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Copy Protection Is a Crime
…against humanity. Society is based on bending the rules.
By David Weinberger
Scott Menchin
Digital rights management sounds unobjectionable on paper: Consumers purchase certain rights to use creative works and are prevented from violating those rights. Who could balk at that except the pirates? Fair is fair, right? Well, no.
In reality, our legal system usually leaves us wiggle room. What's fair in one case won't be in another - and only human judgment can discern the difference. As we write the rules of use into software and hardware, we are also rewriting the rules we live by as a society, without anyone first bothering to ask if that's OK.
The problem starts with the fact that digital content can be copied - perfectly - from one machine to another. This has led the recording and movie industries to push for digital rights management schemes. Buy a one-time right to play the latest hit song or movie, and DRM could prevent you from playing it twice.
Of course, to exercise such exquisite control over content, DRM requires deep changes to all parts of the equation - the hardware, the operating system, and the content itself. Sure enough, some in Congress recently pushed the FCC to add a "broadcast flag" to content which digital hardware would be required to honor. DRM is barreling down the pike.
Joshua Ellingson
The usual criticism is that the scheme gives too much power to copyright holders. But there's a deeper problem: Perfect enforcement of rules is by its nature unfair. For contrast, consider how imperfectly rules are applied in the real world.
If your lease stipulates that you can't paint without explicit permission from your landlord, you will nevertheless patch up the scratches made by your yappy little dog on the bottom of the front door. If the high-priced industry analyst's report warns you on every page against duplicating, you'll still hand out at your weekly sales meeting copies of a page with a relevant chart. You'd snicker at the very suggestion of doing otherwise.
But why? The analyst report is stamped 'DO NOT PHOTOCOPY', and the bit in your lease about not painting really couldn't be any clearer. We chuckle because we all understand that before the law there's leeway - the true bedrock of human relationships. Sure, we rely on rules to decide the hard cases, but the rest of the time we cut one another a whole lot of slack. We have to. That's the only way we humans can manage to share a world. Otherwise, we'd be at one another's throats all the time - or, more exactly, our lawyers would be at each other's throats.
Yet we're on the verge of instituting digital rights management. What do computers do best? Obey rules. What do they do worst? Allow latitude. Why? Because computers don't know when to look the other way.
We're screwed. Not because we MP3 cowboys and cowgirls will not have to pay for content we've been "stealing." No, we're screwed because we're undercutting the basis of our shared intellectual and creative lives. For us to talk, argue, try out ideas, tear down and build up thoughts, assimilate and appropriate concepts - heck, just to be together in public - we have to grant all sorts of leeway. That's how ideas breed, how cultures get built. If any public space needs plenty of light, air, and room to play, it's the marketplace of ideas.
There are times when rules need to be imposed within that marketplace, whether they're international laws against bootleg CDs or the right of someone to sue for libel. But the fact that sometimes we resort to rules shouldn't lead us to think that they are the norm. In fact, leeway is the default and rules are the exception.
Fairness means knowing when to make exceptions. After all, applying rules equally is easy. Any bureaucrat can do it. It's far harder to know when to bend or even ignore the rules. That requires being sensitive to individual needs, understanding the larger context, balancing competing values, and forgiving transgressions when appropriate.
But in the digital world - the global marketplace of ideas made real - we're on the verge of handing amorphous, context-dependent decisions to hard-coded software incapable of applying the snicker test. This is a problem, and not one that more and better programming can fix. That would just add more rules. What we really need is to recognize that the world - online and off - is necessarily imperfect, and that it's important it stay that way.
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David Weinberger (self@evident.com) is the author of Small Pieces Loosely Joined.
Cheap mp3s will cut piracy, claims online music boss
By Patrick Gray, ZDNet Australia
26 May 2003
Selling mp3s on the Internet cheaply will reduce piracy, according to Domenic Carosa, chief executive of Destra Corporation, the parent of mp3.com.au.
Whilst record sales are currently being affected by piracy, Carosa says it’s because there is currently no alternative for consumers who want mp3s.
“Piracy is hurting sales at this particular point in time [because] there is no other option. If you want music in a digital format what options do you currently have? Piracy,” he said.
Going back a few years, Carosa says record companies would slam the door in his face--they didn’t want to talk to a company offering music for download, even if it was charging for it. However the same groups are now realising they have to go online if they’re going to remain competitive.
“The record companies are changing their views, they’re actually being a little more liberal... with relation to their licensing as well as their expectations of royalties,” Carosa told ZDNet Australia.
He believes piracy can be reduced by making music cheaper. This will result in a boost in sales, and eventually a boost in profits.
“If they can sell music cheaply, no-one’s going to bother pirating,” he said.
But there’s still resistance.
“They’ve been selling physical CD’s, now [we’re] trying to get them to cut up that CD into little chunks... their perception is ‘we’re only going to sell a little bit’,” he said.
The companies are worried they’ll only sell single tracks and not whole albums. But Carosa, who is trying to convince the record companies to allow him to sell their music through mp3.com.au on a retail and wholesale basis, says his customers usually buy four to five tracks.
An interesting lesson in consumer behaviour can be learned by observing shoppers on Destra’s mp3 site. The cheap music, priced at 99c a track, sells a lot faster than anything else, regardless of the artist.
“This is old stuff like Frank Sinatra... people will buy it if it’s cheap-—we’ve proven it,” he laughed.
Carosa has plenty to laugh about. Destra started life as Sprint, which was back-door listed on the Australian stock Exchange for AU$16 million only a few hours before the tech bubble burst in the US. Since then, he has steered the company to EBITA profitability in the last quarter, with AU$1 million left in cash reserves. It never would have happened if Sprint had listed one day later.
“Someone upstairs must have been looking out for me,” he said.
Another spin on digital music
University offers antipiracy plan
By Chris Gaither, Globe Staff, 5/26/2003
At a time when college administrators are coming under fire for students illegallly downloading copyrighted songs, the president of one major university is urging schools to launch their own digital music services as an alternative to digital piracy.
Graham Spanier, president of Pennsylvania State University, wants colleges to license songs and charge students to listen to them online. He has proposed that schools increase each student's tuition or fees by perhaps a few dollars in exchange for unlimited listening, though the ability to burn songs onto a CD might cost extra.
The idea is still in early discussions and faces considerable skepticism from the recording industry. Yet Spanier, cochairman of a national committee of university and entertainment leaders that discussed the proposal in Washington, D.C., last week, says he expects pilot programs to begin at some universities by the start of classes this fall.
If schools can negotiate licensing deals, they would enter into direct competition with digital music services from companies like Apple Computer Inc., RealNetworks Inc., and Roxio Inc., which last week acquired Pressplay from Universal Music Group and Sony Music Group with plans to relaunch it next year as a paid service under the Napster name.
But the ultimate goal of a university-run music service, Spanier says, would be to reduce the number of songs downloaded from file-sharing services like Kazaa, whose popularity on college campuses has swamped computer networks and administrators who field complaints of copyright infringement from the entertainment industry.
''If the service is good enough, offers enough songs, has high reliability, and is user-friendly, it can compete with Kazaa and similar programs,'' Spanier said in an e-mail interview.
Cary Sherman, president of the Recording Industry Association of America, downplayed the idea, calling it ''Graham's opening thoughts at the beginning of a dialogue.'' He said many questions remain about the proposed service -- such as whether songs would be available for download or streamed over the Internet, how the songs would be protected from illegal copying and distribution, and whether copyright holders would grant permission for such broad use -- but praised it as a starting point.
''I think it's a very good step to try to find new ways to provide music legally to college students,'' said Sherman, who is cochairman, along with Spanier, of the Joint Committee of the Higher Education and Entertainment Communities.
Each digital media company would create its own product and negotiate terms with individual universities, Spanier said. He said he anticipates some trial runs by this fall, though his own top technology administrator, J. Gary Auguston, in a phone interview called that ''a pretty aggressive schedule.'' Penn State has not even begun negotiating with any content providers, Auguston said.
Two business students from the Massachusetts Institute of Technology, David Galper and Vince Han, say their venture for streaming music and movies over the Internet to college students is among the candidates to run test programs at Penn State and other universities.
Sherman said universities might find it easier to negotiate licenses for limited test programs, thanks to the early success of Apple's iTunes Music Store. But network administrators say services like Apple's have done little thus far to slow the illegal exchange of songs by students.
''I really don't think they understand or believe that illegal file-sharing is the same thing as going into Tower [Records], grabbing a CD off the rack, and running out the door with it,'' said Scott Hervey, chairman of California Bar's cyberspace law committee.
That's one reason why Spanier wants to charge each student for music. If they're already paying for the service, they just may use it instead of Kazaa, protecting themselves -- and, potentially, their colleges or universities -- from liability for piracy. ''It would make legal what is now illegal,'' he said.
But students would still use file-sharing programs to download songs, movies, and television shows not included in a university's catalogue, said James Bruce, MIT's vice president for information systems. Spanier's proposal also raises questions about whether parents would pay higher tuition so their children can listen to the latest 50 Cent hit. Northwestern University in Evanston, Ill., charges all undergraduates in its residence halls $120 a year for access to 20 cable channels streamed over the Internet. Students approved the fees in a referendum. But administrators at public universities in cash-strapped states say fee hikes for digital music would be poorly received.
''The university is not in a position to undertake any new initiatives,'' said Scott Conti, network operations manager for the University of Massachusetts at Amherst.
Anticipating 10 percent cuts in its technology budget, the University of California at Berkeley has delayed computer lab upgrades and renewals of anti-virus software. Jack McCredie, the university's chief information officer and associate vice chancellor, said he appreciates Spanier exploring ways to combat piracy, but with other pressing needs he would only consider a service that students sign up for.
''We have to somehow fix the culture that thinks it's OK to rip off people's intellectual property rights,'' McCredie said. But he added, ''It's a terrible precedent for universities to be essentially paying for the entertainment of its students.''
Chris Gaither can be reached at gaither@globe.com.
This story ran on page D1 of the Boston Globe on 5/26/2003.
Music Labels Shun Online Distribution
Sun May 25,11:23 AM ET Add Entertainment - Reuters Industry to My Yahoo!
By Brian Garrity
NEW YORK (Billboard) - Suddenly, the major labels have a new mantra about digital distribution: Let someone else do it.
That's the lesson industry insiders are drawing from the surprise decision by Sony Music Entertainment and Universal Music Group (UMG) to sell their service, Pressplay, to Roxio.
"The marketplace has changed," Sony Music executive VP Robert Bowlin says. "We are in the content business. We don't have to own the highway necessarily unless it is strategic to do so."
Sources say that the move is neither a direct reaction to the early success of Apple Computer's new iTunes service nor a response to a recent court decision allowing the Grokster and Streamcast peer-to-peer (P2P) services to continue operating.
But they agree that both the Apple launch and the court decision will likely influence the futures of both Pressplay and another Internet service, MusicNet. The MusicNet digital venture involves Real Networks, Warner Music Group (WMG), EMI Recorded Music, and BMG Entertainment.
Among other things, the move also should ease the concerns of independent labels, technology companies, and even some legislators on Capitol Hill.
For the past two years, they have worried that the world's five largest record companies were attempting to corner the market on selling music to consumers with Pressplay and MusicNet.
The ability to profit from online music, however, is proving to be a greater allure to the industry than controlling it.
"It's pretty clear that want to step out of the management role and just hold an equity position," Jupiter Research analyst Lee Black says.
For the major labels, their venture into digital music has proved to be a costly lesson as well. Building the business has been neither cheap nor easy.
Sony and UMG have pumped an estimated $60 million into developing Pressplay since its 2001 launch. A similar amount has been spent on MusicNet.
But the services have only an estimated 100,000 customers between them and virtually no name recognition among music fans.
BUILDING BRAND RECOGNITION
In making a deal with Roxio, owner of the Napster (news - web sites) brand, UMG and Sony are looking to solve the problem of Pressplay's lack of brand recognition.
Roxio plans to relaunch the digital-music service by early next year under the Napster name, which is still the most recognized among consumers for digital downloading.
Roxio, as well as UMG and Sony, is betting that consumers will be drawn to the Napster brand, even if its application is different from what it was in the past.
"If you put Napster up on a billboard, people are going to know what you're talking about. If you put Pressplay up on a billboard, you're going to have to explain what Pressplay is," says Larry Kenswil, president of UMG's eLabs division. "It's just much easier marketing."
And while UMG and Sony may take a reduced role in the future of the service they developed, they are still positioned to participate in the financial upside of a rebranded Pressplay.
Under terms of the cash-and-stock transaction, valued at roughly $40 million, the two majors will receive approximately 3.9 million shares of Roxio common stock and $12.5 million in cash.
Should the new Napster service turn a profit, UMG and Sony are each eligible to also receive up to $6.25 million. Additionally, UMG and Sony each will have a representative on Roxio's board of directors.
The strategy of holding an equity stake and leaving management concerns to someone else is playing out in a similar fashion with the backers of MusicNet.
Sources tell Billboard that MusicNet recently received $10 million in new funding from Real Networks, WMG, EMI, and BMG parent Bertelsmann.
MusicNet declined to comment on the figure but acknowledged the funding round. MusicNet CEO Alan McGlade says the deal proves that the founding companies "continue to be committed and supportive" with regard to the venture.
FUTURE IN DOUBT
MusicNet's future has been the subject of speculation in recent weeks.
Real Networks, the venture's lead financial backer, just acquired a rival subscription service -- the Rhapsody-owned listen.com -- and is expected to drop commercial distribution of MusicNet in the near future.
Real has also pulled its representatives from the MusicNet board of directors.
There have been some reports that MusicNet may be up for sale. MusicNet denies such speculation.
Meanwhile, Apple has reported that more than 2 million songs have been sold since its store launched early this month, and the majors are pushing other digital services to pursue models similar to iTunes.
Roxio, which plans to retool Pressplay to make it easier to use before rereleasing it as Napster by March 2004, is expected to make a la carte downloads a feature in its service.
Plans to incorporate into the MusicNet service a greater focus on a la carte downloads are also in the works.
Meanwhile, competition from unlicensed services could also mount.
A new for-pay digital music service being distributed through the Grokster P2P network in the U.S. is running afoul of the recording industry by selling unlimited access to major-label music without authorization.
Madrid-based Puretunes enables consumers to download all the MP3 files they want, in subscription packages ranging from $3.99 for eight hours of access to $168 for one year.
The company does not have licensing deals with the major labels; however, it claims that because it has deals with the Spanish Assn. of Authors and Editors and the country's Assn. of Artists, Performers, and Players, the service is legal under Spain's copyright law.
The international recording industry disputes the legality of the service.
"Distributing music on the Internet without authorization from the copyright holders is illegal in Spain, as it is everywhere else," says Allen Dixon, general counsel for the International Federation of the Phonographic Industry.
"The legal situation in Spain is very clear, and any site offering music downloads needs to have the authorization of record producers," he says. "If Puretunes is going ahead and putting music on the Internet without that authorization, then they will have to face the consequences."
OT Upstart with sass hums first notes
With Suzi Q serving drinks and Captain Bob in the cockpit, Delta's offshoot goes after customers with fun and low fares. It begins flying out of Tampa on Saturday.
By STEVE HUETTEL, Times Staff Writer
© St. Petersburg Times
published May 23, 2003
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ORLANDO - The gate announcement makes a few bleary-eyed travelers waiting for the 7 a.m. flight to the Big Apple sit up and laugh.
"In New York, the weather is 54 degrees and raining, and they're expecting rain all week," an agent says. "Here in Orlando, we're expecting sun and 89 degrees. It's your choice."
Once on board, the 69 passengers on Song Flight 2490 get a few more surprises.
Leather seats trimmed in garish purple, orange and lime green. Flight attendants going down the aisle handing out Game Boys and selling $3 bagels and apples for $1. Crew members introduced as Suzi Q, Dynamic Desiree and Captain Bob.
Song is the all-coach, low-fare offshoot of Delta Air Lines, the nation's No. 3 carrier and a company not known for coloring outside the lines. But Song was built to look, sound and act like a sassy startup, not its buttoned-down parent.
"We were always warm and friendly at Delta," says Desiree Harris, a.k.a. Dynamic Desiree, a 15-year Delta flight attendant. "We just haven't been fun."
Of course, Song isn't only about fun. Low-fare carriers, especially hip JetBlue Airways, have nibbled away at Delta's share of the huge air travel market between Florida and the Northeast.
Song took flight last month and has only four planes flying three routes: New York's John F. Kennedy International Airport-Orlando, JFK-West Palm Beach and Boston-West Palm Beach.
The airline will make its debut at Tampa International Airport on Saturday, starting with three daily round trips to JFK International and one to Boston.
Song is set to expand quickly. By Oct. 1, the airline plans to have 36 jets and fly to 12 cities. It will add nonstop flights from Tampa to New York's LaGuardia Airport Aug. 4 and to Hartford, Conn., Sept. 10.
To compete with JetBlue and low-fare king Southwest Airlines, Song must match prices and nonstop routes. And the carrier has to operate leaner than Delta.
Although pilots receive their normal pay on the new airline, flight attendants earn lower hourly pay than their Delta counterparts. Many can make up the difference because they're allowed to work more hours.
At locations where Song has its own airport staff, the airline needs fewer customer service agents because they don't give upgrades or take passes for employees' friends and family members.
Song also is trying to create a new brand identity, a buzz of the kind that gave the two competitors such loyal followings.
Flight attendants, called "talent" on Song, bombard passengers on Flight 2490 with a steady stream of one-liners.
They call the safety announcement "some notes from the friendly FAA." They suggest travelers let a certain flight attendant help store their luggage in overhead bins because she can't make it to the gym that day.
Even on a flight where two out of three seats are empty, flight attendants spend almost all their time in the aisle, asking if passengers want beverage refills or just making small talk. Song wants the crew to spend as much face time with customers as possible, says Harris.
"Typically, the Delta way was finish the service and get back into the galley," she says.
Passengers get free soft drinks, juice and coffee. Food, even snacks, is strictly pay-as-you-go. Flight attendant Susan Lang sells about a dozen Lender's bagels with cream cheese, the hottest item on a slow morning.
Brand name products like the $7 Pizzeria Uno wrap sandwiches and Fig Newtons ($2) are a key part of the appeal. People would rather pay for a bottle of Evian water and an organic pear than get a warm bottle of generic water and a bruised apple, Harris says.
Ken Ward decided on the bagel as soon as he heard about the food menu at the gate. "It's okay as long as it's affordable," said Ward, an accounting student at Stetson University in DeLand. "A lot of people aren't satisfied with peanuts and a soda. It's not enough for me."
But the food service can be a hassle on short flights, said Robin Clark, a 20-year-old music student who took a full Song flight from New York to Orlando.
"The carts with food and beverages kept going up and down the aisles, so it was hard for people to get to the restrooms," she said. "For a two-hour flight, it was a little chaotic."
If the price is the same, Clark said, she'll stick with JetBlue and its 24 channels of satellite TV at every seat.
JetBlue markets this advantage aggressively. A row of flat-screen TVs are positioned above the airline's JFK International ticket counter, each showing a different channel. A banner reads, "Behave. Or it's straight to Florida with no TV."
Song pledges to install video screens in its planes by October and trump JetBlue's technology. The airline will offer satellite TV, plus pay-per-view movies, multiplayer video games and MP3 programming that will let customers create play lists.
The bells and whistles only go so far, says passenger Kevin Gowen, owner of CitiFactors Financial Group in Celebration, the Disney development near Orlando. Gowen tried Song because he found a $415 round trip to New York just the day before. He usually flies other discount carriers.
"I'm a frequent cheap flier," he said. "The biggest thing I like about JetBlue and Southwest is historically they leave on time and there's no bull."
Another traveler on Flight 2490 said Song gouged her. Raisa Cartagena of Altamonte Springs bought a $155 round-trip ticket last month. But when she moved the flight up a week to visit her gravely ill sister in New York, Cartagena said, Song charged $170 more.
The lesson for Song and other carriers: it's all about fares.
"What used to be important was your frequent flier program, (flight) frequencies and price," said Lang, the flight attendant. "Now, it's reversed."
- Steve Huettel can be reached at huettel@sptimes.com or (813) 226-3384.
Subject: Microsoft prepares counteratack
From EDIGlong
PostID 255549 On Friday, May 23, 2003 (EST) at 10:15:45 PM
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Microsoft prepares reply to iTunes
By Evan Hansen
Staff Writer, CNET News.com
May 23, 2003, 5:22 PM PT
While Apple Computer grabs publicity for its new 99 cent music download store, Microsoft is quietly preparing for a counterattack by improving its own technology for supporting subscription music services.
Services such as Pressplay, which uses Microsoft technology, have been put on the defensive with news that Apple has sold more than 2 million downloads since April 28, the day its iTunes Music Store launched. But Microsoft is betting that new security enhancements planned for later this year could make renting music, rather than owning it, more attractive to consumers.
Microsoft said it is developing software that makes it easier for subscription services to transfer music to portable music players. These services now provide unlimited downloads of hundreds of thousands of songs to a PC for a monthly fee, but they typically do not allow files to be moved around much. Microsoft said it will soon address this shortcoming with technology that will allow unlimited downloads to a portable device--a dramatic improvement.
'We can already support unlimited downloads tethered to the PC,' said Jonathan Usher, director of Microsoft's Windows Media division. 'The next step is enabling access to unlimited downloads on consumer devices.'
After years of delays, the record industry is experimenting with services to combat the wide availability of free music brought on by the MP3 file format and file-swapping software such as Kazaa. Record labels and retailers have tried to lure paying customers by offering singles for sale as downloads for less than $1, and also for rent through monthly subscription services.
Microsoft has been a key player in developing the technologies behind many of these trials, but its partners so far have failed to hit on a formula that rivals the early success of Apple's music store. Record label-backed services such as Pressplay do not disclose their subscriber rates, but estimates for sign-ups hover in the tens of thousands--far short of the numbers that would suggest significant consumer interest.
Microsoft originally planned to announce the security enhancements in January at the Consumer Electronics Show in Las Vegas. But it missed that deadline, giving Apple the opportunity to take the offensive by launching the iTunes Music Store first.
'It was supposed to launch last CES, with a big announcement with the labels, but it was delayed,' said Kevin Branigan, vice president of marketing for Diamond Rio MP3 players. 'Once it's ready, the labels will promote this very heavily.'
The delay may hurt the reception for Microsoft's enhancements, which are expected to arrive as part of its Windows Media Digital Rights Management for Devices version 9. Key features of this upgrade are designed for subscription services, an idea that was well received only months ago but has now lost luster thanks to Apple.
Apple's music product grants permanent ownership of files and relies on relatively light controls, maintained through a proprietary security format called FairPlay, that aim to be invisible to most users. People who buy tracks through Apple's iTunes music store can burn songs up to 10 times from the same playlist, share access from three different computers, and transfer tracks to Apple's iPod portable music player.
Subscription services subpar?
Subscription services, on the other hand, have typically applied heavy-handed locks that make it difficult to move files from a PC in their downloaded form, and the services may charge extra for the right to burn songs to a CD or transfer them to a device.
As of last week, at least one record label executive was ready to declare closely restricted subscription services a failure already: 'I don't see the model becoming a significant part of the music industry,' he said.
To be sure, it's too early to call Apple a winner in the online music market, which is still in its formative stages. Many label representatives believe the industry may gravitate toward a hybrid model that marries some elements of a download store and other elements drawn from subscription services.
Subscription services are 'ahead of their time' according to a senior executive at another record label, who said a key stumbling block is providing unlimited access to subscription music away from the PC on portable music players and other devices. 'Ultimately, there will be a huge audience for this, but the services need to provide portability,' he said.
'Downloads are very close to an old-fashioned experience,' he added. 'Subscriptions are much more of a shift...but the technology isn't right for the shift to happen. We're hoping it will happen this year, that the technology companies will provide portable players that can play the music.'
Microsoft's Usher said that Windows Media already supports secure playback on some 15 portable music players, including the Diamond Rio, but only for songs that are purchased, not rented. He said the company is continuing to work on enhancements to support subscription services on devices.
Microsoft plans to add support for a clock in portable music players and other consumer-electronics devices. The clock would provide a 'time out' feature much like that used in PC versions of its DRM software. If customers don't pay their monthly subscription bills by a certain date, access to the files on those devices is cut off.
Time-outs can be supported relatively easily on PCs, which have plenty of memory and processing power to handle a clock and the associated DRM. But supporting clock DRM on small handheld devices poses a considerable engineering challenge, thanks to limited CPU resources and battery life. Usher said Microsoft is working with consumer-electronics device makers to add clocks that can be hooked up to its rights-management system.
'It's taken longer than we originally intended,' Usher said, confirming that Microsoft had originally planned to release a security upgrade in January.
Usher said the company's DRM technology is flexible enough to be used in numerous music schemes, including $1 download stores like Apple's. He added that he's confident consumers eventually will warm up to subscription services once they support wider copying rights and their value is better understood.
'We already support a couple of business models,' Usher said. 'The other part of the business model that gets interesting is, what about unlimited downloads? The Apple store is not looking at or supporting anything like that.'
Voice Recognition Technologies
Speech-Based Operation and Navigation on PCs and Non-PC Embedded Portable A/V Products
by Chris Palmer
On April 29, the AES LA section meeting provided an overview of speech recognition technologies on PC platform as well as on embedded devices, such as portable audio/video player products. Our guest presenter was Atul Anandpura, VP of research and development for e.Digital Corp. To kick off the meeting, section executive committee member and director of product management and development of Acoustic System, Inc., Chris Palmer, described some basic communication and language challenges that occur in an increasingly global business and entertainment world. Speech recognition is one tool that can assist in breaking down some of the barriers to communication by offering a hands-free input device option, versus the more conventional keyboard input.
Over the past ten years, numerous PC speech recognition applications have been introduced into the market. In general, these systems rely on comparison of phoneme-based acoustic patterns. Phonemes are the smallest units of speech sound from which recognition profile libraries are created. Almost all speech recognition software package and many word processing applications are able to support continuous dictation as well as command-and-control functionality. In order to prepare for accepting voice input, the software trains itself by analyzing samples of the user’s voice, directed via screen prompts. In general, the more training the user provides, the more accurate the speech recognition will be. Most applications claim between 80–95% accuracy, based on a combination of accurate voice profiles, proper headset microphone technique, and extensive dictation training. Chris read a paragraph of text in order to demonstrate continuous speech recognition based on his voice profile. Additionally, he showed how menus, or even macros, could be controlled using command-and-control functionality. The purpose of this was to provide a contrast to the inherent challenges in handling speech and voice navigation on non-PC, embedded, audio device applications.
Our guest presenter, Atul Anandpura provided an overview of the input and control devices used in portable devices, such as keypads, touch-screens, stylus, hand gloves and eye tracking devices. As the methods of inputting data have grown, so has the use of high-capacity compact storage. The proliferation of mass media storage of audio and music files has created both an opportunity and challenge to hardware developers and manufacturers, and locating thousands of audio clips quickly on small LCD displays has opened new avenues for the use of speech recognition.
Historically, voice recognition technology includes the early work of Alexander Graham Bell using visible speech for the hearing impaired, the 1950’s Bell Labs 10-digit recognition systems, and in more recent history, PC dictation software applications that are able to recognize over 100,000 words. Today, it is possible navigate data on embedded portable devices in a structured hierarchy, that could include such information as genre, artist, album, and title information. Additionally, transport controls such as play can be voice activated. This is quite a challenge for hardware and software designers in that portable devices have limited processing power and memory, require voice independence, and must be capable of effectively detecting speech. The system architecture must be able to manage and address issues of audio level clipping, signal to noise, fidelity, microphone mounting and noise. To demonstrate, Atul showed an e.Digital-designed music player with a 20 GB hard drive, which can store thousands of sound files. This hand-held device quite impressively and without error recognized the artist and album names spoken to it by several audience members.
The meeting neared conclusion on a rather interesting note as Atul demonstrated dictation in Microsoft Word using Chris’s voice profile, which produced startlingly humorous results. For comparison, a female audience member also read the same passage of text. As expected, the demonstration showed that when using Chris’ profile, the software more accurately recognized his own voice than the others’.
The purpose of this meeting was to provide an overview of recent advances in speech-recognition technologies. Although PC applications are able to take advantage of extensive processing power in dictation and command-and-control functionality, more recent and far less known are the advances made in non-PC embedded designs such as the portable audio device shown this evening.
The AES LA section would like to thank Atul Anandpura for providing us with a speech recognition overview as well as describing and demonstrating voice navigation advances in embedded audio device applications, and Chris Palmer for his demonstration of speech recognition in word processing software and for organizing the meeting. Mr Anandpura's presentation (PDF 212 KB) can be downloaded here.
Startup Cornice readies 1-inch hard drive
By Rick Merritt
EE Times
May 23, 2003 (2:41 p.m. ET)
SAN JOSE, Calif. — A startup is close to announcing a 1-inch hard-disk drive that could offer 50 percent greater capacity than IBM Corp.'s Microdrive at less than half the cost.
Cornice Inc. (Longmont, Colo.) said its 1.5-Gbyte internal drive, aimed at the next generation of digital portable consumer gadgets, could sell for as little as $70. The drive is already generating some buzz for a ground-up redesign of the hard disk that focuses on low power consumption as well as cost.
But analysts noted that other 1-inch drive startups have not been able to overcome financial and technical difficulties and that a broad market for the drives has failed to emerge.
With just four chips—three of them from Texas Instruments Inc.—and a handful of discretes, the Cornice drive is said to use fewer components than the current, 1-Gbyte IBM Microdrive. Cornice is said to have a road map that gets the drive down to three and then two chips.
The drive does not use a conventional interface but instead links directly to a host processor and is designed as an embedded drive. It was reportedly used in several prototype products shown at CES in January, including the Digital Gadget, a multifunction camera developed by Samsung Electronics.
The new drive comes as other startups with 1-inch drives struggle to survive.
Marqlin Corp. (San Jose) is trying to find a new set of financial backers after having lost its initial investors. The company has given up hopes of launching its initial product, a 2.5-Gbyte drive using the CompactFlash interface, and is now designing a second-generation product as its market entry. “We ran into some funding problems. This is one of the tightest funding environments I have seen,” said Gilbert Springer, chief executive of Marqlin.
Marqlin struck a technology deal with Cornice recently, trading its mechanical engineering expertise for Cornice's microcode technology, Springer said.
Another 1-inch drive startup, GS Microdrive Inc. (Guizhou, China), has launched the 2.4-Gbyte MagicStor 1-inch drive in a CompactFlash II format. However, the drive has had poor feedback from reviewers, who said it draws too much current and can be unreliable at times. “The 1-inch drive market thus far has totaled “a few hundred thousand drives, not the millions that were promised,” said veteran drive analyst Jim Porter of Disk/Trend (Mountain View, Calif.). The industry is awaiting the arrival of “shirt-pocket computers with voice recognition—the grandsons of the Palm”—as the app that could see the drives take off, he said.
Most IBM Microdrives have wound up in professional-grade digital cameras that sell for more than $2,000, Porter said. The company plans to follow up its 1-Gbyte model, which sells for slightly more than $200, with a 4-Gbyte model later this year, Porter added.
“I don't think these systems will find a huge business in the next year or two,” he said.
Kazaa Says on Track to Be Most-Downloaded Program
Thu May 22, 7:52 PM ET Add Technology - Internet Report to My Yahoo!
LOS ANGELES (Reuters) - Sharman Networks Ltd. on Thursday said its Kazaa file-sharing software was on track to set a record in the next day as it becomes the most-popular free program on the Web with over 230 million downloads.
By hitting that total, Kazaa would surpass the popular ICQ instant messaging (news - web sites) program, Sharman said.
Kazaa's growing popularity comes at a crucial time for the music industry as it battles file-swapping services in court and tries to develop commercially viable online music services.
As of late Thursday, the Kazaa Media Desktop application -- a file-sharing software that has drawn the wrath of the music industry by enabling its users to swap songs for free -- had been downloaded 229,150,955 times, as measured by Download.com, which is owned by CNET Networks Inc.(Nasdaq:CNET - news)
Sharman said by midday Friday it expected Kazaa would top the record set by ICQ. As of Thursday, ICQ has been downloaded 229,363,307 times, according to Download.com.
A Sharman spokeswoman said Kazaa has been receiving an average of 366,000 downloads per day, whereas the ICQ application has been receiving an average of 50,000 downloads per day, as measured by Download.com.
This week, media software maker Roxio Inc.(Nasdaq:ROXI - news) bought struggling online service Pressplay, launched by Vivendi Universal and Sony Corp (news - web sites). Apple Computer Inc.(Nasdaq:AAPL - news) recently launched its own online music service, which analysts say has been a standout success in the struggling sector.
Record labels suffered a setback in April when a federal judge ruled song-swap networks Grokster and Morpheus should not be shut since they do not control what is traded on them.
Kazaa, which is involved in a separate lawsuit with the recording industry, also distributes licensed files, including music, movies, games and software through a partnership with a company called Altnet.
Music Sector Calls For Fans To Go Online With Pro-Music.org
Today sees the launch of www.pro-music.org, a new international initiative to promote legitimate online music services and confront the myths surrounding online music piracy.
The website is supported by an international alliance of musicians, performers, artists, major and independent record companies and retailers across the music industry.
Pro-Music.org, which comes as several new paid-for online music services are emerging in Europe, is the legitimate music sector's latest strike against the spread of unauthorised music on the Internet.
The site includes the biggest international repository of information on the growing number of legitimate online music sites now offering more than 200,000 songs to consumers. It also features a step-by-step guide to the processes in making music and the teams of people involved, viewpoints on the piracy debate from a cross-section of artists, the media and the public, and answers to frequently asked questions about copyright laws for online music.
Pro-music has already attracted widespread support from across the music sector. It is endorsed by IFPI and IMPALA, representing thousands of record companies worldwide; GERA-Europe, representing entertainment retailers in Europe; GIART, representing music performers in Europe; the international musicians union FIM; and the International Music Managers Forum (IMMF).
Pro-music has also drawn statements of support from a range of artists of all music genres from across Europe, as well as music companies such as MTV Europe and digital music distributor OD2.
Jay Berman, IFPI chairman and CEO, said: "The success in the US of Apple's iTunes, which saw sales of over one million songs in less than a week, is proof that if it's done right, music lovers want to get music in a way that rewards the artists and creators - that is, by paying for it."
"The point of this initiative is to arm people with knowledge. The Pro-music.org site is an important resource for news and information about legitimate music online: where to find it, how it works, why it's important and what the artists and creators of music think. Once they have gone through the site we hope people will stop and think about the impact of their choices as consumers of music. And they can make their own minds up next time someone asks, 'so what's the problem with getting music 'free' on the net?'".
This is not the first such public awareness campaign aimed at informing the public about illegal copying and distribution of music. Several national campaigns have been launched over the past 12 months, such as "musicunited.org" in the US, "Save Music" in Japan, "Keepmusiccoming.com" in Canada and "BRN>BRNT" in New Zealand. Pro-music is the first international public awareness venture, with plans to roll out on a national level in several European countries in coming year.
The site features the following sections:
* Making Music: a look behind the scenes at the specialist skills and practical experience needed to do some of the hundreds of different jobs that help musicians and artists attain their vision and get it out to the world. Making Music also expresses views from across the music-making community, from top successful managers to aspiring music students at the very start of their career.
* Artists Speak: a range of artists and musicians, at different stages in their careers, explain how they feel about having their music taken without permission, how it effects the work and livelihoods of all those involved and how it stunts the development of new talent.
* Music Online: the largest international listing of online digital music services and retailers, this section carries links to scores of music download sites and other sources of information about online music. It also contains news, commentary and a time-line the music sector's moves to create an online music business.
* Viewpoints: features quotes from music specialists, including large and small record labels, music associations, retailers and the media. The section also provides an overview of other campaigns launched by music groups from around the world.
* Free Music?: This section confronts some of the biggest myths about on-line music piracy, such as "File sharing and burning is just like home taping, and that never killed the music sector", and "Free music sounds great - what's the problem?"
* On Copyright: Copyright is often misunderstood or misrepresented as serving only the interests of big business. "On Copyright" explains why copyright is needed and what the laws mean. This section also provides a more technical explanation on how to reset or uninstall p2p software to stay legal, and provides guidance for companies and colleges who wish to implement policies to avoid copyright theft.
UPDATE - MusicNet gets new round of funding
Thursday May 22, 3:06 pm ET
By Sue Zeidler
(Adds details, byline)
LOS ANGELES, May 22 (Reuters) - Online music service MusicNet on Thursday said it got about $10 million in new funding from its shareholders, including three giant record labels and RealNetworks Inc. (NasdaqNM:RNWK - News).
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A source close to the company said the new round of funding showed its partners remained committed to the service, squashing rumors that MusicNet was up for sale like its rival Pressplay, which this week was acquired by digital media company Roxio Inc. (NasdaqNM:ROXI - News).
"While we are a lean, strategically focused company, we will continue to set the bar because of our unique business approach as the digital music space grows and matures," MusicNet Chief Executive Alan McGlade said in a statement.
In addition to RealNetworks, MusicNet is co-owned by AOL Time Warner's (NYSE:AOL - News) Warner Music, Bertelsmann AG's (BERT.UL) BMG and EMI Group Plc (London:EMI.L - News).
Both Pressplay and MusicNet have been losing money as they have struggled to gain a foothold against wildly popular unauthorized song-swapping services like Kazaa and Morpheus, which the industry largely blames for a decline in CD sales.
In announcing its acquisition of Pressplay this week, Roxio said it plans to combine the struggling online music service launched by Vivendi Universal (NYSE:V - News) and Sony Corp. (Tokyo:6758.T - News) with the Napster brand and assets it bought at a bankruptcy auction last year.
Analysts said the Roxio deal pointed to more consolidation in online music, where commercial services have had only mixed success in the nearly two years since Napster was shut down.
Another subscription service, Listen.com, was recently sold to RealNetworks Inc. (NasdaqNM:RNWK - News), while independent service FullAudio denied rumors this week it was shopping for a buyer.
Sony and Universal have each lost about $30 million on Pressplay, and MusicNet's founding members have also pumped millions into MusicNet, also a money-losing operation.
However, some analysts noted that since going live on America Online in February, MusicNet has been gaining momentum, with subscribers now topping 100,000, versus the 50,000 estimated subscribers for Pressplay.
But the one real success story in commercial online music to date has been the service launched by Apple Computer Inc. (NasdaqNM:AAPL - News), which sold more than 2 million songs at 99 cents each in just over two weeks, easily topping the traffic on Pressplay and MusicNet.
The service, accessible only on Apple computers, is a pay-per-download model that does not require users to pay a monthly subscription, unlike other services.
Some analysts believe the managers of MusicNet are encouraged by the Apple news. "The funding shows that their founding members are committed to the company and the space and are also rejuvenated by recent events in the market, like Apple's success and AOL's continued growth," said Lee Black, analyst with Jupiter Research.
great post 9 miles.eom
Roxio Pressing for Flexibility on Napster
By George Mannes
Senior Writer
05/21/2003 06:22 PM EDT
Click here for more stories by George Mannes
Napster-reviver Roxio (ROXI:Nasdaq - news - commentary - research - analysis) is headed toward the download-and-burn path for its online music business, though it hasn't quite forsaken the subscription music model it just bought into.
Roxio -- which owns the name of the defunct file-sharing service, and which bought the Pressplay subscription music service earlier this week -- indicated on a Wednesday night conference call it was taking several measures to increase flexibility regarding how consumers could listen to music they will obtain through the Pressplay service, which Roxio plans to relaunch under the Napster brand within a year.
But Roxio CEO Chris Gorog said the company hadn't yet decided yet whether the company would launch a per-song sale business, either as an addition to the current subscription model or as an alternative. Pressplay already permits users to download single tracks for burning onto a recordable CD or transfer to a portable MP3 listening device, but only after paying a $9.95-a-month subscription fee.
These comments came as Roxio reported a strong quarter but a weak near-term outlook for its current digital media software business and insisted the time was right for Roxio to diversify and take advantage of "enormous" opportunity in the online music business.
Between now and the Pressplay-as-Napster relaunch, Gorog said the company would be making "significant enhancements" to Pressplay's ease of use, such as enabling seamless CD burning and offloading to MP3 devices. Gorog said the company already obtained important concessions regarding user flexibility from record labels in the course of its negotiation to buy Pressplay, launched in 2001 as a partnership of Sony (SNE:NYSE - news - commentary - research - analysis) and Vivendi Universal (V:NYSE - news - commentary - research - analysis).
Meanwhile, Gorog said the company had seen a decline in software sales in recent weeks, attributable to several factors: A normal falloff following the release of the company's Easy CD & DVD Creator 6, an expected decline in sales to companies packaging its software with their hardware, soft consumer spending at retail, and increased competition from software tailored for the copying of DVD movies -- an area Gorog says it's "imprudent" for Roxio to enter because of legal issues.
Roxio's shares fell 75 cents Wednesday to close at $7.26. They traded 17 cents lower in after hours trading following the release of quarterly financial results.
New ‘APED™’ – Audio Personal Entertainment Device - Line From Evolution Technologies, Inc. Offers Dupont’s OLED Display
05-22-2003
Raleigh - Thanks to the breakthrough display technology from Evolution Technologies, Inc.and Dupont, the two companies are announcing a new line of digital music players that are feature-rich, extremely easy to use and affordable.
The two APED Models, APED-20 GB and APED-30 GB are setting new standards for portable music players by including support for MP3 and WMA digital music formats. According to Vice President of Marketing Howard Blumberg, this line delivers a bright, vibrant OLED display, built-in direct record, FM radio and a PDA-like cradle that syncs, charges and even allows for easy connection to a home stereo system, and all the memory capacity you need.
“The Evolution Technologies, Inc. APED is the first portable music player to use Dupont’s new OLED technology; offering the easiest to read screen ever seen in a handheld player,” Blumberg offered. “On top of that, the player just flat looks great, and will take the market by storm.”
“We’re determined to offer the greatest value and feature-set to our customers,” Blumberg said. “We love music at Evolution Technologies, Inc. and it gives us great satisfaction to offer unique, high-quality, affordable products.” Blumberg continues by pointing out the greatest advantage of OLED displays are that they create their own illumination, which provides a vibrant, sharper, and more readable display than an LCD. The OLED technology allows the Evolution Technologies, Inc. APED to be a more compact product. In addition, the APED has a docking station, which creates ‘permanent’ connections with your computer or stereo. This docking station allows for simple, fast and easy file transfer, battery charging and stereo system playback.
About APED:
APED is packed with additional features that make it the class of the hard-drive based portable music player field. APED supports the popular MP3 and WMA digital music formats and is compliant with the Secure Digital Music Initiative (SDMI) formats currently in development.
About Evolution Technologies, Inc.:
Headquartered in Raleigh, North Carolina, Evolution Technologies, Inc. is an emerging leader in Internet audio players (MP3) that embody its motto, “Evolution Through Technology.” Just two years old, the company is growing at a rate of more than 2,000 percent per annum in market that is forecast to double each year through 2005. The first line of MP3 players won “Top Gear” plaudits from Maxim (August 2001) and “The Best: MP3 Player” designation from Men’s Journal (September 2001). Please visit www.nowevolution.com for more information.
Steve Jobs' half note
By Evan Hansen
May 21, 2003, 4:00 AM PT
Buying music online got a lot easier with Apple Computer's new music store. It's a promising sign of things to come in the music business. That said, the service feels like half a loaf--it only begins to offer the music experience that is possible with the Internet.
Apple negotiated some great licenses from the record labels, and there's genius in that. Others tried and failed to get similar rights, so Apple CEO Steve Jobs deserves to gloat a little. But in the end, iTunes Music Store is just a music fulfillment service. It has done little or nothing to change the ways people explore and learn about the music that they eventually buy, and that's a disappointment.
If online music were approached in the right way, it would have the power to transform and enrich an industry that historically has courted consumers with a blunt marketing instrument.
Currently, a mere 2 percent of releases account for 80 percent of music industry sales. Online distribution could help rebalance that ratio, building careers for hundreds of artists who now linger in obscurity, and drawing in millions of new fans bored and alienated by the industry's star-making machinery.
The key is getting more and better information to consumers. The music store of the future can and should be a primary force in making that happen.
Look at how Amazon.com has reinvented book selling with recommendations and customer reviews, and you'll get an idea of how much simple innovation Apple and the record labels left off the table.
It's not too hard to imagine features that any great online music store should have--and likely will in short order. If Apple doesn't take these up, competitors like Amazon or a big CD retailer like Virgin almost certainly will, assuming that they can get the necessary licenses. The idea is so appealing that venture capitalists in Silicon Valley are even rumored to be drumming up a business plan for a full-featured e-commerce music start-up.
The recording industry is no slouch when it comes to marketing, and it will probably manage to turn the whole thing into an annoying mess once the idea of online distribution really gets going. But for now, it hasn't even started trying.
Paralyzed by fears of piracy, the record labels have taken years to get their act together for online distribution. In that time, they have nearly squandered their biggest sales opportunity ever by demanding complex digital rights management (DRM) features that hinder copying at the expense of turning off paying customers.
Paralyzed by fears of piracy, the record labels have taken years to get their act together on online distribution. As Jobs said, the Internet is made to sell music. Record industry executives have seen free file-swapping networks as a lethal threat. But in fact, there is good reason to believe the networks can be contained if they are countered with products and services that offer real value without resorting to consumer-unfriendly DRM.
To give Apple its due, the company won the right to deliver musical digits in a way that could actually convince some people to pay--especially if the price of 99 cents a song drops.
But some other online music services--including ones that Jobs and others disparage as worthless--have done a lot more to attempt to change for the better the way that music is packaged and sold.
I'm talking about subscription services, which are taking a rap from the iTunes Music Store marketing department that they don't deserve. I've tried most of them out, and I'm ready to recommend one: Listen.com's Rhapsody service. It's a neat little product that delivers in lots of ways what the iTunes store doesn't even try to match.
Subscription services like Rhapsody are supposed to be a bad deal because they treat you like a pirate, according to Jobs. You're tied to your PC and forced to rent songs, instead of being allowed to own them, and that's supposedly unforgivable.
Rhapsody is far from perfect. It uses a streaming delivery system that cuts out from time to time, even with a broadband connection. Holes in its catalog abound. It doesn't synchronize with the MP3 collection on your hard drive. And at about $10 a month, it's still probably too expensive to be a mass hit.
Shortcomings aside, there's a lot of great stuff that you do get with Rhapsody and some other subscription plans. It's an amazing ear-opener to scroll through Rhapsody's listings, which offer the equivalent of a music encyclopedia. Name almost any artist, and you can immediately begin sampling--not just for 30 seconds, as in iTunes, but for weeks on end. For a dollar, you can burn songs, after which you can rip them back to your hard drive, solving the bogus ownership argument.
Online music stores or services can and probably should offer a lot more than just music downloads. Rhapsody highlights the fact that online music stores or services can and probably should offer a lot more than just music downloads.
So, what should the ideal music store of the future look like?
At the very least, it should provide unsecured MP3 downloads; reams of information about artists and music, including trusted reviews and recommendations; numerous opportunities to sample before buying; concert schedules and tickets; and access to lyrics and sheet music.
Bundling editorial content with an online music store is a no-brainer and could either include exclusive material that pushes the service toward a hybrid magazine format, or tie in with existing publications, such as Verve or Rolling Stone.
Other add-ons might include short articles that discuss the tools and techniques used to make particular songs. Artists could sell paid advertising links in these articles to the vendors of the equipment they use. In turn, those companies would get to reach a very targeted and receptive audience with some useful and trusted information about their products.
How revolutionary might all of this get? One idea that's been discussed recently proposes creating a real-time pricing scheme for music, with song prices based on their popularity. Hot new singles might spike up to $3 or higher during the first hours or days of their release, while unpopular titles would be substantially discounted. Demand pricing could increase sales for otherwise overlooked works, or at least lower the cost of trying out something new, while rewarding top sellers.
I don't know if this would work. But it sets the bar pretty high for innovation. By comparison, Apple's music store is rather modest.
GADGET CHECK: Radio Your Way radio recorder
[I hope we weigh in with a similar (better) product as I for one would love to have a portable product that could do this]-gern
• Product: Recordable radio
• Uses: Think of Radio Your Way as the next generation of those pocket-size transistor radios that were so popular in the 1960s.
Manufacturer PoGo Products built the features of both an AM-FM radio and an MP3 player into a palm-size recorder/radio. The device can be set to record radio broadcasts at a preset time daily or weekly or on the fly.
Users can listen to the recording through the device's speaker, through included headphones or by transferring the recording to a computer.
Radio Your Way records in a proprietary format, allowing users to record up to four hours of talk shows, National Public Radio broadcasts or music. The device includes a USB cable to link it to a computer and software to convert the files to .wav format for users who want to burn them to a CD-ROM or save them to their hard drive.
The device doubles as an MP3 player with 32 megabytes of memory for music and a voice recorder. It includes an expansion slot to add a card for additional memory.
• Techno-stress factor: Should be low. The company boasts that programming is done with a single button.
• Price: $149.99. Available online only. Scheduled to ship late this week.
• More information: www.pogoproducts.com
Report finds growing interest in copy-protection technologies
By George Leopold
EE Times
May 20, 2003 (3:57 p.m. ET)
WASHINGTON — A government report has identified more than 100 companies developing or offering copy-protection technologies to prevent infringement of copyrighted materials.
In a report to Congress released Tuesday (May 20), the U.S. Patent and Trademark Office said leading technologies to prevent against theft of digital content include hardware- and software-based digital rights management architectures, encryption, authentication and digital watermarking technologies.
Lawmakers are attempting to push digital copy-protection technologies as a way to break a stalemate between Hollywood and the computer industry over how to protect copyrighted content. Resolving the issue is seen as a way of boosting demnd for broadband technologies.
"Protection of America's digitized copyrighted works is an increasingly important part of intellectual property protection, and this report provides a snapshot of technological protection systems in today's dynamic marketplace,” James Rogan, undersecretary of Commerce for Intellectual Property, said in a statement releasing the report.
The survey was mandated by passage last year of the Technology, Education and Copyright Harmonization Act. The law seeks to prevent infringement of digital copyrights.
IBM, Sony team for set-top reference designs
By John Walko
CommsDesign.com
May 20, 2003 (7:51 a.m. EST)
LONDON — IBM Microelectronics and Sony Business Europe's Semiconductor & Devices division have combined their respective front- and back-end set-top box technologies to offer suppliers and software developers a reference design for digital TV that targets terrestrial and satellite standards.
The companies announced the partnership at the MediaCast trade show being held here this week.
Set top makers, software and applications designers will receive driver source code, rather than usual object code, allowing them to focus on differentiated platforms.
The companies claim this approach reduces 'time-to-market' to under three months, with reduced resource investment. Current development times can be up to 12 months or more.
IBM and Sony are significant players in their respective front- and back-end digital set top technologies. Sony focuses on terrestrial and satellite tuner/demodulators, while IBM provides PowerPC integrated controllers and MPEG-2 subsystems.
The companies selected Wind River's latest Platform CD for designing the reference platform, allowing designers to use Wind River's cross-development tools including the DIAB compiler.
IBM and Sony have developed two platform variants, DVB-Terrestrial and DVB-Satellite. The reference board integrates IBM's set top controller based on the Power PC delivering 350 DMIPS, a DVB compliant demux, MPEG 2 audio and video decoders and a range of DTV peripheral IC's from Sony, including a Cofdm demodulators and a single-package silicon QPSK tuner and demodulator.
A Conversation with Gateway's Ted Waitt
By Michael J. Miller
May 20, 2003
Total posts: 1
Recently, I had the opportunity to spend a few minutes with Ted Waitt, the cofounder, chairman, and CEO of Gateway. We discussed the company's new directions. Here are some highlights.
Michael J. Miller: Gateway is clearly moving into the consumer electronics space. Why now?
Ted Waitt: It's like Back to the Future in a way. We can exercise all our expertise in the direct model and drive traffic to the stores. Everything is going digital now. We can leverage everything else we are doing. Remember the Destination? [an early Gateway computer designed for use with a large-screen display]. Now is the time we can establish a beachhead in consumer electronics.
MJM: What kind of consumer electronics products can we expect from Gateway?
TW: In addition to our plasma TVs—and we will have more plasma TVs—you will see more displays from 13 to 30 inches. We're also working on TVs based on Texas Instrument's DLP technology. It's very likely we'll have digital cameras and digital camcorders. You'll see Gateway-branded home networking products, DVD players, networked DVD players—just about everything you would expect to see in a Best Buy under our brand in one place.
MJM: Are you going get into the business of selling DVDs and CDs like the retail CE [consumer electronics] stores do?
TW: No, but could you see a hard disk from us with digital content you could unlock? That's very possible, but that's down the road.
MJM: In the PC space, what do you think is exciting?
TW: Convertible notebooks are cool. Most of the excitement is in the notebook space. I'm interested in very-small-footprint PCs and machines that fit in a network rack. Gaming machines are very interesting. The Media Center is interesting because it demonstrates convergence activity. Most of what interests consumers is lower cost. We'll deliver high quality PCs at a great price point, but most of what's interesting is connecting the PC world with the CE world.
Hyperthreading is also somewhat interesting. Kids can be playing a game in one room while the PC is streaming video into another room. It's an enabler of convergence.
MJM: Which of these technologies do you personally use?
TW: Ever since Gateway announced the Destination, I've used a large-screen TV with my PC. I like the concept of a media center with a high-resolution screen so you can have Internet content with TV in a window. I use PVRs [personal video recorders]. I don't use the Media Center version, but I like connected PVRs to have whatever show you want. Everyone will have it eventually. I like to put up a slide show of pictures and have a customized playlist of music at the same time. I like having a hard drive in my car for digital music, because I hate carrying CDs around.
And I'm a big wireless connected e-mail user.
MJM: You say you are making a big play toward the SMB [small-to-midsize business], government, and education markets. You've had servers for a while without all that much success. What could make that different?
TW: First, it's the management team—people we have leading it. Scott Weinbrandt led the team at Dell, which was extremely aggressive. Point two is putting dedicated salespeople in place. And the third reason is because of all the consolidation in the industry, customers want another tier-one supplier, someone to keep Dell and HP honest. We're putting all the services in place and all the products in place to go around the server. Our customers have been very happy with the service levels they've gotten; we just haven't gotten enough of them.
MJM: How important are the Gateway stores to your strategy?
TW: We built the stores initially for two reasons: One was to seek PC market share in the mid-to-late nineties. It started as a PC showroom selling build-to-order PCs. At the same time, we knew there would have to be a reason that people would go to a place to see where the PC world and the CE world were coming together. If we didn't have the stores, we couldn't get to market with the CE and convergence products that people wanted to see. We haven't leveraged that well but we will. [A person walking] into a store in the holiday season, [will] see a different environment than he or she has ever seen. Since we can bypass the middleman, we can offer a better deal—a better value—which is what made us successful in the PC business to begin with.
OT Digital radio set to launch in Europe
By Junko Yoshida
EE Times
May 19, 2003 (1:00 p.m. ET)
PARIS — DAB, a decade-old digital radio broadcasting technology based on Europe's Eureka-147 standard, is poised to take off in volume later this year as an ordinary radio embedded in ubiquitous household appliances. The opening results from the entry of one the U.K.'s biggest brand-name appliance manufacturers into the DAB market, according to a key player in the emerging market.
RadioScape, a London-based DAB technology supplier, announced Monday (May 19) that Morphy Richards, the U.K. appliance manufacturer, will roll out a range of DAB radios using a DAB radio module designed by RadioScape.
RadioScape is predicting DAB radio units, which the industry sold only in the "high tens of thousand of units" last year in the U.K. will grow close to a million worldwide in 2003.
RadioScape's DAB module, integrated with analog FM reception capability, consists of an RF front-end, D-to-A converter, Texas Instruments' DSP, flash memory and A-to-D converter, all handpicked by RadioScape in terms of quality and availability in mass volume. The module also comes with RadioScape's core software that runs real-time demodulation and decoding and user interface software.
Morphy Richards' DAB radios will be produced by an unnamed Asian radio manufacturer that will use DAB modules built by Taiwan-based Gyro Signal, one of the first companies to license RadioScape's DAB module design.
By using RadioScape's DAB radio module rather than designing its own DAB radio appliance, Morphy Richards will need only "four months" from the time when they decided to enter the DAB market to actually start shipping DAB radios, said Nigel Oakley, vice president of marketing at RadioScape. Further, "they will have the confidence that their DAB radios will be completed in time, their products will work properly and they will be produced in volume to cope with a huge demand expected later this year," he added.
Known for its software-defined radio technology, RadioScape until last year focused on developing a software-based DAB radio baseband stack and that was ported to a Texas Instruments' DSP. Together with TI, RadioScape also launched a DAB reference design more than a year ago with hopes of propelling DAB into a number of consumer products.
Now, RadioScape is betting the house on the rapidly growing DAB market. Thus, it has gone one step further by designing a DAB module on its own. The start-up believes it "the lowest risk and the fastest possible route" for consumer OEMs to jump into the DAB market.
The RadioScape-designed DAB modules produced by companies such as Gyro Signal could be sold to radio manufacturers at "less than $40" in 10,000 units, according to RadioScape.
Roxio Buys Pressplay, Napster Lives
Associated Press Page 1 of 1
10:30 AM May. 19, 2003 PT
SANTA CLARA, California -- Software maker Roxio said Monday it has acquired for about $40 million the online music service pressplay, a venture jointly owned by Universal Music Group and Sony Music Entertainment.
Roxio, best known for its CD-burning software, owns the Napster brand and is expected to relaunch pressplay under the name that set Internet music file-swapping in motion.
The Santa Clara-based Roxio purchased pressplay for $12.5 million in cash and approximately 3.9 million shares of Roxio common stock, according to a statement from both companies.
Based on Roxio's closing stock price on Friday, the purchase price would be approximately $39.5 million, the companies said. Roxio shares were trading at $7.49 each, up 59 cents, on the Nasdaq Stock Market on Monday.
Roxio bought the Napster brand on the cheap after the company, sued into submission by the music labels, dissolved.
"With our acquisition of Napster we obtained the most powerful brand in the online music space," said Roxio's chairman and CEO, Chris Gorog. "Now, with our acquisition of pressplay, we have the most complete and scaleable legal technology infrastructure to use as a platform to relaunch Napster."
Pressplay President Mike Bebel will become the president of the new Napster company and the service will be launched some time in the current fiscal year, Gorog said.
The new Napster, when it launches, can expect continued competition from Apple's new iTunes Music Store, MusicNet and Listen.com's Rhapsody service. But for brand recognition with online music, the Napster name has a leg up, Gorog said.
"We really like our position," Gorog told The Associated Press Monday. "To begin our life with the biggest brand in the online music space is a very happy place to be."
Do snide comments like this one count?? fred, they are competition and so whether we are in the player or not the info is relevant capice?
Big Music in post-Napster merger deal
Roxio to pay $40 million Sony, Universal for Pressplay
By Steve Gelsi, CBS.MarketWatch.com
Last Update: 4:47 PM ET May 19, 2003
SANTA CLARA, Calif. (CBS.MW) -- Shares of Roxio surged Monday after the software company agreed to buy Pressplay, an online music service jointly owned by Universal and Sony, in a $40 million deal that will resurrect the old Napster brand.
Roxio (ROXI: news, chart, profile), which acquired Napster for $5 million last year following its court-ordered closure, had said it was going to relaunch a legitimate successor under its well-known brand name. However, now it will jump-start that process by selling music offered by Pressplay.
"The new Napster will be unrecognizable from the current Pressplay," said Chris Gorog, CEO of Roxio. "We'll have ease of use and more features and will be a friendly, easier application."
The move allows Roxio to mount a direct challenge to other entrants to the online music market. Earlier this month, Apple Computer (AAPL: news, chart, profile) launched its ITunes service, which sold more than 2 million songs in its first two weeks in business.
Gorog said subscriptions and pay-per-downloads are worthy business models, and Roxio will decide within the next few months which one of them to pursue.
Under the cash-and-stock Pressplay deal, Sony (SNE: news, chart, profile) and Universal, which is part of Vivendi Universal (V: news, chart, profile), each have the right to earn up to $6.25 million based on positive cash flows resulting from the new Napster service.
Shares of Roxio, based in Santa Clara, Calif., rose 17 percent to close at $8.09, even as most U.S. stocks lost ground. Vivendi's stock dropped 5 percent to $16.11. Sony shares fell 13 cents to $24.99.
The terms of the pact give Roxio a legal digital music distribution framework and catalog rights with all five major music labels.
Roxio's software for burning CDs was featured in the launch of Pressplay in 2001 as a monthly subscription service for unlimited access to songs from all five major music companies. Customers pay extra to permanently download songs.
As for Apple, Gorog said he doesn't consider the company a competitor for now, because ITunes operates only on Apple machines, which make up about 3 percent of the market.
Even so, when ITunes becomes available for Windows-based computers, said Gorog, "We have a monster competitive advantage with the biggest brand in the online music business, and it's recognized as a music brand and not a computer brand."
Roxio said it would spend about $20 million to fund the relaunch of Napster by March of next year. "We expect that this new business will result in negative cash flows until the service is widely adopted," Roxio said.
The company will provide a more detailed outlook of the financial impact of this transaction on Wednesday with its quarterly conference call.
Roxio is adding online music sales and distribution to its core business of making the leading software for burning music and data onto compact disks.
The move is probably one of the most significant in the two-year history of Roxio as a publicly traded company.
Roxio first filed to go public on Sept. 26, 2000 with underwriter Morgan Stanley, but it withdrew the $58 million deal the following January as the bear market took hold of Wall Street.
On May 14, 2001 it went public in spinoff off from its parent, Adaptec. Under the deal, Adaptec owners got 0.1646 shares of Roxio per share in the form of a dividend.
Roxio opened at $13 per share and climbed to $14.23 on its kickoff .
Roxio climbed smartly for a while, but shares hit a major bump in the road on June 26, 2002, when its stock fell about 50 percent on an earnings warning. The stock continued losing steam and touched a low of $2.25 last October.
Last year, the stock got a boost when it announced plans to buy the defunct Napster music service. It also hired Napster founder Sean Fanning as a consultant.
The stock is now once again trading over the $7 range for the first time since last summer.
As Roxio continues its push into the music business, Gorog will likely deploy more of his experience in the entertainment business.
Before joining Roxio in September of 2000, Gorog served as a consultant in the entertainment and media industry. From 1995 to 1999, he was president of new business development at Universal Studios.
Gorog has been navigating a careful route for Roxio in the stormy waters of music file-swapping.
On one hand, he defended the rights of consumers to make their own personal CDs from music that they buy, but he speaks out against music-swapping Web sites that offer copyrighted material for free.
Gorog breaks with the industry over experimental CDs that play on your stereo, but won't reproduce on CD burners. Several million of the encrypted discs have been introduced thus far, mostly in Europe.
"We don't think this is a viable solution," he said in a recent interview. "We think it's very antagonistic toward the consumer."
Now Gorog has a chance to show more of what he's been talking about with the plan to relaunch Napster.
While Roxio was forced to forgo the roughly $58 million it would have raised in an IPO, it's managed to become publicly traded and fight its way back from some crushing sell-offs.
Steve Gelsi is a reporter for CBS.MarketWatch.com in New York.
Ride is a little bumpy for in-car PC linkups
By Scott Kirsner, 5/19/2003
We're parked in the garage of a multimillion-dollar home in Swampscott. The engine of the Mercedes CL600 is running. The car doors are open. In the front seat, Andrew Rollert and Alex Huff are once again rebooting the PC they've installed in their client's car, trying to get it talking to the home's wireless network. Rollert is talking to an engineer on his cellphone. In the back seat, I'm starting to get light-headed from the exhaust fumes. This $100,000-plus Mercedes is one of the first cars in the country to be outfitted with a PC capable of connecting with the owner's home wireless network, allowing him to download MP3 music files and Rolodex information from his home computer to his car, or upload e-mails that a passenger has composed on the road. Is being one of the first to see the system in action, I wonder, worth a touch of carbon monoxide poisoning?
The car was outfitted by Rollert's Wellesley company, SaVoyant, Boston Audio Design in Quincy, and Truman Mobile Systems, the Minneapolis company that Huff works for. There's a custom-designed PC in the trunk, and a seven-inch color LCD display mounted on a short post protruding from the center console. Passengers can control the PC using a full-sized wireless keyboard, or by touching the screen. They can watch DVDs, play videogames, or write the next chapter in their Kerouac-inspired road novel.
Rollert, whose company installs and maintains high-end home networks, said a system like the one in the Mercedes would cost between $7,000 and $10,000, adding that he has a waiting list of 10 customers eager to have one installed in their vehicles.
''People spend so much time in their cars,'' he said, ''that they think they should be able to do the same kinds of things that they can do at their desk or with a laptop.''
Back in Swampscott, after several reboots and phone calls to Rollert's office, the car finally realized where it was and started talking to the home's wireless network. Inside the client's house, we downloaded an MP3, and when we returned to the car a few minutes later, we found it had been automatically transferred to the car. (Rollert said his client, who runs a food wholesaling business, prefers to remain anonymous.)
Unfortunately, when we tried to play the music on the drive back to Boston, the sound was fuzzy. The system was using a small battery-powered device called an iRock to send the music from the PC in the trunk to the radio, via a short-range FM transmission. The song sounded like it was being broadcast by a Top 40 station in Paraguay. (Rollert said the PC's audio would eventually be hard-wired into the car's stereo system, solving that problem.)
When I went along for a test ride last week, the car was only capable of tuning in to WiFi wireless networks, which meant we only had Internet access in the garage, or parked near someplace with an open wireless network. We found one in front of Cheers on Beacon Street, and used it to pull up some traffic information while we were stopped in front of the bar. Rollert says he may eventually add a wireless card that can communicate with Sprint's PCS data network, which would allow the car to stay connected to the Internet as it is moving. Passengers could then check movie times, manage their brokerage accounts, or participate in an exchange of instant messages.
Also in the works is a fingerprint reader, which would authenticate the driver before starting up the computer.
''You don't want the valet parking guy surfing the Web or checking out your files,'' Rollert explained.
Budget battles: The videogame
If you've ever entertained the idea of running for public office, you'll want to try your hand at the just-released online game ''MassBalance,'' developed by the Game Development Club at the Worcester Polytechnic Institute. The project was initiated earlier this year by state Senator Richard T. Moore, who wanted to give citizens of the Commonwealth a hands-on way to understand the trade-offs involved in trying to balance the budget. The student-run WPI Game Development Club stepped forward, agreeing to design the game for free. (The students, led by Michael Gesner and Darius Kazemi, will receive a few course credits for their work.)
Players encounter a spreadsheet-like interface that asks them to figure out how much they want to fund various program areas, from education to transportation to economic development. You can choose to raise taxes or cut spending -- or do a bit of both. But every action has a repercussion. Raise taxes, and people blame you for hurting business activity and prolonging the recession. Cut funding for public health, and the state could be in bad shape to handle a SARS-like epidemic.
You can play the game at http://gdc.wpi.edu/massbalance, and find out more about the Game Development Club at gdc.wpi.edu.
Dr. Start-up and Mr. Shutdown
Update the classic Robert Louis Stevenson novel about a man with two personalities for the post-dotcom era, and the main character would resemble Edward W. James of Framingham. You could title it ''The Strange Case of Dr. Start-up and Mr. Shutdown.''
James is a consultant who works as a temporary executive for healthcare start-ups -- at the same time as he is working on behalf of venture capitalists to shut down high-tech companies.
On the positive side, James often conducts due diligence for investors interested in funding companies that make healthcare products, like infusion devices. He has been involved in successful roll-ups of companies in medical imaging, billing, and ambulance services. One roll-up, AdvaCare, went public in 1992. He's frequently involved in corporate restructurings that put a company back on the right track.
But over the past few years, James has also been doing a lot of what he calls ''organized shutdowns,'' when a company is closed down and sold for parts. ''I don't do bankruptcies and I don't do big companies,'' he says. James is paid a day rate for his work, and if there's more money left in the bank than expected at the end of the process, he sometimes gets a cut of that.
James is understandably reluctant to talk about his shutdown work. ''A lot of times, investors are embarrassed, and they don't want to be reminded of their bad adventures,'' he says. His job often involves laying off employees -- and making sure that they don't walk off with the company's computers on their way out. Then he's involved in selling the company's assets, including the software it may have developed.
James has worked on five shutdowns in Digital's old Maynard Mill complex, including that of Digital Goods (formerly SoftLock), a small public company that helped customers securely distribute e-books and other electronic content. One of his current projects is serving as interim CEO and CFO of Network-1 Security Solutions in Waltham, which was delisted from the Nasdaq Small Cap Market in March. The company is being sued by its former CEO and CFO, has lost money each year since going public in 1998, and is now approaching closure.
I asked James whether he was seeing a decline in the number of new shutdown projects he is asked to handle. ''I think there's a lot more to occur,'' he says. ''I'm still picking and choosing what I'm working on.'' James says he has worked every weekend and evening since mid-March, and in that time has turned down a year's worth of new projects. But he adds: ''I do believe we will come out of this, and the Internet will once again drive the investment community.''
Scott Kirsner is a contributing editor at Wired and Fast Company magazines. He can be reached at kirsner@att.net.
Ride is a little bumpy for in-car PC linkups
By Scott Kirsner, 5/19/2003
e're parked in the garage of a multimillion-dollar home in Swampscott. The engine of the Mercedes CL600 is running. The car doors are open. In the front seat, Andrew Rollert and Alex Huff are once again rebooting the PC they've installed in their client's car, trying to get it talking to the home's wireless network. Rollert is talking to an engineer on his cellphone. In the back seat, I'm starting to get light-headed from the exhaust fumes. This $100,000-plus Mercedes is one of the first cars in the country to be outfitted with a PC capable of connecting with the owner's home wireless network, allowing him to download MP3 music files and Rolodex information from his home computer to his car, or upload e-mails that a passenger has composed on the road. Is being one of the first to see the system in action, I wonder, worth a touch of carbon monoxide poisoning?
The car was outfitted by Rollert's Wellesley company, SaVoyant, Boston Audio Design in Quincy, and Truman Mobile Systems, the Minneapolis company that Huff works for. There's a custom-designed PC in the trunk, and a seven-inch color LCD display mounted on a short post protruding from the center console. Passengers can control the PC using a full-sized wireless keyboard, or by touching the screen. They can watch DVDs, play videogames, or write the next chapter in their Kerouac-inspired road novel.
Rollert, whose company installs and maintains high-end home networks, said a system like the one in the Mercedes would cost between $7,000 and $10,000, adding that he has a waiting list of 10 customers eager to have one installed in their vehicles.
''People spend so much time in their cars,'' he said, ''that they think they should be able to do the same kinds of things that they can do at their desk or with a laptop.''
Back in Swampscott, after several reboots and phone calls to Rollert's office, the car finally realized where it was and started talking to the home's wireless network. Inside the client's house, we downloaded an MP3, and when we returned to the car a few minutes later, we found it had been automatically transferred to the car. (Rollert said his client, who runs a food wholesaling business, prefers to remain anonymous.)
Unfortunately, when we tried to play the music on the drive back to Boston, the sound was fuzzy. The system was using a small battery-powered device called an iRock to send the music from the PC in the trunk to the radio, via a short-range FM transmission. The song sounded like it was being broadcast by a Top 40 station in Paraguay. (Rollert said the PC's audio would eventually be hard-wired into the car's stereo system, solving that problem.)
When I went along for a test ride last week, the car was only capable of tuning in to WiFi wireless networks, which meant we only had Internet access in the garage, or parked near someplace with an open wireless network. We found one in front of Cheers on Beacon Street, and used it to pull up some traffic information while we were stopped in front of the bar. Rollert says he may eventually add a wireless card that can communicate with Sprint's PCS data network, which would allow the car to stay connected to the Internet as it is moving. Passengers could then check movie times, manage their brokerage accounts, or participate in an exchange of instant messages.
Also in the works is a fingerprint reader, which would authenticate the driver before starting up the computer.
''You don't want the valet parking guy surfing the Web or checking out your files,'' Rollert explained.
Budget battles: The videogame
If you've ever entertained the idea of running for public office, you'll want to try your hand at the just-released online game ''MassBalance,'' developed by the Game Development Club at the Worcester Polytechnic Institute. The project was initiated earlier this year by state Senator Richard T. Moore, who wanted to give citizens of the Commonwealth a hands-on way to understand the trade-offs involved in trying to balance the budget. The student-run WPI Game Development Club stepped forward, agreeing to design the game for free. (The students, led by Michael Gesner and Darius Kazemi, will receive a few course credits for their work.)
Players encounter a spreadsheet-like interface that asks them to figure out how much they want to fund various program areas, from education to transportation to economic development. You can choose to raise taxes or cut spending -- or do a bit of both. But every action has a repercussion. Raise taxes, and people blame you for hurting business activity and prolonging the recession. Cut funding for public health, and the state could be in bad shape to handle a SARS-like epidemic.
You can play the game at http://gdc.wpi.edu/massbalance, and find out more about the Game Development Club at gdc.wpi.edu.
Dr. Start-up and Mr. Shutdown
Update the classic Robert Louis Stevenson novel about a man with two personalities for the post-dotcom era, and the main character would resemble Edward W. James of Framingham. You could title it ''The Strange Case of Dr. Start-up and Mr. Shutdown.''
James is a consultant who works as a temporary executive for healthcare start-ups -- at the same time as he is working on behalf of venture capitalists to shut down high-tech companies.
On the positive side, James often conducts due diligence for investors interested in funding companies that make healthcare products, like infusion devices. He has been involved in successful roll-ups of companies in medical imaging, billing, and ambulance services. One roll-up, AdvaCare, went public in 1992. He's frequently involved in corporate restructurings that put a company back on the right track.
But over the past few years, James has also been doing a lot of what he calls ''organized shutdowns,'' when a company is closed down and sold for parts. ''I don't do bankruptcies and I don't do big companies,'' he says. James is paid a day rate for his work, and if there's more money left in the bank than expected at the end of the process, he sometimes gets a cut of that.
James is understandably reluctant to talk about his shutdown work. ''A lot of times, investors are embarrassed, and they don't want to be reminded of their bad adventures,'' he says. His job often involves laying off employees -- and making sure that they don't walk off with the company's computers on their way out. Then he's involved in selling the company's assets, including the software it may have developed.
James has worked on five shutdowns in Digital's old Maynard Mill complex, including that of Digital Goods (formerly SoftLock), a small public company that helped customers securely distribute e-books and other electronic content. One of his current projects is serving as interim CEO and CFO of Network-1 Security Solutions in Waltham, which was delisted from the Nasdaq Small Cap Market in March. The company is being sued by its former CEO and CFO, has lost money each year since going public in 1998, and is now approaching closure.
I asked James whether he was seeing a decline in the number of new shutdown projects he is asked to handle. ''I think there's a lot more to occur,'' he says. ''I'm still picking and choosing what I'm working on.'' James says he has worked every weekend and evening since mid-March, and in that time has turned down a year's worth of new projects. But he adds: ''I do believe we will come out of this, and the Internet will once again drive the investment community.''
Scott Kirsner is a contributing editor at Wired and Fast Company magazines. He can be reached at kirsner@att.net.
moxa1, there is a different perspective "in charge" on this board now. Pessimism reigns and is wholly endorsed by board management. Wallowing in remorse and bemoaning every lost opportunity is the order of the day now. The fact is all this speculation about what happened to RPs positive statements are just that....speculation. They could all have been BS but that seems to be stretching it a bit as well. As berge has stated, many things conspired to make the market less amenable to our business model and while i think the poway group has painted many rosy scenarios, much of what has happened to this small company was not self-inflicted IMO. The manufacture and sale of our own players has not made the company profitable yet but we are addressing several other markets which stand to bring in reasonable revenues and it seems that what is required now is a little more patience. Not so much with EDIG but with the economy to recover so that enthusiastic markets exist to embrace our products.
We have seen the first successful online music service which only addresses 5% or less of the market. If today's rumors are true we are likely to see at least one more appear wielding the powerful brand of Napster and likely building on the success of the Apple initiative. If this does not finally drive mass market adoption of mp3 players I suspect nothing will anytime soon. The Fujitsu-ten product seems to be a winner and time will tell what kind of revenues we will reap from this deal. IFE seems a little more speculative in light of the health of the airlines but this too could easily pan out given a reasonable economic recovery. As many have stated before this remains a high risk, speculative investment. There are several posting here who only see the risk (indeed even regularly claim fraud) and have no concept of the potential of some of the markets EDIG is capable of addressing. Time certainly will sort out among all these possibilities.
Music service may take familiar name: Napster
UNIVERSAL, SONY REPORTEDLY NEAR DEAL TO SELL PRESSPLAY TO SANTA CLARA'S ROXIO
Posted on Sat, May. 17, 2003
By Jon Healey and Joseph Menn
Los Angeles Times
The online music service launched by two of the world's largest record companies to combat Internet piracy may soon have a new and familiar name: Napster.
Sources said Friday that Universal Music Group and Sony Music Entertainment were nearing a deal to sell pressplay, their 3-year-old online music venture, to the Santa Clara software company that bought Napster's name and technology at a bankruptcy auction last year.
Roxio is expected to dump the Pressplay brand and rename it after the pioneering online song-sharing service, which enabled tens of millions of music fans to steal billions of songs until it was shut down by a federal judge. Universal, Sony and other record labels continue to blame Napster and its offspring for a prolonged slump in CD sales.
The deal, which could be announced as early as Monday, would have the ironic outcome of teaming Universal and Sony with the poster child for the pirated music revolution: Napster founder Shawn Fanning, whom Roxio hired as a part-time adviser in February.
It also underscores how poorly the labels have fared in their efforts to produce an attractive yet legal music service.
And it would enable the record companies to trade a money-losing subscription service for an undisclosed stake in Roxio, the leading manufacturer of software for recording CDs. The deal would give Roxio access to the major labels' songs, as well as a proven and legal means for distribution.
The tentative deal has come together in the last two weeks, sources said, in the wake of two watershed events.
One was the introduction by Apple Computer of an industry-sanctioned system for selling songs, which was seen by many as a dramatic improvement over the major labels' efforts. Apple's iTunes Music Store sold more than 2 million tracks in its first two weeks.
The other was a ruling by a federal judge in Los Angeles that two file-swapping networks that gained fame after Napster's demise were not illegal and could not be shut down by the labels.
The initial value of Roxio's offer is about $30 million and consists mainly of stock, sources say. Executives at Universal, Sony, Roxio and pressplay declined to comment.
After Sony and Universal formed pressplay and the other three major record companies launched the MusicNet service with RealNetworks, competitors accused the labels of trying to corner the market for music on the Net. Now Universal and Sony are looking to cut their substantial losses on pressplay, and MusicNet is on the verge of being dropped by one of its two distributors.
Pressplay hasn't disclosed how many subscribers it has, but analysts estimate it's fewer than 50,000.
Pressplay, which costs at least $9.95 a month, lets consumers listen to or download an unlimited number of songs from a huge online library. But it comes with piracy-deterring restrictions that make it less attractive than the free file-sharing networks.
Napster pioneered the concept of creating an online network that let people find and copy songs from one another's computers. The company's free service eventually attracted 40 million users before record industry lawsuits forced its shutdown in July 2001.
Roxio has said little about its intentions for its new version of Napster. Unlike the initial version, it is designed to pay rights holders and allow them to limit how songs can be copied, transmitted or stored.
Disney to Begin Renting 'Self-Destructing' DVDs
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LOS ANGELES (Reuters) - This disc will self-destruct in 48 hours. That is the warning The Walt Disney Co. (NYSE:DIS - news) will issue this August when it begins to "rent" DVDs that after two days become unplayable and do not have to be returned.
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Disney home video unit Buena Vista Home Entertainment will launch a pilot movie "rental" program in August that uses the self-destruction technology, the company said on Friday.
The discs stop working when a process similar to rusting makes them unreadable. The discs start off red, but when they are taken out of the package, exposure to oxygen turns the coating black and makes it impenetrable by a DVD laser.
Buena Vista hopes the technology will let it crack a wider rental market, since it can sell the DVDs in stores or almost anywhere without setting up a system to get the discs back.
The discs work perfectly for the two-day viewing window, said Flexplay Technologies, Inc., the private company which developed the technology using material from General Electric Co.(NYSE:GE - news)
The technology cannot be hacked by programmers who would want to view the disc longer because the mechanism which closes the viewing window is chemical and has nothing to do with computer technology.
However, the disc can be copied within 48 hours, since it works like any other DVD during that window.
Buena Vista did not disclose pricing plans but said the discs, dubbed EZ-D, would be available in August in select markets with recent releases including "The Recruit," "The Hot Chick," and "Signs."
Goes with this
By Nicole Manktelow
May 17 2003
Icon
It's a concept that's moving in reverse to most mobile phone designs. While manufacturers build cameras, music players, PDAs and games into their handsets, the brave are breaking the combo phone apart - into mix-and-match modules.
Instead of one phone that can do it all, they're considering a simpler, streamlined handset just for voice calls, and a new device called a Personal Mobile Gateway (PMG) - a central unit that communicates via short-range wireless networking technologies such as Bluetooth and Wi-Fi.
Want to take pictures? The PMG will connect to a matching digital camera. Want to check email? Tiny messaging terminals with keyboards have been envisioned for this task, as well as for tapping out an SMS. And while these are things you can do on mobiles now, there's room for all manner of other accessories planned to connect to the PMG, such as a wristwatch, headset, dedicated web browser terminal, games console, personal information manager and MP3 player. As part of the concept, all of them are separate, fashionable pieces, ready to wear or slipped into a pocket - not a wire in sight.
Until recently, the concept of the PMG has been somewhat obscure. But mobile makers are starting to take a closer look, with designs moving into prototypes and beyond.
Software maker IXI Mobile is pushing the idea. It provides the software that allows devices from various manufacturers to communicate together via a PMG.
These devices require Bluetooth or Wi-Fi connectivity and IXI's specialty PMG software.
Samsung is the first of the mobile makers to test the water with a product based on the PMG. Another manufacturer, Motorola has also expressed an interest in going modular, although reports of its early designs suggest it will utilise connectivity only with other devices in the brand.
The Samsung SGH-X410 was revealed this year at CeBit technology expo in Germany. Although it is expected to reach commercialisation in the second half of the year, the phone is a long way from the retail counters in Australia, according to a spokesman for the company. "The PMG is not even on the product road map here for at least seven to eight months," he says.
The SGH-X410 is a fully fledged tri-band GSM/GPRS handset and the first phone to incorporate the IXI software, allowing it to connect to other PMG-ready devices.
The list of suitable devices is steadily growing. There's a Seiko wristwatch, a digital camera from Infohand and a mobile messaging terminal from Lite-On, which is essentially a small keyboard and touch-screen combination. A games console called the GP23 from Game Park combines a 3.5 inch colour TFT LCD screen between the play buttons. It also includes an MP3 player and viewer for text, image and multimedia.
All of these devices will be able to talk to each other when the user decides to wear them all at once. Exactly what they will say and which applications will benefit from this wearable connectivity is not yet clear. However, the same can be said of other devices being initiated into the wireless world.
Is the pen, for example, any mightier for having Bluetooth abilities? Sony Ericsson and Nokia have both designed Bluetooth-enabled pens, which used a specially designed notepaper to help electronically log handwritten notes. No surprise then that another Bluetooth pen, this time by Taiwanese manufacturer Human Interface Technologies, adds the ability to link up with a PMG.
The PMG itself may either be embedded into a phone handset, or bought as a stand-alone hub. It contains a server and router and will potentially be able to connect to other wireless devices, too, including office equipment, laptops and printers.
IXI Mobile describes the ideal PMG gadgets as "sleek devices", designed for a specific purpose. It's hoped that their single-mindedness will pay off, providing lower cost accessories targeted at the youthful and fashionably minded.
The strategy could bring in a new culture of mobile consumption. Instead of buying an expensive Swiss-Army-knife-type phone, customers could, instead, start off with the PMG and voice-call phone, adding to the rest of their mobile gadget collection over time.
nicole@auscape.net.au
Can Ogg Vorbis change digital audio?
Friday May 16, 2003 - [ 08:08 AM GMT ]
Topic - Free Software
- by Anne Zieger -
When consumers refer to digital music, they usually mean the MP3 format. One open source organization, however, would like to change the terms of the digital audio game. The Xiph.Org Foundation, a non-profit dedicated to creating open source multimedia software, has created an open source audio encoder/decoder named Ogg Vorbis . Vorbis, part of a family of open source multimedia apps, is trying to gain ground as a free alternative to MP3.
To date, roughly 100 million devices play digital audio encoded using MP3, the MPEG-1/MPEG-2 Layer 3 standard developed by the International Organization for Standardization. More than one billion MP3 files are downloaded from the Internet each month, according to MP3 patent manager Thomson, a large French-based consumer electronics company.
The downside to this, some say, is that MP3 is controlled by Thomson, whose licensing fees arguably put MP3 encoding out of the reach of some independent developers and broadcasters.
Xiph technologies –- including the Ogg bitstream format specification and the Vorbis RTP packet spec -– are currently under standards consideration by the Internet Engineering Task Force.
Perhaps more importantly, gaming companies, hardware manufacturers, Web publishers, streaming audio developers and various other independents interested in digital audio are incorporating Vorbis into their products -- far from enough to unseat the MP3 hegemony but enough to make some ripples in the software world.
"We may never overcome the MP3 mindshare, but our goal wasn't to build a super-strong brand," says Jack Moffitt, executive director of the Xiph.Org Foundation and developer of open source streaming media system Icecast . "It was to make multimedia technology free in every sense of the word -- to build a stable and excellent platform for future development."
At the high end of the fee scale, MP3 licensees can pay as much as $5 per device to use the MP3 encoder; the decoder fee ranges from a flat $50K for traditional MP3 to $90K for the next-gen MP3PRO. Thomson is seeking 2 to 3 percent of revenues in fees from companies that broadcast MP3s as well.
Xiph.Org, meanwhile, which distributes Vorbis for free under the BSD license, is attracting a growing community of developers and manufacturers unwilling to pay the price for MP3 technology.
Licensing Ogg Vorbis was a "no-brainer," says Joe Born, chairman and CTO of Chicago-based Digital Innovations LLC, which licensed Ogg Vorbis for use with its Neuros audio device. "Much of the innovation in digital audio has come from the open source community," Born says. "We wanted to open up our player and encourage that kind of development."
Xiph.Org is an umbrella organization for a group of open source multimedia development projects. Other projects operated by Xiph.Org include Ogg Theora , a video code developed in cooperation with On2 Technologies ; Free Lossless Audio Codec (FLAC); and Speex , a low bitrate codec designed for speech compression. Vorbis, however, is probably the highest-profile aspect of the project.
To speed adoption, Xiph hopes to make things as easy as possible for users. Rather than create its own player, Xiph.Org offers plug-ins which allow well-known players such as Winamp and Linux-based xmms to play Ogg-formatted files. The idea, Moffitt says, is to make things simpler for consumers by creating a file format that can run on all standard players.
"Anyone on a Mac who tries to play WMA is out of luck," Moffitt points out. "They'd have to figure out where to find the media player for Mac, install that, and hope that the MIME types get registered correctly. QuickTime does not play WMA or WMV and Windows Media Player won't play QuickTime."
So far, Ogg Vorbis's biggest supporters have been in game development space, Moffitt says. A growing list of game developers have chosen to license Ogg Vorbis rather than pay the $2,500 to $3,750 per title Thomson charges game developers.
Thomson execs, for their part, say they have no interest in squeezing out of the marketplace free software from Xiph.Org or anyone else. In fact, Henri Linde, vice president for new business with Thomson's patent and licensing unit, dismisses Ogg Vorbis as a market force. "It's not on our radar," he says.
Thomson engineers have tested Ogg Vorbis data compression and quality and concluded that it performs more or less on the same level as Real Networks and Microsoft technology. Without offering a dramatic improvement over these other technologies, Ogg is unlikely to attract mass consumer adoption, Linde contends. "You'd want to see instead of compressing data 10X, compressing 100X or 200X the original data," Linde says. "That's the only area where I can see an order-of-magnitude improvement. I don't think there's much room for improved quality."
It's Microsoft, whose Windows Media Audio standard competes with MP3, that gives Thomson pause, Linde says. After all, the Windows Media Player is included with every copy of Windows, putting it on virtually every PC in the world and giving the WMA format a shot at unseating MP3.
"We've seen in multiple instances the attempt to make their solution the standard solution," Linde says. "I think as soon as the big company in Redmond is interested in a market, everybody should take that seriously."
Though Thomson essentially owns the audio playback niche at the moment, Microsoft has also shown an increasingly strong interest in the device market. Most recently, Microsoft announced that it would hardware giant Creative Labs would be releasing a personal media player running MS's "Media2Go" software platform. Media2Go, built on top of Windows CE .NET, can run video and audio files, as well as displaying still images.
Devices are also the next frontier Xiph.Org wants to crack. "We want Vorbis in hardware, so that people can take their music with them," Moffitt says. "This has been a big weakness for us for some time."
Ultimately, despite its being free, open source software, Ogg Vorbis faces major obstacles in gaining mainstream acceptance. While Ogg files may be comparatively simple to use, they don't play automatically in every player, and in the consumer business, adding even a single extra step can be fatal.
After all, while Xiph has signed a deal with Real Networks under which the Real player automatically downloads an Ogg audio reader if needed, don't expect MS to do that kind of deal anytime soon. And Moffitt hasn't got any unrealistic expectations there: "Microsoft is not going to give us the time of day, much less sign a deal to make the user experience for Ogg [files] better."
Anne Zieger is a technology and business writer whose work has appeared in Information Week, Byte, Business Week, Forbes and CNNfn.
Hollywood Vs. Copycats, Round 2
Penelope Patsuris, 05.15.03, 3:11 PM ET
NEW YORK - Do consumers have the right to make digital copies of the DVDs they buy, or is that just a thinly veiled argument that promotes piracy?
This afternoon a federal judge in San Francisco is expected to signal whether a DVD-copying software company gets to plead its case in court. Like the recent Grokster decision, this case will have a major impact on the evolution of modern copyright law.
Seven Hollywood movie studios have asked the court to dismiss a suit brought by the St. Louis-based company, 321 Studios, which seeks a ruling that its DVD-copying software does not violate the federal Digital Millennium Copyright Act (DMCA). Today the judge will decide whether to hear the case and give the Missouri startup a chance to prove to a jury that it does not violate the law.
The software outfit filed its suit in April 2002 in a preemptive strike against the studios, including AOL Time Warner (nyse: AOL - news - people ), Disney (nyse: DIS - news - people ), Sony (nyse: SNE - news - people ), Metro-Goldwyn-Mayer (nyse: MGM - news - people ) and Vivendi Universal's (nyse: V - news - people ) Universal Studios. 321 Studios anticipated that Hollywood's heavyweights would eventually take action against it, so the upstart decided to strike the first legal blow.
The latest version of 321's software copies a DVD in about an hour, according to founder Robert Moore, who says his product is mainly used by people to make backups of DVDs they already own. Hollywood is dubious about that claim. Altogether the two versions of the software, which sell for between $70 and $100, have sold 750,000 copies. They can be found at retailers like Amazon.com (nasdaq: AMZN - news - people ), Best Buy (nyse: BBY - news - people ), Office Depot (nyse: ODP - news - people ) and the Wal-Mart (nyse: WMT - news - people ) unit Sam's Club.
"We have hundreds of testimonials from people with children who are on their third copy of Shrek, or have a collector's DVD that's out of print and irreplaceable," says Moore. "This is about protecting what you buy."
But what is at issue before the court is not whether 321's software is used to copy or pirate films. The judge is considering the issue of whether the software violates the law's stipulation against circumventing the electronic locks that manufacturers now place on all DVDs.
The April 25 Grokster decision by a U.S. District Court judge in Los Angeles held that file-sharing services Grokster and Morpheus are not breaking copyright law by simply making software that allows people to share pirated audio and video materials. The ruling surprised both sides when it drew an analogy between the file-sharing software and the Supreme Court's 1984 Betamax ruling, which found that VCRs were legal even though they could be used for copyright infringement.
The Grokster case does not directly parallel the 321 Studios case--the file-sharing software makers were accused of abetting copyright infringement, while 321 is being accused only of breaking copyright encryption code. Still, the Grokster ruling does not bode well for the film studios. Not coincidentally, the same attorneys who fought on behalf of Grokster against the music industry are now working for 321 Studios.
"The studios haven't claimed copyright infringement in this case because they know that they'd lose," says 321 Studios attorney Michael Page. "The studio has never presented any evidence that people have misused our product."
Irrelevant, say the studios. "The law says that I have the right to lock up my intellectual property and you don't have the right to break that lock," says Motion Picture Association of America attorney Russell Frackman. "If you break into my house, it doesn't matter if you take anything."
All of these legal arguments boil down to the issue of "fair use" copyright law, which gives consumers the right to make copies of media that they have purchased as long as they are employed for personal use. Since the DMCA law prohibits breaking any copyright encryption, fair use advocates argue, the 1998 act that the studios have based their case upon prohibits a consumer's right to make personal copies of legally purchased media.
Jonathan Zittrain, co-director of the Berkman Center for Internet and Society at Harvard Law School, fears the long-term implications of the 321 Studios case, should it be decided in favor of the film studios. Zittrain says that would give corporations too much control over how and where people use media.
"We won't really know whether the DMCA destroys all fair use for another 15 to 20 years, when all the video stores and libraries have disappeared," says Zittrain. "But at that point it will be too late to challenge the law."
Agreed SSI.eom
Yeah....whatever.eom
OT Thinking of buying a Segway? Rent one
SEATTLE (Reuters) — Want to ride a Segway Human Transporter, the new self-balancing electric scooter that went on sale in March, but can't bring yourself to shell out $5,000?
Then you can rent on — if you go to Spokane, Washington state's second-largest city, and meet with Larry Lambeth, who started renting the scooter to the public last Saturday.
"The response has been incredible," said Lambeth, a long-time entrepreneur who bought 10 Segway Human Transporters with a partner and started his company, Fun Transport, which aims to rent them out to people looking for easy, cheap transportation.
Lambeth is hoping that he can take his business nationwide with help from Dean Kamen, the scooter's inventor, but so far Lambeth said he has no deal with Segway, which Kamen founded.
Lambeth, a longtime entrepreneur, is also betting that the scooter won't be banned from Spokane's sidewalks, as it is in San Francisco.
Kamen envisioned Segway as a transportation device that could eliminate the need to use gas-guzzling automobiles for short trips and an alternative to bikes, inline skates and skateboards.
The Segway carries one user standing on a small platform between two side-by-side wheels. Leaning slightly forward moves the scooter forward, leaning back reverses course and turns are made by twisting the handle.
Others are also jumping onto the rental idea, with entrepreneurs in Seattle and Vancouver starting Segway rental businesses.
Segway Human Transporters are available only through Amazon.com Inc.'s online store, and buyers are required to take a training course from Segway before they start riding on the machine. Amazon hasn't disclosed how many Segways have been ordered or sold, but said it was among the top-selling items on its Web site.
Rentals cost as much as $20 for each 30-minute increment, for up to 90 minutes "so that users will come back before the battery runs out," Lambeth said, adding that users are asked to sign waive any liability claims if they are in an accident.
Users can also pay $5 for a test drive, or "pre-glide" as Lambeth calls it.
Users will also get a two-way radio for their spin on the Segway to call for help if they don't have a cell phone.
And forget about renting one of the expensive machines and scooting off with Larry Lambeth's investment.
"We put GPS (global positioning satellite units on them so we could track their location," Lambeth said, "but its hidden within the machine so don't bother looking for it."
Posted by: Cassandra
In reply to: chwdrhed who wrote msg# 35625
Date:5/15/2003 1:43:22 PM
Post #of 35644
chwdrhed: Regarding sleep, I would think that holding EDIG stock as a dominant part of an investment portfolio would be enough to keep people up at night.
~Cassandra
This was on topic and worthy of preservation though eh chwdrhed??
Music downloads attract older audience
15 May 2003
- by Veronique De Freitas
(good cuz they're the ones with the cash to buy an Odyssey..;))
Almost a quarter of online music fans are over 45 years old, a new European survey has found.
According to digital music site MP3.com, 24 per cent of people downloading music are aged over 45, just one per cent less than the biggest download group of 25 to 34 year olds.
The survey also found that 16 per cent of those downloading music from the internet are aged between 18 to 24, while the 35 to 44 age group represents 23 per cent of the total digital music download audience.
Over 45s in France download the most (32 per cent), followed by Germany (22 per cent) and the UK (20 per cent). MP3.com's survey quizzed 3,500 users in UK, France and Germany.
Leanne Sharman, vice president of sales and marketing at MP3.com, said: "These are staggering statistics and contradict the traditional thinking that teenagers are the largest consumers of music on the internet."
Related items:
www.mp3.com
OT Nokia N-Gage 'game deck' expands game portfolio
14/05/2003 Editor: Leigh Phillips
Nokia has announced new game titles for the Nokia N-Gage game deck at the annual E3 (Electronic Entertainment Expo) in Los Angeles, California. The N-Gage is a mobile game deck device that creates a new market for time, place and context sensitive game genres – it is more a game deck with mobile telephony capability than a mobile phone with advanced gaming capability. Built for hard-core gamers, the Nokia N-Gage allows for online mobile multi-player game play. In addition to gaming, the handset also features a digital music player (MP3/AAC), stereo FM radio, as well as a tri-band GSM 900/1800/1900 mobile phone.
Several popular launch titles will be available for the N-Gage. Tomb Raider Starring Lara Croft from Eidos has been extended to include such mobile gaming services as advanced wirelessly networked gaming as well as the ability for players to direct, edit and share their own cinematic gameplay sequences over the mobile network. Tom Clancy's Splinter Cell from Gameloft allows two players to join together in co-operative mode to solve special situations. Other titles from Gameloft include Tom Clancy's Ghost Recon, Rayman 3 and Marcel Desailly Pro Soccer.
Nokia is also acting as a game publisher to create branded Nokia N-Gage game titles as part of the evolving games portfolio. Pathway to Glory, an online warfare community and original Nokia title, is due to be released in spring 2004.
N-Gage game deck devices and games (sold separately on game cards using the MultiMediaCard standard) will be available to consumers in volumes across five continents in early October 2003. With roughly 20 game titles available for the holiday shopping season, hot new titles will be added on a regular basis. N-Gage game deck handsets and game titles will be available in major retail outlets, game-specific and video game retail outlets, as well as in regular mobile phone delivery channels in all major markets.
The handset deck features a colour display with backlight, and eight-way direction controller (called the 'Rocker') and an ergonomic design optimised for mobile game play. Games for the Nokia N-Gage game deck, featuring advanced graphics and enhanced sounds, will be sold separately on game cards.
Apple doubles online music success
Apple boss Steve Jobs gambles on online music success
Apple's new iTunes online music store has continued its run-away success, with more than two million songs downloaded within its first 16 days.
The online store has more than 200,000 songs for sale, costing 99 cents each.
Worries in the record industry that customers would cherry-pick hit songs have not come true, with more than half of all songs purchased as part of full album downloads.
However, there are indications of first cracks in the revenue model. Some Macintosh users have reportedly begun to circumvent Apple's copy-protection software and began to swap songs online - without paying.
US, Macintosh only - for now
So far the service is accessible to less than 5% of the world's computer users, those owning an Apple Macintosh and living in the United States
A Windows version of iTunes is planned for later this year, and an overseas expansion is on the cards as well.
The iTunes web site allows customers to listen to brief snippets of songs before deciding whether to buy them.
By clicking a button the music is downloaded to their computer and can then be "burned" on CDs, copied to up to three other Macintoshs, or transferred to digital music players like Apple's popular iPod.
Apple's online music store is the first of its kind that shows any clear commercial success.
Most record companies have tried in some shape or another, but failed to attract customers in large numbers.
Getting music online was popularised by file-swapping service Napster, which is now-defunct.
It allowed Napster users to swap songs with each other, but without paying any royalties to artists or record companies.
Napster was taken to court and shut down, because its service was based on a central registry of available files held on Napster's computers.
Other file-swapping services like Kazaa and Morpheus use different decentralised technologies that allows users to track down and download music, and have so far escaped any legal sanctions.
But analysts and music executives now report the emergence of web sites and software that enables Macintosh users to make unauthorised copies of songs downloaded from iTunes.
Industry executives interviewed by Reuters news agency say that so far Apple's success outweighs the services problems, although one was quoted as saying that "no solution is bullet-proof".
Hollywood Execs Fight DVD Duplication
Hollywood Executives Fight Software That Allows Users to Copy DVD Movies at Home
The Associated Press
WASHINGTON May 14 —
Brian Martin, a computer consultant in Maryland, is careful when he handles the plastic discs in his DVD library of more than 200 movies. But accidents and scratches still happen.
"The worst thing is, one little scratch is enough to make the movie skip foward a chapter," says Martin, who estimates his collection at more than $3,000. "That's become really annoying with a few of mine."
An increasingly popular class of software lets consumers make duplicate DVDs as backups by copying movies onto inexpensive blank discs using their home computers. With two mouseclicks, one such package creates a near-perfect copy of a two-hour feature in as little as 20 minutes.
But movie buffs who want to make backups of their treasured DVD libraries are running into a formidable enemy: Hollywood, where studio executives worried about convenient, widespread movie piracy are about as nervous as Abbott and Costello in the mummy's tomb.
Painfully aware of technology's impact on the music industry, movie-makers are headed to court Thursday to persuade U.S. District Judge Susan Illston in San Francisco to declare the distribution of such software illegal under the 1998 Digital Millenium Copyright Act.
The legal battle, which focuses on software products sold by 321 Studios Inc. of Chesterfield, Mo., is emerging as one of the most significant technology debates in years. Congress, which once appeared inclined to intervene, is sitting out until the courtroom fight gets resolved.
The powerful Motion Picture Association of America argues that this type of software circumvents the anti-copying digital "locks" that studios employ on DVDs, which would be illegal under the 1998 copyright law. There are typically no such locks on music CDs.
The MPAA maintains that consumers aren't permitted to make personal backups of DVDs, saying a movie buff whose disc becomes scratched needs to buy a new one.
Consumers-rights organizations and some technology groups contend that copying software doesn't unlawfully help users violate copyrights, because consumers should be allowed under "fair use" copyright provisions to make backups of DVDs they've already purchased.
"The future of our company is at stake. The future of consumers' expectations and what they perceive to be their rights are in question," says Robert Moore, the head of 321 Studios, which sells its copying software for $99. "This case represents something very significant; it could set the standard."
The latest software product from Moore's company, called "DVD Xpress," is enough to cause fits for studio executives. Unlike similar programs that can take hours to make copies and span most Hollywood movies across two blank discs, Xpress can squeeze a near-perfect copy onto a single disc in as little as 20 minutes.
"If I own the DVD and make a copy for my own personal use, there should be no problem with that," said Martin of Laurel, Md., who doesn't use 321's software but has followed the technology debate. "They're being a little overzealous in stopping me from protecting my assets."
In a minor concession to Hollywood, 321's software adds to each blank disc a warning about copyright laws and refuses to make further copies from a duplicate disc. But experts note that other copying software, freely available on the Internet, doesn't include such concessions and can make third- and fourth-generation copies just as perfectly.
"It's almost to the point of a one-click operation, where even the average Joe can make a DVD backup," says Adam Sleight of San Diego, who runs the popular www.mrbass.org Web site with instructions on copying DVD movies.
Sleight says he's copied hundreds of DVD movies onto blank discs, including many Disney films for his two children. One advantage of his efforts: When Sleight makes copies, he eliminates five to 10 minutes of previews and advertisements that typically precede his children's movies.
Sleight acknowledges that "probably the majority of people" use such software to make illegal duplicates such as copies of DVD rentals or movies borrowed from friends.
"That is probably what happens a lot of the time, but I think the movie studios should prioritize," Sleight said. "They should target the people in China and the street vendors who sell them at a profit. The true thieves are the people who make a profit off them."
photo credit and caption:
Robert Moore, president of 321 Studios, shows off DVD X Copy software Tuesday May 13, 2003 at the company headquarters in Chesterfield, Mo. A legal battle, which focuses on the software sold by 321 Studios Inc. is emerging as one of the most significant technology debates in years. (AP Photo/Tom Gannam)
OT Hedge Funds Under SEC Spotlight
32 minutes ago
Add Business - Reuters to My Yahoo!
By Kevin Drawbaugh
WASHINGTON (Reuters) - Hedge fund industry advocates on Wednesday told U.S. market regulators, amid a continuing investigation of the $600-billion industry, that it is sound and needs no major regulatory crackdown.
But at the outset of a two-day U.S. Securities and Exchange Commission (news - web sites) roundtable on hedge funds, SEC Chairman William Donaldson warned industry participants that the roundtable did not mark an end to the SEC's inquiries.
"The discussion does not end when we leave here tomorrow," Donaldson told a hearing room packed with managers, consultants and others active in a business that has grown dramatically in recent years, but remains largely beyond government oversight.
Asked whether the SEC might require hedge funds to register with the agency, Commissioner Roel Campos told Reuters, "It's one thing we'll consider."
He said he expects SEC staff to put forward recommendations to the commission as a result of the roundtable.
Hedge fund advocates taking part complained that their business, itself increasingly managed by large institutions striving to become more transparent to investors, is sometimes unfairly cast as secretive and shady.
At the same time, hedge fund consulting group Tremont Advisers' co-chief executive Robert Schulman said it would be "death" to the industry if it were required to disclose its investment positions, as some critics have suggested.
Hedge funds are loosely regulated investment pools, and aided by the loose oversight that allowed them to invest in almost anything -- unlike mutual funds -- some hedge funds delivered stellar returns in the 1990s bull market.
Favored as investment vehicles by the super-rich and large financial institutions, such as pension funds and endowments, hedge funds are increasingly reaching into the middle classes.
This so-called "retailization" is one of the key concerns of the SEC, which warned in February that hedge funds posed a growing danger to investors.
The SEC said it had seen a sharp uptick in fraud actions brought against hedge funds, with 12 SEC hedge fund fraud cases in 2002 versus five or fewer in each year from 1998 to 2001.
"Over the past few years, hedge funds have become more popular and continue to grow in size," Donaldson said.
Close to 5,700 hedge funds are operating in the United States today with $600 billion in assets, up from far fewer funds and only about $50 billion under management as recently as 1990, the SEC estimated.
The bear market has caught up with hedge funds, but some continue to provide above-average returns. That and the reputation for huge profits gained in the 1990s are helping the industry reach down to attract more middle-class investors.
"While there are frequent reports of high returns for hedge funds, there are reports just as frequently that highlight possible areas of concern," Donaldson said.
Among these are "potential conflicts of interest, questionable marketing techniques, valuation concerns and the market impact of hedge fund strategies," he said.
The SEC's hedge fund probe is multi-pronged, but one aspect focuses on "funds of hedge funds," which gather assets of small investors to get them in the high-stakes hedge fund game.