Entertainment (VUE), which combines the Hollywood name behind "The Hulk" with cable TV channels USA and Sci Fi, as well as the Universal theme parks.
MESSY MESSIER PAYOFF
The Vivendi auction is aimed at repairing the legacy left by former Chief Executive Jean-Marie Messier, whose decision to turn the former water utility into a media giant proved disastrous. Messier took on debt that became unmanageable and was ousted in a boardroom coup one year ago.
To the evident frustration of Vivendi management, Tuesday's board meeting, which was to have focused on the bids, was unexpectedly hijacked by a U.S. tribunal's decision to award Messier 20.6 million euros ($24 million) in severance pay.
Vivendi said afterwards it would examine "all available legal actions, both in France and the United States, to void Jean-Marie's so-called termination agreenment."
The statement refers to a document thrashed out under U.S. law on July 1 last year. Vivendi argues the agreement was not approved by its board and that the payoff was inappropriate given the state of Vivendi's finances at the time.
Current CEO Jean-Rene Fourtou subsequently took Vivendi's reins and carved out a strategy to slash debt by selling assets.
Vivendi shares closed down 3.8 percent at 15.25 euros. Despite recovering from a March low of 11.03 euros, they are worth 14 percent less than when Messier left.
In New York, the company's American shares ended trading off 30 cents, or 1.6 percent, at $18.14. (Additional reporting by Bob Tourtellotte and Sue Zeidler in Los Angeles, William Emmanuel in Paris, Jeffrey Goldfarb and Reshma Kapadia in New York)
PluggedIn: Pocket TV jukeboxes creep toward prime time
Tuesday July 1, 2:53 pm ET
By Franklin Paul
NEW YORK, July 1 (Reuters) - Portable digital video players make it easy to pack Bach, Beck and a season of "Brady Bunch" episodes into one pocket-sized gadget, but consumers initially may balk at the hefty cost and limited video programming choices.
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This new wave of gadgets is aimed at frequent travelers and young people who are comfortable with digital music and video. About the size of a John Grisham paperback and encased in shiny metal, they can hold dozens of full-length movies, thousands of music files and pictures, with space left over for storage.
The Jetsons-age vision of carrying all your favorite television programs and songs in the palm of your hand brings to fruition a dream: that one man can be a walking warehouse of good tunes and moving pictures.
Twenty years ago such a claim might have meant that a person had his media collection -- on hundreds of albums, cassettes and video tapes -- loaded in one's recreational vehicle, with a "roadie" waiting to lug it around.
Still, despite their small size and "gee-whiz" appeal, it may be years before consumers warm up to personal video players -- also called PVPs -- in the same fashion as its popular digital cousin, the MP3 player.
"There is not nearly as much momentum behind portable video as there is behind portable audio," said Yankee Group analyst Ryan Jones. "But it's still pretty early for these devices."
Just three years ago, downloading movies and sharing digital video was still considered a far-off notion. Only recently have portable music players became mainstream gadgets, and prices for digital home video cameras have come down. As such, the portable video market has arrived sooner then expected.
POWERFUL, YET PRICEY
The video jukeboxes come with a screen about 3 inches wide and 2 inches tall -- just larger than a credit card. The first two models originate in France, from Archos, with its AV320 and Thomson's (Paris:TMS.PA - News) RCA Lyra RD2780, due this fall.
Starting with 20 gigabytes of memory, each is about the size of a paperback book but has the weight of a hardcover. Both can play back digital video transferred from a video camera or other material acquired at home or on the Internet.
In addition, they record from television, much like a video cassette recorder, and Archos sells an add-on camera that turns the jukebox into a video camera. RCA's Lyra lets users program it to start and stop recording television shows at a set time.
Danielle Levitas, an analyst at research firm IDC, said consumers wowed by the their abilities may be put off by the price: the Archos tops $500, and the LYRA sells for $400.
"Most consumers think twice before they drop $400 ... and I don't see the cost coming down dramatically for a couple of years," she said. "Plus, there is competition from existing popular technology like portable DVD players."
Indeed, video-in-your-pocket is not a new idea. Frequent airline flyers can often be seen watching Hollywood's best on portable DVD players, whose screens are bigger than the PVP. Many of the same people who might buy PVPs already own laptop computers, which can play both DVDs and digital video files.
Other devices, such as Panasonic's SV-AV30, let users record from TV and play back the video, but have far less capacity. These machines, popular with camera enthusiasts as a way to view digital pictures, record data in increments of about 256 megabytes, or 80 times less capacity than a 20-gigabyte drive.
Personal digital assistants (PDAs) -- such as Sony's TG-50, JVC's MP-PV331 and Palm Inc.'s (NasdaqNM:PALM - News) Zire 71 -- also play video in the MPEG-4 format. This is to video what the more familiar MP3 is to digital music recordings. But PDAs also carry very limited memory for watching films, and are pricey: Sony's and JVC's models sell for more than $400 each.
Besides the fact that the world doesn't need another three-letter acronym to remember, PVPs face other issues that could keep buyers away, such as concerns over short battery life and difficulty acquiring videos to view on the machine.
With the advent of PCs that pull songs from CDs and turn them into MP3 for portable use, music files are ubiquitous in homes and on the Internet, although not without some protest from music industry bigwigs who worry about unlawful swapping.
"We are seeing between 5 and 6 million households in the U.S. downloading feature-length content on a regular basis," Jones of Yankee Group said. "That's not just car commercials; that's TV shows or full-length movies."
Should these models succeed, experts see competing devices coming from companies such as Apple Computer Inc. (NasdaqNM:AAPL - News), whose iPod dominates the audio "hard drive" market, and Sony Corp.(Tokyo:6758.T - News), the world's biggest consumer electronics maker.
(The PluggedIn column appears weekly. Comments or questions on this one can be e-mailed to franklin.paul(at)reuters.com.)
Is RP snoring??LOL
MIR, maybe it has something to do with the maintenance end of the deal. If we are involved with the end-to-end manufacture of the devices, we are in a better position to service them as well IMO.
cheers
Thanks marc4..hoping to hear this verified in the webcast as well.
gern
Aimster shutdown upheld
Decision may affect rulings on other services
By Hiawatha Bray, Globe Staff, 7/1/2003
A federal appeals court in Chicago yesterday upheld an injunction that shut down the file-sharing service Aimster to stop its users from illegally swapping copyrighted music recordings.
The decision may call into question another recent federal court ruling, which allowed continued distribution of two other file-swapping programs, Grokster and Morpheus. In that case, a judge in Los Angeles said Grokster and Morpheus were not legally responsible when users of the programs swapped files illegally.
Cary Sherman, president of the Recording Industry Association of America, hailed yesterday's ruling.
'We're delighted by this decision which makes clear . . . that companies cannot profit from copyright infringement,' Sherman said.
Yet Johnny Deep, who founded Aimster and has since renamed it Madster, also celebrated the ruling.
'It's a stunning victory for us,' Deep said. Deep said that although the court left the injunction in place, the court's opinion, written by Judge Richard Posner, laid out a series of tests that the file-sharing service would have to meet in order to resume business. Deep said that his company could easily meet those tests and would therefore prevail at trial.
Posner wrote that the service could continue if it could prove that people used the software for legitimate purposes, such as trading non-copyrighted music files.
Also yesterday, the Electronic Frontier Foundation, an Internet civil liberties organization, launched a grass-roots lobbying campaign to block a plan by the RIAA to sue thousands of individuals engaged in illegal file-swapping.Under the plan announced last week, RIAA investigators will subpoena Internet service providers to get the names of users who swap large amounts of copyrighted music. These people will then be subject to civil or criminal penalties for copyright infringement.
EFF is trying to persuade Congress to modify federal copyright law to make file-swapping legal under a new system for collecting music royalties that ensures that music producers are compensated for their work.
EFF senior staff attorney Fred von Lohmann proposed 'compulsory licensing,' which would require music companies to allow Internet users to swap and listen to whatever tunes they pleased. In exchange, Internet companies and makers of related technologies such as MP3 players and CD-ROM recorders would pay a special fee to compensate musicians and composers. The fee would be paid by consumers through price increases, and the money collected in escrow accounts, to be divided in accordance with a prescribed formula. For instance, artists whose tunes are downloaded more frequently would get a larger share of the money.
Mitch Glazier, the RIAA's senior vice president for government relations said a compulsory licensing plan would require some sort of federal regulatory body to set the fees and make sure the money is distributed fairly. In effect, said Glazier, 'the EFF is advocating having the government regulate the Internet.' Glazier prefers the RIAA approach -- aggressive pursuit of file-swappers modeled on the cable TV industry's prosecution of those who sell illegal set-top boxes.
'If you look at the case of cable signal theft and satellite signal theft,' said Glazier, 'you can see that it does work.'
Hiawatha Bray can be reached at bray@globe.com.
This story ran on page D2 of the Boston Globe on 7/1/2003.
Eight Consumer Electronics Firms Form Linux Forum
Tuesday July 1, 4:10 am ET
Edited Press Release
AMSTERDAM -(Dow Jones)- Eight consumer electronics companies Tuesday establish the CE Linux Forum, which will focus on the establishment and promotion of Linux based digital consumer electronic products.
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Matsushita Electric Industrial Co. Ltd. , Sony Corporation (NYSE:SNE - News) , Hitachi Ltd. , NEC Corp. , Royal Philips Electronics , Samsung Electronics Co., Ltd. , Sharp Corporation , and Toshiba Corporation established the CE Linux Forum, or CELF.
CELF will discuss and formalize requirements for extensions to Linux to meet the needs of consumer electronics products such as audio/visual products and cellular phones, etc.
CELF will publish such requirements and will accept and evaluate open source solutions that support to meet the published requirements. CELF will also promote broad usage of Linux for CE products. IBM, an industry leader in Linux solutions and supporter of open standards ecosystems, is pursuing membership and plans to be an active participant in the CELF.
Linux is widely used in personal computers and network servers, and has been selected as an OS for CE products. On December 18, an announcement was made to develop Linux for CE products and to establish a forum with the aim to enhance Linux platform for consumer electronics devices.
CELF will first aim to improve the following: Further improve the startup and shutdown time; improve real-time capabilities; reduce ROM/RAM size requirements; improve efficiency of power management.
CELFs main activities will include defining requirements for a variety of extensions in Linux based CE products, collaborating and reaching consensus with open source projects as well as with the Linux community, thereby promoting the proliferation of CE Linux based digital electronics in the electronics industry.
Linux is a POSIX compatible open source operating system developed in 1991 by Linus Torvalds, who was a graduate student of Helsinki University. The source code is released under the GPL license and the development continues (by expansion or maintenance) by volunteers all over the world.
Forum website: http://www.celinuxforum.org
Reprogramming radio and TV habits
By Scott Kirsner, 6/30/2003
im Logan wants to break into your car. And your living room. In order for Logan's company, Gotuit Media, to be successful, he'll have to get his technology into your car and living room, and change the way you listen to the radio and watch TV.
It's rare for a small tech start-up to harbor such ambitious aims. Even rarer is that Gotuit has found backing from the likes of Motorola, Highland Capital Partners, and the Kraft Group, which owns the Patriots.
Gotuit is really three separate companies under one roof, in Andover's Brickstone Square office complex.
Gotuit Media has 18 employees, and is working with cable TV providers to index some of their programming. The idea behind indexing: Instead of watching a full three-hour football game from start to finish, you might pay a small fee to access a DVD-like, sliced-and-diced version of the game.
Logan shows a demo in the company's reception area, which is decorated to resemble a plush living room. We're watching a Pats/Dolphins game from last October. On the screen is a menu. We can choose to watch just the highlights, or the ''best hits,'' or the top plays by Tom Brady, or even a 20-minute, Reader's Digest condensed version of the game.
The same technology, which relies on both smart software and human employees to index a show, can be applied to a news broadcast. Don't bother with the sports highlights, if all you care about is the weather.
Cable operators ''have spent $60 billion building their digital networks, and now they're wondering how they will monetize that,'' says Dan Nova, an investor at Highland Capital in Lexington. Gotuit's service could be a way for them to make sure their subscribers stick with digital cable, and buy lots of video-on-demand programming each month, enhanced with the Gotuit indexing.
The second associated company is called Gotuit Audio. While Gotuit Media pulled in $6 million of funding late last year, and raised $2 million in 2000, Gotuit Audio is operating on a small seed round of only about $1 million, raised in March. Later this year, Gotuit Audio hopes to launch a TiVo-style recording system for your car.
Just as TiVo digital recorders enable consumers to pause live television, skip ads, and easily store shows for later viewing, Gotuit Audio's product, marketed as ''The Radio That Remembers,'' will allow you to do the same with Howard Stern and 50 Cent.
''You may be someone who loves [talk show host Don] Imus, and you want to listen to some of his show when you drive to work, and the rest of it when you drive home,'' Logan says. ''Or you're a big NPR listener, but you want to skip over the story about water buffalo so you can hear about rebuilding Iraq.''
Users could even program their Gotuit system, a small box mounted behind the dash or in the trunk, to record late-night talk shows while the car was parked in the garage.
''It'll keep processing audio overnight,'' says Mike Green, Gotuit Audio's vice president of manufacturing, ''but it'll know if you're parked at the airport for six days that it needs to throttle down, so it doesn't drain your battery.''
Other neat features: You'd be able to store favorite songs on the system, and you'd be able to use a small, inexpensive USB drive about half the size of a pack of gum to transfer songs or radio shows between your car and your home computer.
Logan expects the system to cost about $299. Initially, the technology would be an add-on to your current stereo system, but eventually he hopes to license his technology to companies like Kenwood or Blaupunkt for use in their products.
Company number three is called Pause Technology. Pause is a company set up as the repository for what could prove a very important patent, issued to Jim Logan and a partner in 1995. The patent is for a ''Time Delayed Digital Video System Using Concurrent Recording and Playback.'' Logan believes that TiVo, among other manufacturers, is infringing on this patent, which was filed in 1992.
After TiVo refused to license the patent from Logan and Pause, the company sued TiVo in US District Court in Boston. The case could go to trial next year, and it could have a major impact on anyone who is building -- or intends to build -- a TiVo-like device for storing digital video while also watching a show.
Launching two innovative products and pushing ahead with a major court case will challenge Logan and his team. But wait, as they say in the infomercials, there's more.
This summer, Gotuit Media will have to prove that its video-indexing product works within cable providers' existing technology infrastructure. The company will have to convince cable operators to invest in one more thing, on top of that $60 billion they've already spent.
Then the company will have to hope that the Gotuit index will prompt consumers to either buy more ideo-on-demand programming, or that couch potatoes will find it so useful that they're willing to pay an additional monthly fee for it.
Gotuit Audio will need to ''prove that they can manufacture [the product] at the cost they think,'' says Nova. ''They'll have to prove that it's easy to install, and do some early tests with consumers to make sure that they would be interested in purchasing the product.'' On top of that, there's competition from other technologies trying to make their way into your dashboard, from MP3 music players to satellite radio.
Gotuit Audio will also have to put together another round of funding before it can launch its product, a chore Logan is only now starting. And many venture firms -- Highland is an anomaly here -- shy away from investing in technologies, like Gotuit's, that target consumers rather than businesses.
Before launching Gotuit, Logan was founder and chairman of MicroTouch Systems, a Methuen company that went public in 1992 and became the world's largest manufacturer of touch-screens for ATMs before being sold to 3M. (After leaving MicroTouch, Logan was hit with charges of insider trading; he settled with the SEC without admitting any wrongdoing, and paid more than $580,000 in penalties and returned profits.)
Logan knows that even if the products he's introducing do happen to connect with consumers, Gotuit will need a few years to have a real impact.
''With the touch-screen business, I learned that markets grow at a natural rate,'' he says. ''You can't have grandiose expectations, and you can't promise [your investors] to be a billion-dollar company next year.''
That's the new old tech wisdom: Thinking big while growing slowly isn't a crime.
Scott Kirsner is a contributing editor at Fast Company. He can be reached at kirsner@att.net.
This story ran on page C1 of the Boston Globe on 6/30/2003.
The Audiophile Future?
By Jon Iverson
June 30, 2003 — Apple announced last week that music fans have downloaded over five million songs from its iTunes Music Store since its launch two months ago. In addition, the company reports that over 46% of the songs have been purchased as albums, and over 80% of the over 200,000 songs available on the online store have been purchased at least once.
Apple also announced that it shipped its one millionth iPod music player last week. Apple introduced the third generation of its portable digital audio player in April, edging out consumer electronics heavies like Sony, whose portable music players have been floundering due to built-in file use restrictions.
When the iTunes store was launched, critics quickly pointed out that the service was only compatible with Apple's computer products, which represent about 5% of the personal computing market. This makes it all the more remarkable that five million audio files have been downloaded—and bought—in such a short period.
Critics have also suggested that with only 200,000 songs currently available, and at 99¢ per download, the iTunes appeal would be limited to Apple's early adopters, with its success tapering off rapidly. So far, however, this clearly has not been the case, and Apple says PC users will be able to download songs from the iTunes Music Store when it is released for the Windows platform by the end of this year.
Pricing and limited title availability issues may prove irrelevant, since, as any audiophile will testify, download audio quality may be good enough for portable devices and most car systems, but it just can't cut it for critical listening in the home. That attitude is reflected in last week's Vote results, where a hefty 92% of our readers say they have never legally downloaded an audio file. Most seem disgusted at the idea of listening to downloaded files; as reader Al Earz comments, "Why download compressed versions of any music? What purpose does it serve? This completely baffles me."
However, as reader Paul Abbott points out in last week's Soapbox, the success of iTunes isn't about sound quality and compressed formats: "What current (and future) download systems offer is convenience. No need to go to a bricks-and-mortar store, no need to find space for hundreds (or thousands) of CDs in your house, and no need to spend time looking for one or two discs out of thousands when you jump in your car and hit the road."
Arguably, convenience is what gave CD players the edge when they replaced turntables in most folks' home systems and slowly edged out cassette decks in cars. Audiophiles cringed at early CD sound, but soon set to work perfecting it over the ensuing decade.
It's easy to imagine the same thing happening with audio downloading. There are many young audiophiles dedicated to maximizing download audio sound quality with higher bit-rates and variable bit-rate encoding. As digital bandwidth to the home increases, demand for ever-higher-resolution audio files may finally reach the critical mass needed to make it worthwhile for the labels to provide songs in more audiophile-friendly formats.
Abbott notes, "For . . . convenience there is (and will always be) a trade-off. Currently it's lower resolution and limited selection. Over time that margin will narrow." Critical audiophiles should keep in mind that, as reader Mitchell Gusat wrote, "We're still in the Stone Age of Digital. . . . But, can one dream of ripping and encoding high-rez formats? Chances are that the MP3 VBR of a 24/192 or DSD recording will better the 16/44 layer. Things are moving ahead fast. Format wars and copyright/DRM confusions are only delaying the inevitable."
Will audiophiles accept their traditional role in the format dance? Historically, once the mass market has adopted an audio format it finds convenient (the LP, CD or downloaded audio file), audiophiles are expected to grumble a bit and then get down to the business of perfecting it.
Museums use new technology to attract visitors
D.C. Denison, Boston Globe Monday, June 30, 2003
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John Borden has just pressed a button on what he calls "the automatic bubble photograph shooting machine," and now he's sitting at a work table in his Cambridge, Mass. studio/workshop.
He's surrounded by a small forest of industrial-looking tripods and spindly tubular structures bristling with cameras, laptop computers, lights, and small machinery.
Behind Borden, the "bubble photograph shooting machine" is clicking through 28 positions as it shoots the multiple images that are stitched into a seamless photo orb.
The new photo machine, formally named the PixOrb, is one of many technologies Borden has developed at Peace Rivers Studios, which he co-founded in 1994. A 3-D object photography system is set up against one wall, multiscreen movies are edited in the next room. Borden is not surprised that much of his work ends up being admired by museum visitors and tourists.
"Museums are great incubators for new technology," he says.
New England institutions certainly appear to support Borden's view. From the animated text that flows from the fountain in the Hall of Ideas in the new Mary Baker Eddy Library to the digital audio guides that are offered on Boston's Freedom Trail, technology is playing an increasingly important role in museums, tourist destinations and public spaces.
"Museums have to be attuned to technology. They can't afford to be musty," said Howard Litwak, an independent museum planner and exhibit developer in Seattle. "With competition like theme parks and video games, museums have to deliver whiz-bang attention grabbers to cut through the clutter."
For many museums, pushing technology is the way they make their exhibits memorable.
Significantly, although Peace River Studios' PixOrb system was launched less than six months ago, images from the unit are already on display in a museum.
EXPLORING AT KIOSK
The Portland Museum of Art in Maine is using the technology in an interactive kiosk that allows visitors to explore the neighboring historic McLellan House, which was meticulously restored by the museum.
On the kiosk, these spheres allow the user to pan left or right, up or down to view any part of the room. Clicking on hot spots in the picture can show a video describing part of the restoration or a photograph with detail about a particular feature of the room.
The museum regards the rooms themselves as works of art and has taken pains to familiarize visitors with the details of their restoration.
Other tech-driven museum projects Peace River Studios has designed include a three-screen movie for the New England Aquarium, live, controllable Webcams focused on the restoration of the Sargent Murals in the Boston Public Library, and an exhibit at Harvard's Peabody Museum that allows visitors to examine a 3- D virtual image of a Mayan altar from every possible angle.
"Museums are ideal for these kinds of projects because the users are able to concentrate and explore them," Borden said. "There are not many places that encourage that today."
The Mary Baker Eddy Library, which opened on Boston's Christian Science Plaza last September, also uses technology to highlight its theme, "the power of ideas."
The centerpiece sculptural fountain in the Hall of Ideas, created by artist Howard Ben Tre in collaboration with media designer David Small, displays more than 800 quotes from thinkers on themes such as democracy, courage, equality, community, freedom, hope and spirituality.
Using high-resolution computer imagery, the installation illuminates words and letters projected into the fountain where they appear to bubble up from the center and then swirl around to formulate quotes. These quotes then spill across the floor and onto scrims hanging in the Hall of Ideas before fading away.
TELLING STORY WITH TECHNOLOGY
"Technology is very effective in helping to tell a story," said Chet Manchester, the library's artistic director. "It lifts history into the present day. You want to invite the visitor to interact with the ideas and exhibits, and technology can make that happen."
The Peabody Essex Museum in Salem, Mass., which reopened earlier this month after a $125 million expansion, also has a substantial technology component, including a 7,000-square-foot interactive learning center and "Acoustiguide" wands that allow visitors to punch in an exhibit number, learn more about a piece and later download information about it to a home computer.
Even the 50-year-old Freedom Trail, one of Boston's oldest tourist destinations, has recently upgraded its technology. In April, the Freedom Trail Foundation introduced an audio guide technology system that allows tourists to hear historical facts as they walk the Freedom Trail. The system, designed by Antenna Audio, is based on digital MP3 technology. The units rent for $15 for the first unit and $12 for each additional unit.
In many museum settings, the Antenna Audio units are remotely controlled by either radio signals or infrared signals, but because the units are being used in a relatively uncontrolled outdoor setting (the project is the first to use the units outside), users manually enter codes at each stop.
For the Museum of Science, pushing the boundaries of technology is central to its core mission. The museum's Current Science & Technology Center, which opened in April 2001, is a constantly updated collection of digital media technology and content, including live feeds from the museum's Gilliland Observatory telescopes and NASA satellite news sources.
The science museum is also currently displaying a "whole body computer experience," titled Virtual Maze, in which visitors play the role of the marble in a virtual version of the old mechanical maze game.
Designed by MIT researcher Ron MacNeil, the game uses an overhead camera to track the players on the maze, and a computer calculates how the surface would tilt as a result of the player's body mass in any given location. It then displays the result as a change in the projected image of the maze.
Another museum exhibit, the Virtual Fishtank, is a playful, aquatic take on the technology that simulates the complex interplay of living systems. Developed by Nearlife Inc. and the MIT Media Laboratory with funding from the National Science Foundation, the 1,700-square-foot virtual tank allows visitors to create and interact with their own virtual fish.
PDAS SHOW GREAT PROMISE
Although such large-scale techno exhibits are impressive, the most promising technology platform for museums may be the lowly personal digital assistant, according to exhibit planner Litwak.
"Museums always know a lot more about their content than they can present in a text block on the wall," he said. "PDAs give users the option to read or listen to as much content as they want as they tour the museum."
Litwak pointed to the Experience Music Project in Seattle, which is primarily funded by Microsoft Corp. co-founder Paul Allen, as an example of an institution that has created a significant amount of content for PDA-like devices called MEGs, or mobile exhibit guides, that visitors carry around the music museum.
The Exploratorium in San Francisco has also been developing a handheld electronic guide system.
"PDAs make perfect sense for museums," Litwak said.
Claire Loughheed, education director at the DeCordova Museum in Lincoln, Mass., would agree. Loughheed is planning a location-sensitive wireless network to work with the DeCordova's collection, creating a range of tours for PDA-toting families and adults.
A number of companies are also working to develop technology that will enable the use of wireless PDA devices for museums. PanGo Networks in Pittsburgh already has worked on a handheld project with the Tate Modern museum in London. Boston-area companies Newbury Networks and Wivid are also pursuing museums as possible customers for their handheld technology.
Giuseppe Taibi, co-founder and CEO of SmartWorlds, a startup based in Cambridge, Mass., is also developing a mobile context and location-aware tool that is based on a PDA platform.
At this point, he said, he is focusing his efforts on a number of markets, including medical, education, manufacturing and security. Unsurprisingly, Taibi is also counting on museums to help further develop his technology. The company recently published a white paper on the use of wireless technology in museums and tourist destinations.
"The business uses of our technology may be the most promising from a financial point of view," Taibi said, "but we will probably learn the most from our museum projects. One reason is that it's not so much about return on investment, but more about the best experience."
"For technologists, museums are the best playground," Taibi said.
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Storage Newcomer Readies 2.4-GB "Microdrive"
By David Morgenstern, Storage Supersite
Digital photographers shooting high-resolution images often gripe about the limited storage available on flash cards and even tiny hard drives. Storage Supersite Editor David Morgenstern reports that some relief is on the way with a new Compact Flash-compatible hard drive that raises capacity beyond 2GB.
The storage requirements of digital cameras keep climbing, and while storage vendors have driven capacities for desktop hard disks—the destination for downloaded images—they've been a bit more leisurely where it comes to the removable media for cameras. However, a storage industry outsider this week will offer a micro-sized hard drive holding 2.4GB, double the current capacity leader.
Colby Systems Corp., a longtime vendor of custom hardware solutions for vertical markets, said it will announce its MD 2.4 drive this week. The company had not finalized pricing, the list price will be about $279.
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Click here to read the rest of this article from the Ziff-Davis Storage Supersite.