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Hmmmm...Nods Drive Audio Interface
Technology Research News June 9, 2003
The interface between human and computer is less than ideal, especially in an age when computers are becoming more portable.
Researchers from the University of Glasgow and the Canadian National Research Council have devised a pair of interaction techniques that allow people to manipulate mobile computers without looking at or talking to them.
The first technique is a three-dimensional audio menu that presents users with sounds or speech that seems to come from different directions. Users select items by nodding in the direction of the audio choice.
The second technique involves tracing shapes like X, N, and / onto a screen. Key to the no-look method is audio feedback. The screen is divided into nine squares, and one of nine different chords sounds depending on where the user's finger is. The researchers' prototype employs 12 shapes to control an MP3 player.
The techniques, which require headphones and a head-tracking device, are designed for mobile environments where people cannot take their eyes off another task, and for situations too noisy for speech recognition.
The methods are ready for practical application, according to the researchers. The work was presented at the Association of Computing Machinery Computer-Human Interaction (ACM-CHI) conference in Fort Lauderdale, Florida, April 5-10, 2003.
Review: PoGo! Radio YourWay
Portable VCR for your AM/FM dial sounds sweet, so why does it flat-out stink?
Watch today at 8:30 p.m., tomorrow at 6:30 p.m., and Friday 6/13 at 7 a.m. Eastern.
By Robert Heron
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Take a portable MP3 player, make it digitally record voice and AM/FM radio, and you've got an audio lover's dream. The PoGo! Products Radio YourWay (RYW) tries to be a do-it-all VCR for radio. Unfortunately, the $150 RYW's confusing interface and poor recording quality snuff out any potential for success.
Forget recording music radio
Don't expect to upload many MP3/WMA tracks to the RYW without springing for an MMC/SD card to augment its paltry 32MB of internal storage, good for only 135 minutes of recording time at the "best" quality (twice that time at a lower-quality setting).
You can choose to record at either 16 Kbps or 32 Kbps, but both speeds are too slow for anything but talk. Recorded music at such low bitrates may leave you wondering, "What the hell is that?"
(PoGo!'s RipFlash Trio comes equipped with four times the memory, a rechargeable battery, and the ability to record directly to MP3 or WMA -- all for the same price. Heck, for $50 more you could double the memory again and have a RipFlash Pro-2.)
Conversion aversion
The RYW records audio in an RVF format compatible only with RYW-Explorer software. Unfortunately, the software's RVF-to-WAV conversion tool didn't work.
My two-hour test file played fine on the player in its native RVF format. But on my PC the conversion tool truncated the file into a 30-second WAV. Could I leave the file in RVF and still listen to it on my PC? Nope. I tested the software on two systems. Both played the first 30 seconds and then choked.
Set autorecord times
Regardless, the RYW is a capable AM/FM radio with 10 presets for each band as well as autoseek functionality for finding your favorite stations. Ten timer presets let you schedule unattended recordings.
I could learn to live with the RYW's 24-hour time format for clock and timer settings, but I can't remember the last clock-equipped device I saw without an AM/PM indicator.
Smaller than a deck of cards
The pocket-friendly and fairly rugged RYW sports the following features:
1.4-inch by 0.75-inch LCD
Hold switch on side
1/8th-inch line-in
USB 1.1 interface (cable provided)
Integrated speaker on back
Generic earbuds and headphone jack
The lack of a backlight renders the LCD useless after dark without some form of external lighting. (Where's my headlamp?)
Bust out the bug spray
The install application is a nightmare. It couldn't automatically find a file on its own disk, it launched without asking me, and it came with a confusing manual.
I discovered another limitation when I played long radio shows I had recorded. About halfway through listening to my two-hour recording, I accidentally pressed the stop button. There was no easy way to return to where I had left off, short of restarting the file and fast-forwarding. I went to my PC and tried the RYW software's "slider" to advance to somewhere close to where I left off. No dice. Moving the slider somehow messed up the software. The audio went dead, but the file appeared to still be playing.
Finding and transferring files
The included RYW-Explorer software's split-pane interface shows local PC files on the top and device files on the bottom. An attractive media player resides in the middle. But it took me a few minutes to realize that the software media player controls only work with files already transferred to the PC's hard drive. Were they trying to trick me?
On the plus side, RYW-Explorer let me easily browse my recorded files by organizing them into three types: music, data, and voice. Separate up and down buttons handle moving files between the player and the PC.
Does voice and MP3, but...
The RYW had no issues playing my CBR/VBR MP3 test tracks as well as Windows Media Audio (WMA) files. But if you like MP3 tag data for getting artist and title information, forget it. All music files are reduced to a number (1 to 99), and that's it.
Voice recording using the built-in microphone worked as expected. However, brushing the awkwardly placed function buttons produced a sound similar to rubbing a live microphone.
Summary: The RYW is a capable voice recorder, MP3 player, and AM/FM recorder. But buggy software, confusing interface, and near-useless record settings earn this $150 gizmo a lowest-possible one star.
Company: PoGo! Products
Price: $149.99
Available: Now
Platform: PC
Specs: Digital AM/FM radio tuner; 32MB internal flash storage; integrated speaker; line-in jack; MMC/SD card slot; dimensions: 2.1 inches wide, 3.8 inches long, 0.7 inches thick; requires (2) AAA batteries (included).
Posted June 9, 2003
Modified June 6, 2003
OT Va. inventor vindicated, vilified after verdict against eBay
Posted 6/9/2003 3:29 PM
GREAT FALLS, Va. (AP) — Thomas Woolston's recent $35 million victory in a patent infringement suit against Internet colossus eBay has brought both vindication and vilification.
The vindication comes from the decisiveness of the jury's verdict after an exhaustive five-week trial. The jury gave the northern Virginia inventor's tiny company, Great Falls-based MercExchange, nearly everything it asked for, and found that eBay's infringement had been "willful," meaning the judge can triple the $35 million award.
While his victory would seem to be a heartwarming, underdog tale of David slaying Goliath, many in the tech community have had the opposite reaction, angry at Woolston for besmirching the name of a beloved company with what they see as a bogus claim.
Woolston said he has received death threats since his victory. Technology forums like those on slashdot.org routinely take eBay's side. Even Woolston acknowledged that many see him as the enemy.
"It bugs me that the debate is so uninformed," Woolston said. "Patents help the little guy; they help the startup firm. If the patent system isn't there for protection, then innovation is dead. The big guys are just going to come in" and crush small inventors.
Last month, a federal jury in Norfolk ruled that eBay willfully infringed on Woolston's patents, which devised a method for people to buy a product over the Internet for a fixed price. EBay's "Buy It Now" feature, which allows Web surfers to do the same thing, infringes on that patent.
EBay's core auction bidding system, which accounts for the bulk of its revenue, is not affected — Woolston had claimed a patent infringement there also, but the judge tossed that claim out.
Still, the verdict could affect more than 25% of eBay's sales, depending on how the judge crafts his final ruling. And he could bar eBay from using its "Buy It Now" feature in its current form, unless it agrees to pay royalties to MercExchange.
On the other hand, he could also set aside the verdict, as eBay's lawyers have urged.
EBay spokesman Kevin Pursglove said the San Jose-based company is focusing on its post-trial motions, which ask for a new trial if the judge refuses to set aside the verdict.
He said Woolston's patents "are illustrative of patents being issued that maybe shouldn't have been issued" and said the case raises questions about the large number of business method patents that were issued in the mid- to late 1990s, when the Internet took off.
Most observers felt Woolston stood little chance of a courtroom victory. And eBay vehemently defended its position, to the point that even Woolston's veteran trial lawyer was taken aback.
"There were times we were mightily discouraged by the vehemence of their defense," said Greg Stillman, a trial lawyer with the Hunton and Williams law firm. "The vigor with which they asserted that this was a frivolous claim would make anyone wonder if maybe we were missing something."
Stillman acknowledged that there is a general skepticism any time a small inventor stands up and claims that a big corporation stole his ideas and methods. But he said that when he reviewed the patents filed by Woolston's company, he knew he was on solid ground.
"I'm certain that the vast majority of armchair quarterbacks who dismissed our claims had never actually read the patents," Stillman said.
Woolston patented a method, filing an application in 1995 that would allow a purchaser over the Internet to buy a product from a seller for a fixed price.
The idea came to him in 1994 during the baseball strike, when he heard a news item about a local baseball card shop that was shutting down because of a decline in interest. That got him to thinking about the Internet as a means to expand the marketplace for a small business. But he thought an intermediary was necessary to overcome a consumer's hesitancy to purchase from an unfamiliar merchant who could be thousands of miles away.
While the idea seems obvious now, it was far from that in 1995, when the Internet was in its infancy, Woolston said. He said many venture capitalists told him his idea was foolish.
Woolston put some of the technological expertise he had honed in the Air Force and CIA to use in working out the details of his invention. As an airman, Woolston worked the computers on high-tech reconnaissance flights against the Soviet Union. In the CIA, Woolston helped investigate the 1986 discotheque bombing in Berlin that killed three people and wounded 229.
That bombing pushed the CIA toward a more proactive stance on counterterrorism surveillance, and it was Woolston's job to develop the computer network that would allow the CIA to keep better track of potential terrorists.
He bristles at the notion that his patent merely claims an obvious idea. The patents, he said, are complex and detailed, and have now been validated not only by the Patent and Trademark Office but also a jury.
"It's the combination of elements that defines the invention. There are 42 patents on the Post-It note. It's the combination of a not-so-good glue and a pad of paper," Woolston said.
Cassie did you read this part too...
Q You poke holes in a number of investment systems that people swear by. Why?
A In a way, investment strategies are like diets. There are all kinds of diets, and most of them will lose weight. Whether you would lose more weight using a balanced diet is the real question.
Q Is it an investor's fatal flaw to seek order in a disorderly world?
A People in general view almost any coincidence as significant. When you point out it's random, they don't believe you. It's one problem investors have, especially technical analysts who look at patterns and think they presage this or that. The underlying problem is randomness doesn't look random.
Q Do we look for patterns in the markets because that's how our brains work, or is it the way we're trained to think? Is this a case of nature vs. nurture?
A It's hard-wired. In the past, if you saw a rustle in the bush, it paid to run like hell. It might be a lion.Now, the number of possible sensory inputs is so large. We're bombarded with numbers, acronyms and dates, and this kind of genetic machinery is easily fooled. If we continue to think everything is significant, it leads to all kinds of conspiracy theories and all kinds of strategies, technical analysis and Elliott Waves and other nonsense.
I believe 70% of all consumers consume their music in their cars. A "niche" market that EDIG is addressing thru Eclipse by Fujitsu-Ten.
Math professor learned lesson from losing on WorldCom
By Mark Schwanhausser
Mercury News
John Allen Paulos isn't much different from countless others who lost money investing in WorldCom -- except that he blames himself, not the executives implicated in the company's accounting scandals.
Somehow, WorldCom's hype transformed the Temple University math professor into a ``dim-witted addict'' who frequented online chat rooms for insights and bought even more WorldCom stock as it sank lower and lower.
There may be redemption for Paulos yet, however. He has written ``A Mathematician Plays the Stock Market'' (Basic Books, $25), which hit bookshelves Sunday. In it, he seems intent on convincing readers -- and perhaps himself -- that his mathematical right brain has regained control.
Here's an edited interview with Paulos:
Q What did you learn from falling in love with WorldCom?
A Diversify. Don't fall in love with the stock. Don't be disdainful of the herd. Don't let greed blind you.
Q You poke holes in a number of investment systems that people swear by. Why?
A In a way, investment strategies are like diets. There are all kinds of diets, and most of them will lose weight. Whether you would lose more weight using a balanced diet is the real question.
Q Is it an investor's fatal flaw to seek order in a disorderly world?
A People in general view almost any coincidence as significant. When you point out it's random, they don't believe you. It's one problem investors have, especially technical analysts who look at patterns and think they presage this or that. The underlying problem is randomness doesn't look random.
Q Do we look for patterns in the markets because that's how our brains work, or is it the way we're trained to think? Is this a case of nature vs. nurture?
A It's hard-wired. In the past, if you saw a rustle in the bush, it paid to run like hell. It might be a lion. Now, the number of possible sensory inputs is so large. We're bombarded with numbers, acronyms and dates, and this kind of genetic machinery is easily fooled. If we continue to think everything is significant, it leads to all kinds of conspiracy theories and all kinds of strategies, technical analysis and Elliott Waves and other nonsense.
Q How else do investors sabotage themselves?
A Economist John Maynard Keynes compared short-term investors to readers of newspaper beauty contests in his day. They'd give prizes only to the readers who listed the same five prettiest as the totality of readers. What they had to do was anticipate what the average opinion thought the average opinion would be. You're not just judging beauty. It's something even less tangible, which is others' reactions to it.
Investing is like that. You're not gauging the investment itself, just the other investors' reaction to it. You can't afford to disdainfully say, ``They're wrong,'' because the market is such that by definition they're right.
Q If math professors can get burned in the market, what chance does an innumerate investor have?
A Perhaps a better chance. The funny thing is people often wrap themselves in the mantle of mathematics. They say, ``Look at all my sigmas, betas and all this math apparatus.'' They don't realize that the mathematical mechanisms are based on certain assumptions, and the assumptions often as not are guesses and gut feelings. If all this panoply of tools is based on guesses and gut feelings, they're not going to do much better than those who guess or feel.
Q In an earlier book, ``A Mathematician Reads the Newspaper,'' you provide ample evidence why readers should be skeptical of what the media report. Can they trust what they're reading now?
A This column is gospel, but in general, no. Jayson Blair plagiarized and fabricated, and that's awful. Nobody can deny that. But there are other stories in which other journalistic sins are more serious.
Take the business media during the whole bubble. They subjected few of these analysts and spokesmen and CEOs to any sort of scrutiny and were more cheerleaders than investigative journalists -- or even impartial journalists. That journalistic sin, if you want to use that term, had a greater consequence than Blair's.
--------------------------------------------------------------------------------
The Money Manual appears every other Sunday, or online at www.siliconvalley.com/mld/siliconvalley/business/columnists /Mark_Schwanhausser. Contact me at mschwanhausser@mercurynews.com or (408) 920-5543.
Musicians cancelling T.O. gigs 'wankers,' says Johnny Rotten
FROM CANADIAN PRESS
John Lydon proved Friday he's still the acid-tongued punk lovingly known by legions of fans as Johnny Rotten when he trained his verbal guns on everything from celebrities afraid of SARS to people who download music from the Internet.
"Who told them not to come?" Lydon asked of all the musicians, including Elton John and the Dixie Chicks, who have recently cancelled gigs in Toronto in the wake of its SARS outbreak.
"I made my own decisions. Hello, I am a free person. I'm not a number. That's why I'm here and those wankers are not."
That characteristically Rotten rant, given during a keynote speech at the North by Northeast music conference, was followed by his thoughts on what role he'd like to play on the big screen.
"It would be Jesus Christ," replied Lydon, who also fronted the band Public Image Ltd. after the Sex Pistols broke up in 1978. "And I'll do the musical too. Jesus Christ, the Canadian version, SuperSARS."
Showing up late for the engagement, Lydon snarled his way through his address attended mostly by aspiring rock stars. He had few kind words for those looking for advice on getting a recording contract.
"I don't know why I'm here," said Lydon, clad all in black, in contrast with his spiky bleached-blond hair. "To help young bands, is it? My best advice is give up. For several reasons. One, I don't need the competition. And two, you can bet your sweet Fanny Adams none of you are honest."
"If you're in this business just for the cash, that's a good enough reason in itself. But then you shouldn't be talking or listening to the likes of me. I'm the exact opposite of that. Any penny I've earned has been hard, has been deserved. There's a difference, isn't there? You don't penny pinch just out of sheer molestation. So on that, goodbye!"
And with that statement, the man often regarded as one of the godfathers of British punk finished his prepared speaking portion — running a total of two minutes — and asked for questions from the crowd.
Over the course of about 40 more minutes, Lydon spoke mostly in non sequiturs and dished out vitriol to the adoring crowd eager to see the Rotten of yesteryear.
The audience of about 200 lapped up his wit, making Lydon seem more like a stand-up comic playing to a friendly crowd than an aging rock star with anger issues.
Lydon, 47, poked fun at the group, which applauded politely after nearly every response.
"All this handclapping after is a bit naff, isn't it?" he asked. "You make me feel right pretentious. I could really get into this."
Some trinkets of advice managed to sneak through. He told the musicians they'd need to push and shove their way to the top.
"We broke in. A blind sheer bloody-minded ignorance, mostly. That's the key to it," he said. "There are no rules. I don't step on anyone and I don't hurt anyone but you get in my way and you're going to have a serious bad time."
Lydon was an interesting choice for the North by Northeast organizers, since he generally has nothing positive to say about the music business.
"Here we are at this record company-sponsored conference and my best advice is don't trust the record company," he said. "Don't be daft. They're out there to make money . . . The trouble is with radio, TV, the whole music industry, it's politically motivated at some point. Somebody's out there with a preconceived conception about how the world works according to their safety records. You have to stop that."
He also had his own individual take on the debate surrounding the downloading of music, something he calls a "wonderful con."
"It's just like how they removed vinyl and moved it over to compact disc. Hello? Now we find out that compact discs don't last forever. They deteriorate really rapidly," he said. "The whole world of MP3 is the worst, lowest level of fidelity in sound you could ever expect. You're being conned and you've got a whole world out there thinking `Hey, hey, I've got it free.' "
After his speech, Lydon autographed copies of his book, Rotten: No Irish, No Blacks, No Dogs.
Dear Steve: Where's my video iPod?
By David Carnoy
Executive editor, CNET Reviews
(June 4, 2003) E-mail to a friend
Send us feedback
From: David Carnoy
To: Steve Jobs
Re: Device I want
Just wanted to let you know that all the hoopla over the introduction of the slimmer iPod and the Apple Music Store was quite a coup--and good for business--but it didn't get much of a rise out of me. Don't get me wrong; the iPod is still sweet, but now that so many people have them, it's not as insanely great as it once was. I hope you understand, but a guy like me needs to stay ahead of the pack, and the whole iPod thing is already starting to feel a little passé (someone called my scrollwheel iPod "old school").
The new object of my affection is a portable digital media jukebox akin to the unborn video iPod that got a lot of chatter on rumor sites before the last Macworld in January. I've been playing around with an engineering sample of the soon-to-be released Archos AV320, which has a 3.8-inch color LCD built over a 20GB hard drive; a 40GB version, the AV340, will also be available. While it's going to be a bit heftier and not nearly as slick as the iPod, this fairly expensive ($549) item does some pretty nifty stuff, including encoding MPEG-4 videos on the fly from a video source such as a TV or camcorder, as well as allowing you to store and view thousands of digital images. It's sort of like having a tiny, portable VCR, TV, MP3 player, and image viewer all in one. You won't see DVD-quality video, but it's good enough, like MP3s.
Archos AV320
(Click to enlarge.)
I also got my hands on an early version of RCA's promising Lyra RD2780 audio/video jukebox, which is less expensive and more sleek-looking than the Archos. The 13-ounce device won't be out until August or September, but it offers similar features, including USB 2.0 connectivity, for less money ($449).
On paper, both of these guys are shades of the rumored video iPod. According to the dreamers, the video iPod was going to look similar to the original Apple model. But in place of the small monochrome screen, the whole front face would be a sharp color LCD. Not only could this new iPod--or whatever the thing would be called--do music, photos, and video, it would double as an electronic organizer, getting Apple back into the PDA game.
Of course, a rumor is just a rumor, and from your recent quotes, it seems as if you’re not really interested in doing a video iPod or PDA.
Of course, a rumor is just a rumor, and from your recent quotes, it seems as if you're not really interested in doing a video iPod or PDA. Smoke screen? Maybe. Our MP3 Insider and senior editor Eliot Van Buskirk believes that Apple will not come out with such a device anytime soon for several reasons: Video is far more complicated than audio (thanks to large files and extensive format parameters), the usual, nasty copy-protection issues are a few years from being worked out, and Apple likes to control the entire user experience from start to finish to create that wonderfully smooth ride.
Valid points, all of them, but here's how I look at it.
A video iPod would fit in nicely with iTunes, iMovie, iPhoto, and iSync, and it would encourage people to buy more Macs. As for the studios' concerns about piracy, what can I say? Several companies, including the aforementioned ones, have their eyes on creating the video Walkman and seem willing to set out into murky waters for the chance to be at the forefront of a potentially killer category.
Lyra RD2780 Jukebox
(Click to enlarge.)
Moreover, despite the challenges of dealing with such large file sizes, downloadable video might ultimately prove to be a more lucrative and less complicated business model than downloadable music. After all, people are willing to rent movies--imagine a digital version of Netflix--rather than buy them. In fact, a subsidiary of Sony is gearing up to sell downloadable, self-destructing video files as I write this. Also, if you establish a portable video platform, you could very well sell advertising into it, sort of along the lines of what TiVo is doing.
My last point is a no-brainer: Apple needs more consumer electronics products to flourish. Gateway, Dell, HP, and others are all headed in this direction. However, they're playing in the budget arena, in the form of low-cost Pocket PCs, plasmas, and so on. Apple, with its design advantage, has proven that it can sell high-end products such as the iPod. Yes, $549 isn't chump change, but I'm sure folks would be willing to fork out that kind of coin for a superslick unit that not only does music, movies, and pictures but is a PDA, to boot. True, Palms and Pocket PCs offer this type of functionality now, but you gotta have at least 20GB--and preferably 40GB--of built-in storage for such a product to make sense.
So what do you say, Steve? Next Macworld, you on the big stage, Finding Nemo on the little screen? Come on. It would be insanely great.
David Carnoy is an executive editor for CNET Reviews. Have a question for him? Let us know!
Wired News on Friday reported that an independent
programmer has written code that re-establishes the ability of Apple
iTunes users to share music with one another over the Internet, a feature
that Apple disabled in a recent update of the software. The controversial
feature, originally intended by Apple for use on small, personal networks,
allows any Mac user to stream music from another Mac user's hard drive
over the Internet.
http://www.wired.com/news/mac/0,2125,59127,00.html
Cassie, it was the public's perception of what e.Digital might become that drove the pps. The PRs from the company were certainly rosy but hardly all hyping. Their is no puck. I own a Treo10. Maycom player is out, Odyssey players are out, B&O player out, etc. Expectations of the digital music market were and still are IMO overblown given the labels obstinancy in moving into the 21st century while protecting their own bloated carcasses. Movement of the company into IFE and video will provide another potential revenue stream with an industry that has "been taken to school" already. Your constant negative diatribes really tell us all we need to know about your intentions in posting here.
Cassantara, wow a blatant accusation of insider trading. Did you include IMO in that?
really, a high end shop probably sells 3 or 4 units a month and even if there are 2300 stores....well, you do the math on those royalties....they are not gonna put us over the top now are they?
SMART SOLUTIONS FOR A DIGITAL WORLD
Current Status: Final review prior to publication has been completed, application will be published for opposition.
Date of Status: 2003-05-31
Filing Date: 2000-12-19
The Information will be/was published in the Official Gazette on (DATE NOT AVAILABLE)
Registration Date: (DATE NOT AVAILABLE)
Law Office Assigned: TMO LAW OFFICE 116
Attorney Assigned:
DWYER JOHN D Employee Location
Current Location: 657 -Pre-Publication Final Review
Date In Location: 2003-06-02
B&O is not a huge retail chain but a very high end shop. What speaks volumes is their attention to audio fidelity which EDIG's technology obviously could measure up to. By most reports, the player is a success for B&O. IMHO, we were never gonna get rich off this one but it speaks to our quality...and maybe helped us with HP who knows...
Oh the irony...File-sharing networks go into battle
09:31 Friday 6th June 2003
Stefanie Olsen and Evan Hansen, CNET News.com
Altnet has warned that other file-sharing networks may be in violation of its patent for digital tags, and is threatening action
In a sign that file-sharing communities may start to turn on each other, Altnet said Thursday that rival networks may be violating its patent for digital tags and it plans to bring to them in line.
In a first step, the Brilliant Digital Entertainment subsidiary Altnet on Thursday licensed its TrueNames patent to its biggest partner, Sharman Networks, owner of Kazaa Media Desktop. Kazaa is one of the most popular file-sharing communities on the Net.
Altnet acquired rights to a 1999 patent that the company says covers the technique of identifying files on peer-to-peer networks using a "hash," or digital fingerprint based on the contents of the file. The company plans to approach virtually all other peer-to-peer services to seek license rights.
"Altnet is very focused on the infringement of the TrueNames patent and we believe that many of today's active peer-to-peer applications may be in direct violation," Altnet CEO Kevin Bermeister said in a statement.
"We're very focused on preserving the integrity of the patent and realising the potential it offers peer-to-peer applications and content owners."
But the scope and enforceability of patents are notoriously difficult to evaluate barring actual court rulings on their validity.
Nevertheless, there is a growing sentiment in technology circles that many patents granted by the US Patent and Trademark Office can be seriously flawed. Among other things, the agency has granted patents for side-to-side swinging on a swing set and for making a peanut butter and jelly sandwich without a crust.
Technology patents have drawn some of the harshest criticisms and have been at the heart of some of the most closely watched patent battles in years, especially so-called business method patents such as Amazon.com's one-click checkout system. Last year, the online retail giant settled claims against Barnes & Noble involving the patent.
Patent number 5,978,791, which Altnet licensed on Thursday, has been litigated at least once before, when content delivery services provider Digital Island used it in a dispute with rival Akamai. A jury rejected Digital Island's claims in December 2001, according to a statement published on Akamai's Web site.
Earlier this month, Kazaa and Altnet jointly released a bundle of file-swapping software that includes components of a new high-security peer-to-peer network and a program that will pay users to be a part of it. The network essentially harnesses the computing resources of the tens of millions of Kazaa users to distribute authorised files such as games, songs and movies.
The companies believe that by giving people an incentive to host and trade paid files it could create a powerful medium for distributing authorised content and could diminish file-trading networks' role as hubs of online piracy.
But as Altnet launches its ambitious new service, parent Brilliant Digital faces financial troubles. In a federal securities document filed in late May, the company said it had "negative working capital of approximately $4,165" and that there were substantial doubts about its survival. However, the filing said Brilliant Digital expects another round of financing to boost operations soon. The company aims to augment earnings by licensing its patent.
Metallica's MP3 Conversion
Thursday, June 05, 2003
What a difference a few years make: Heavy-metal band Metallica once waged a high-profile legal campaign against the online service Napster, claiming it was cheating artists by allowing people to swap songs free. Now it is Metallica putting free material on the Web and Napster that is being retooled to become a for-pay service.
Today, the band is kicking off an experiment to try to prove it isn't afraid of the digital era. Fans who purchase its new CD, "St. Anger," will find an access code tucked inside the case allowing them to go online and download live recordings and other content not available elsewhere.
At launch, the band's MetallicaVault.com site will feature six to seven hours' worth of Metallica's music. The site may eventually hold hundreds of hours of content.
"Our dream is to make this the yellow pages of Metallica," said Bob Pfeifer, who worked with the band on the site. "We'd like it to be a highly organized, high-quality listing of everything. I'd like this to be the temple of Metallica."
Though the music industry and the consumer tech industry have usually been on the opposite ends of struggles over digital rights and copyright issues, the two have been inching toward each other lately in an effort to establish new business models and promotional vehicles. Rare these days is the musical act that does not have a Web site offering samples of its music and videos. Other companies have gotten into the act, too. Speakeasy Inc., the Internet service provider hosting Metallica's new site, says it hopes offerings such as MetallicaVault.com will lead more consumers to try its high-speed Internet service.
The two industries have yet to produce their first breakout hit together, though a new music service created by Apple Computer Inc. could turn out to be the first success story; iTunes Music Store saw sales of 2 million music tracks in its first two weeks. Napster is also ready for a comeback: Roxio Inc., which makes CD-burning software, recently announced plans to release its fee-based version of the once-popular service.
In 2000, Metallica filed the first of a series of copyright-infringement lawsuits by the music industry against Napster, which led to Napster's closing At the height of the conflict, Metallica's drummer, Lars Ulrich, delivered to Napster's headquarters the names of 300,000 users he said were illegally trading the band's songs, demanding that they be kicked off the Napster service.
Phil Leigh, digital media analyst at Raymond James & Associates, regards Metallica's latest promotional strategy largely as an effort to rekindle interest among the 22-year-old band's following. Though Metallica has sold about 80 million albums since its formation in 1981, "St. Anger" is the band's first new studio album since 1997's "Reload."
"Any artist that hasn't had a new album out in so long has got to be as nervous as a cat with deaf kittens right now," said Leigh, who confessed that he prefers Elton John ballads over old-school speed-metal classics from Metallica such as "Creeping Death" or "Leper Messiah."
"They've got to want to do anything they can to build interest in the new album -- and at the same address the lingering hostility that may exist with the kids who might've found their names on the list that Lars Ulrich delivered to Napster," he said.
Artists who have spoken or acted out against illegal distribution of digital music have occasionally seen their actions backfire among fans. Earlier this year, Madonna's record label posted decoy versions of her new songs onto the free file-sharing services; when users downloaded the files, they were treated to tracks with the star cursing at them for trying to listen to her music without paying for it. Shortly afterward, hackers defaced Madonna's Web site with expletives of their own and posted downloadable files of other then-unreleased songs from the singer.
Metallica is racing to get its new CD in stores before the Web is saturated with its new songs. The band's new album was originally scheduled for release next week, but on Monday, Metallica's label, Elektra Records, moved up the release of "St. Anger" by five days, citing "the prevalence of substandard versions" of tracks already circulating on the Internet -- the first time the label has changed a release date as a result of such concerns.
In online discussion groups dedicated to Metallica, anticipation for the new album, which arrives in stores today with a list price of $18.98, and includes a DVD of live performances, mixes closely with cynicism about the band and its record label. "Soooo, are we to actually believe that if the St. Anger rips [or tracks on the CD] were of higher quality, this wouldn't be an issue?" asked one fan.
For a band that has expressed so much concern about protecting its copyrights, the security protocols at MetallicaVault.com are surprisingly liberal. Metallica's new service will let users log on and download songs from any Internet-connected computer, as long as they enter a valid security code.
Rather than using a secure or streaming-media format, which cannot be easily copied, the band chose to post material on its new Web site in the MP3 format -- the most popular digital music format by far, but one that has been controversial in the recording industry because of the ease with which users can trade and copy files.
"We wanted kids to be able to download it and burn it onto a CD if they want to and drive around," Pfeifer said.
Pfeifer said he has already gotten phone calls "from two managers of very big bands" about the Web site. If MetallicaVault.com is a success with fans, "it's very possible that this will be the trend," with other major acts, he said.
Of course, even if Metallica has the best site on the World Wide Web, it won't matter much if the new album turns out to be a flop. Some fans expressed disappointment at Metallica's slower-moving later albums, which they regarded as the band moving away from its high-speed, heavy metal roots.
But "St. Anger" has already earned some positive reviews. Spin magazine recently called the new album "an inspired return to the complex savagery of old."
Reported by Washington Post
Keep hope alive...Tower Records Launches Brand New Emerging Artist Program Retail Marketing Focuses on Breaking New Bands and a Lower Price Point
TOWER RECORDS LOGO
Tower Records company logo. (PRNewsFoto)[JL]
WEST SACRAMENTO, CA USA 12/11/2002
SACRAMENTO, Calif., June 6 /PRNewswire/ -- Tower Records, known as the
authoritative voice in packaged entertainment retail, announced the launch
this month of its emerging artist marketing program dedicated to bands the
retailer believes will be the next big thing.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990915/TOWERRECORDS )
For over forty years Tower Records has played a key role in launching the
careers of thousands of bands, and is recognized as a retail force when it
comes to breaking new artists. Today, Tower Records' Product Experts filter
through the morass of synthetic produced pop to find quality bands, which they
believe will be the artists of the future. Tower Records is again leading the
way with this savvy new marketing program.
Designed specifically with both customers and developing artists in mind,
Tower has created a marketing program geared to introducing less well known,
but emerging artists to the consumer at a price point of $9.99 or less per CD.
Each month Tower's Product Experts will give customers valuable insight
into up and coming artists by selecting four to be featured in the emerging
artist marketing program. Each band's CD will be showcased in a dedicated
chain wide listening station featuring bio and buzz on the band and priced at
$9.99 or lower, as well as in a dedicated front end rack which will also house
over twenty artists representing all music genres at a price point under $10.
Tower's objective is to provide customers with the best selection of emerging
artists in an easy to find rack and at a price point that is also easy on the
pocket.
For this month's launch Tower's TV advertising will focus on VH-1, Bravo,
The Fuse and MTV2, whilst print publicity will include positioning in Tower
Records' weekly inserts and a front cover spotlight. Additionally, each band
will receive exposure online at Tower.com and will be highlighted in targeted
email blasts.
So, which bands will Tower Records be touting as the next big thing for
June? Here's who and why --
Alkaline Trio -- Good Mourning takes the punk rock revival to deeper and
darker places. Spin magazine just gave this album an A-, saying it's the
band's best album by a mile.
Rooney -- The sounds of Cheap Trick, Weezer, the Cars and the Beach Boys
all shine through, making Rooney the perfect soundtrack to your summer.
The Thorns -- Matthew Sweet, Pete Droge and Shawn Mullins came together to
make an album of heartbreaking songs and comforting harmonies.
Grandaddy -- If your life was changed by the last Wilco or Flaming Lips
records, you'll be amazed by Grandaddy's mix of lo-fi electronics and
roots-rock songwriting.
Of this trend setting marketing program, Tower Records Vice President of
Marketing Russ Eisenman said, " At Tower, music is our passion, and the
creation of this program enables us to really get behind these bands and stand
behind the recommendations of our Product Experts to our customers. This is
what the shopping experience is all about at Tower: expertise, selection and
passion. Music is not an appliance; it's an art form that we want to share
with our customers. We are dedicated to educating our customers and broadening
their musical horizons beyond what you hear on commercial radio with new
suggestions and music we just rave about. We are also committed to artists who
have honed their craft. If as a retailer, we can play a significant role in
launching an artist's career, or breaking a band, then that's what were here
for."
About Tower Records
Since 1960, Tower Records has been recognized and respected throughout the
world for its unique brand of retailing. Founded in Sacramento, CA, by
Chairman, Russ Solomon, the Company's growth over four decades has made Tower
Records a household name.
Tower Records stores are represented in fourteen countries throughout the
world and in 218 different locations as wholly owned operations, licensees and
affiliations. The company opened one of the first Internet music stores on
America Online in June 1995 and followed a year later with the launch of
Tower.com. The site was named among the top 50 retail websites by Internet
Retailer magazine.
Tower Records' commitment to providing its customers with a superior and
specialized shopping experience is key to the organization's retail
philosophy. Tower forges ahead with the development of exciting shopping
environments, presenting diverse product ranges, artist performance stages,
personal electronics departments, and digital centers. Tower Records
maintains its commitment to providing the deepest selection of packaged and
digital entertainment in the world merchandised in stores that celebrate the
unique interests and needs of the local community.
New system could speed up Web downloads
Thursday, June 5, 2003 Posted: 10:00 AM EDT (1400 GMT)
• Scientists: Internet speed record smashed
LONDON (Reuters) -- Scientists in California are working on a fast new Internet connection system that could enable an entire movie to be downloaded in a matter of seconds.
The Fast TCP system, designed by a team of researchers at California Institute of Technology in Pasadena, runs on the same Internet infrastructure currently used but is designed to be much quicker.
Internet traffic is controlled by a system called Transmission Control Protocol (TCP) which was developed in the 1970s and breaks down files into small packets of about 1500 bytes.
"The sending computer transmits a pack, waits for a signal from the recipient that acknowledges its safe arrival, and then sends the next packet," New Scientist magazine said on Wednesday.
Revealing delays
But if there is no reply, the packet is sent again and again at successively slower speeds until it arrives. So minor problems can make connections sluggish.
"The difference (in Fast TCP) is in the software and hardware on the sending computer, which continually measures the time it takes for sent packets to arrive and how long acknowledgements take to come back," the magazine added.
The Fast TCP reveals the delays and predict the highest data rate the connection can support without losing data.
When the researchers tested 10 Fast TCP systems together it boosted the speed to more than 6,000 times the capacity of the ordinary broadband links.
"Caltech is already in talks with Microsoft and Disney about using it for video on demand," the magazine added.
Music Industry, Schools Agree Webcasting Rate
33 minutes ago
Add Technology - Internet Report to My Yahoo!
WASHINGTON (Reuters) - Universities and the music industry said on Tuesday they had reached a royalty payment deal that will allow college radio stations to stream music over the Internet at a discount.
The agreement marks the final settlement in a long string of negotiations to ensure that musicians and record labels get paid for performances on satellites, cable systems, the Internet and other new distribution channels.
Internet "Webcasters" and the music industry have struggled for years to set an appropriate royalty rate that would compensate musicians and record companies while not driving the fledgling online broadcasters into bankruptcy.
Under the deal, college radio stations and other educational broadcasters will pay a flat fee of $250 to stream their signals over the Internet this year, while other noncommercial Webcasters will pay up to $400. The deal applies retroactively to 1998 and lasts through the end of next year.
Fees are lower if the broadcast is limited to news or sports, while those transmitting more than one channel or reaching larger audiences would pay more.
The flat-fee structure echoes a deal reached last fall with smaller commercial Webcasters, who agreed to pay $500 per year rather than the standard commercial rate of roughly 1 cent per hour for each listener, which they feared would drive them out of business.
Noncommercial operators had until June 30 to reach a deal of their own before heading to arbitration, a costly and time-consuming process.
Officials on all sides praised the deal, saying it would provide revenue for musicians and labels while encouraging small Webcasters to play lesser-known music.
"We recognize that noncommercial Webcasters operate under different conditions than for-profit Webcasters," said Steven Marks, a senior vice president at the Recording Industry Association of America (news - web sites), which represents large record labels.
OT Central bankers signal they will push rates lower
By Stella Dawson, Reuters
BERLIN — Top central bankers signalled Tuesday that they are ready to push interest rates even lower in the world's three largest economies to boost slow growth and ward off risks of "corrosive" deflation.
While both the United States and Germany stressed chances remain extremely limited for a destructive deflationary price spiral in their economies (a chronic problem Japan is facing), they chose a high-profile conference of top bankers to pledge they are battling early against it.
Financial markets took that as a sign more interest rate cuts are coming from the U.S. Federal Reserve and the European Central Bank, probably this month. Inflation is virtually dead, and slow growth and deflation now appear to be bigger threats.
"It is a substantial step, they are clearly preparing the ground for a rate cut," said Lorenzo Codogno, economist at Bank of America in London.
U.S. and European interest rate futures and bond prices surged after the central bankers spoke, sending two-year interest rates to record lows on both sides of the Atlantic — below 2% in Europe and below 1.25% in the U.S..
In Japan, where official rates already are effectively zero, Bank of Japan Deputy Governor Toshiru Muto said further steps are in the works to inject more money into a deflating economy where growth has stagnated for over a decade.
"The bank will explore measures to improve the transmission mechanism of quantitative easing," Muto told the International Monetary Conference.
Fed Chairman Alan Greenspan described deflation as a low probability for the U.S. economy, but he said it is so hard to tackle that it requires taking out an insurance policy.
"The issue we are concerned about is not deflation in the sense of falling prices per se, but the issue of what I would call corrosive deflation," where a downward price spiral destroys economic growth in a self-feeding cycle, Greenspan said.
With inflation unlikely to emerge any time soon, the Fed needs to act before deflation grabs hold, because it can be very hard to expunge.
"We need a much wider firebreak, in logging and foresting terms, because we know so little about it. So we lean over backwards to make certain we contain deflationary forces," Greenspan said.
The ECB also has taken action, said ECB President Wim Duisenberg. In updating its monetary policy strategy last month to state that the ECB aims to keep inflation close to 2%, it has given itself "sufficient margin to guard against the possible effects of deflation," he told the conference.
At the same time, Duisenberg said inflationary pressures are falling significantly in the slow-growing region thanks to easing wage pressures, falling oil prices and the euro's strength.
This would clear the path for an ECB rate cut on Thursday to new lows, possibly as much as half a percentage point from the current 2.50% official rate, analysts say.
Underlining that deflation is on the ECB agenda, Germany's Bundesbank President Ernst Welteke addressed the issue for his country head on.
"Let's call a spade a spade. The two most pressing questions are whether Germany is on the brink of deflation and whether Germany is in for a Japanese-like scenario," he said.
He then laid out reasons why he sees deflation unlikely — Germany has no real estate bubble like Japan had, and, unlike Japan, Germany's banks are tackling bad loan problems.
If they have a webcast
it's undoubtedly fluff. If they don't have a webcast....it must be some kind of conspiracy.
OT Nokia, Warner Music sign mobile music agreement
Associated Press
Helsinki (Finland), June 2
Nokia, the world's biggest cell phone maker, said on Monday that it has signed a marketing agreement with Warner Music International to deliver music content for its upcoming Nokia 3300 cell phone, which also plays music.
The 3300 -- expected to be released in June -- includes a 64-megabyte multimedia memory card with short music clips, which allows for real music samples such as ring tones, and ships with a CD-ROM with recordings featuring artists from Warner Music, Nokia said.
The phone supports MP3 and AAC compressed audio file formats, which can be transferred from a personal computer with a USB cable. It also features a built-in FM stereo.
The companies said the deal "marks a new way for music fans to legally consume music content."
Financial terms of the deal were not disclosed.
Nokia leads cell phone sales with about 35.8 per cent of all mobile phones sold worldwide, according to Gartner Dataquest. Last year, Nokia claimed a 38 per cent market share.
Nokia has sales in 130 countries with some 53,000 workers.
'Rewards' to encourage legal file sharing
ANICK JESDANUN
Associated Press
Posted on Mon, Jun. 02, 2003
NEW YORK - Concert tickets, DVDs and even laptops will be used to encourage users of the online bazaar known as Kazaa to swap legal files instead of pirated movies and music.
The Peer Points Manager program announced Monday will essentially be Internet file-sharing's version of frequent flyer miles.
Kazaa users earn points for making legal files available to others over the Internet. The points can be redeemed for small prizes like computer games or for sweepstakes entries to win larger items.
The program is being run by Altnet, a Kazaa partner trying to promote sharing of legal files that can be limited in different ways by their creators, for instance songs that can only be played a certain number of times.
Altnet distributes about 1,000 of such protected files for music, movies and software. Many of the songs available, however, are from obscure bands who aren't charging for the protected files anyway.
Currently, when users search for files on Kazaa, they get "gold" listings of Altnet-sponsored items and "blue" listings of everything else, much of it pirated. Either way, users obtain files directly from a fellow user's computer.
Kevin Bermeister, Altnet's chief executive, said users have been downloading about 20 million gold files each month, even though the blue versions are just a click away.
Altnet hopes to increase usage to 20 million files a day through programs like Peer Points.
Kazaa users will have an incentive to stop sharing pirated files, knowing they could tie up resources that could be used for points-earning Altnet files, Bermeister said. As fewer users make unsanctioned files available, he said, stealing movies and music will be harder.
Michael Goodman, a media and entertainment analyst with the Yankee Group in Boston, said the points program shows promise given that many Kazaa users are already opting for the protected files even without points.
"A loyalty incentive program gives consumers one more reason to pay for content instead of migrating to unlicensed content," he said. "Can you make (piracy) completely go away? No. Can you bring it to a manageable level? This is arguably a step along that road."
But Lee Black, a senior analyst at the New York-based Jupiter Research, said success will be limited if recording companies do not make more music available. The labels so far have been reluctant to cooperate with a service they blame for eroding CD sales.
Black added that even if Kazaa users stop sharing pirated files in hopes of earning points, determined music lovers can go to other file-sharing services to find songs they want.
Bermeister estimates that a typical user will earn about 3,000 points each month. Prizes and sweepstakes entries will typically cost 100 to 500 points. Altnet now gets revenues by charging content owners for distributing files.
Software for keeping track of points will come with the new version of Kazaa Media Desktop, expected later in June. Phil Morle, director of technology of Kazaa parent Sharman Networks, said the new software will also highlight niche "channels" such as hip-hop to give users easier access to the Altnet files.
Digital video goes portable with Archos gadget
Handheld device also stores music and photographs
Benny Evangelista, Chronicle Staff Writer Monday, June 2, 2003
--------------------------------------------------------------------------------
Handheld devices like Apple's iPod set a new standard in digital music,
making it easy for people to take their entire CD collections on the road without lugging around a box full of plastic discs.
Now a company from Southern California named Archos Inc. -- which introduced a portable jukebox two years before the iPod -- has come up with a new Palm-size device that takes the iPod concept for music and extends it to digital movies, TV shows and photos.
Last week, I tested the Archos Video AV320, which costs $570 and can store about 40 hours of near DVD-quality video, thousands of MP3 songs and 400,000 digital photos. It also has an optional attachment that turns the unit into a tapeless digital video camera.
While the AV320 itself may be too cutting edge for most consumers, it does represent the next generation of portable digital entertainment devices that we'll see on the market, doing for video what the early handheld MP3 players did for music.
Archos, which has headquarters in Irvine (Orange County) and Igny, France, sent a demo AV320, which comes with a built-in 3.8-inch color LCD screen and a 20-GB internal hard drive.
The AV320 and another model, with a 40-GB hard drive, the AV340, go on sale today on Archos' Web site, www.archos.com. The company also plans to start taking orders from retail stores today.
The AV320 weighs 12.5 ounces and is 4.4 inches long, 3.2 inches wide and 1. 2 inches deep.
Both models evolved from Archos' Jukebox Multimedia device, which had a 1 1/2-inch screen.
Archos' marketing director, Gilda Eldridge, conceded that screen was far too tiny to watch video, requiring you to hook that unit up to a bigger screen.
The new AV300 models solve that problem with a built-in 3.8-inch color LCD screen, similar to what you would get with a video camera. The screen displayed a remarkably clear picture and was big enough to watch TV comfortably.
I've seen portable DVD players for about the same price that have as good or better displays, but the advantage of the AV320 is that you don't have to lug around a stack of DVDs.
With an optional $200 AVCam attachment, which wasn't available for me to test, you can turn the unit into a digital video camcorder and still camera, using a hard drive instead of tape to store images.
I took the AV320 on my morning BART commute, which lasts about half an hour,
and instead of taking my usual nap, watched a short independent film that was preloaded on the unit.
I also imagined the possibilities of taking a long plane, train or car trip and being able to choose from a variety of movies, TV shows or sporting events I hadn't had time to watch before.
MP3s and digital photos can be downloaded from or uploaded to a PC or a Mac through a USB connection, although it was easier to do on an Apple-supplied Powerbook G4 than my Sony Vaio PC, which had trouble recognizing the Archos.
The unit is also designed to store work-related files such as PowerPoint presentations and sales videos, so you can even attempt to justify to your boss why the company should buy an AV320 for you.
Video is loaded by attaching the included digital video recorder module, which snaps onto the AV320 and connects by RCA jacks or an S-Video cable to a DVD player or VCR.
The device copies the analog signal that is played back by the DVD player or VCR and converts it to digital MPEG-4 video. However, you don't get an exact digital copy, as you would by transferring an MP3 or digital photo file.
You also have to take the time to play back the entire video to copy it.
I copied the movie "Drumline" from a DVD, and the picture on the Archos was close to DVD quality. I also copied a VHS version of "Demolition Man," which looked just as good as the original. The quality of several TV programs I recorded from the Disney Channel was also similar to VHS.
Connecting the Archos to my 32-inch TV brought mixed results. The Archos produced acceptable VHS quality images, but not anywhere near the high resolution produced by a DVD player. A version of "Drumline" that I recorded using a lower setting -- which allows you to store more video on the disk -- produced a pixilated picture.
The audio was disappointing in both cases. The AV300 records in MP3 stereo, but sounded slightly muffled, as if I were standing in the shower.
Another gripe: The control buttons and ports are poorly marked and not intuitive.
I liked the large LCD screen, which gives you an intuitive list of menu icons. But I was frustrated by the five control buttons and miniature thumb- controlled joystick on the side. Each button controls different functions that change from menu to menu, sometimes without any text or icon to describe that function, causing me frequent missteps.
For now, Archos is hoping the product is good enough to set the pace in a new market, but it won't be alone forever. Microsoft and Intel, for example, were working on a portable personal video recorder with ReplayTV, but that product was moved to the back burner after bankrupt Sonicblue Inc. sold the ReplayTV division to D&M Holdings earlier this year.
In addition, it's not hard to imagine Apple's Steve Jobs working hard already to design a better mousetrap. He did that with the iPod, vastly improving upon the designs of other manufacturers' hard drive-based MP3 players, and the AV320 is basically an iPod with a video screen.
With the AV320's price and imperfect design, it may appeal only to stalwart early adopters or people with money and patience to burn. Still, it has that cool gadget appeal, which may make video-to-go a must-have device in the future.
Still, nontechie consumers may want to keep an eye on future iterations of what Archos calls a multimedia Swiss Army knife.
E-mail Benny Evangelista at bevangelista@sfchronicle.com.
Gateway to Invest More in Its Stores
1 hour, 26 minutes ago Add Technology - Reuters to My Yahoo!
By Duncan Martell
SAN FRANCISCO (Reuters) - Gateway Inc. has been burdened by a costly retail network, a loss-making personal computer business and critics who want to see it close the stores and focus like a laser on getting its flagship PC business back in shape.
But Gateway Chairman and Chief Executive Ted Waitt refuses to fold what has recently been a losing hand.
Instead, Gateway Inc. (NYSE:GTW - news), the No. 4 U.S. PC maker that was once a Wall Street darling, is doubling down by investing more in its 192 stores and renovating all but four of them by the fourth quarter -- in time for the holiday shopping season.
"I'm confident that the direction we're going is the absolute right direction," Waitt told Reuters in an interview.
Waitt is counting on the stores to help drive Gateway to becoming what he calls a "branded integrator," essentially marrying information technology and consumer electronics to sell products and services that are easy to use -- a strategy analysts call bold but risky.
When Gateway, now based in Poway, California, opened its first stores in 1996, Waitt said they boosted sales of its custom-configured PCs that shipped in the company's trademark bovine-themed boxes and had great profit margins.
But tough times in the PC industry for the last three years, brought on by the dot-com and telecommunications bust in 2001, hit Gateway harder than its rivals. It has posted losses in nine of the last 10 quarters and its PC market share declined again in the first quarter.
"They need to dig in their heels," said Roger Kay, an analyst at market researcher IDC.
Gateway has been cutting costs in its PC business, with sales of business computers remaining profitable and a pledge to strip $400 million in costs in 2003.
The remodeled stores -- redesigned to reflect the broadening array of PCs and electronic gizmos that Gateway will start selling under its own brand as well as others this year -- will come online in batches of about 60 each at the end of July, August and September.
"Our format is, you know, tired," Waitt said of the stores' current arrangement. "It was developed to basically sell a custom-configured PC."
Bill Parker, who joined Gateway in January from clothing retailer Banana Republic and runs Gateway's stores, put it this way: "We really started as a showroom and there are not a lot of showroom retailers anymore."
Analysts have questioned Gateway's commitment to its stores, noting the risk of carrying and managing inventory.
But Waitt and Parker see stores as key to boosting sales of hardware outside computers at the 18-year-old company whose shares crested at $80 each in November 1999.
Sales of non-PC products and services in Gateway's first quarter were 24 percent of revenue, up from 17 percent in the prior quarter.
Five pilot stores will be gutted so that renovations can get underway next week, Parker said.
Other high-tech companies have taken the controversial
plunge into retail, the most notable among them next to Gateway being Apple Computer Inc.(Nasdaq:AAPL - news).
But Waitt said he is betting that his approach, which he says is broader than Apple's, is the right one to help Gateway move back into the black.
Gateway has promised 50 new products across 15 different categories in the coming year, the first of which are slated to start rolling out in July, Waitt said, and will appear in the revamped stores.
IDC's Kay says that sticking with stores is risky.
"There is a risk involved," Kay said. "You might even say they're crazy. You know there are fixed costs in the stores every month, regardless of how much traffic comes through."
Risky, but it could work, he said.
"If they turn themselves into a boutique in terms of the home digital experience where PCs are part of it but not all of it, that could work," Kay said.
Read it to Me reads RSS headlines via iTunes, iPod
By Peter Cohen pcohen@maccentral.com
May 27, 2003 9:10 am ET
Adam Tow and Alex King have released Read it to Me, a software application designed for iPod-toting news junkies.
Read it to Me works hand-in-hand with Ranchero Software's NetNewsWire software. Using Apple's Text-to-Speech software, Read it to Me creates a playlist of MP3 files containing your unread news headlines; you can then sync the headline playlist in your iPod.
Read it to Me lets you choose which Text-To-Speech voice you want the headlines read to you in. The playlist itself contains information like the headline and the source. What's more, the software lets you "Clean Up iTunes" by stripping any RSS news headlines you've put in there.
Read it to Me is distributed as "Donationware." The software requires Mac OS X 10.2.6 or higher and the full version of Ranchero Software's NetNewsWire. The developers also recommend having UnicodeChecker installed.
Tiny drives net big things
Cornice Inc. lands $22M in venture capital funding
By Erika Stutzman, Camera Business Writer
May 29, 2003
A small storage company in Longmont has been quietly developing its tiny, inexpensive drive for three years and is ready to face the public with announcements ranging from a windfall of venture capital to new customers.
Cornice Inc. makes storage for equipment including MP3 players and digital cameras. And at a time when almost no one can secure funding, they've landed $22 million from investors.
Cornice, founded in August 2000, employs 50 people, said Kevin Magenis, company president and chief executive. Magenis said the company's strategy was to lie low until it was ready to sell its product and announce customers.
"There's a lot of companies that have come and gone that were local," he said. On Monday, the firm will announce some customers and partners, Magenis said.
The $22 million round is the company's first venture capital, though it received seed funding from Texas Instruments, which helped with development, Magenis said. Investors include CIBC Capital Partners, Nokia Venture Partners and VantagePoint Venture Partners.
The funds come at a time when venture capital has become very tight.
According to the MoneyTree Survey, Colorado companies raised $152.4 million in first-quarter 2003 compared with $222.8 million in the year-ago period. The survey is prepared by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.
According to the survey for 2002, Colorado firms raised $547.3 million, down from the $1.39 billion raised in 2001 and a fraction of the $4.34 billion raised in 2000.
Magenis said he thinks the reason the firm was able to secure funds is simple: "We were more than an idea." The company already had a working prototype by the time it approached investors.
"We had customers we could show (investors) who said, 'If you build it, we will buy it,'" Magenis said.
The company's product is a tiny drive with 1.5 gigabytes of space designed to hold data in portable devices — small MP3 players, personal digital assistants, digital cameras. The power could hold 30 CDs worth of MP3s, and the company says it will be cheaper — both per gigabyte and per storage device — than what's available on the market now.
But Magenis said the firm won't talk pricing until customers are announced next week.
But trade publications, including EE Times and the Webzine Mobilemag.com, have published that the drives will be cheaper than $100 — cheaper than the tiny Hitachi drive. Mobilemag and Ziff Davis Media earlier this month reported an MP3 player with the Cornice device would retail for an estimated $199.
Contact Erika Stutzman at stutzmane@dailycamera.com or (303) 473-1354.
Putting a Trace on Copyrighted Booty
MAY 29, 2003
PRIVACY MATTERS
By Jane Black
Paul Kocher's technology would allow investigators to track pirated material's provenance -- without snooping on the innocent
Star cryptographer Paul Kocher's business strategy is simple: Search out industries that are losing money because of security holes and then find ways to plug them. So it's no surprise that Kocher has zeroed in on Hollywood, which views global piracy of movies with dread. The illicit swapping of music files online has already ravaged the music industry, which saw CD shipments fall 9% in 2002, according to industry trade group the Recording Industry Association of America (RIAA). Movie piracy is already big business -- and it only threatens to get worse.
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Kocher's approach to taming piracy, however, is vastly different -- and less privacy-invasive -- than the proposed solutions from technology giants such as Microsoft (MSFT ) or the legislative solutions being sought on Capitol Hill. Instead of trying to track everyone's habits and patterns, Kocher's code would create a forensic trail to allow law-enforcement authorities to hunt down criminals -- but only after there is evidence that illegal copies have been made. Says Kocher: "We're trying to create a system where there will be consequences if people don't obey the laws, but anonymity will be protected if they do."
Though Kocher's work is still in the research stage, his ideas are getting rave reviews from Hollywood studios, as well as DVD-player manufacturers. Small wonder. Whiz kid Kocher, 29, is the creator of Secure Socket Layer (SSL), a security protocol that allows Internet users to make secure online purchases. His eight-person company, San Francisco-based Cryptography Research, serves multinational clients, including Netscape, Microsoft, Visa Intl., and Mondex, MasterCard's smart-card division.
Kocher stresses that it isn't necessary to trade privacy for security: "The people that attack credit-card networks, that commit piracy, that commit identity theft -- it's the same people. And you've got to keep them from dominating. But, at the same time, you don't want to punish the legitimate guy." On May 15, I sat down with Kocher in New York to discuss his approach to battling piracy. Following are edited excerpts of our conversation:
Q: Protecting intellectual property and copyrighted works is tricky. What's your solution?
A: We've been trying to come up with a compromise. We've figured a way that, rather than reporting what customers are doing over phone lines or cable pipes -- which is really a serious problem from a privacy perspective -- we put any information you want to carry actually into the content itself.
If somebody makes a copy of a complete work, you can trace that back to the device that was used. But if you're not making a copy, or if you're making copies and only using them within your house or even giving them to a friend who doesn't distribute them, then there's no record of what happens.
Q: That makes sense. Why hasn't someone done it before?
A: Technologically, this is really quite difficult to do. Right now, in a normal security device -- like a DVD player -- there's some code that sits in the player that decrypts data using keys that are "baked" into the player.
In order to get a technique like mine to work, what you actually have to do is make it so that, instead of decrypting the disk the same way in every player, each player decrypts in its own unique way. That way, when illegal copies are found, they can be traced back to the specific disk and machine from which they were made.
In fact, you have to actually go beyond that, because your bad guy or bad people may take multiple players, for example, and compare the output and try to eradicate the differences, so that law enforcement can't then figure out which devices were used. So you need to build the key management using some fairly sophisticated techniques. And that means putting a lot of that logic on as program code with the content.
Q: What does this mean to the consumer?
A: From a customer perspective, it would be the same. You drop a disk in your DVD player and hit "play." But what actually ends up happening is a little bit of code from that disk works with information stored on the player and, together, they control the decryption process.
Q: How does this help prevent copyright infringement and protect privacy?
A: The approach doesn't prevent anything. But it lets an investigator, who has already got proof that there was a crime, go through and trace it back to the device. We call it forensic marketing.
My research group believes it's the most customer-friendly thing you can do. Unless you're breaking the rules, you get your anonymity. But when you start breaking the rules, then it's easy to see who's doing what.
Q: How are entertainment companies responding to the idea? Until now, many studios have tried to foist the responsibility of copy protection onto technology companies.
A: We're getting a very warm reception from Hollywood studios. And that's good. My philosophy on this -- which is kind of reflected in the research we're doing -- is that Hollywood takes the risk and it's their problem. To a large extent, they should bear the costs of developing countermeasures against attacks.
There are two reasons why I think Hollywood should be paying for it. One is that it's their content, so they'll make the most rational choices about how much to spend on security. Two, from a financial perspective, the consumer-electronic device makers have no incentive to do it right. Their job is to produce boxes that customers want to buy and not to go around solving somebody else's problem.
Q: Is this a model that exists in other industries?
A: Yeah. The direction we're coming from here is, in a large part, motivated by work we've done for credit-card companies. If your card is stolen and used for fraudulent purposes, theoretically you can lose $50 out of it, but really, it's nothing. You don't have any liability as a customer. It's up to the banks to control fraud because they take the hit. And they do a pretty good job.
They'll never get rid of it, but fraud rates for the credit-card networks are around 0.07%. And if Hollywood could have their piracy rates be 0.07%, they would probably be delighted. That's vastly better than what anybody would expect to achieve.
Q: So when will we see products that embed your ideal security?
A: This is still very much in the research phase. It's not going to pop up in any products next month.
Black covers privacy issues for BusinessWeek Online in her twice-monthly Privacy Matters column
Edited by Patricia O'Connell
and what service do you provide??eom
Judge backs labels' MP3 search
Chris Jenkins
May 30, 2003
THE Federal Court appears to have opened the door for record companies to examine university data for pirated music.
Record companies Sony, EMI and Universal were seeking court approval to conduct a search of data held by the Universities of Tasmania, Sydney and Melbourne as part of the discovery process in an action against alleged student music pirates.
The universities had proposed searching by file type, where the record companies believed that a search of file headers was necessary to find any material that infringed copyright.
Computer forensic expert John Thackray had testified that the search method proposed by the universities was "very limited" and could potentially overlook pertinent files.
The universities argued that the type of search proposed by the record labels could compromise private information held on their systems, including information on third parties uninvolved in the case.
Justice Tamberlin preferred the search method proposed by Mr Thackray, which included using specialist forensic software known as EnCase, to the method proposed by the universities, which he said would prove too limited.
Nevertheless, he said the method proposed by Mr Thackray would "reveal a great deal of extraneous information , some of which may be privileged or subject to confidentiality obligations".
"It must be remembered that none of the parties in this application, it seems, are aware as to the full content of the material contained in the very extensive records," he said
Still, he argued it was unlikely the record companies and their lawyers would not " 'rummage' or 'trawl' through a miscellany of irrelevant material".
Justice Tamberlin recommended that on the condition of undertakings of "strict non-disclosure and confidentiality ... then access could be given to all the preserved records to search using the EnCase program".
He suggested that the data extraction could be done under the supervision of the universities, with copies of the information obtained also given to the record companies and their lawyers.
Legal advice should then be sought, along with consultation with third parties, to determine whether there are any claims for confidentiality or privilege over the information.
The documents would then be available to the accused students for inspection.
Justice Tamberlin elected not to make any substantive order, instead standing the matter over for 14 days to give the parties time to consider his reasoning and prepare further submissions.
Australian IT
Sony sets movies to self-destruct
By CNETAsia Staff
CNETAsia
May 30, 2003, 11:50 AM PT
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A subsidiary of electronics maker Sony is to sell downloadable movie files that self-destruct after a given time.
According to Japanese newspaper Nikkei Business Daily, the company's So-net Internet service provider will soon trial the service in Japan.
Many digital content providers currently use encrypted streaming to prevent people from saving and copying movie files. The downside is that the quality of the video suffers, as it is reduced in size for Web transmission. In addition, people must stay online to view the feed.
However, allowing downloads of movie files opens the door to illegal copying.
To sidestep these issues, So-net's new service allows people to download the content from its Web site to their hard drives--but those hoping to add the file to a permanent collection or to copy it could have their attempts frustrated.
The company has incorporated a digital rights management (DRM) technology from software maker Japan Wave into its service, which should make copying impossible, the report said.
Instead of saving a video to a single file and location, Japan Wave's technology splits the data into numerous directories on a hard disk. People need to download special software to play back the various pieces as a continuous movie.
There's a second layer of protection: Those who manage to join up the files won't be able to use them for very long. Software embedded in the file is designed to cause it to self-destruct after a given time, said the report.
So-net's approach to DRM is part of a growing effort by ISPs to find robust copy protection without restricting people's rights to enjoy the content.
Earlier this month, Walt Disney announced plans for a trial in the United States. The company said it will start renting self-destructing DVDs that automatically become unplayable after a two-day period.
Major movie studios in Hollywood are also turning up the heat, joining forces in a slew of lawsuits against U.S.-based DVD-copying software makers like DVDBackupbuddy.com and DVDSqueeze.com.
CNETAsia staff reported from Singapore.
dot..dot..dot..e.DIGITAL, SOFTEQ TO PARTNER ON DEVELOPMENT OF PORTABLE PRODUCTS USING WIRELESS PROTOCOL
Infrared-Enabled Products To Offer Enhanced Digital Audio Experience
(SAN DIEGO, CA - February 19, 2003) - e.Digital Corporation (OTC: EDIG) and independent systems integrator Softeq Development Corporation have entered into an agreement to partner on the development of new products for the digital audio market.
The agreement paves the way for the companies to collaborate on the development of products using e.Digital’s patented MicroOSTM technology and applying its expertise in portable product design
An early customer of the partnership is Hewlett-Packard, who is working with the companies to explore opportunities for future digital audio products.
"This partnership is an example of HP’s strategy of working with innovative partners," said Robert Corbett, director for Retail Industry Solutions at HP. "HP believes that doing so will result in the development of exciting new products that provide consumers with simple and rewarding experiences by making technologies work better together. It will also allow retailers to provide a more satisfying environment for their customers, and facilitate better customer service."
e.Digital brings to the partnership broad experience in the design of portable products, proven, patented technologies and success in integrating such sophisticated technologies as infrared communications into portable devices.
"We have developed, enhanced, and integrated several technologies that have resulted in a number of exciting uses for digital audio technology," said Atul Anandpura, vice president of research and development for e.Digital. "Our experience and expertise complements the strong reputation that HP has for putting innovative technology into the hands of the customer."
Research into possible new products is already underway.
About e.Digital
e.Digital Corporation designs, licenses, brands, manufactures, and sells digital audio products and technologies. The company's trademarked digital audio players include the MXPTM 100, TreóTM portable digital jukebox line, and OdysseyTM line of flash- and hard disk drive-based players. e.Digital launched WeDigMusic.com to complement its digital audio players by providing consumers with a one-stop-shop for streaming and downloading music from thousands of artists on the Web. The company also offers an engineering partnership for the world's leading electronics companies to link portable digital devices to PCs and the Internet. e.Digital develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of open and secure digital media with a focus on music, voice and video players/recorders, and automotive infotainment and telematics systems. Other applications for e.Digital's technology include portable digital music players and voice recorders; desktop, laptop, and handheld computers; PC peripherals; cellular phone peripherals; e-books; video games; digital cameras; and digital video recorders. Engineering services range from the licensing of e.Digital's patented MicroOS(tm) file management system to custom software and hardware development, industrial design, and manufacturing services. For more information on the company, please visit www.edigital.com. To shop at the e.Digital online store, please visit www.edigital-store.com.
About Softeq
Softeq is a privately held corporation specializing in system integration, project management, and product development for Fortune 1000 companies worldwide. For more information on the company, please visit www.softeq.com.
Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. Those statements are not guarantees of future performance and involve risks, uncertainties and assumptions that will be difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by those forward-looking statements. Factors that may affect the Company’s businesses, financial condition and operating results include future products and results, technological shifts, potential technical difficulties that could delay new products and services, competition, pricing pressures, the uncertainty of market acceptance of new products and services by OEM's and end-user customers, effects of changes in the economy, consumer spending, the ability of the Company to maintain relationships with strategic partners and suppliers, the ability of the Company to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of the company to attract corporate financing and the ability of the Company to attract and retain qualified personnel. These factors may also include, but are not limited to, general market conditions, the Company’s ability to develop new products to meet market demand, the Company’s ability to maintain cost controls, the mix of products and services the Company’s customers require and the effects of natural disasters, international conflicts and other events beyond the Company’s control. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by e.Digital with the Securities and Exchange Commission ("SEC"). e.Digital disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated by it.
# # #
Editors Note: e.Digital and MicroOS are trademarks of e.Digital Corporation. All other company, product, and service names are the property of their respective owners.
CONTACT:
e.Digital Corporation: Robert Putnam, (858) 679-1504, robert@edig.com
What's the Point
Sales, service and strategy are in POS
For the traditional installed base of POS, IBM and NCR are the old dominant players. But all the guns of the POS technology industry today are trained on IBM and NCR. The two market leaders are depicted as old, and in the case of IBM, proprietary, thanks to its own operating system in the 4690.
As this year began, a POS revolution was underway. Shots were fired over the IBM market dominance by Microsoft, which for the first time took the lead in POS installations, according to several published reports. Shortly before the Retail Systems show in Chicago, Microsoft created a 100-member retail division with sales and services. Also trained on the IBM market were a variety of Java based systems in the embodiment of Triversity, 360 Commerce, JDA, Retek and more. And then there was the X factor—Linux—the “free” open source operating system. To use Linux, retailers quickly learned they had to work with Red Hat or SCO Group (formerly Caldera, formerly SCO) or UnitedLinux or others.
In research published in partnership with the ARTS council of the National Retail Federation, IHL Consulting – the leading counter of retail systems in the marketplace – defined a POS as “PC-based workstations….and LAN-available terminals.”
As examples of whose hardware constituted a POS platform, IHL pointed to IBM’s 46XX series, IBM SurePOS, Wincor Nixdorf Beetles, NCR 7XXX series and Fujitsu Atrium, TeamPOS and 98XX series. To this list must be added HP (formerly Compaq) and its XPOS allies, Radiant and the latest comer in Dell.
“The bottom line for the retailer is there is no need to continue running after more expensive hardware and proprietary operating systems,” says Brent Brown, retail marketing director for HP. The HP XPOS strategy pits their systems against that of IBM.
Earlier in the year Ken Pink, CIO of Harmons grocery chain (and now solutions consultant for Tomax) set the tone for the rest of the industry. “It’s a much more competitive market today than it was five or so years ago,” he told RED. But IBM, he said, was entrenched in retail for a reason. In Pink’s words: “Reliability, service, support—the IBM treatment.”
Still Dell POS systems were found in Leslie Pools, Loew’s and other chains. What was the advantage? “We do one thing—commoditize hardware,” says Brian Slaughter, retail market director for Dell. With such allies as Epson and Symbol, Dell began spreading its influence beyond corporate servers and store servers and started to make a pitch for the POS.
There was no doubt among retailers that Dell would make some inroads on the issue of price and quality, but it would have its work cut out for it in retail-hardened reliability, where IBM and NCR have strong reputations. In addition to a market that has such outstanding POS systems vendors as CRS Retail, Fujitsu, Retek and JDA selling IBM hardware, other low cost alternatives might also get points for retail hardness. Wincor Nixdorf, for instance, won the Burlington Coat Factory business with a fanless system that could survive the hostile environment of an apparel house with its dust and particles. Compaq, another low-cost alternative, also had a jump in retail specialization.
“As the migration continues, there will be more questions about what a POS system is,” says Robert Corbett, another HP executive. “We can’t say that the traditional fixed POS system will be everyone’s idea of a way to check customers out. In the wireless era, we might see a plethora of hand-held devices become the new model for the POS.”
Napster's Rise And Fall--And Its Future
05.28.03, 4:13 PM ET
What follows is the transcript of a May 27 online chat hosted by Los Angeles Times reporter Joseph Menn for members of the Forbes.com CEO Network. Menn is the author of the recently published All The Rave: The Rise and Fall of Shawn Fanning's Napster (Crown Business, $25).
FDCEDITORS: Welcome everyone. Joseph Menn is here and ready to begin answering your questions, so let's begin.
Frank_Giles: What was so revolutionary about Shawn Fanning's original computer program?
JOSEPH_MENN: Shawn's great insight was that there was no reason that he could not combine the power of a search engine like Google with what is known as "presence-awareness" of instant messaging and other systems. In this way, only people whose MP3 files were available at any one moment would have those files listed for others to find. The other brilliant aspect was that since each music file would be stored on individual personal computers, it didn't take massive numbers of servers--some thousands--to store all of the content.
audenkim: Is Fanning at all involved in their re-launch as a legit service?
JOSEPH_MENN: Yes he is. Roxio had hired Shawn previously as a consultant to advise it on the user interface. Now that Roxio has bought Pressplay and will re-launch it, Shawn will continue to advise them.
SamathaP: Can Napster not rebound by offering a service like Apple Computer, where they charge 99 cents per song download?
JOSEPH_MENN: The new service when it launches will certainly charge for most songs. My personal guess is that by then the 99 cent figure will be lower, both for the new Napster and for other legitimate services. Apple's success shows that there is a broad market for paid music online and underscores how foolish the record industry was for not offering something similar three years ago, a lapse that allowed Napster to become the fastest-growing business in history.
Jasper: What's Shawn Fanning doing now?
JOSEPH_MENN: While Shawn is helping Roxio as it attempts to revamp Pressplay, he's spending most of his time on a new startup. That startup is designed to send music through the Internet on behalf of artists who want their music distributed.
DaltonZ: What about the studies that show that the downloading services helped boost record sales--is there any validity to those studies?
JOSEPH_MENN: There are a number of conflicting studies. I think the definitive answer remains to be determined. Certainly, some people used Napster to sample music before buying it. But I agree with the findings of the federal judge in the main Napster lawsuit who concluded that overall, Napster contributed to what is now three years of declines in record industry sales.
SamathaP: How come Kazaa hasn't been shut down? Is Kazaa next? What about the other music-sharing sites? Will they survive?
JOSEPH_MENN: Kazaa and the other major peer-to-peer networks that succeeded Napster drew huge benefits from coming second. They have done three things differently. First, they based themselves offshore, making it much harder for U.S. authorities to shut them down. Second, they constructed themselves in a more decentralized manner, so that they give or sell you the software and then step out of the picture so that unlike Napster, they can't stop individual transmissions. And finally, they apparently have not been so foolish as to draft internal documents discussing how most of their users are swapping pirated material.
A federal judge recently determined that some of these networks are not in themselves illegal. If that ruling is upheld on appeal, I expect the record and movie industries to run back to Congress. But I don't think the networks are in any way stoppable.
Frank_Giles: Will Steve Jobs succeed where Napster failed? Does his strategy make sense?
JOSEPH_MENN: I think Steve Jobs' strategy is a very good one, though it's already run into problems with people hacking the system. Apple's MusicStore sold 1 million songs in its first week of operation. It has a terrific interface and allows users to listen to 30 seconds of a song for free before deciding whether to buy it. It makes terrific sense; the only problem is that at least for the time being it serves only the 2% or 3% of computer users who have Apple hardware.
jupiter334: How long did it take Fanning to realize he had come up with something that would turn the music industry upside down? Did he have a clue what he was getting into?
JOSEPH_MENN: Shawn realized very early--within months at most--that his invention would change everything, according to his emails from that period. What he didn't know was that the system would provoke such a backlash and that the record industry would rather fight to the death than buy him off, which is what he and the others expected to happen.
KEVIN_GILDEN: What should the recording industry do that it's not doing now to make P2P useless (and wouldn't that be smarter than trying to punish--and thereby alienate--buyers/P2P subscribers)?
JOSEPH_MENN: The record industry has to do a lot more deals like those it hatched with Steve Jobs. It should lower the price for all music and allow people to own downloads whether or not they own a Mac. It should also use peer-to-peer systems for promotions, especially for lesser-known acts.
DaltonZ: What about that anti-piracy software some record labels were using to prevent consumers from extracting mp3 files from their CDs--are consumers just going to figure out ways to get around the software?
JOSEPH_MENN: I don't think engaging in a worldwide dogfight with legions of hackers is a wise strategy, as Madonna learned when she put fake MP3s from her new album on peer-to-peer networks. The hackers will always win. A potentially more effective remedy would be the industry's work with Microsoft, which wants the right to pry into its customers' computers and delete or disable material that it deems infringing. That fight will play out for years.
Frank_Giles: You paint Shawn's Uncle John as the villain of the piece. Why?
JOSEPH_MENN: First of all, Shawn Fanning looked up to his Uncle John as a mentor, and more than that a father figure. John repaid his nephew's trust by keeping 70% of Napster's ownership for himself, by driving away seasoned investors who might have righted Napster's course, and by insisting that Napster was worth $1 billion despite having no revenue, let alone profit. John Fanning's track record, which I report for the first time, shows a history of failed or failing businesses, employees denied their due, multiple lawsuits, a tendency to mix personal and business affairs ... This is not the sort of man most people would pick to lead any business, let alone one so dependent on hard-headed realism and brilliant strategy.
Frank_Giles: What will happen now that Roxio has bought Pressplay?
JOSEPH_MENN: Most interesting will be whether the Napster brand name--recognized by 97% of the population--will continue to draw in users once the system re-launches as a service charging money for people's work. A lot will depend on the quality of the technology, which is still being reworked. At least at first, it will not be a peer-to-peer system, and at least some of the tens of millions of fans of the old Napster aren't going to want to play.
jforbes: How much is Shawn Fanning worth?
JOSEPH_MENN: His net worth on paper is not dramatic, reflecting the fact that his uncle profited far more from Napster's success than he did. But as a generational icon and a smart guy, he should be compensated pretty well in his next ventures.
RickyBurke: What sort of music did Shawn Fanning himself like to download? Did he have a favorite song?
JOSEPH_MENN: Shawn's comments to others, and the contents of his hard drive when examined by record industry lawyers, both show him to be a serious rap fan, fond of Snoop Dogg and Dr.Dre, among others. The kids at Napster were far more upset when Dr. Dre sued the company than when Metallica did.
jforbes: What's the lesson to be learned from Fanning's experience?
JOSEPH_MENN: There are many lessons. Among them: Due diligence, while utterly out of fashion during the bubble years, is absolutely essential for investors, potential executives and entrepreneurs. As Shawn's mother put it to me, it would have been a good idea if Napster had sorted out all of the copyright issues before people started investing and the company moved to California and the big time.
jupiter334: Is Fanning some sort of tech genius, or was it just luck that he (as opposed to the other thousands of teen-ager computer geeks) who came up with Napster?
JOSEPH_MENN: Shawn is very bright. Probably more important than that was his ability to focus for days at a time--days without sleep--on a technological challenge. Luck played a part, certainly, in his timing-- as one of the people who worked on Gnutella told me, the time could easily have come and gone when people would be willing to fund something that was clearly illegal. And finally, it is true that Napster might not have spread so far so fast without the reckless leadership provided by Shawn's uncle and a venture capitalist that eventually invested.
KEVIN_GILDEN: Will the latest technical attempts to block P2P use (record companies trying technology that threatens to punish users) be successful?
JOSEPH_MENN: In general, I don't think so. And the fighting will further alienate many of the record industry's customers.
RickyBurke: What is likely to be Napster's long-term impact on the music industry? Is the traditional business model doomed?
JOSEPH_MENN: The traditional business model will have to change. I don't believe the record labels will go out of business, but they are going to have to settle for a less-dominant role in influencing what people choose to listen to. Consumers are going to have much more power and there will be fewer middlemen between them and the artists.
audenkim: Do you file-swap yourself?
JOSEPH_MENN: No. I watched others do it. I personally had moral issues.
Jasper: What happened to the cool demonic-looking emblem?
JOSEPH_MENN: The logo, which is on my book jacket, which was known internally as Mean Kitty, was sidelined by the company because the executives worried that it was just a little too evil-looking. Roxio now has the rights to use that logo, along with them more common Nice Kitty logo, and the indications I get suggest Roxio will use the Nice Kitty logo when it re-launches by early next year.
FDCEDITORS: That's all we have time for today. Thank you for joining us.
AOL forms duet with Dolby
By Jim Hu
CNET
America Online plans to use Dolby Laboratories' streaming audio technology in its Internet radio products, swapping out software from the service's former provider, RealNetworks.
As previously reported, AOL has been planning the switch to Dolby AAC (Advanced Audio Coding) for months, in the latest sign that the digital audio format is gaining momentum against competing technologies such as MP3.
AOL's decision comes at the expense of its longtime audio technology partner RealNetworks. Although AOL will continue supporting RealNetworks technology in other areas in its service, the longstanding relationship between the two companies has withered.
Much of the rift stems from AOL's internal efforts to build its own Web streaming technology called Ultravox. AOL has touted the technology for allowing faster song loads and for its efficiency in delivering numerous simultaneous streams.
As part of the Dolby move, AOL will deploy Ultravox as the streaming backbone for Radio@AOL, which it claims will boost radio station load times. Other features will allow access to playlists from remote computers and station sharing through AOL Instant Messenger.
With Wednesday's announcement, AOL will become the latest online music service to embrace AAC, a technology developed by Dolby, AT&T, the Fraunhofer Institute and Sony Electronics. Apple Computer's iTunes Music Store also distributed music files encoded with AAC, although Apple has created its own security wrapper.
Online subscription service MusicNet, which is owned by RealNetworks, AOL Time Warner, Bertelsmann and EMI Recorded Music, will also support AAC as one of many audio technologies, MusicNet CEO Alan McGlade said in a previous interview.
The Moving Pictures Experts Group (MPEG) has endorsed AAC as a specification in the latest version of its digital media standards, MPEG-4, and it could emerge as a challenger to MP3 and Microsoft's Windows Media audio format.
In a separate announcement, Loudeye said it will encode 1 million music files into Dolby AAC for AOL's radio services.
Two Labels Warm Up to MP3's
By BILL WERDE
WHILE the record industry sweats over how to prevent consumers from transferring music from commercial CD's to digital files and swapping copyrighted material online, two labels are exploring a different approach to the format battle.
In early April, the Palm and Mute labels began to release discs that include unprotected MP3 files along with conventional CD audio tracks. Palm, working with a small independent label, Kemado, released "Sunlight Makes Me Paranoid" from the New York band Elefant; fans can listen to all 10 tracks on a CD player or in MP3 format, and the disc includes a bonus song available only in MP3 format.
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Mute, well known among fans of electronic music, released a double album of techno tracks, "2 CD's & MP3's." The album has 12 MP3-only cuts in addition to 16 tunes in both formats.
Representatives of the labels say the decision to include MP3 files on the CD's does not reflect a surrender to illegal file traders, but rather, pragmatism.
"We're just acknowledging the way our fans like to listen to their music," said Dan Cohen, head of marketing for Palm. "The idea of doing this isn't to say to kids, 'Hey, swap our files.' We're saying: 'Thank you for buying the record. We want to give you something.' Maybe that's saying, 'You'll burn this onto your iPod anyway; well, here - it's high quality, it's sanctioned by the artist and we're cool with you having it on your player.' And if a few people trade it, well, we're hoping they'll like it enough that they'll go buy it."
Mr. Cohen said the Elefant album had sold just under 2,000 copies in six weeks, exceeding its 90-day sales goal. Palm has since released three more MP3/CD albums; a fifth is coming in August.
Seth Hodder, the label manager at Mute, said it, too, was seeking to meet the demand of its customers.
"We spoke with some of the D.J.'s we work with, and it became clear that more and more of them were abandoning vinyl for programs such as Final Scratch and Traktor, and playing digital files," Mr. Hodder said. "It just made sense to include them on the CD."
In early May, Mute's star D.J. and techno composer, Richie Hawtin, drove home the point in a promotional appearance for Apple Computer. At Apple's Manhattan store, he spun a compelling set of music using five iPods.
Hilary B. Rosen, the chairman and chief executive officer of the Recording Industry Association of America, the organization behind recent lawsuits that took aim at file-swapping consumers, offered a cautious endorsement of this latest marketing tactic. "If companies want to save people the trouble of ripping their files to an MP3 format, that's fine," she said. "Our view has always been if the copyright holder wants to give away their product, it's fine. The key issue is that it's their choice to give it away."
Including unprotected digital files on a CD is little more than a gesture, because it takes only a few minutes to convert the tracks on an unprotected CD to MP3 files anyway. But in the context of the rocky relationship between record labels and music consumers over the last few years, Palm and Mute and the artists they represent are wagering that the symbolism won't be lost on fans.
"This is about artists trying to get closer to their audience," said Mr. Hawtin, who, performing as Plastikman, contributed "Afrika," a track of clanging drums, to the Mute compilation.
"Maybe this CD is only giving people what they could already have, but it shows a good attitude from the label toward the consumer," he said. "These labels understand what's happening and want to be part of the digital revolution."
Paying Through The Air
By Mark Leon
May 28, 2003
Visa International and Royal Philips Electronics (Quote, Company Info) want to help you buy stuff anywhere, any time, and through any device.
To that end the two companies Wednesday announced an alliance to promote and develop "contactless" chip technology for payment transactions.
Built on each company's existing smartcard line, the technology is most commonly associated with identity authentication for building access. Operating on 13.56 MHz, the new near field radio-frequency communication technology (NFC) technology would allow the transfer of any kind of data between devices such as mobile phones, digital cameras and PDA's as well as to PC's, laptops, game consoles or PC Peripherals, across a distance of up to twenty centimeters.
Among the potential consumer applications cited by Philips and Foster City, Calif.-based Visa are gaming, ticketing, mass transit, and home shopping.
"You could start seeing some of these on the market within eighteen months," said Gaylon Howe, executive vice president of Visa, consumer product platforms. "I think digital content, music and games will be some of the first."
"For example," Howe said, "you could download a song on your MP3 player, using your chip card to pay for the rights. Then you could use your card to get and play the same song on someone else's player."
Technology that allows you to tap an MP3 player with a card and automatically download music already exists said Howe. "What is lacking is the proliferation," he said.
Philips, based in Amsterdam, is already a leading manufacturer of smart card [credit card sized cards with embedded microchips] technology for the European market.
It is technology that has been slow to catch on in the U.S. Aaron McPherson, analyst with financial insights, a division of IDC in Framingham, Mass., said the new alliance may be aimed at cracking the domestic market.
"One reason smart cards have not found widespread adoption in the U.S.," explained McPherson, "is that they require special readers and merchants have been reluctant to make that investment. But if you integrate contactless chips into these cards there may be a more compelling case for adoption."
Similar to a partnership between Philips and Sony, the two companies are looking beyond smart cards to cell phones, PCs, and other devices. "Smart cards are certainly the foundation for us here at Visa," said Howe, but we think this technology will start to show up in mobile phones, game stations, MP3 players and TVs."
"That is the other promising aspect of these deals," said McPherson. "If you can integrate a contactless chip into a device people are already carrying, such as a cell phone, there is better chance of adoption."
OT Visa, Philips team to promote 'contactless' credit card
By Junko Yoshida
EE Times
May 28, 2003 (2:27 p.m. ET)
PARIS — Visa International and Royal Philips Electronics have unveiled an exclusive partnership agreement under which the two companies will jointly develop and promote the application of contactless chip technology for payment transactions.
The partners said they share a common vision for widespread deployment of contactless chip technology on various consumer devices. Using the technology, consumers could easily make payments to purchase goods or unlock services simply by waving a credit card equipped with a contactless interface at a reader.
"We've been talking about the similar vision, but coming from two different directions—Visa from the payment side and Philips from the consumer device/product angle," said Gaylon Howe, executive vice president of consumer product platforms at Visa International.
Visa is promoting what it calls "universal commerce" that would enable consumers to make payments "anytime, anywhere, and on any device," said Howe. Philips, meanwhile, wants to create "a standardized, open infrastructure in a connected home," where consumers can use a host of consumer devices—PCs, mobile phones, gaming devices or PDAs—to securely access information, entertainment and services, said Karsten Ottenberg, senior vice president at Philips Semiconductors.
One of the biggest hurdles faced by consumer electronics manufacturers designing "connected" consumer devices is developing a business model that allows devices to offer consumers an easy way to purchase content and services. Content and service providers face similar issues. They need solutions for secure digital rights management and a reliable means of getting paid.
Both Visa and Philips said they can help the content and consumer electronics industries overcome these hurdles with contactless chip technology. Rather than going it alone, the two decided to join forces.
Howe said potential customers include CE device manufacturers, content providers and the music, gaming and transport industries. Ottenberg said Philips has had discussions with key companies. By adding Visa as its partner, "We can really add momentum [to the discussions]," said Ottenberg.
Work on new near-field radio communication technology, called Near Field Communication (NFC), initiated by Philips and Sony Corp. last fall, helped attract Visa as a partner. NFC can "talk" to two diverging contactless smart card interfaces—"FeliCa" developed by Sony and "Mifare" developed by Philips— and has been specifically designed to open opportunities for smart cards in the consumer market.
NFC operates at 13.56 MHz and is designed to be "interoperable with both Mifare and FeliCa protocols," while its specifications will be extended to include support for data rates as high as 1Megabit/sec over a distance of 20 centimeters, according to Philips.
Contactless smart cards today exchange data at a speed of 212 Kbp/sec. NFC could help consumer devices to offer not only "wireless peer-to-peer communication capabilities" but also "access to services based on smart card applications," according to Philips.
With the proliferation of contactless chip technology, consumer devices can in theory become ubiquitous point-of-sales devices for services. Credit cards with dual interfaces, both contact and contactless communication capabilities, means they could function not just as a payment card but a storage device that could track subscriptions for services. A consumer can bring it with him to another location, to unlock services to which the holder already subscribed.
Visa has pilot programs on dual interface credit cards running in South Korea and in two other unnamed countries. The company, however, has yet to roll out any commercial dual interface cards.
Visa gave its stamp of approval last year to smart cards featuring both a contact interface and a contactless interface based on Philips' dual interface controller chip. Smart cards with the dual interface allow Visa to issue a debit/credit card with a contactless feature that can be used for building access or for buying travel tickets.
The agreement with Philips means Visa can explore other applications for multi-function cards, including the ability to offer different content and services on consumer devices.
Philips' Ottenberg predicted that the first dual interface card with multiple applications will show up in 2004.
America's radio revolution stalls
CRYSTAL-CLEAR digital radio was set to hit America this September - but the technology has run into trouble. The US National Radio Systems Committee (NRSC) last week decided the system's sound quality is not good enough to broadcast.
As a result, the NRSC has suspended its digital radio standards-setting process, which is vital to the launch of new radio sets. The NRSC says digital radio cannot be rolled out to consumers until iBiquity Digital of Columbia, Maryland- the company that is providing the digital technology- gets it right.
iBiquity Digital planned to use a technology called in-band, on-channel (IBOC) broadcasting that squeezes both the old analogue radio and the new digital radio signals into the frequencies currently used by AM and FM channels. Listeners would need an IBOC-compatible radio to receive the digital signals, but these cannot be manufactured until the NRSC sets the standards.
The official suspension of the standards is a victory for the Amherst Alliance, a protest group that includes broadcasters, audio webcasters and what spokesman Donald Schellhardt calls "good old-fashioned concerned citizens".
Last October, Amherst petitioned the US Federal Communications Commission to abandon IBOC and test alternative systems, such as the proven European Eureka system that has been adopted, or is being adopted, by most other countries.
iBiquity Digital was formed two years ago from the merger of Lucent Digital Radio, a division of Lucent Technologies, and USA Digital Radio. IBOC uses Lucent's Perceptual Audio Coder (PAC) software to compress sound into very slow digital data streams- similar to that of a fast dial-up modem. PAC constantly analyses the sound and throws away what it calculates the ear doesn't need to hear.
The overriding advantage is that the data rates are so slow that the digital signal can be broadcast alongside existing analogue AM and FM stations, without the need for extra radio frequencies. iBiquity claims "richer-sounding music" and "compact-disc-like quality". But Amherst has warned all along that the sound quality of IBOC is poor and that its signals will interfere with analogue radio. NRSC now agrees.
There are "growing concerns over the audio quality", says the NRSC, blaming "poor performance" of the technology at low digital bit rates. This raises concerns over performance at higher bit rates. When bit rates are too low, digital sound becomes coarse, like cellphone sound. Crucially, the signal can also interfere with the standard AM or FM radio signal it sits beside.
By contrast, Europe's Eureka-based Digital Audio Broadcasting system uses much higher data rates- up to 196 kilobits per second- and needs completely new frequencies to carry the high-speed signals. Amherst says eight years of broadcasts and booming sales of digital radios in the UK have proven Eureka's sound quality to be good, largely free of interference and "superior" to IBOC.
In February this year, the powerful National Association of Broadcasters (NAB) accused Amherst of trying to "throw sand in the gears" with "frivolous charges and makeweight issues". But now the NRSC, which is sponsored by the NAB, has thrown its own sand by complaining about the IBOC sound quality and freezing official approval unless it improves.
Charles Hutton, a radio engineer from Seattle who works with the Amherst Alliance, says: "I'm amazed at the NRSC's decision. Everyone thought IBOC audio quality was mediocre at best...Finally the Emperor was found to have no clothes."
iBiquity says it concurs with the NRSC's decision to delay roll-out of digital radio. "We have an ongoing improvement plan," says a spokesman.
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Author: Barry Fox
UK CONTACT - Claire Bowles, New Scientist Press Office, London:
Tel: 44-207-331-2751 or email claire.bowles@rbi.co.uk
US CONTACT - Michelle Soucy, New Scientist Boston Office:
Tel: 617-558-4939 or email michelle.soucy@newscientist.com
New Scientist issue: 31 MAY 2003
PLEASE MENTION NEW SCIENTIST AS THE SOURCE OF THIS STORY AND, IF PUBLISHING ONLINE, PLEASE CARRY A HYPERLINK TO: http://www.newscientist.com
RealNetworks' Listen.com to Lower Fees
Wed May 28, 1:57 AM ET Add Technology - AP to My Yahoo!
By HELEN JUNG, AP Business Writer
SEATTLE - The online music price war has begun. Listen.com, which offers Internet radio broadcasts and other programming for $9.95 a month, is lowering the price for burning digital music onto compact discs to 79 cents per song, the company said Wednesday.
The move comes just one month after Apple Computer Inc. launched an online music store, in which Macintosh (news - web sites) users can download a song for 99 cents with few restrictions — and no monthly subscription fee.
The announcement also reflects how companies are casting about for effective strategies to lure customers in the nascent business of selling songs online.
"We're starting to see the business model experiments," said Michael McGuire, an analyst with Gartner G2.
Seattle-based RealNetworks, which is acquiring San Francisco-based Listen.com, scheduled a Wednesday announcement that it is also offering the Rhapsody subscription feature under its own RealOne brand in a product called RealOne Rhapsody.
The Listen.com acquisition, valued at about $36 million in cash and stock, is expected to close later this year.
Companies are trying to allow consumers to copy music from the Internet onto personal computers and CDs legally, cheaply and with few restrictions — while still satisfying major record labels wary of piracy.
Apple's Music Store approach — in which customers spend 99 cents per song — has been popular in its initial month, with more than 2 million downloaded songs in the first 16 days of its launch.
Listen.com offers a different strategy. It already charges customers a $9.95 monthly fee for access to online radio stations, custom playlists and other programming. It claims "tens of thousands" of subscribers, but is hoping for more by lowering the fee to burn songs to 79 cents, down from 99 cents.
The company decided on the 79-cent price after a six-week experiment, in which Listen.com charged 49 cents per song, chief executive Sean Ryan said. The move attracted more subscribers and boosted song downloading, although he declined to reveal figures.
Listen.com may allow customers to burn songs for a fee without buying a monthly subscription, Ryan said, calling 2003 "the year to test business models."
Apple drew widespread attention — and customers — with its new iTunes Music Store. But McGuire said the key is going to be who offers the best and most updated mix of music on a regular basis.
And Apple will need substantial sales to make its store work, as downloads don't generate the recurring revenues Listen.com enjoys with subscriptions, said Lee Black, an analyst with Jupiter Research.
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