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just to amplify..How is the Best of CES award different from the CES Innovation awards?
The CES Innovations awards focus on the design and engineering of the most innovative products of 2002, including products already on the market. In addition, Innovations judges review photos and text descriptions of products, but do not do any hands-on evaluation. The Best of CES considers only products that have not yet begun or are just starting to ship. In addition to reviewing product information, pictures and videos, the judges test each product. The judging for Innovations is wrapped up by early November. The Best of CES judging happens at CES in January.
OT Watching for Chinese knock-offs
While theft of IP is rare, chip and EDA companies remain wary of piracy in burgeoning Chinese market
By Kitty McKinsey -- Electronic Business, 1/1/2003
Sections:
Mysterious calls from afar
Take a global view
Bad judgment
Patent or trade secret?
"EDA software is most certainly being copied, and once you have the software, you can make a chip from it."
—Barry Marsh, vice president of product marketing, Actel Corp.
You just have to take a few steps inside China—across the border from Hong Kong into the Lo Wu shopping center that sits right on the Shenzhen border crossing—to make your first acquaintance with China's legendary brand-name pirates. In seconds, you'll be bombarded with offers of fake Rolex watches, pirated CDs and above all computer software. Professional-looking bootleg Microsoft XP packages were available even before its official launch in Hong Kong. Indeed, 92% of the software sold in China in 2001 was pirated, says the Business Software Alliance, a Washington DC-based trade association.
And watch out—it's not just consumer software any more. Semiconductors and the electronic design automation (EDA) software needed to design chips are fair game, too. "EDA software is most certainly being copied, and once you have the software, you can make a chip from it," warns Barry Marsh, vice president of product marketing at Actel Corp., a Sunnyvale, CA, supplier of programmable logic.
The extent to which the Chinese are stealing chip designs and EDA software is difficult to measure. Some say it's still a limited problem because of the sophistication of the technology. But most in the industry are convinced it's a potentially serious problem.
The Semiconductor Industry Association knows of two recent cases of mask-work violations in China, where counterfeit chips were made for consumption in China, says Daryl Hatano, vice president for public policy at the SIA in San Jose. Hatano says the counterfeiters may not have tried to ship them abroad because the "intellectual property (IP) holders have the right to ask customs authorities to seize pirated goods at the border, so the pirate runs a risk in shipping illegal goods into foreign markets."
Counterfeiting of chips or stealing EDA software still appears to be rare in China. "It's still very difficult to master that type of technology," says Chiang Ling Li, partner in the IP practice at international law firm Baker & McKenzie's Hong Kong office. "Usually, the piracy is of consumer-type products that they can sell on the street." Mei Yin Lim, partner in the IP technology practice at Perkins Coie LLP law firm in Hong Kong, agrees. "If anyone is stealing technology like that (EDA software), it's probably a very sophisticated, intelligent operation. You're talking about industrial espionage."
Mysterious calls from afar
Theft of IP associated with semiconductors takes three forms: overbuilding (where a factory makes extra copies of a licensed product and sells it on the black market), reverse engineering and cloning. Actel's Marsh admits that "now and then we get mysterious calls from various parts of the world from people who want to buy preprogrammed Actel parts with a certain consumer code, and they are not that consumer. When they want 10,000 copies of a part number that wasn't theirs, we can only speculate that [they don't want them] for research." Some of the calls, he says, are "sinister—your competitor wants to reverse engineer. Sometimes someone is just trying to make a buck by copying your design without even understanding how it works." Such calls set off the alarm bells at Actel, and the parts are not shipped, he adds.
Since EDA software is expensive—costing $100,000 or more—the incentive to copy it is high. And once a company has designed a chip using the software, the resulting netlist can be delivered to a foundry that has no idea it's based on pirated software.
Cadence Design Systems Inc., San Jose, one of the largest EDA suppliers, says it hasn't had many problems with IP theft in China. "Piracy in our own market space is not as serious as commodity software," says Chris Ho, marketing director for Asia Pacific in Hong Kong. He emphasizes, however that "we are always very concerned about software piracy." The EDA market in China still is relatively small, so piracy likely would be detected quickly. "We know most of our customers and we understand what they are doing." Cadence also protects its expensive products with a sophisticated licensing system that requires a key—which must be renewed periodically—to activate the software.
"One Chinese factory could counterfeit six or seven brands. It's better if companies share their information and combine forces to get a better result."
—Jack Clode, managing director of the Hong Kong office of Kroll FactFinders
What piracy exists is likely driven by outside demand rather than originating in China, says Jack Clode, managing director of the Hong Kong office of Kroll FactFinders, the IP unit of the international risk consulting company Kroll Inc. For example, a foreign company may bring a netlist based on stolen software to a Chinese manufacturer. "If a China-based semiconductor company is building chips off pirated designs, they're innocent bystanders," says Actel's Marsh. Tim Bennett, a policy expert with the American Electronics Association (AeA) in Washington, DC, agrees. "Some of these back-alley operatives—there's no way they are going to have these designs. Somebody's got to be feeding it to them. Not that this exonerates them, but there are non-Chinese partners feeding the system."
Take a global view
In fact, Clode advises aggrieved companies to tackle IP theft as a global problem, not just a Chinese issue. One case of consumer-goods pirating he recently pursued for a Western company involved a factory in China, financing from Taiwan, shipments to India through a trading company registered in Hong Kong and on to Panama and then to the end market, Brazil, where the loss of profits was being felt, he notes. By taking legal action in Taiwan, China and Hong Kong and conducting raids in Panama, Kroll was able to help the company restore its market share in Brazil. Just closing down one offending factory in China would have simply shifted the problem, not ended it, he adds.
The good news for foreign companies is that IP protection is improving in China, stimulated in particular by the country's accession in 2001 to the World Trade Organization (WTO). As part of its preparation to join the WTO, China enacted a law that specifically protects semiconductor designs. Effective as of Oct. 1, 2001, China's Regulation on Integrated Circuit Layout Design Protection meets the general requirements of the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a broader international treaty within the WTO. Nevertheless, the SIA is concerned that Chinese officials are interpreting the law to cover only ICs and not discrete semiconductors, says Hatano.
Even though specific protection for ICs is now on the law books, it's not yet thoroughly backed up by enforcement. "At the national level, there is the political will to fight corruption with respect to IP," says Li at Baker & McKenzie in Hong Kong. "The system is much better on paper, but we don't expect enforcement to improve to international standards overnight. Certainly it's a big improvement even to have this law on the books." That's because of the high level of corruption in China's judicial system.
China is unusual in that the first avenue of redress is administrative, through authorities who have the power to make raids, seize counterfeit goods, impose fines and put infringers out of business. Court action comes only if an IP rights holder is not satisfied with the administrative remedies.
The administrative authorities can now issue a preliminary injunction very quickly, says Li. Baker & McKenzie has handled cases of trademark violation where evidence was presented to local Chinese authorities one night, and a raid on the suspected pirate factories took place the next morning, she notes.
Bad judgment
But some are not so sanguine about the Chinese judicial system, which is riddled with corruption. Even judges who don't take bribes may rule in favor of a local pirate factory over a foreign IP rights holder in order to save Chinese jobs, says AeA's Bennett. "In terms of getting good legal and regulatory infrastructure in place, China has made great strides. But the key is enforcement. There, the jury is still out," he says.
Industry insiders agree that China has made significant progress in combating piracy of all sorts. "The progress I have observed in the past two or three years is very big," says Jun Tan, president of ARM China, a division of ARM Holdings Plc, Cambridge, UK, which provides embedded microprocessor designs. "Even the piracy of electronic gadgets has come down." However, "it will take some time to get the message (that IP should be protected) from the top down to the bottom," he notes.
Most observers agree that what's most needed in China is education to instill respect for intellectual property. Until recently, many Chinese manufacturers felt anything on the market was fair game for duplication. In the three or four cases of IP theft of its own products that Cadence has come across in China in the last two years, it has managed to convert all the pirate companies into license-holding customers. In one case, it compelled the offending company to take out advertisements in Chinese newspapers admitting it had been using pirate software, but was now using the genuine article, says Ho. "We are not trying to embarrass our customers," he adds. "We want to raise the general awareness that people need to respect IP." Lawyers agree that making an example of infringers—particularly in as small a universe as the chip business in China—is an effective tool to combat piracy.
What other steps can companies take to protect their IP in China? The first step is deciding whether to register your product in China under one of the many forms of protection (for patents, trademarks or copyrights) to lay the groundwork for any eventual administrative or judicial remedies. "Even these big companies are sometimes behind in their registration of patents and trademarks," says Clode at Kroll. "Be sure you're covered in all these relevant jurisdictions."
Patent or trade secret?
Although IC layout and design are now protected under Chinese regulations, lawyer Lim at Perkins Coie warns that Chinese patent protection can be a double-edged sword. "When you patent it, you have to put all your information into the public arena," she says. "In a way, this can make it much easier for your competitors to find out how it's done. But you do have strong protection for the next 20 years." The alternative, Lim says, is to keep your invention a trade secret. Li at Baker & McKenzie agrees you may want to "lock it up. Limit the number of people who have access and make them sign confidentiality agreements."
"The progress I have observed in the past two or three years is very big."
—Jun Tan, president, ARM China
Clode also advises doing due diligence on your Chinese partners before you even start doing business in China, so you don't find the engineer you've trained disappearing, only to set up a counterfeit shop six months later. AeA's Bennett agrees: "Try to know the people you hire. Keep an eye on them." And expect that any mass-market product "is probably going to be stolen and counterfeited," he adds. "The best chance for success is doing custom work."
ARM China tries to protect its IP by working closely with Chinese foundries, and placing the IP in the foundry, not in the customers' hands. "If you want to use it, you come to the factory and you have to be licensed," says Tan.
Clode also advises chip companies to talk to each other about problems they may be having with IP theft. "One Chinese factory could counterfeit six or seven brands. It's better if companies share their information and combine forces to get a better result."
The best protection, however, may be the development of high-tech industries in China itself. Not only is China luring more and more Western companies to do significant research and development in the country, it also is breeding home-grown design centers. "The more important factor at work is China's interest in encouraging and protecting its domestic technology industry," says Lim at Perkins Coie. "The whole movement to protect and develop technology in China will be of benefit to foreign technology as well. You can't just protect Chinese rights without protecting foreign rights."
Cadence's Ho agrees that Chinese self-interest will be a decisive factor in protecting IP. "When people's revenue and income depend on IP, the level of awareness and respect for IP will increase."
Kitty McKinsey is a freelance writer formerly based in Hong Kong. Reach her at k.mckinsey@att.net .
U-R-Linked
http://www.actel.com/products/security
Actel Corp., maker of antifuse FPGAs, has its own Web site devoted to security issues, including frequently asked questions about semiconductor security.
http://www.bakerinfo.com/BakerNet/Places/Asia+Pacific/
Regional+Site/Description/default.htm
Asia Pacific Web page of international law firm Baker & McKenzie, including IP and technology practices.
http://www.krollworldwide.com
Site for international risk consulting company. Its IP subsidiary is Kroll FactFinders. Includes links to offices in China (Beijing and Shanghai) and Hong Kong.
http://www.perkinscoie.com/pracarea/china.htm
Perkins Coie law firm represents companies conducting business in Asia and the Pacific Rim and specializes in technology and IP issues. This site takes you directly to their China practice.
Home electronics on the net
Posted : 03 Jan 2003
DJ Bak
VP Multimedia Segment, STMicroelectronics
The integration of home entertainment and domestic appliances on the Internet will be a major driving force for the consumer electronics market in the next two to three years. The integration of PVR (personal video recording) on the server enabling you to record programs on HDD or DVD recorder from either TV signals or Internet and converting the contents from HDD to DVD recorder and vice versa is already a reality. And with portable wireless Internet adapter or server, you can watch TV and browse the Internet from anywhere in your home, even in your bathtub.
DVD players and STBs for digital broadcasting on satellite, cable, or terrestrial TV will also go to the net where you will be able to better handle video files as well as web browse using TV as monitors. Audio systems can play back music from your PC files, downloaded from broadcasting station or other media through the home network.
Putting your household appliances on the Internet means you can operate them from your workplace. Not home yet? A house guest can only be allowed entry once his identity is verified on the remote camera through the Internet. Imagine too the possibility to surf on your appliances.
What is holding us from having our dream home? Essentially costs. Cost is a major stumbling block keeping consumers at bay. But the good news is that the evolution in the AV entertainment area is driving the trend toward home electronics on the net. As AV equipment do not require separate display monitors, significant costs achievement will come from silicon evolution in large scale integration and faster processing power.
Looking at current complexity of circuits and increasing faster processing power, STB, and DVD are set to lead the change this year.
Silicon costs in STB and DVD have gone down by more than half compared to a few years ago, thanks to SoC integration. This trend of cost reduction will continue. With faster processing power, new generations of DVD players and STB will offer browsing functions. The earliest units are expected in the market around mid-2003.
It will also accelerate the integration of DVD and STB chipsets into one common back-end MPEG-2 decoder.
Of course, a powerful home server is necessary to link up all the home entertainment and appliances together for easy control. With the current rate of evolution for PDAs, future home servers are expected to come in wireless type with high processing power. This will happen when mobile phones evolve into home networking. When that happens, there will be more variables due to its mobility and connectivity.
OT DivXNetworks Adds Kevin Hell As Chief Marketing Officer And Managing Director
Former Palm And Gateway Executive Brings Senior Strategic Marketing And Product Management Experience To Leading Video Convergence Company
SAN DIEGO, CA -- (INTERNET WIRE) -- 12/10/2002 -- DivXNetworks, Inc, the company that created the revolutionary patent-pending DivX ™ video compression technology, today announced the hiring of Kevin Hell as chief marketing officer and managing director. A technology industry veteran with significant experience developing and implementing high-level corporate strategy, Mr. Hell will round out the DivXNetworks executive team along with chief operating officer Shahi Ghanem and chief executive officer Jordan Greenhall.
Mr. Hell most recently served as senior vice president of product management at Palm ™ Inc.’s Solutions Group, where he was responsible for Palm branded products and services worldwide. While at Palm, Mr. Hell launched four innovative handheld devices in nine months, accelerated Palm's transition to wireless and ARM-based products, and was responsible for the definition of Palm's new entry-level and premium products. Before joining Palm, Mr. Hell was vice president of the Connected Home division at Gateway, Inc., leading the company's entry into the Internet appliance, PDA and networked music player markets. He also served as vice president of corporate strategy at Gateway and helped define and implement Gateway's "beyond-the-box" strategy.
"With his unique experience in high-level corporate strategy and his keen understanding of the consumer marketplace, Kevin is the ideal person to help take our company to the next level," said Jordan Greenhall, co-founder and CEO of DivXNetworks, Inc. "Kevin possesses a long-term strategic vision of multimedia convergence that fits perfectly with the growth of the DivX phenomenon as we move into a new world of DivX-powered products that span the value chain from PC video to a variety of portable and home theatre devices."
Mr. Hell will be in charge of product management, sales, marketing and business development efforts at DivXNetworks. He will also work with the executive team to create and implement a strategic corporate plan across all lines of business.
"Thanks to the superior technology and significant global brand equity of DivX video, DivXNetworks is uniquely positioned to play a strong leadership role in the convergence marketplace," said Mr. Hell. "The DivX phenomenon has already started making the transition beyond the PC into next-generation consumer electronics devices, and the next year will see the explosion of DivX technology across a range of new products and applications. I am very excited to join the great team at DivXNetworks to help manage the growth of the company moving forward."
Prior to his tenure at Palm and Gateway, Mr. Hell worked for seven years in the Los Angeles office of the Boston Consulting Group, working principally with clients in the high-technology, telecommunications, and entertainment markets. Earlier in his career, he designed communications satellites for Hughes Aircraft Company. Mr. Hell holds an MBA from The Wharton School and a master's degree in aeronautics and astronautics and a bachelor's degree in mechanical engineering from Stanford University. Mr. Hell also served as executive producer of the award-winning 1994 short film "Some Folks Call it a Sling Blade" starring Billy Bob Thornton.
About DivXNetworks
DivXNetworks is a leading technology company that enables the rapid proliferation of video content over Internet Protocol (IP) networks by combining the lightweight, ubiquitous access of the Internet with DVD-quality video performance. The company's approach is built upon the success of the DivX™ codec, a leading standard for MPEG-4 compatible video distribution with over 75 million users worldwide, and the DivX Open Video System™, a next-generation content delivery system that provides unsurpassed aggregation, promotion, and distribution of video content for mass markets. DivXNetworks is headquartered in San Diego, California, with a satellite office in Los Angeles. For more information about DivXNetworks, visit www.divxnetworks.com.
------------------------------------------------------------------------
Contact: Tom Huntington
Company: For DivXNetworks
Title: Corporate Communications Manager
Phone: 858-909-5358
Email: thuntington@divxnetworks.com
Downsizing DataPlay
Prospective bidder has a much smaller operation in mind
By Janet Forgrieve, Rocky Mountain News
December 30, 2002
If DPHI Acquisitions Inc. succeeds in its bid to buy bankrupt DataPlay Inc.'s assets for $1.5 million, it's likely the revamped company wouldn't look much like its predecessor.
"The size of the company we envision is something smaller, more nimble and efficient," said Bill Almon Jr.
Almon's Boulder-based investment firm Almon Ventures, along with DataPlay investor Hexagon Investments, created DPHI specifically to do the deal, Almon said.
Almon and his father and partner, Bill Almon Sr., have spent decades in the data-storage arena, Almon said, including stints at IBM and Boulder-based Ecrix Corp., now part of Exabyte Corp.
Under DPHI, Boulder-based DataPlay would operate more conservatively and outsource its manufacturing instead of owning overseas factories as it had done, Almon said.
It would hire back some of its former employees, especially engineers, Almon said. But the size of the operation wouldn't come close to DataPlay at its peak, when it employed 240.
Also, while the group is negotiating with landlord Flat Irons North LLC to take over DataPlay's two 50,000-square-foot East Boulder buildings, the new company likely would be able to get by with one-fourth that amount of space, Almon said.
DataPlay burned through more than $120 million on its four-year quest to create the next new thing in storing and playing music, movies, pictures and other data.
Part of that investment included buying interests in two Asian manufacturing facilities. Those interests are being liquidated, with sales expected to bring about $600,000. Half of that would go toward paying back wages and benefits to former employees.
DPHI's bid still must obtain approval from Federal Bankruptcy Court Judge Donald D. Cordova, and it's possible that other bidders may top its offer.
IRiver Inc. was the first to incorporate DataPlay's tiny disk drives into pocket-size players, which retailed for $349 when they debuted this past summer.
Since DataPlay's October Chapter 11 filing, iRiver has been selling off inventory amid uncertainty about DataPlay's future. Because DataPlay ran out of money before it could intensively market the new devices, there are still quite a few players in stock, said iRiver marketing director Jonathan Sasse.
IRiver recently dropped the retail price to $199, he said.
"It's brought the value more in line with people shopping for competitive flash memory players," said Sasse.
If the drives, and the tiny plastic encased disks that play on them, are to survive, the company must quickly move forward with new applications that convince consumers to invest in new electronic devices, Sasse said.
That's the plan, said Almon.
"From our standpoint, we're really concentrating in a focus and execute strategy, said Almon. "We want to simplify things and get back to the core business of providing versatile portable storage applications."
According to the terms of DPHI's proposed acquisition, previous investors who also participated in a $15 million interim or "bridge" loan will receive 8 percent equity in the company.
If the bid is successful, DPHI expects to raise between $10 million and $15 million in operating capital, Almon said.
DataPlay's downfall has been blamed on delays in getting the product to market; lack of support by a floundering music industry; the high cost of manufacturing; and an economic downturn that all but killed venture-capital investing.
Bankruptcy court records indicate that big spending in certain areas and dot-com-era executive pay may have contributed.
Recently filed documents show that the startup's net losses of $37.6 million between Jan. 1, 2002, and the Oct. 18 bankruptcy filing far outweighed its $7.9 million in sales for the same period.
Founder Steve Volk, who owned almost 18 percent of the company, was chairman and CEO until shortly after the bankruptcy filing. Records filed with the bankruptcy court showed the company paid him $261,250 in salary during the 12 months before the filing.
Four other executives were paid more than $200,000 during that time, and at least two others made almost that much, records show. During the same period, the company was desperately searching for investors to keep it afloat and was beginning to be unable to pay vendors.
In July, it cut its 240-member staff in half.
DataPlay, the third data-storage startup entrepreneur Volk had a hand in, is also the third to go bankrupt. If the $1.5 million bid closes, it'll be the cheapest fire sale of the three.
In the early 1990s, Conner Peripherals Inc. paid $18 million for 2.5-inch disk drive technology from bankrupt PrairieTek Inc., the first company Volk co-founded.
Volk had already left to start Integral Peripherals. Less than a decade later, that company also filed for Chapter 11 and eventually sold its 1.8-inch drive technology for $5.5 million.
While espousing his vision of a trimmed down DataPlay, Almon declined to cite causes for the company's downfall.
"I wasn't there, so it's hard to comment when you weren't there," Almon said. "And really, our focus is more on the go-forward."
forgrievej@RockyMountainNews.com or (303) 892-5191
Supreme Court stays DVD ruling
By Paul Roberts
January 2, 2003 11:12 am PT
THE U.S. SUPREME Court last week indicated its interest in a case involving a Texas citizen who was sued in California courts for posting software that can be used to illegally copy DVDs.
On December 26, Justice Sandra Day O'Connor issued a stay on a California Supreme Court ruling in a 1999 case brought by the DVD Copy Control Association (DVD CCA) against Texas resident Matthew Pavlovich.
O'Connor's stay was issued in response to an application filed by the DVD CCA and will remain in effect pending a response from the defendant, due by the end of the day on Thursday, and further action by O'Connor. After reviewing the response from Pavlovich's attorneys, Justice O'Connor can make the stay more permanent, giving the DVD CCA time to draft further petitions asking the Supreme Court to take a look at the California case.
In the case in question, the DVD CCA charged that Pavlovich and other defendants violated California's law governing trade secrets by posting a copy of the DeCSS (De Contents Scramble System) software on a Web site that Pavlovich maintained while a student at Purdue University in Indiana.
The DVD CCA argued that Pavlovich's action was intended to harm the computer hardware industry involved in producing CSS-encrypted DVD players -- an industry that Pavlovich knew was centered in California.
In November, however, the California Supreme Court ruled that Pavlovich could not be sued in California court, saying that "the mere posting of information on a passive Internet Web site, which is accessible from anywhere but is directed at no particular audience, cannot be an action targeted at a particular [state]."
"Otherwise," the California court said in its opinion, "[the] mere use of the Internet would subject the user to personal jurisdiction in any forum where the site was accessible."
Practically, the stay is a stop-gap measure to prevent Pavlovich from reposting the DeCSS software following his victory in the California Supreme Court, according to Jonathan Zittrain, a co-director of the Berkman Center for Internet & Society at Harvard Law School.
"[The DVD CCA] is trying to maintain the status quo before the California Supreme Court ruled, which is that Pavlovich better have [the DeCSS software] down in the meantime," Zittrain said.
O'Connor's stay does not give any indication of whether the Supreme Court will review the California court's decision, according to Zittrain. It is more likely a response to an application by the DVD CCA arguing that the ruling against them would cause irreparable harm to makers of DVDs.
However, the decision to grant a stay may signal an interest by the court in clarifying issues of state legal jurisdiction in cases involving Internet content and Web sites, Zittrain said.
The Pavlovich case tests the U.S. Constitution's commerce clause, which ensures that no state's laws can supersede those of other states, Zittrain said.
The case also raises jurisdictional issues similar to other cases being heard in the U.S. and around the world. In December, The High Court of Australia ruled that Dow Jones & Co. Inc. could be held liable in that country for content in an article published on its U.S.-based Web site.
At the very least, O'Connor's stay will provide cheer to the DVD CCA, which is fighting to establish a precedent for others who may consider publishing software that defeats copyright protections, Zittrain said.
"They don't want to stop this one guy from posting DeCSS. What they want is to create some law that says 'If you put up the next generation of DeCSS, we're going to fast track it and you're going to lose."
Market For Paid Online Content In The U.S. Grows To $361 Million In Q3 2002
The Online Publishers Association announced today the results of its Q2/Q3 U.S. Market Spending Report for paid online content.
The study, conducted by comScore Networks, determined that the total market for paid online content in the U.S. grew to $361.4 million for the third quarter, a 14 percent gain over the previous quarter and a 105.3 percent gain over Q3 2001. Through the first three quarters of 2002, U.S. consumer spending for paid online content totaled $975 million, versus only $670 million for the full-year 2001.
The report also found that the number of U.S. consumers paying for online content in Q3 2002 nearly doubled to 14.8 million from 7.9 million in Q3 2001, with more than 1 in 10 online users now paying for some form of content online.
The Personals/Dating category surpassed Business/Investing and Entertainment/Lifestyles content to become the leading paid content category in Q3 2002 with $87 million in revenues, a 387% gain over the same quarter last year. The OPA/comScore study found that spending in nearly all content categories grew more than 100 percent in the third quarter of 2002 versus the same quarter last year. The top three categories - Personals/Dating, Business/Investment and Entertainment/Lifestyles - account for 62% of all paid content revenue year-to-date in 2002.
"Remarkably, during a period of general economic stagnation, the market for online paid content in the U.S. maintained its stunning year-over-year growth rate," said Michael Zimbalist, executive director of the Online Publishers Association. "As consumer acceptance continues to rise, premium content will play an increasingly important role in the revenue mix for online publishers."
In Q3 2002, nearly every pricing model experienced triple-digit growth over Q3 2001. Single-purchase transactions rose to more than $56 million, a gain of 132 percent over Q3 2001. General News showed phenomenal growth in single purchases, going from $604,000 in all of 2001 to almost $9 million in just the first three quarters of 2002. The single-purchase growth in that category came primarily in the $5 -$49.99 price range.
Micropayment transactions (individual purchases under five dollars) also experienced dramatic growth, up from $279,000 in Q3 2001 to $3.1 million in Q3 2002, a more than tenfold year-over-year growth rate, although such transactions still account for only a small fraction of all paid content spending.
The information contained in the report is based not on self-reported consumer surveys, but on actual observed purchases of content. Using its representative panel of more than 1 million U.S. online consumers, comScore Networks calculated the results by passively and electronically monitoring the actual purchase and usage transactions that took place during the analysis period.
The full presentation of results, as well as the report, itself, is available at the Online Publishers Association Web site at www.online-publishers.org. The next report, covering the full-year 2002, is scheduled to be released in early 2003.
CDR shove your hokey homilies...you are the epitomy of why people can't stand "religious" types. Your hypocrisy is unbelievable and matched only by your pompous, phony "personality"..You have revealed yourself to be nothing more than a manipulative, opportunistic trader of this stock and a basher of the lowest form..stick that in your pipe and smoke it.
Internet-Portable Sellthrough: Unit Growth Accelerates In '02
By Joseph Palenchar
TWICE
12/23/2002
Port Washington, N.Y.— The overall portable-audio market might be down, but sales of Internet audio portables keep going up, NPD Techworld found.
Retail-level unit and dollar sales of flash-memory and hard-drive portables rose sharply in the first three quarters of this year following strong 2001 growth, the research company said (see tables). In fact, unit sales grew at a faster rate during the first three quarters of this year than they did during the year-ago period, when sales were also up sharply.
Price erosion, however, caused the percentage growth rate in dollar sales to slow slightly during the January-September 2002 period, but dollar growth rates nonetheless remained in the double digits.
NPD's Internet-portable statistics cover brick-and-mortar, click-and-mortar, catalog and pure Internet sales.
During the first three quarters of 2002, unit sales rose by 97.8 percent compared to the year-ago period's 57.8 percent gain, NPD said. Also during the three-quarter period, dollar sales rose 56.4 percent to $94.6 million compared to the year-ago period's 67.6 percent gain to $60.5 million.
For all of 2001, unit sales rose 57.9 percent, while dollar sales gained 42.2 percent to $125.9 million.
Average prices grew in the first two quarters of 2001 but slid in 2001's second half and in 2002's first three quarters, the statistics show.
Marketers attribute the unit and dollar sales surge to more affordable high-capacity flash-memory devices (with at least one 128MB model retailing for $129 after rebate in the fourth quarter) and to the growing popularity of higher capacity, higher priced hard-drive models.
Despite the growth, Internet portables remains a small niche in the portable audio segment, which was forecast early this year by CEA to slip 1 percent to $2.03 billion in factory-level 2002 volume. Unit sales were forecast to hit 46.4 million units. The numbers combine boombox and headset stereo sales, including headset Internet audio portables.
Here are additional details about the NPD numbers:
Unit sales: If double-digit growth continued in the fourth quarter, the industry could break the million-unit mark at the brick-and-mortar retail level in 2002, NPD statistics show. Unit sellthrough nearly doubled (by 97.8%) during the first three quarters, with third-quarter growth hitting 99.1 percent, second-quarter growth hitting 114.9 percent, and first-quarter growth hitting 78.3 percent.
Dollar sales: The category posted high double-digit growth rates throughout 2001 and during the first three quarters of 2002.
This year, dollar sales growth rates accelerated with each consecutive quarter: 24 percent in the first, 67.2 percent in the second, and 81.5 percent in the third.
Percentage gains during 2001 and 2002 ranged from a low of 24 percent in the first quarter of 2002 to a high of 96.5 percent in the second quarter of 2001.
NPD's results are based on actual consumer transactions from a panel of more than 400 retail outlets, including appliance and electronics stores, office and computer superstores, mass merchants, mail-order companies, and department stores. The data are then projected to represent the total market, including sales by pure internet retailers. Data representing Wal-Mart and warehouse club sales are not projected.
Internet Portable $ Sellthrough
2000 2001 2002
Q1 $11,301,542 $21,115,161 (+86.8%) $26,192,362 (+24%)
Q2 $10,740,576 $21,106,648 (+96.5%) $35,299,179 (+67.2%)
Q3 $14,030,935 $18,229,950 (+40.3%) $33,083,613 (+81.5%)
Q4 $52,462,471 $65,480,317 (+24.8%) NA
Q1-Q3 $36,073,053 $60,451,759 (+67.6%) $94,573,804 (+56.4%)
Full Year $88,536,016 $125,936,760 (+42.2%) NA
Source: NPD Techworld, Port Washington, N.Y. © TWICE 2002
Unit Growth (Percentage growth in units)
2001 2002
Q1 65.9% 78.3%
Q2 86.8% 114.9%
Q3 31.6% 99.1%
Q4 58.0% NA
Q1-Q3 57.8% 97.8%
Full Year 57.9% NA
Q&A Executive Leads Sony on Digital Tightrope
December 28, 2002
By Jon Healey, Times Staff Writer
In the debate over online piracy and consumer rights, Sony Corp. has a unique vantage point.
Not only does it own a major Hollywood studio and record company, but it also builds computers, CD burners, DVD recorders and portable media players that millions of consumers use to make unauthorized copies of movies and music.
As a result, the Tokyo company aims to strike a delicate balance: to protect copyrights while building gear that lets consumers use digital media more freely. To that end, Sony is forging ahead with a new generation of devices designed to connect to the Internet and to one another, allowing users to move digitized music, movies and information around a personal network with great ease.
Kunitake Ando, Sony's president and chief operating officer, is optimistic that the differences between content creators and device makers will be resolved in the marketplace. He is expected to reveal more about his vision for this new digital era in a keynote speech at next month's International Consumer Electronics Show in Las Vegas. In the meantime, he spoke with The Times about networking, copy protection and other hot topics via videoconference from Sony's headquarters in Japan.
Question: How do you strike a balance between the needs of the content community and the needs of consumer electronics manufacturers?
Answer: Some people think consumer electronics and content, like [motion] pictures or music, go different ways. But I don't think so, because hardware needs content in order to make a usable, attractive product, and [vice versa].
In the network age, without network-connected hardware, I don't think the music industry will survive, and [motion] pictures are the same. It may seem that they're looking in a different direction only because they try to protect their own rights. They want to have strong copy protection.
Q: How will consumers react to copy protection?
A: We need a little bit more advancement from technology, but from the users' viewpoint, I don't think it's a good thing to get everything free on the Internet. Of course, there is a certain balance between usability and price and the ease of use and so forth. Right now, we are in the transition period. If you want to really develop a good content industry, we need certain protection, and the same thing for the consumer electronics industry.
Sony is in an advantageous position because, since we have both industries, we can really talk and discuss with each other within the group. In fact, we have a committee we call Contents and Technology, [where we] frequently discuss the benefit for both industries. So I think when we introduce new types of products, we are trying to be always ahead.
Q: Do you think the Sony Music side of the company has done enough to let consumers -- and particularly Sony Vaio owners -- do what they say they want to do with digital music?
A: Record label companies' whole model has been sort of collapsed or broken. Package media sales are now decreasing instead of increasing. So it's very clear that we have to change the way we do business in the music industry because they're probably hard-hit from the network age. In that sense, I think the music label has to move faster.
As Steve Jobs of Apple [Computer Inc.] said, nobody wants to steal anything -- if there's a reasonable way [to buy it] and the price is [fair]. The music in- dustry has not caught up fast enough with the demands of the users. I think that once it settles, we'll be OK.
Q: Are you providing a way for your devices to communicate with one another?
A: That's our direction. We are now introducing many products which will all be connected with each other. We introduced last September the new device that we call RoomLink, which connects a Vaio PC and Wega TV. And we introduced a new product called Cocoon, which connects with a TV but is directly connected to broadband [a high-speed Internet connection]. This Cocoon machine will actually evolve depending on the user's habits and taste and so forth.
Q: It sounds as if it's designed to be a storage network for the whole home. Is that correct?
A: Right, with a hard disk drive and Linux operating system. I think we are going to continue to introduce many of these networkable devices, all connected seamlessly. We are going to connect all our consumer electronics products under one platform instead of just introducing all those stand-alone type of products. That's basically our strategy, so that our platform products connect easily to an Internet service as well as the content the user feels like using.
Q: How do you get the rest of the consumer electronics world to connect their devices to the Sony platform?
A: We are ready to discuss [the platform] with any consumer electronics company to make it an open standard. We aren't going to make it closed only to Sony, because unless users can easily connect our products to all other electronic companies', it's not so convenient. We don't want to really stick to a propriety type of standard format or even media technology.
Q: Is there a risk that lawmakers, particularly those in Washington, might overreact and mandate certain technologies for content protection? Could that hurt your ability to compete and develop products?
A: Truthfully, I'm rather optimistic because both industries need each other. Right now, of course, there are sometimes heated discussions. The Consumer Electronics Assn. is saying very extreme things and the Motion Picture Assn. of America is saying [extreme things in] the other direction. It's a really tough issue, but I think both industries will find a comfortable manner, so I'm not so worried.
Q: Much of the content industry has adopted Microsoft Corp.'s Windows Media audio and video formats and its digital rights management software to protect their content. How do you feel about those technologies?
A: All of our consumer electronics products will not necessarily adopt Windows Media audio and video. It's necessary for the PC but not all the consumer electronics products.
We are going to have our own media technology. We should have our own DRM [digital rights management] and our own [digital media formats] and also media players as well. People should have a choice.
Initially, when we introduced [music players designed to resist piracy], user ability was so bad, nobody wanted to use them. That's why people [would] rather rip [CDs] or download [songs] from the Net.
But I think technology has advanced quite a bit since then. It's much easier. So I think consumers will also get used to paying a certain price for the content they get. It may take some time, but it will be OK.
In the Air with Portable Movies
By Lance Ulanoff
December 19, 2002
Total posts: 18
Flying over the Rockies on my way to Comdex in Las Vegas last month, I was marveling at nature's patterns--the mountains receding into foothills and then into sandy jetties that rolled underneath lakes and reservoirs. Then Arnold Schwarzenegger started screaming bloody murder, yanking me back to the full-length movie playing on my laptop.
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Watching a feature film this way is no longer an improbable occurrence. After my not-so-pleasant experience with CinemaNow, I decided to try the service's newest competitor. Movielink, which launched in November, differs from CinemaNow. It offers full downloads, but does not also offer streaming, and it is backed by five major movie studios (MGM, Paramount, Sony, Universal and Warner Bros.). CinemaNow works with these same studios but is not backed by them.
As I've said previously, I don't envision the family crowded around the PC to watch the latest downloaded film. Movielink's CEO, Jim Ramo, seems to agree, saying that while services like his are trying to change consumer behavior, Movielink believes that people will view downloaded movies "in a portable mode," initially. A DVD would give better quality, but Ramo counters that playing a movie from the hard drive eats up less battery power. Listening to his pitch, I realized that my upcoming five-hour flight to Comdex would be the perfect test of his service and its supposed playback prowess.
Big Movie News
You can't transfer files downloaded from Movielink between PCs, so I brought my work (and travel) laptop, an IBM T21 ThinkPad, home and visited the site. Since the site is so new (Ramo called this a soft launch), the movie selection is a bit limited, and a number films listed appear under multiple genres, but there are some relatively new releases and even a selection of classic films. The service has no plans to carry adult content, television movies, or episodic television programs.
Registration was painless, and I learned a key piece of information. Ramo had said a downloaded film stays on your hard drive for 30 days. That's true, but once you start viewing that latest blockbuster, you have exactly 24 hours before it magically disappears from your hard drive (it goes to the Recycle Bin but cannot be played again).
No big deal, right? All I needed to do was download the films and then play them while I was on my flight. Not quite. What the Web site neglects to mention is that the Movielink player's digital rights management (DRM) system requires you to be authenticated ("individualized" is the term Ramos uses) over the Internet--and you can't complete the process without playing the film, which starts the clock.
Movielink's free download-management software queues up the movies you want and even restarts an interrupted session from where it left off. To test the two formats the player supports, I downloaded the Arnold Schwarzenegger action flick Collateral Damage as a Windows Media file and Cameron Diaz's The Sweetest Thing in RealVideo, each for $4.95. Price varies depending on how new a film is. Both downloads were over 500MB, but neither took more than 30 minutes over my cable modem. I was impressed.
To keep within the 24-hour window, I prepared to perform the authentication process for each film a day or so later and started with the RealVideo film. With Movielink you start the playback through the download manager. I clicked Play, RealOne Player launched, and the main screen filled with the words, "We're sorry, the movie you requested is unavailable at this time. Please contact Customer Service." The customer service representative said this was a known issue with DRM for RealVideo and talked me through the authentication process until we got it working. I experienced no DRM problems with the Windows Media movie. Now I was free to watch the films as many times as I wanted--in 24 hours.
First up--The Sweetest Thing. Right away I could tell that the film's native resolution was 320-by-240. I tried bumping it up to full-screen, but the image quality degraded too much. Running at 200 percent seemed better and the film was completely watchable--with the exception of the content, which I deemed unwatchable. I decided to switch to the Schwarzenegger film in Windows Media format. It, too, played at a native resolution of 320-by-240 and looked best at 200 percent. But in the loudly droning airplane, I couldn't crank up the sound enough to consistently hear the voices clearly through my headphones. I had no such problem with the Real movie.
Johnismad: These services are just too restrictive.
view full post >
caboosemoose: $4.95 for the priviledge of access to a movie with pitiful resolution for 24 hours.
view full post >
robgeurtsen: Yet this is promising for sure...
view full post >
I watched about two-thirds of the movie, then had to switch out my battery (the first one was fully charged when I started). My system cannot maintain standby without a battery, so I had to shut down and reboot. When I relaunched the movie, I simply fast forwarded to where I left off by dragging the slider in Windows Media Player's (Version 7.0) playback bar.
All in all, I would call my Movielink experience a success. Ramo was right about the battery lasting longer than with a DVD--I've played back DVDs on this system and they eat battery power at an incredible rate. I did, of course, give up premium image quality, though, and I'm amazed at services like Movielink and CinemaNow suggesting that whole families can watch these movies on larger PC screens.
Oh, and as promised, the Movielink software placed each film in my Recycle Bin automatically, exactly 24 hours after I first started viewing it. The Movielink Manager (the download manager), which now sits resident on my task bar, informed me of the event.
My recommendation? If you're about to take a long flight, you have a laptop with a good screen, good viewing angles and healthy battery life, and you're not annoyed that the clock starts ticking as soon as you authenticate, you might try a few Movielink movies. On the other hand, the view out the airplane window is pretty darn entertaining, and the batteries don't run out.
OT American Airlines and DuoCash Partner in Promotion Featuring eBooks from Rosetta Books
NEW YORK, NY -- (INTERNET WIRE) -- 12/23/2002 -- DuoCash, a New York City-based payment technology company, has announced a promotional program with AMR Corp's American Airlines (NYSE: AMR), which will offer its customers a complimentary DuoCash-enabled prepaid phone card. The cards also can be used to purchase ebooks, which can be downloaded from Rosetta Books' Web site directly to the traveler's laptop or PDA.
The promotion is being launched in the New York metropolitan area, with $10 cards being distributed to key corporate travel customers, as well as at the American Airlines Admirals Clubs at LaGuardia, JFK and Newark airports.
"This is a great partnership in that it gives American Airlines customers the choice of some classic books that they can read conveniently during their travels and also brings these highly-desirable consumers to RosettaBooks.com, one of the newest online merchants accepting DuoCash." said Bruce Colwin, Executive Vice President of DuoCash. "And by letting consumers download ebooks from Rosetta Books' website, it also demonstrates the ease and simplicity of our alternative payment method for purchasing digital content."
Highlighted Links
DuoCash Home Page
Entertainment, such as ebooks, music and games, is driving the growing market for paid digital content, which Jupiter Media Metrix expects to reach $5.8 billion by 2006. And as consumers increase their appetite for digital content, they're also increasing their usage of portable devices that enable them to enjoy it wherever they go.
"We've seen that travelers are becoming increasingly dependent on their laptops, PDAs and other wireless devices, making them essential travel gear," said Chuck Imhof, American Airlines Regional Director of Passenger Sales. "In response, we're adding more amenities for the wired business traveler, including downloadable schedules, electronic flight notification, airport lounges with WiFi connectivity, and of course More Room Throughout Coach so they have the personal space to open and use their laptops. We also thought it would be a good idea to offer them some great books that they can enjoy while they're plugged in at the airport or in flight."
The program was developed jointly with Rosetta Books, which currently offers more than 100 titles and has gained international prominence for the quality and marketing of its e-book list, including works by Kurt Vonnegut, Agatha Christie, Winston Churchill, Aldous Huxley, George Orwell and Virginia Woolf. Rosetta has also recently announced a licensing agreement with Random House for exclusive rights to publish e-book editions of mutually agreed-upon titles.
ABOUT DUOCASH: DuoCash is the developer of a proprietary technology which enables prepaid phone cards from leading telcos to be used for online transactions - providing e-merchants access to an untapped market of hundreds of millions of cards currently in circulation in the United States, with over $5.2 billion in stored value. They also provide customers a secure and private alternative to using credit cards online for purchasing digital content.
For additional information, contact: Bruce Colwin, Executive Vice President, DuoCash Inc. at 212-725-6725 or by email at bcolwin@duocash.com.
Critics Decry Digital TV Signal Coding
The Associated Press, Sun 22 Dec 2002
SAN JOSE, Calif. (AP) -- If Hollywood gets its way, future broadcasts of digital television will not only have crisp video and sound but also invisible data to block unauthorized sharing.
The ``broadcast flag'' is promoted by content owners as the least intrusive way to keep consumers from illegally redistributing copyright works. Digital TV technology, they say, can finally take off once popular movies and shows can be safely broadcast without fear of Internet piracy.
But critics argue the flag is the latest attempt to wrest control from consumers, stifle innovation, create inconvenience, turn tinkerers into criminals and raise prices -- all for a technology that won't stop piracy anyway.
``This has to do with controlling the customary, expected uses of law-abiding consumers in their homes,'' said Cory Doctorow of the Electronic Frontier Foundation. ``When they say `This keeps honest people honest,' they mean `This keeps honest people in chains.'''
Supporters say the flag would be used to limit redistribution to ``personal networks,'' not crack down on personal copying. For example, a recorded program could be viewed at home but not sent to millions of ``friends'' on the Internet.
Though the flag is unlikely to be everything Hollywood hopes for or civil libertarians fear, it is under serious consideration by industry and the government and could quickly alter the landscape of copy protection.
No longer would users be trusted to take the ethical route. Rather, anyone who strays from a content creator's desires would run into a technical roadblock.
The concept mirrors a trend in ``trusted'' computer chips and software. The technology is designed to keep hackers out, but can also be used to restrict everyday users.
But unlike ``trusted computing'' initiatives, the broadcast flag would be just a mark on the content. It could still be transmitted without encryption over the airwaves.
The flag -- only a few bits of information that transmit with a broadcast -- would be recognized by devices that turn the signal into a viewable format. Whether a set-top box, PC card or handheld computer, the device would follow rules triggered by the flag.
If the mark is permissive or missing, a program can be freely copied and distributed. Another variant would allow copying but restrict redistribution. It's also possible that some programming -- such as pay per view -- could be flagged to prevent any copying whatsoever.
To ensure the flag will be recognized, the government must require compatibility among devices that receive digital signals, from set-top TV boxes to components of general-purpose computers. Such a move, critics say, could harm high-tech innovation, because the government isn't known for speed or adaptivity.
``It's one of those things that makes us both skeptical and careful about this whole activity of getting the government involved,'' said Joe Tasker, general counsel of the Information Technology Association of America.
Earlier this year, the Federal Communications Commission announced it would consider setting rules after representatives from the high-tech and entertainment industries reached a general consensus on the flag. Commissioners have sought comments on whether the agency has the jurisdiction to act, as well as on the technology itself.
Even if the FCC decides it doesn't have jurisdiction, key members of Congress are standing by. After all, a big payoff is at stake once the nation's TVs can receive digital broadcasts and the airwaves that now carry analog signals can be auctioned off.
Though some, including the ITAA, suggest further study, others point out that the alternative -- end-to-end encryption of TV broadcasts -- would render existing digital TVs useless.
The flag ``doesn't disenfranchise any consumers,'' said Don Whiteside, vice president of legal and government affairs at Intel, which along with Mitsubishi Digital Electronics America and News Corp.'s Fox Technology Group led the Broadcast Protection Discussion Group of 70 companies that reached the consensus on the flag.
Still, critics worry that building in a single, government-mandated type of security could stifle innovation, especially if the approved technology is proprietary and secret.
If so, open-source programmers who share code to build software like the Linux operating system could find themselves prosecuted under laws barring the cracking of copyright protection schemes.
Even with such protection, the broadcast flag won't stamp out all piracy. It can be bypassed simply by converting digital signals to analog.
But it's a strong enough deterrent against casual copying to make studios comfortable, said Fritz Attaway, executive vice president of the Motion Picture Association of America.
``It will provide some level of discouragement to uploading broadcast content to the Internet and distributing it around the world,'' Attaway said.
Critics of the flag say it might be used to prepare the high-tech industry to accept more governmental restrictions on technology, such as when Hollywood decides it wants to also combat analog copies.
Others question its need.
High-definition video broadcasts are simply too large to be circulated online, and laws already exist to prosecute infringement, Doctorow said.
``It addresses a nonexistent problem with an insufficient technical measure at great expense to liberty and innovation,'' he said.
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On the Net:
FCC:
Electronic Frontier Foundation:
OT Sendo sues Microsoft over mobile phone software
By John Walko
CommsDesign.com
December 23, 2002 (11:26 a.m. EST)
ArchivesLondon, UK — British mobile phone manufacturer Sendo is suing its former partner Microsoft for alleged misuse of proprietary information used in its mobile handsets.
A spokesperson for Sendo said the allegations were "serious and substantial". The handset maker filed a suit against the software giant in a federal court in Texas in the US.
The move follows Sendo's unexpected decision last month to abandoned plans to sell a device using Microsoft's operating system, the Smartphone 2002, originally knows as Stinger. Sendo is instead using Nokia's Series 60 Platform in a mobile phone now under development.
The Finnish company's Series 60 is an interface and set of smartphone applications based on the Symbian operating system, and is already used by other companies developing mobile devices, including Siemens, Samsung and Nokia itself.
Sendo was one of the first to partner with Microsoft to use the software giant's Smartphone 2002 system. The Birmingham, England based company was within weeks of shipping the Z100, a tri-band GPRS enabled phone, to European retailers and carriers. It is unlikely it will now launch a Series 60 based product before the middle of next year.
Back in November, Sendo would not comment on why it terminated the deal with Microsoft “because of legal reasons”. Neither would the company comment on the future of the minority, roughly 10% stake Microsoft holds in the handset maker, for which it paid about $10m last July.
Sendo is understood to have had concerns that some of the features it had introduced for the Smartphone it was developing in conjunction with Microsoft have since been adopted in other hand-held devices that Microsoft has been working on with other partners.
One of these may be the handset launched late October by Orange, the SPV, which uses Microsoft's operating system and is manufactured by Taiwanese group High Tech Computers
Microsoft declined to comment on Monday about this or Sendo's legal action.
However, the lawsuit is yet another blow to Microsoft's ambition to establish itself as one of the leading suppliers of software in mobile phones.
EU Clears Sony, Philips Purchase
Monday December 23, 8:22 am ET
European Commission Clears Sony, Philips $453 Million Purchase of InterTrust Technologies Corp.
BRUSSELS, Belgium (AP) -- The European Commission on Monday approved the $453 million purchase of InterTrust Technologies Corp. by a group that includes Sony Corp.'s Amercian unit and Royal Philips Electronics NV of the Netherlands.
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Santa Clara, Calif.-based InterTrust, which is locked in a patent fight with Microsoft Corp., specializes in a field called digital-rights management.
DRM software enforces rules on the usage of computerized text, music, movies or other content -- technology that could be used to prevent digitalized music from unauthorized copying.
In a statement, the EU head office said the deal raised "no serious competition concerns" because the market for such software is in its infancy and already a number of a strong competitors are present.
Under the agreement, Fidelio Acquisition Co., which includes Sony of America, Philips and other investors, will acquire InterTrust for $4.25 a share.
InterTrust, which once negotiated to build its copyright-protection software into Microsoft's Windows operating system, accuses the software giant of violating its patents, and company officials have discussed damage figures in the billions of dollars.
Small labels sign older artists
Yesteryear's stars aren't on MTV, but they're not all exiled to obscurity, either.
By Jim Farber
New York Daily News
December 22, 2002
The music business puts pop stars out to pasture every day. The moment they lose their youthful glow and commercial clout, most get bounced from the major-label league.
Lately, though, various recording and demographic trends have collided to counter this woeful tradition. A few labels have built significant parts of their business plans around giving a second chance to older artists who still can whip up vital work.
In the past two years, Artemis Records has taken in such major-label refugees as the Pretenders, Steve Earle, Warren Zevon and Rickie Lee Jones. Nonesuch has relocated castoffs Emmylou Harris, Wilco, Randy Newman and Joni Mitchell. iMUSIC rescued Tom Tom Club, Johnny Marr, Cracker and John Doe, while Sanctuary Records has given just that to the Pet Shop Boys and King Crimson.
The parent company of Sanctuary (CMC International) pioneered the trend by signing a host of dumped hair-metal bands, from Dokken to Poison, in the mid-1990s. According to Artemis chief Danny Goldberg, a key factor in the trend has been the consolidation of the record business over the past few years.
"We've had a contraction from six to five major labels, and in the process a lot of artists got dropped -- some of whom are still really creative," he says.
Lost their advocates
Consolidation put many seasoned label executives out of work, too, leaving lots of longtime artists without benefactors.
Meanwhile, the lean and mean labels that were left came under the scrutiny of ever-larger conglomerates, which have demanded huge sales quickly as marketing costs surged.
"The system just wasn't working for a lot of older artists," says Marc Geiger, head of iMUSIC. "The break-even point for marketing an album was going up to between 500,000 and 800,000 copies sold, which is a lot of albums for a mature artist to hit every time."
By contrast, the indie labels could go for niche sales as low as 100,000 records, according to Goldberg. Or 10,000, for Geiger's label. "We make our deals based on a worst-case sales scenario," the iMUSIC chief says. "All we have to do is hit those numbers and we're in a profit place."
As compensation for the more modest advances that Geiger's company offers, artists receive higher royalties. Stars have been attracted by those numbers, while, at the same time, they've been repelled by a belief that major labels have been shifty in their accounting.
Marketed differently
Still, the companies that snap up older stars face a marketing battle. Major video exposure, prime retail space and commercial radio play usually are off-limits. So they concentrate on things like direct TV advertising. Older fans, after all, spend far more time gazing at the tube than cruising the record aisles.
Mature stars also can land air time on "The Late Show With David Letterman," "The Tonight Show" and on PBS and National Public Radio.
The Internet spreads the message, too, as do print media, which lack the instant-response pressures that prompt mainstream radio stations to take few chances. In addition, experienced artists often have extensive touring potential, because fan bases are drawn to their material.
Better yet, older artists don't have to worry much about two practices that sap sales from younger stars -- CD burning and file-sharing.
Nonetheless, older artists face the challenge of battling their own histories each time they put out something fresh. Listeners often are reluctant to let their heroes change.
"It's always easier to get someone to relive their memories than to pay for something new," Goldberg explains.
Of course, the artists' current work also may be sub-par.
"I went to see Paul McCartney on this last tour, and it was a very emotional experience," Geiger says. "But when he did his new songs, they were terrible and the audience was bored."
Older and better
But some older artists' new material beats the odds.
Fiftysomething stars James Taylor, Santana and Bruce Springsteen have enjoyed lofty chart positions, healthy sales and critical acclaim recently.
"You have all these good rock artists who are over 50 now," says the Pretenders' Chrissie Hynde. "Given the fact that classical composers like Schubert and Mozart died in their 30s, rock is more of an old man's game these days than is classical music."
Such successes are harder to envision for older hip-hop performers. That genre has been especially tied to youth and the zeitgeist. Yet Geiger is betting against that view by signing such senior rappers as Sir Mix-A-Lot and MC Lyte.
"Hip-hop is in a different place than it was," he says. "It's now deserving of a place where artists can keep putting out work even when the trend and scene they came out of is over."
While aging artists have to be realistic about their current sales potential, Geiger says many are not. "There is resentment over the fact that all the great work they did in the past does not count."
But there's reason to believe the deep-seated prejudice against new music from old stars may one day erode. There's an underexploited market of boomers who identify strongly with music but simply need to be schooled in the potent stuff still coming from stars of advancing years. It's the work of the indie labels to nudge them along.
"Music has its own energy," Goldberg believes. "When it's really good -- no matter how old the artist -- it defies the odds and breaks through."
Big Companies Jumping in Voice Technology Market
By Yun Dae-won
Wednesday, December 18, 2002
With projection of world voice technology market at $38 billion in 2003 and domestic market growing from 26 billion won last year to 100 billion this year to 2 trillion won in 2005 big companies such as Samsung Electronics, LG Electronics and KT are rushing to the market. If big companies with technology and money enter the voice technology market there will be a change in the landscape of the market.
In terms of number of patents for voice recognition and synthesizing technologies Samsung have made 44 applications from 1999 until now, LG 39 and KT 16. Their R&D momentum for technology is also accelerating materializing into commercial products.
Samsung Electronics established a HCI lab comprised of researchers in August in an effort to commercialize technologies into products. The company also is trying to focus on development of foundation technology including voice engine through Samsung Advanced Institute of Technology.
The company made its first step into the arena of voice technology commercialization by adding its own voice synthesizing technology to PDA NEXIO and smart phone. It plans to integrate its voice technology into its home appliances in the future.
LG Electronics, which has been developing voice technology at its research institute in 1988, is stepping up commercialization of voice technologies. LG Electronics Institute of Technology has 15 researchers with advanced degrees and is pursuing more patents and application of voice technologies.
LG Electronics actually provided KOSDAQ-registered VoiceWare with core voice technologies and is maintaining a close relationship with the firm as a 2nd major shareholder.
KT has been focusing on developing user interface-centered technologies at its voice recognition service development team since 1991. The research team of 7 researcher with doctoral degree developed an automatic interpretation system in 1995 and introduced VXML-based voice recognition technology in 2000.
It is recently stepping up development of multi-modal technology, so-called next-generation voice technology along with VXML-based personal voice recognition directory system.
U.S. Market for Paid Online Content Grows Despite Economy Market for Paid Online Content in the U.S. Grows to $361 million in Q3 2002, According to Online Publishers Association Report
Business Editors
NEW YORK--(BUSINESS WIRE)--Dec. 20, 2002--
Personals/Dating Overtakes Business/Investment and Entertainment/Lifestyles to Become Leading Paid Content Category
The Online Publishers Association announced today the results of its Q2/Q3 U.S. Market Spending Report for paid online content.
The study, conducted by comScore Networks, determined that the total market for paid online content in the U.S. grew to $361.4 million for the third quarter, a 14 percent gain over the previous quarter and a 105.3 percent gain over Q3 2001. Through the first three quarters of 2002, U.S. consumer spending for paid online content totaled $975 million, versus only $670 million for the full-year 2001.
The report also found that the number of U.S. consumers paying for online content in Q3 2002 nearly doubled to 14.8 million from 7.9 million in Q3 2001, with more than 1 in 10 online users now paying for some form of content online.
The Personals/Dating category surpassed Business/Investing and Entertainment/Lifestyles content to become the leading paid content category in Q3 2002 with $87 million in revenues, a 387% gain over the same quarter last year. The OPA/comScore study found that spending in nearly all content categories grew more than 100 percent in the third quarter of 2002 versus the same quarter last year. The top three categories - Personals/Dating, Business/Investment and Entertainment/Lifestyles - account for 62% of all paid content revenue year-to-date in 2002.
"Remarkably, during a period of general economic stagnation, the market for online paid content in the U.S. maintained its stunning year-over-year growth rate," said Michael Zimbalist, executive director of the Online Publishers Association. "As consumer acceptance continues to rise, premium content will play an increasingly important role in the revenue mix for online publishers."
In Q3 2002, nearly every pricing model experienced triple-digit growth over Q3 2001. Single-purchase transactions rose to more than $56 million, a gain of 132 percent over Q3 2001. General News showed phenomenal growth in single purchases, going from $604,000 in all of 2001 to almost $9 million in just the first three quarters of 2002. The single-purchase growth in that category came primarily in the $5 -$49.99 price range.
Micropayment transactions (individual purchases under five dollars) also experienced dramatic growth, up from $279,000 in Q3 2001 to $3.1 million in Q3 2002, a more than tenfold year-over-year growth rate, although such transactions still account for only a small fraction of all paid content spending.
The information contained in the report is based not on self-reported consumer surveys, but on actual observed purchases of content. Using its representative panel of more than 1 million U.S. online consumers, comScore Networks calculated the results by passively and electronically monitoring the actual purchase and usage transactions that took place during the analysis period.
The full presentation of results, as well as the report, itself, is available at the Online Publishers Association Web site at www.online-publishers.org. The next report, covering the full-year 2002, is scheduled to be released in early 2003.
About the Online Publishers Association
Founded in June 2001, the Online Publishers Association (OPA) is an industry trade organization whose mission is to advance the interests of high-quality online publishers before the advertising community, the press, the government and the public. Members of OPA represent the standards in Internet publishing with respect to editorial quality and integrity, credibility and accountability. OPA member sites have a combined, unduplicated reach of 68.1 million visitors, or 47.5% of the total U.S. Internet audience. (Source: comScore Media Metrix, November 2002 combined home/work/university data). For more information about the Online Publishers Association, visit www.online-publishers.org.
About comScore Networks
comScore Networks provides unparalleled insight into consumer behavior. This capability is based on a representative cross-section of more than 1.5 million global Internet users who have given comScore explicit permission to confidentially capture their Web-wide browsing, buying and other transaction behavior, including offline purchasing. Through its patent-pending technology, comScore measures what matters across the entire spectrum of surfing and buying behavior. This deep knowledge of customers and competitors helps clients design more powerful marketing strategies and tactics that deliver superior ROI. comScore services are used by global leaders such as Microsoft, Kraft, The New York Times Company, Best Buy, Starwood Hotels and Resorts, Nestle, Wells Fargo & Company, GlaxoSmithKline, and Orbitz. For more information, please visit www.comscore.com.
This press release may be found at http://www.online-publishers.org
--30--AH/ny
CONTACT: Online Publishers Association, New York
Lisa Carparelli, 917/743-4537
E-mail: lcarparelli@online-publishers.org
KEYWORD: NEW YORK
INDUSTRY KEYWORD: ENTERTAINMENT PUBLISHING CONSUMER/HOUSEHOLD
INTERNET ADVERTISING/MARKETING
SOURCE: Online Publishers Association
IMDC Releases Inflight Connectivity and Aeronautical Broadband Report
Tuesday 17th December 2002, Today the Inflight Management Development Centre (IMDC) announces the release of its Inflight Connectivity and Aeronautical Broadband report. This market report is a comprehensive review of the current market for inflight communication products and provides clarity in a currently complex and evolving market.
Passenger connectivity has been available for a number of years; however, until recently, was limited to the under-performing telephony systems offered onboard. The proliferation of email and internet over the past decade combined with rapid developments in technology has led a number of companies into investing in these services for the onboard passenger market.
The number of players in the market and the wide range of technical solutions available have given rise to a high degree of confusion and uncertainty among the decision-makers in the market. There is a clear requirement for top-level knowledge in the market, with the situation being compounded by a high level of jargon and the difficulty of distinguishing between what are merely concepts and what can realistically be achieved.
“We have spent the past few months gathering information and data from airlines, passengers, and from the key suppliers of passengers communications services. The result is this well balanced report which is a useful tool in understanding the issues”, says Walé Adepoju, CEO of IMDC.
“It is clear from our investigation that there are some impressive solutions out there for passenger email and internet, telephony and live TV. However, the real work has only just begun in addressing commercial, operational, logistics and implementation issues”, says Adepoju.
For more information on the Inflight Connectivity report please contact IMDC on +44 1332 344 339, or by visiting the website – www.inflightmanagement.com.
DMX MUSIC Promotes Beth Almberg To Senior Director Of Inflight Division
Los Angeles (December 11, 2002) – DMX MUSIC, the premier provider of unique and diverse music, visual imaging and message marketing experiences worldwide, via satellite, digital cable, aircraft and the Internet today announced the promotion of Beth Almberg to Senior Director, Inflight Division. In her new role, Almberg will manage all day-to-day activities of the Inflight Division, as well as analyze potential growth opportunities for the division. She will continue to be based in Orange, California and report directly to Christy Noel, Vice President, Marketing and Product Development.
In the five years she has been with DMX MUSIC, Almberg has become an experienced business strategist, with a focus on growing video accounts and revenues and enhancing customer service. Most recently Almberg successfully led negotiations to extend the company’s relationship with American Airlines with a multi-year agreement to be the airline’s full-service IFE provider.
“Beth’s much deserved promotion was based on her incomparable industry knowledge, experience and relationships,” said Noel. “She’s proven her abilities as an effective manager and we are confident in her ability to continue driving our Inflight initiatives.”
Almberg brings 25 years tenure of progressive management experience to her new position. Most recently, Beth served as Director of Video Services and Business Development managing DMX Inflight’s feature film accounts, customer video production and video shipping & distribution, as well as business development for the Inflight Division. Prior to DMX MUSIC, Almberg worked for Trans World Airlines, where her responsibilities included such diverse areas as inflight entertainment, aircraft acquisitions, and duty-free sales.
About DMX MUSIC:
DMX MUSIC, Inc., which was formed by the merger of DMX MUSIC and AEI Music Network, Inc. in May 2001, is a majority-owned subsidiary of Liberty Media Corporation (NYSE: L, LMC.B). Operating in more than 50 countries, DMX MUSIC is headquartered in Los Angeles with offices in Seattle and throughout the United States and internationally in Australia, Belgium, Canada, The Czech Republic, France, Germany, Holland, Hungary, Poland, Spain, Japan and the United Kingdom. DMX MUSIC is a global leader in digital music programming, with one of the world's largest digital music and video libraries, creating more than 400 unparalleled styles of non-stop music delivered via digital cable, satellite, DVD and the Internet. DMX MUSIC distributes its music services worldwide to more than 10 million homes, 180,000 businesses, and 30 airlines with a worldwide daily listening audience of more than 100 million people.
Seems to be. Guess holiday season includes returns and new purchases LOL.
Retailers Gear Up for Saturday Sales
Friday December 20, 11:44 am ET
By Emily Kaiser
CHICAGO (Reuters) - It pays to procrastinate this holiday season as U.S. retailers slash prices on everything from DVDs to diamonds, hoping to lure last-minute shoppers on the Saturday before Christmas.
Consumers will be able to choose from some of the season's biggest discounts and round-the-clock sales on what has become the biggest shopping day of the year.
With many Web sites now charging a fortune for guaranteed Christmas delivery, retailers are counting on even dot-com devotees venturing out for those last few gifts.
Friday's newspapers were filled with coupons for extra savings on already marked-down items. Some chains are starting early-bird offers at 7 a.m. on Saturday or offering special discounts for shoppers who use in-store credit cards, which bolster profits with fat interest fees.
Holiday sales got off to a strong start in the weekend after Thanksgiving, but most retailers reported sluggish demand in the first half of December, hampered by uncooperative weather that kept shoppers at home -- and often clicking on Internet retail sites.
The latest online sales data from comparison shopping service BizRate.com showed sales reached $262.8 million onWednesday, down 28 percent from the week before. From November 1 to Dec. 18, sales grew a strong 42 percent to $11.1 billion from $7.8 billion a year earlier.
Analysts attributed the gains to free shipping offers, but most of these have expired, causing sales to drop off.
Orders placed on Friday with leading Internet retailer Amazon.com Inc. (NasdaqNM:AMZN - News) should arrive in time for Christmas -- if they're for items that usually ship within 24 hours.
On Friday morning, the Web site rang up a $14.25 shipping and handling fee to deliver the $32.99 LeapFrog Imagination Desk -- which Amazon.com ranked as its top customer choice -- in time for Christmas. For one-day shipping, the cost soars to $25.55.
LAST-MINUTE ADVANTAGE
Television advertisements show brick-and-mortar retailers are well aware of their advantage in the last-minute shopping arena. Wal-Mart Stores Inc. (NYSE:WMT - News), the world's biggest retailer, has been running ads promising its stores will be well-stocked, even on Christmas Eve.
Sears, Roebuck and Co. (NYSE:S - News), the largest U.S. department chain, was one of many "clicks-and-bricks" retailers offering the best of both worlds -- online ordering and in-store pickup.
The company was taking 50 percent off fine jewelry and offering zero-percent financing on everything from vacuums to treadmills.
Discount retailer Kmart Corp. (NYSE:KM - News), which needs a strong holiday season to meet its goal of exiting bankruptcy by July, will keep its stores open for 110 hours nonstop from 6 a.m. Friday through Christmas Eve for the second year in a row.
Analysts are expecting retailers to post only a modest sales gain in a year clouded by a soft economy, heavy job cuts and the threat of war with Iraq. Consumer confidence levels have inched up in recent weeks, but still languish near nine-year lows.
Even holiday destination stores like toy and electronics retailers are reporting disappointing results.
Top electronics retailer Best Buy Co. Inc. (NYSE:BBY - News), which books the bulk of its profit during the holiday season, cut its earnings outlook earlier this week, saying sales at stores open at least one year will probably come in flat for the quarter ending in February.
The company was offering popular DVDs, including "Minority Report" for $15.99. Amazon.com had the same movie for $19.49, plus shipping and handling.
FAO Inc. (NasdaqNM:FAOO - News), parent of FAO Schwarz and Zany Brainy toy store chains, warned it is likely to file for bankruptcy unless its bank helped it out of a liquidity crisis.
Name: Sony NW-MS70D
Category: Portable Audio
Price: Open (but approx 40,000 yen)
Release date in Japan: February 10, 2003
The Gist: Lord, how sweet is this? Sony has just announced a totally
beautiful Network Walkman and, while I wouldn't normally say this in
mixed company, I lust after it. With a passion. It's unbelievably sexy
in chunky titanium with a sweeeet, organic-looking USB-compatible
docking cradle that looks like it's been born rather than molded.
Only the decidedly unsexy name that Sony's chosen -- "MS70D" -- can
ruin the mood. Anyway, got to snap out of it and get down to details:
256MB of onboard memory means up to 11 hours and 40 minutes of ATRAC3
musical bliss and much more if you take advantage of the player's
Memory Stick Duo slot. And if that wasn't good enough (I KNOW that
should be "weren't good enough"), Sony's "Virtual Mobile Engine"
technology used in the player means a vast improvement in battery
life, giving 33 hours of ATRAC3 playback and 28 hours of the
ATRAC3plus variety. I could wibble on with all the tech specs and
other details, but trust me, take a look at it on Sony's site and
you'll want to buy it. Seriously.
P.S. Works with Windows 98 SE, Me, 2000 and XP.
Stocks Set for First 'Quadruple-Witching'
Friday December 20, 1:14 am ET
By Doris Frankel
CHICAGO (Reuters) - It used to be called "triple-witching," the scary Friday once a quarter when Wall Street braced for volatility as equity options, stock index futures and stock index options all expired on the same day.
This Friday will be the first "quadruple-witching" when new single-stock futures are added to the concoction.
Wall Street traders said the coming expirations were already adding volatility to stock trading on Thursday.
Most December stock index options and some index futures, such as the Standard and Poor's 500, ceased trading on Thursday and settle on the Friday opening. Options contracts on the S&P 100 index close on Friday. Individual stock options stop trading and settle at Friday's close.
But traders do not expect single-stock futures expirations to have much impact because volume in the new market is still small. Single-stock futures are contracts that allow investors to buy or sell 100 shares of an individual stock at a certain price on a set future date.
"In this upcoming expiration, single-stock futures will probably not have an impact in the volatility mix because the volume is still insignificant compared to other markets," said Steve Sanders, vice president for marketing and business development at Interactive Brokers Group, a global electronics brokerage firm.
ONCE A SCARY TIME
Triple-witching first became a scary time for Wall Street in the early 1980s when trading took off in equity futures and options. The simultaneous expirations might have caused some wild gyrations in prices as traders rushed to close out or roll over positions, sometimes affecting underlying stock prices and the market.
"At that time, the equity markets were less volatile and when volatility did show up during the quarterly expiration, it became more noticeable," said Dave Lerman, associate director of index products at the Chicago Mercantile Exchange.
By the late 1990s, the nervousness around triple-witching faded as Wall Street got used to increased volatility due to the bull market and the technology boom.
"With Internet stocks doubling and tripling in value in a couple of weeks, not a lot of people would notice the volatility associated with a quarterly expiration," Lerman said.
In recent years, investors have devised ways to cope with the triple-witching phenomenon.
"In the past few quarters, investors have not waited for the last minute and have adjusted their portfolios the week prior to expiration," said John Person, head financial analyst with Infinity Brokerage Services.
Diane Garnick, a global investment strategist with State Street Global Advisors, said triple-witching gives a sense of where stock market sentiment is.
For example, if investors were betting the stock market was going to go higher, they would need to sell their long December stock index futures positions and buy March positions before Thursday's close.
"But what adds to the volatility is Thursday's deadline, because investors need to adjust or roll over their positions or risk being subjected to the cash settlement value of the underlying futures contract which is assigned on Friday morning," Person said.
NEW DERIVATIVES ON THE BLOCK
On Nov. 8, trading in futures on individual stocks such as Microsoft Corp. began on OneChicago LLC, a consortium of three Chicago derivatives exchanges, and on rival venture Nasdaq Liffe Markets LLC.
Although volume in single-stock futures has gained momentum after a full month of trading, many players are still on the sidelines as they wait for liquidity to build.
"It will probably take a few more months before I even have interest," said George Fontanills, president of Optionetics.com, an options education firm. "Larger institutional traders are going to need volume to get into and out of the trade."
As of Dec. 17, a total of 248,546 contracts had changed hands on the two electronic exchanges since trading began, according to the Options Clearing Corp.
At OneChicago and Nasdaq Liffe, December futures contracts close and settle on Friday with physical delivery scheduled for Dec. 26.
Nasdaq Liffe, a venture between the Nasdaq stock market and the London International Financial Futures and Options Exchange, lists December futures on 30 stocks and four exchange-traded funds.
One Chicago, an alliance of the Chicago Board of Trade, Chicago Mercantile Exchange and Chicago Board Options Exchange, offers December futures on 43 stocks and one exchange-traded fund.
What's to Be in 2003
by PRNewswire
Euro RSCG Worldwide today released forecasts for the coming year, focusing on global, youth, and European trends. Insights are drawn from the ongoing research of the agency's S.T.A.R. (Strategic Trendspotting and Research) team and from a global panel of Stargazers, colleagues who report in regularly on local trends and information.
"So much of what we're seeing in trends right now is a response to our heightened feelings of insecurity," said Marian Salzman, Chief Strategy Officer at Euro RSCG Worldwide. "Even as we go about our daily business, we are aware that things are not quite normal. This is why we're turning to products, services, and new behaviors that help us to retain some sense of control."
Top Global Trends:
Anxiety Avoidance
-- In a post-9.11 world concerned with terrorist threats, job layoffs, the prospect of war between the United States and Iraq, and sinking stock prices, more people will decide that ignorance is bliss. They'll avoid world news, choose to leave financial statements unopened -- generally do anything they can to keep anxiety at bay.
-- Consumers will seek emotional fulfillment, not complexity. In 2003, this will impact everything from product design to branding to luxurious indulgences. Consumers and companies will single-mindedly focus on the here and now rather than worry about the long-term, and businesses will continue a movement away from sustainability and toward accountability.
The Pursuit of Safety
-- People want to feel safe -- and they're willing to spend money for the privilege. There will be far more emphasis on defensive and preventative products, from tick detectors to "panic rooms," personal weaponry to water filtration.
-- The post-9.11 trend toward "everyday heroes" reminds us that the best things in life require courage, commitment, and personal sacrifice. 2003 will bring louder cries for personal responsibility and a lesser willingness to accept quick fixes that gloss over problems without getting to their roots.
-- People are taking comfort in all that is genuine -- the antithesis of our high-tech environments teeming with artifice. One result will be a push for companies to use real people in their marketing communications. Additionally, research shows that consumers think companies owned and managed by families are more likely to make products they can trust and to treat their employees well. We'll see more companies follow the lead of SC Johnson, which last year re- branded itself as "SC Johnson: A Family Company."
-- In the past 18 months, home has gained new meaning, whether it's an increased interest in DIY, household comfort, homeschooling, cooking, or creating personal spaces that reflect one's individuality. Home will continue to serve as a sanctuary and a workplace.
Forming Tribes
-- Tribes of unmarried young adults are flourishing, changing the format of socialization. Tribes function as substitute families and sources of security. Look for more organized "branding" of the groups, through anything from modern-day coats of arms to joint sponsorship of needy children or youth soccer teams.
Making It Count
-- With staffs cut, competition tighter, and employees finding difficulty in accomplishing everything during regular work hours, people will be increasingly intolerant of endless meetings and other time wasters. We can expect less business travel and fewer team meetings.
Top Youth Trends:
A Sense-ational 2003
-- Youths' technology-driven lives, media's profusion, and post-9.11 vulnerability are fueling the popularity of experiences that stimulate all five senses. Energy drinks, narcotics, indulgent foods, sensual fabrics, and visceral music will thrive, while high-tech environments and products will be a turnoff.
Artifice's Decline
-- Stardom is now within the grasp of ordinary people, thanks to reality-TV shows and a movement toward real talent and low-budget genius. Youth are gravitating toward characters like Eminem instead of Britney. As the artifice of celebrity is stripped away, ambitious young talents are working around bureaucracies and systems on their road to success. Artists are using guerilla tactics such as whisper campaigns and poster blasts to promote their art. Young musicians are building grassroots fan bases and using the Internet to work around the major labels.
-- In 2003 we'll see a grittier version of anti-glamour. Rock music is back as lead singers ring in a new post-punk genre that borrows from groups like the Clash and the Ramones. For some, the obsession with all things gritty takes on an extra dimension: young Japanese men tanning to darken their skin in imitation of Brooklyn hip-hop crews, and theme parties such as London's School Disco, which requires everyone to wear a school uniform. From fashion to lifestyle, young people are looking for ways to be intimate and real, in appearance and action. Tried and true brands are ousting designer duds. "Trucker chic" and "bohemian chic" aesthetics in fashion and decor are spilling over into life. Local dives and neighborhood bars are supplanting exclusive clubs.
Social Identity Convergence and Gender-Bending
-- The issues of race, gender, religion and heritage are now ambiguous. Even language is morphing, as evidenced by the rise in Spanglish in the U.S. This will lead young people to explore cultures that might have once seemed off-limits, and also closely investigate their own heritage.
-- Another convergence will be the continued blurring of gender lines. Young men are exploring vanity and pampering. In Japan, men are plucking their eyebrows and applying concealer. In the U.S., male cosmetics brands such as Aramis are expanding their lines.
Marrying Younger and Focusing on the Home
-- During the 1990s, the number of married teens in the U.S. increased nearly 50 percent, reversing a decades-long decline. Among the factors contributing to this trend: teens' awareness of thirty-somethings bemoaning their decisions to put off marriage and children; a yearning for the emotional and financial security that marriage suggests; and a growing conservatism as a reaction to uncertain times.
-- Additionally, house parties and other forms of in-home entertainment will continue to grow in popularity among young people in 2003.
Slow, Thoughtful Food
-- Young people will shun their parents' fast food for more healthful solutions. Chains that offer fresh, convenient foods with options for vegetarians and environmentally conscious consumers will reap the rewards.
Top European Trends:
Increased Ethnic Marketing:
-- As populations of ethnic minorities grow across Europe, smart marketers are targeting these groups in culturally specific ways. Marketers are learning that it is imperative to understand the cultural nuances, linguistic preferences, and consumer attitudes of each unique group. The influence of these niche markets upon the broader population may give them a power that belies their actual numbers.
Eurocracy
-- European nations are grappling with compliance with EU directives banning certain marketing practices and restricting the advertising of a number of products. Among the categories affected: cigarettes, cigars, tobacco, and related products; confectionary products; alcohol; nutritional supplements; financial products; and children's products. One result will be an increase in alternative marketing, including buzz campaigns on- and offline.
The above forecasts are derived from Euro RSCG's Mind & Mood Monitor, a series of e-surveys conducted throughout the year; the X-Plorer Panel, a group of influential youth aged 18-29 who regularly consult with Euro RSCG about youth issues; the Stargazer network, made up of Euro RSCG employees across the globe who serve as local trendscouts; and ongoing data scans online.
Euro RSCG Worldwide, one of the world's five largest integrated marketing communications agencies, is made up of 233 offices located in 75 countries throughout Europe, North America, Latin America, and Asia Pacific. Euro RSCG provides advertising, marketing services, corporate communications, and interactive solutions to global, regional, and local clients. The agency's client roster includes Air France, Danone Group, Intel Corporation, LVMH Louis Vuitton, Reckitt Benckiser, Volvo, and Yahoo!. Headquartered in New York, Euro RSCG Worldwide is the largest unit of Havas, the world's sixth-largest communications group.
Microsoft to bump Apple into sync-hole?
By Joe Wilcox
Staff Writer, CNET News.com
December 19, 2002, 4:00 AM PT
Read more about Apple, Microsoft, syncing and wireless.
Apple Computer is refining a strategy for connecting cell phones and other portable devices to its Macintosh systems in an effort to boost sales.
But a rival endeavor from Microsoft, expected to be unveiled early next year, could dim the company's hopes, analysts said.
Cupertino, Calif.-based Apple is nearing the end of a long testing cycle for iSync, its software for synchronizing information between Macs, Bluetooth-enabled cell phones, personal digital assistants or the company's iPod music player.
The software, due for release early next year and currently available in a beta version, lets consumers and business users input data once and replicate it to many different devices.
That's why synchronization software is shaping up as a key battleground for Apple and Microsoft. As consumers shift spending away from PCs to more portable devices, such as cell phones or digital music players, controlling the key element for synchronizing data on these devices with computers is becoming increasingly important, say analysts.
Although no projections for the value of the synchronization software market are available, analysts said control of the market could be hugely profitable.
"As end-user client devices proliferate, users may have an array of gadgets," said Jupiter Research analyst Michael Gartenberg. "Since most users will have the bulk of their data--both personal and business--on their PCs, controlling the synchronization of that data will help determine the overall success of future devices and services."
For Apple, synchronization software could become an important hook that might persuade consumers or businesses to choose Macs over PCs. Apple has seen its share of the overall operating system market slide in recent years as Linux gains popularity. IDC estimates that the market share for Mac OS dropped to 3.1 percent in 2001 from 4.6 percent two years earlier. Windows, in contrast, has more than 90 percent market share.
"Certainly by...2005, possibly by the end of 2003, Linux will pass Mac OS as the No. 2 operating environment," said IDC analyst Dan Kusnetzky.
Apple hopes its iSync software can slow, or even reverse, its market share erosion. Apple did not specify exactly when the service would be available. Sources said it's unlikely that it will debut at next month's Macworld Expo in San Francisco.
"I don't think people understand that how (the cell phone) works with the computer could be a reason for choosing a platform," said Phil Schiller, the Apple executive in charge of worldwide marketing.
Analysts see Apple currently in the lead for such synchronization services.
"By controlling sync to devices, Apple is now the gatekeeper of a critical part of the technology needed to enable the future advances in mobile computing as we move into the post PC world," Gartenberg said. "This means that Apple can add support for devices like Pocket PCs if it chooses and redefines the relationship with device vendors that want to be a part of the core OS sync experience."
The Microsoft issue
The big question mark for Apple is whether Microsoft intends to put its considerable resources behind its own synchronization software effort.
Microsoft is expected to announce, as early as March, during its Mobility Developer Conference, refinements to its synchronization software, called ActiveSync. But it remains unclear when the company might increase marketing and development efforts behind its synchronization strategy.
A Microsoft representative said the company had no immediate plans to incorporate ActiveSync into its Windows operating system. Such a move would most likely mean that Microsoft would automatically control the vast majority of the sync software market. While Microsoft says it has not decided on its plan, analysts said that adding ActiveSync to Windows is a real possibility, should the market heat up.
"Microsoft is considering making ActiveSync a part of the operating system, which would be consistent with the company's past strategy of bundling 'mature' technologies into Windows," Gartenberg said.
Directions on Microsoft analyst Robert Helm said he hadn't "heard anything specific" about such a move. Still, bundling ActiveSync into Windows with the next service pack would be a quick way to respond to Apple's plans for iSync.
"ActiveSync is definitely Microsoft's strategic synchronization protocol today, but that could change a lot over the next three to four years," Helm said.
Clearly, Microsoft is taking this area more seriously. But the company's approach differs in several respects from Apple's. For one thing, the software titan has largely focused on synchronization of corporate data, which has helped Pocket PC steal some momentum from Palm in the personal digital assistant market.
However, Microsoft's synchronization approach uses proprietary protocols, which could slow its acceptance among third-party developers and corporate information services departments, analysts said. Right now, Apple's iSync supports several synchronization protocols, but "SyncXML is the emerging standard," and the one Apple most aggressively supports, said Joe Hyashi, the company's director of applications worldwide product marketing.
Microsoft's more proprietary approach could greatly benefit Windows, since consumers would need the latest version of the operating system in order to obtain ActiveSync. That plan would be similar to Microsoft's approach to the media player market, where Windows XP includes a more feature-packed version of its Media Player software. But the company's plan is not set in stone, making it difficult for Apple and other competitors to see where Microsoft is headed.
"Looking further out, it's not clear that ActiveSync is the Microsoft synchronization protocol," Directions on Microsoft's Helm said. "The company actually has several synchronization protocols it's supporting today: ActiveSync, SQL Server replication...(and) Outlook."
Apple's in more than one basket
Another advantage for Apple could be that Microsoft has largely limited its focus to handhelds and cell phones running the company's Pocket PC software. Apple, in contrast, is looking at a broader array of devices.
Apple's early synchronization strategy largely focuses on cell phones, which the company sees quickly displacing personal digital assistants as repositories for contact and calendaring information.
"We believe this (cell phone and iSync strategy) replaces the PDA," Apple's Schiller said. "The cell phone becomes your PDA."
Apple is hedging its bets on cell phones as the wireless handset industry recovers from its worst year. But analysts see rapid growth on the horizon, particularly as carriers deploy more advanced networks, and manufacturers add more features to devices. IDC expects handset sales to rise from 391 million this year to 606 million by 2006.
Another reason to focus on cell phones for synchronization with PCs is that consumers and businesses typically replace cell phones more quickly than PCs. On top of that, manufacturers are rapidly adding newer, PC-like features to phones.
"The next big thing happening on the cell phone is the digital picture stuff," Schiller said.
But synchronization is about more than cell phones, particularly as consumers add digital cameras, camcorders and music players to the growing list of devices they connect to computers.
Apple clearly is considering these other categories, starting with its iPod digital music player. Already, the company has successfully positioned the Mac as a hub for connecting digital devices.
"As personal computers can synchronize more data types beyond calendar and contacts--as the iPod synchronizes music--we will see more devices proliferate," Jupiter Research's Gartenberg said. "For example, a future DVR (digital video recorder), might not record anything directly, but sync the TV shows to your TV for home viewing or to your handheld for the road. All of which can be translated in profits for whoever controls the access points of the data sync."
Warner Music Group Names Howard Singer Vice President Technology
December 19, 2002 1:18pm
>
NEW YORK, Dec. 19 /PRNewswire/ -- Warner Music Group (WMG) named Howard Singer vice president technology. Based in New York, Singer will report to WMG senior vice president and chief information officer, Tsvi Gal.
Singer joins WMG from Rightscom, Limited, where he served as a senior consultant, providing business strategy and technical expertise to major media companies, technology providers, and other enterprises working with e-commerce and digital rights management. In his new capacity, Singer will oversee systems, networks, and other infrastructure related technology for WMG's global information services team. In addition, he will lead the recently created Digital Technology Group, which supports technical aspects of WMG's on-line music and new media initiatives.
In making the announcement, Gal said, "I am thrilled to welcome an executive with Howard's technical and entertainment management experience to WMG. His expertise will prove invaluable to Warner Music as we continue to maintain our competitive advantage in the music technology space."
Prior to his work at Rightscom, Limited, from 1999 to 2001, he served as senior vice president, marketing and product strategy at Reciprocal, where he was involved in the implementation of services for secure digital distribution of media. During his tenure at Reciprocal, the company developed more than 100 clients and processed millions of transactions for the sale and distribution of protected content. In 1997, he co-founded a2b music and held the position of CTO, where he led the development of a secure digital distribution service for the music industry. Before a2b music, Singer spent 20 years at AT&T, where he held technical and business positions on product development teams responsible for the production of speakerphones, cellular phones, smart cards and videogame peripherals.
Singer holds more than a dozen U.S. patents in video processing, consumer electronics and multimedia. He holds a BS degree in Mathematics and Computer Science from the State University of New York at Stony Brook and a PhD in operations research from Cornell University.
About Warner Music Group
Warner Music Group is home to some of the world's leading record companies, including The Atlantic Group, Elektra Entertainment Group, Rhino Entertainment, Warner Bros. Records Inc. and Word Entertainment. The company's Warner Music International operates in more than 70 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music Group also includes one of the world's leading music and print music publishers, Warner/Chappell, and WEA, Inc., which is composed of three companies, WEA Corp., WEA Manufacturing, and Ivy Hill. Warner Music Group is an AOL Time Warner company. For more information about Warner Music Group visit our corporate site at http://www.wmg.com .
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Kind of an in-your-face w. Janice Ian LOL.eom
Sports Legends from the Past and Present Highlight Packed Line-Up of CES Special Events
Business Editors
2003 International CES
ARLINGTON, Va.--(BUSINESS WIRE)--Dec. 19, 2002--
NFL, "Extreme" Sports Stars and Award-Winning Musicians to Attend World's Largest Consumer Technology Tradeshow
Imagine watching NFL playoffs with sports legends Charles Mann or Cliff Branch or perhaps take sporting enthusiasm to the extreme by witnessing live performances from skateboarding legend Tony Hawk or BMX biker Dave Mirra. That dream becomes a reality when the 2003 International CES, the world's largest consumer technology tradeshow, returns to Las Vegas, Nev. January 9-12.
"Celebrities young and old will roam the halls of the Las Vegas Convention Center during CES, headlined by NFL legends and demonstrations of `extreme' sports," said Karen Chupka, vice president of events and conferences for the Consumer Electronics Association (CEA), the producer of CES. "Our line-up of celebrities and special events give credence to the notion that CES is more than just a tradeshow, it's a must-attend event where leaders of various industries come together to accomplish everything from networking to business to education while seeing the hottest technology to hit the global marketplace."
The brand-new Xtreme Entertainment Pavilion, a venue showcasing the hottest entertainment technology by such exhibitors as Gibson Guitar, Case Logic, Creative Labs, Wildseed and Ellula, also will showcase the latest in extreme sports. Case Logic will host demonstrations in a huge in-house half-pipe by skateboarding legend Tony Hawk. This cultural icon's career has taken him from his beginnings as a 12-year-old Bones Brigade rookie to 14-year-old pro, through the mega-limelight of today's Warped Tours, X-Games and skateboard video games. Hawk will be joined by BMX biker Dave Mirra, a four-time champion of ESPN Summer X-Games, and snowboarder Shaun Palmer, named NEA Extreme Athlete of the Year in 2000 and World's Greatest Athlete by USA Today.
The brand-new HDTV Sports Bar, showcasing the latest in high-definition digital televisions, also will attract two legends from the National Football League (NFL). Former Washington Redskin Charles Mann and Oakland Raider Cliff Branch will be on-hand at the sports bar to sign autographs and chat about the pigskin during CES. Mann ranks second in team history with 82 sacks during six productive seasons, including a Super Bowl victory over Denver in the 1987 season. Mann will be joined by Cliff Branch, who amassed 8,565 receiving yards and 67 touchdowns during his NFL career while playing in four Pro Bowls and two Super Bowls. The HDTV Sports Bar also features a sweepstakes where attendees can enter a drawing to win the ultimate 2003 Super Bowl vacation.
The CES conference track features two stars from the music industry. Artist and performer Janis Ian will participate in the Digital Download SuperSession on Saturday, January 11. Herbie Hancock, winner of five Grammy Awards and an Academy Award, will participate in the Surround Music Summit on Thursday, January 9 at the Alexis Park Resort.
Other Special Events
On CES Press Day, Wednesday, January 8, CES Innovations winners will be highlighted during the first exclusive press/analyst reception from 1:30 to 5:30 p.m. in the Innovations booth #55083 in the Las Vegas Hilton. Innovations recognizes the best designed and engineered products in consumer technology.
On the opening day of the show, CES plays host to the MECP Challenge at 10:00 a.m. in the Silver Lot of the LVCC. Attendees will witness the "best of the best" installers compete in a two-day competition to build the best car. Before or after the MECP Challenge, attendees can head over to the Gold Lot across the street to experience first-hand the latest vehicles from Mercedes-Benz at the CES Mercedes-Benz Tech Drive.
Closing out the opening day of CES, an exclusive international reception for press and attendees will be held at 6:00 p.m. in room S222 of the LVCC. This is the best opportunity to meet and network with exporting exhibitors and international guests from around the world attending the show.
On Friday, January 10, Gateway CEO Ted Waite will keynote at the annual CES Leaders in Technology dinner. This invitation-only dinner brings together CEA's government guests and senior executives from CEA member companies.
Preceeding the dinner, Fast Company magazine and CEA will hold the CES Executive Conference: The New Digital Economy at the Bellagio Hotel from 9:00 a.m. - 6:00 p.m. The event analyzes what's driving the digital consumer today with a select group of leading executives including Nokia's Pekka Vartiainen, SEGA's Charles Bellfield, iN DEMAND's Steve Brenner and NetFlix CEO Reed Hastings.
Attendees rise and shine Saturday morning, January 11, and lace up their sneakers for the first annual CES 5K Run/Walk to benefit the Electronics Industries Foundation (EIF). Held at 8:00 a.m. behind Caesar's Palace, this fun test of physical fitness raises funds for programs focusing on youths and technology.
Later that day, CES focuses on the industry's environmental awareness during the first annual Green Saturday at CES. This day features discussions on environmental issues during conference sessions and a luncheon focusing on the dynamics of electronics recycling and energy efficiency.
Building off a successful charity auction at CES in 2002, eBay will hold 17 eBay University classes in the Las Vegas Hilton during the show. Taught by eBay experts, these free seminars will include general training about how to buy and sell on eBay. For sellers, the classes will provide insight into using eBay as a complementary channel to reach new customers. Sessions will cover tips and tricks for buyers of all levels, selling for individuals, and selling for manufacturers, retailers and small businesses.
CES is North America's largest technology tradeshow. The 2003 International CES will showcase the latest innovations from 2,000 international exhibitors in wireless communications, gaming, digital video, high-end or "extreme" audio, accessories, CE fashion, consumer technology networking, broadband, mobile electronics, content media, new business technology, delivery systems and the Internet.
About CEA
The Consumer Electronics Association (CEA) represents more than 1,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $80 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.
CEA also sponsors and manages the International CES - Defining Technology's Future. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.
UPCOMING EVENTS
-- Electronic House Expo - Spring
February 26-March 1, 2003, Orlando, FL
-- CEA 2003 Winter Technology & Standards Forum
February 24-February 28, 2003, Scottsdale, AZ
-- 2003 CEA Winter Summit
March 4-6, 2003, St. Regis Aspen, Aspen, CO
-- HDTV Summit & the Academy of DTV Pioneers 2002 Awards
March 10, 2003, Renaissance Hotel, Washington, DC
-- CEA 2003 Spring Leadership Retreat
May 5-6, 2003, Grand Hyatt, Washington, D.C.
-- Connections 2003
May 7-9, 2003, Fairmont Hotel, San Jose, CA
-- Asian Home Electronics Fair
May 14-17, 2003, Shanghai, China
-- 7th Annual Consumer Electronics CEO Summit
June 18-20, 2003, Vail, CO
-- CEA 2003 Summer Technology & Standards Forum
August 1-4, 2003, Location TBA
-- CEA 2003 Fall Conference and Industry Forum
October 13-15, 2003, Carlsbad, CA
-- 2004 International CES - Defining Technology's Future
January 8-11, 2004, Las Vegas, NV
--30--JAP/la* hb/la dsc/la
CONTACT: Consumer Electronics Association
Jeff Joseph, 703/907-7664
jjoseph@ce.org
http://www.CE.org
or
Lisa Fasold, 703/907-7669
lfasold@ce.org
onsite tel: 702/943-3521
or
Brad Jones, 703/907-7060
bjones@ce.org
http://www.CESweb.org
KEYWORD: VIRGINIA NEVADA TRACK
INDUSTRY KEYWORD: SPORTS MUSIC ENTERTAINMENT
ELECTRONIC GAMES/MULTIMEDIA COMPUTERS/ELECTRONICS TRADESHOW
SOURCE: Consumer Electronics Association
Sports Legends from the Past and Present Highlight Packed Line-Up of CES Special Events
Business Editors
2003 International CES
ARLINGTON, Va.--(BUSINESS WIRE)--Dec. 19, 2002--
NFL, "Extreme" Sports Stars and Award-Winning Musicians to Attend World's Largest Consumer Technology Tradeshow
Imagine watching NFL playoffs with sports legends Charles Mann or Cliff Branch or perhaps take sporting enthusiasm to the extreme by witnessing live performances from skateboarding legend Tony Hawk or BMX biker Dave Mirra. That dream becomes a reality when the 2003 International CES, the world's largest consumer technology tradeshow, returns to Las Vegas, Nev. January 9-12.
"Celebrities young and old will roam the halls of the Las Vegas Convention Center during CES, headlined by NFL legends and demonstrations of `extreme' sports," said Karen Chupka, vice president of events and conferences for the Consumer Electronics Association (CEA), the producer of CES. "Our line-up of celebrities and special events give credence to the notion that CES is more than just a tradeshow, it's a must-attend event where leaders of various industries come together to accomplish everything from networking to business to education while seeing the hottest technology to hit the global marketplace."
The brand-new Xtreme Entertainment Pavilion, a venue showcasing the hottest entertainment technology by such exhibitors as Gibson Guitar, Case Logic, Creative Labs, Wildseed and Ellula, also will showcase the latest in extreme sports. Case Logic will host demonstrations in a huge in-house half-pipe by skateboarding legend Tony Hawk. This cultural icon's career has taken him from his beginnings as a 12-year-old Bones Brigade rookie to 14-year-old pro, through the mega-limelight of today's Warped Tours, X-Games and skateboard video games. Hawk will be joined by BMX biker Dave Mirra, a four-time champion of ESPN Summer X-Games, and snowboarder Shaun Palmer, named NEA Extreme Athlete of the Year in 2000 and World's Greatest Athlete by USA Today.
The brand-new HDTV Sports Bar, showcasing the latest in high-definition digital televisions, also will attract two legends from the National Football League (NFL). Former Washington Redskin Charles Mann and Oakland Raider Cliff Branch will be on-hand at the sports bar to sign autographs and chat about the pigskin during CES. Mann ranks second in team history with 82 sacks during six productive seasons, including a Super Bowl victory over Denver in the 1987 season. Mann will be joined by Cliff Branch, who amassed 8,565 receiving yards and 67 touchdowns during his NFL career while playing in four Pro Bowls and two Super Bowls. The HDTV Sports Bar also features a sweepstakes where attendees can enter a drawing to win the ultimate 2003 Super Bowl vacation.
The CES conference track features two stars from the music industry. Artist and performer Janis Ian will participate in the Digital Download SuperSession on Saturday, January 11. Herbie Hancock, winner of five Grammy Awards and an Academy Award, will participate in the Surround Music Summit on Thursday, January 9 at the Alexis Park Resort.
Other Special Events
On CES Press Day, Wednesday, January 8, CES Innovations winners will be highlighted during the first exclusive press/analyst reception from 1:30 to 5:30 p.m. in the Innovations booth #55083 in the Las Vegas Hilton. Innovations recognizes the best designed and engineered products in consumer technology.
On the opening day of the show, CES plays host to the MECP Challenge at 10:00 a.m. in the Silver Lot of the LVCC. Attendees will witness the "best of the best" installers compete in a two-day competition to build the best car. Before or after the MECP Challenge, attendees can head over to the Gold Lot across the street to experience first-hand the latest vehicles from Mercedes-Benz at the CES Mercedes-Benz Tech Drive.
Closing out the opening day of CES, an exclusive international reception for press and attendees will be held at 6:00 p.m. in room S222 of the LVCC. This is the best opportunity to meet and network with exporting exhibitors and international guests from around the world attending the show.
On Friday, January 10, Gateway CEO Ted Waite will keynote at the annual CES Leaders in Technology dinner. This invitation-only dinner brings together CEA's government guests and senior executives from CEA member companies.
Preceeding the dinner, Fast Company magazine and CEA will hold the CES Executive Conference: The New Digital Economy at the Bellagio Hotel from 9:00 a.m. - 6:00 p.m. The event analyzes what's driving the digital consumer today with a select group of leading executives including Nokia's Pekka Vartiainen, SEGA's Charles Bellfield, iN DEMAND's Steve Brenner and NetFlix CEO Reed Hastings.
Attendees rise and shine Saturday morning, January 11, and lace up their sneakers for the first annual CES 5K Run/Walk to benefit the Electronics Industries Foundation (EIF). Held at 8:00 a.m. behind Caesar's Palace, this fun test of physical fitness raises funds for programs focusing on youths and technology.
Later that day, CES focuses on the industry's environmental awareness during the first annual Green Saturday at CES. This day features discussions on environmental issues during conference sessions and a luncheon focusing on the dynamics of electronics recycling and energy efficiency.
Building off a successful charity auction at CES in 2002, eBay will hold 17 eBay University classes in the Las Vegas Hilton during the show. Taught by eBay experts, these free seminars will include general training about how to buy and sell on eBay. For sellers, the classes will provide insight into using eBay as a complementary channel to reach new customers. Sessions will cover tips and tricks for buyers of all levels, selling for individuals, and selling for manufacturers, retailers and small businesses.
CES is North America's largest technology tradeshow. The 2003 International CES will showcase the latest innovations from 2,000 international exhibitors in wireless communications, gaming, digital video, high-end or "extreme" audio, accessories, CE fashion, consumer technology networking, broadband, mobile electronics, content media, new business technology, delivery systems and the Internet.
About CEA
The Consumer Electronics Association (CEA) represents more than 1,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $80 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.
CEA also sponsors and manages the International CES - Defining Technology's Future. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.
UPCOMING EVENTS
-- Electronic House Expo - Spring
February 26-March 1, 2003, Orlando, FL
-- CEA 2003 Winter Technology & Standards Forum
February 24-February 28, 2003, Scottsdale, AZ
-- 2003 CEA Winter Summit
March 4-6, 2003, St. Regis Aspen, Aspen, CO
-- HDTV Summit & the Academy of DTV Pioneers 2002 Awards
March 10, 2003, Renaissance Hotel, Washington, DC
-- CEA 2003 Spring Leadership Retreat
May 5-6, 2003, Grand Hyatt, Washington, D.C.
-- Connections 2003
May 7-9, 2003, Fairmont Hotel, San Jose, CA
-- Asian Home Electronics Fair
May 14-17, 2003, Shanghai, China
-- 7th Annual Consumer Electronics CEO Summit
June 18-20, 2003, Vail, CO
-- CEA 2003 Summer Technology & Standards Forum
August 1-4, 2003, Location TBA
-- CEA 2003 Fall Conference and Industry Forum
October 13-15, 2003, Carlsbad, CA
-- 2004 International CES - Defining Technology's Future
January 8-11, 2004, Las Vegas, NV
--30--JAP/la* hb/la dsc/la
CONTACT: Consumer Electronics Association
Jeff Joseph, 703/907-7664
jjoseph@ce.org
http://www.CE.org
or
Lisa Fasold, 703/907-7669
lfasold@ce.org
onsite tel: 702/943-3521
or
Brad Jones, 703/907-7060
bjones@ce.org
http://www.CESweb.org
KEYWORD: VIRGINIA NEVADA TRACK
INDUSTRY KEYWORD: SPORTS MUSIC ENTERTAINMENT
ELECTRONIC GAMES/MULTIMEDIA COMPUTERS/ELECTRONICS TRADESHOW
SOURCE: Consumer Electronics Association
MH imo you've missed the mark. It's the convergence that will demand the seemless integration and that has just begun. WiFi, gps, online music, video, instant messaging...all these items will find their way into handhelds collectively at some point. That is where I think the portalplayer collaboration is headed. That is only the first step though. The DRM has to be tightly integrated with most of this tech as well. Lot's of work for e.Digital IMO and the applications have barely begun. Yeah standards are great but weaving together 10 standards to make multimedia handheld devices still requires seemless integration, a small footprint, and low power consumption.
cheers
Philips to buy reconfigurable DSP firm Systemonic
By Peter Clarke
Semiconductor Business News
December 19, 2002 (5:20 a.m. EST)
AMSTERDAM, The Netherlands --- Royal Philips Electronics is to buy Systemonic GmbH, a three year-old startup company based in Dresden, Germany and apply that company's reconfigurable digital signal processing technology to multiple system-on-chip applications.
Systemonic is best known for applying its reconfigurable DSP technology to wireless LAN basebands able to address 802.11a/b/g standards, but Philips stressed that although the technology would be deployed by Philips in this area the technology is more generally applicable. Systemonic's products, intellectual property and systems expertise are expected to add high-speed wireless capabilities to the Nexperia system-on-chip design platform, Philips said.
The technology is expected to provide a boost to Philips' aspirations in the home- and enterprise-gateway product area, which is expected to comprise a broadband ADSL or VDSL pipe on the infrastructure side and multiple wired and wireless connections on the client side. Deployment of such gateways is being inhibited by the myriad standards available and Systeomonic's reconfigurable technology could aid Philips there.
"We are looking at Systemonic as a reconfigurable and software-programmable computing architecture. It's well suited to tracking the evolution of standards," said Paul Marino, general manager of the 'connectivity' business unit within Philips Semiconductors.
The financial terms and price for the purchase of Systemonic were not disclosed. The deal is expected to close in the first quarter of 2003 and Systemonic is to be integrated within Philips Semiconductors.
"The entire team will join Philips at this time," said Marino. Systemonic currently employs about 90 people.
"The acquisition of Systemonic complements Philips vision of the 'Connected Home'. By adding high-speed wireless connectivity to our strong portfolio of audio/video, connectivity and broadband access technologies, Philips can now integrate all of these key technologies on a single chip so consumers can easily connect to information, entertainment and services anywhere in the home," said Phil Pollok, senior vice president of the emerging businesses unit within Philips Semiconductors, in a statement.
Systemonic a 1999 spin-off from the Technical University of Dresden (see September 7, 1999, story). provides technology for a complete two-chip 802.11a/b and g solution. The company has been heavily backed by venture capital firms, including Sony Ventures, and acquired the wireless LAN activities of Raytheon in 2001.
When applied to wireless LAN the technology offers a range of up to 70 meters, a throughput of up to 72-Mbit/s. "We have a chip set going to customers in limited volumes," said Karsten Roenner, executive vice president of Systemonic. That chip set is being fabbed at Taiwan Semiconductor Manufacturing Co. Ltd. according to Roenner.
After the acquisition Philips plans to work on a cost-optimized version of the chipset that should sample in the first half of 2003 and go to high volume in 2003.
"We are making Systemonic an integral part of our strategy. You can expect some announcements about broadband router very soon," said Marino.
Music file flaws could threaten traders
By Robert Lemos
Staff Writer, CNET News.com
December 18, 2002, 5:12 PM PT
A security firm on Wednesday warned that people using Windows XP or popular music player WinAmp could fall prey to a vulnerability, enabling a modified music file to take control of a person's PC.
Flaws in both pieces of software could introduce malicious MP3 or Windows Media files--which sound identical to unmodified music--into the file-swapping systems, said George Kurtz, CEO of Foundstone.
"These particular vulnerabilities are definitely attack vectors for any people or entity that is looking to go after those that are taking part in file-swapping activities," he said.
The music industry and Hollywood are eyeing such hacking tactics as a way to stop file swappers from trading copyrighted music in the future. A bill sponsored by Rep. Howard Berman, D-Calif., and Howard Coble, R-N.C., and introduced into the U.S. House of Representatives in July, would allow copyright owners limited rights to hack into peer-to-peer networks.
Such attacks could take advantage of flaws similar to the two found by Mission Viejo, Calif.-based Foundstone.
The flaw in Windows XP can force the operating system to run code when a music file is played by Windows Explorer, the operating system's file-browsing application. Even placing the mouse pointer over a file icon--opening a preview of the file--could trigger the file's payload, if it has one. The vulnerability does not affect the Windows Media Player, according to details posted by Microsoft in its advisory.
The vulnerability occurs because certain attributes of the files can be loaded with bad data that affect the amount of memory that Microsoft's Windows allocates for the information. Known as a buffer overflow, such problems are a common software security problem.
People who use NullSoft's popular WinAmp software also have to watch out, said Foundstone's Kurtz. WinAmp has a similar flaw that allows code to run when certain multimedia tags in MP3 and WMA files are loaded with too much data. Kurtz said that the company has notified NullSoft and has a patch prepared. A representative for the software maker couldn't be reached for comment.
This is the second time in recent months that Microsoft has had a problem with a common multimedia format. In November, the company warned that its operating system's mishandling of the PNG (portable network graphics) image format could allow a malicious program to compromise a person's computer. Microsoft later upgraded the severity of that vulnerability to "critical."
Other multimedia formats are also becoming targets for Internet attacks. Web software maker Macromedia warned last week that a flaw in its Shockwave Flash Player, a popular browser plug-in for animating Web graphics, could leave Internet users open to attack.
The patch for Windows XP is available through Microsoft's Windows Update service. The newest version of NullSoft's WinAmp is available on the company's WinAmp site.
Interesting...The Digital Dilemma
George Gilder, Gilder Technology Report, 12.18.02, 4:56 PM ET
NEW YORK - Why are we bringing up a generation of kids who don't know physics but know everything about Windows? Why are there entire nations, such as India, whose economies are increasingly devoted to this and other totemistic excesses of software? Why has software become the medium through which we deal with the physical world?
Sign up for Forbes' Free Investment Guru Weekly e-mail. We fly airplanes with software; our bombs hunt our enemies with software; we run switches with software whose annual upgrades are the single-largest operating cost in running a network. Across the global economy, we ritualistically do in software functions that could be far better accomplished with applications-specific hardware, the all-optical network is perhaps the supreme example.
The science of application-specific hardware has atrophied in part because every young information scientist is taught that the physical layer doesn't matter to the universal computer. But since the challenges the world gives us are messy, the decision to use a generalized machine to solve them necessarily entails a parallel and ponderous effort to represent the specificity of the world in the machine's terms--the software. Software is proverbially the bottleneck of the information economy--because under the Turing model that's where all the work is done.
And what work it is to represent to that universal computer all the problems of the world, natural and man-made alike, using a language that itself moves ever farther away from any physical primitive, rising above machine language to assembly language to ordinary programming language and thence to the hyper-programming language. Each level, no matter how great and complex the tasks it addresses, masks complexities that must ultimately be resolved on the chip by exploiting the tremendous processing clock-rates to accomplish hugely complex procedures.
The digital crisis is so pervasive we have begun to assume it as part of the background. Six-hundred-thousand bugs in Windows XP from Microsoft (nasdaq: MSFT - news - people ) is a crisis. Winnowing them down to two-hundred-thousand bugs is a crisis that has gone chronic, to be coped with rather than resolved. Windows Home XP has some paradoxical bugs that can't be eliminated without transforming the program. Mega-software has reached some kind of wall, one manifestation of the crisis.
Another manifestation can be seen in Pentium as it moves up toward 60 gigahertz, which Intel (nasdaq: INTC - news - people ) now proposes as a feasible goal. Power increases linearly with clock-rate and exponentially with voltage. Voltage has declined to the point where it generates leakage faster than it relieves power consumption. So there is a real question of whether we can continue to increase the clock-rates that mega-software increasingly demands.
Sacrificing Efficiencies
As hierarchical design, the very process that shielded us from the growing complexities on the surface of the chip, ascends multiple levels of abstraction it becomes impossible to test all the resulting designs in all their possible combinations. So you must incorporate built-in self-test, devoting more and more of the processor to testing itself, and even then you don't test it adequately.
The tests become increasingly tests of interfaces. Since those cannot be fully assured as the chip gets bigger and bigger, you include a lot of redundant cells. The structures for incorporating the redundant cells become themselves increasingly complex. As this process advances, the device becomes increasingly suboptimal. At some point it becomes inferior to using a set of separate chips of a manageable size and modularity--reversing the essential teleology of the integrated circuit. But that doesn't solve the problem; it merely shifts the complications and conflicts to the bus.
At current speeds and densities, the universal clock doesn't work anymore, so you have to have separate clock pulses all across the chip, sacrificing many of the fundamental efficiencies of the digital system. Asynchronous designs are a partial and valuable solution. But in isolation every one of these problems can appear solvable. Taken together they entail a set of fundamentally irresolvable conflicts that suggests the whole digital endeavor is reaching an impasse. The clock problem, the power problem, the leakage problem, the interface problem, the pad-limited problem, the failure of memory technology to keep apace with processor clock-rates, so that most of the clock cycles are wait-states. All these together represent a technology in climacteric.
Moore's Law In Crisis
My colleagues, Dynamic Silicon editors Nick Treddenick and Brion Shimamoto, have been wandering around the office with graphs showing not that Moore's Law is reaching the end of its run, but that its continuation may be irrelevant. They point out that the last four generations of chip geometries, 0.25 microns, 0.18 Microns, 0.13 microns, and now 0.09 microns (90 nanometers) account for only 20% of chips made by the major foundries such as TSMC. The adoption curves for the next cycle of Moore's Law used to be nearly vertical--as soon as we could squeeze more circuits on a chip, everybody wanted the capacity. Today the adoption curves for new technologies are nearly horizontal, even though theoretically the marginal cost to make a 90-nanometer function on a 300-millimeter wafer is less than 20% of the cost of a 130-nanometer chip made on a 200-millimeter wafer.
We spent quite a bit of time in the office recently trying to explain this through the Clayton Christensen overshoot theory (the personal computer already over-serves its real market), through mismatch theory (memories cannot keep up with the processor cycle times), and design complexity (design tools have once again fallen behind the complexities of single-chip electronics). In any case, it seems that the bounty of Moore's Law, which for so long appeared to drive the information industry, is increasingly shunned. Whatever the explanation, the phenomenon tends to confirm the existence of a crisis of digitization.
Excerpted from the November 2002 edition of Gilder Technology Report
Consumers are increasingly paying to access online content, as
10 percent of all U.S. Internet users are expected to pony up this year,
according to a recent report from New York-based marketing research firm
eMarketer. The report indicates that 15.7 million U.S. consumers -- or 10
percent of the online population -- will purchase online content in 2002,
a number expected to rise to 21 million -- or 13 percent -- in 2003.
Individual consumers will pay $3.8 billion worldwide for online content in
2002 and organizations $44 billion, adding up to nearly $50 billion by the
end of this year. "The question of whether consumers are more willing to
pay for online content has become largely irrelevant," said eMarketer
senior analyst Ben Macklin. "The more appropriate question is whether
businesses are any longer willing to offer online content and services for
free. And the answer increasingly seems to be no."
http://www.emarketer.com/products/report.php?content_on
Report: Cumulus To Hire Record-Label Liaison
Longtime Jeff McClusky & Associates staffer John Kilgo is reportedly set to be named Director/Label Relations for Cumulus' CHR/Pop stations, with the Los Angeles Times quoting unnamed sources as saying Kilgo will serve as an in-house liaison to record labels. But the newspaper adds that, according to "critics," Kilgo's new job "smacks of payola" and is "sending a shudder through the major labels." Cumulus has had a contract with McClusky but plans to let that agreement lapse at year's end, the newspaper reports. Cumulus executives told the Times late yesterday that they had not yet finalized their decision on Kilgo and that he could still end up as an outside contractor with an "arms'-length" relationship to radio. When asked if it would be against the law for Cumulus to have an in-house record-label liaison, EVP John Dickey told the Times that Kilgo's role "stays well within the confines of how these relationships have been set up. It really is going to allow us to maximize our relationships with the labels."
The Day the Music Industry Died
Wednesday December 18, 11:10 am ET
By James J. Cramer,
An entire industry seems to be disappearing before our eyes: the music industry. Consider Best Buy (NYSE:BBY - News). It bought Musicland to mask a slowdown in hard goods. But Musicland ran smack into the "free" music business that we all know is happening with MP3s, where nobody purchases music from a store anymore.
In fact, when you go to buy a PC, the salespeople tell you that you'll never have to buy music again because you can burn music CDs right off the Internet. And despite industry efforts to control that practice, it's unstoppable.
This article continues for RealCommentary Gold subscribers.
Sony, Matsushita, Fujitsu Take Stakes In Bluetooth JV
Tuesday December 17, 10:46 pm ET
TOKYO -(Dow Jones)- Sony Corp. (SNE or 6758), Matsushita Electric Industrial Co. (MC or 6752) and Fujitsu Ltd. (J.FUT or 6702) have each taken a 2.5% stake in BTQ Corp., a joint venture to provide official qualifications for the use of the Bluetooth short-range wireless communications standard, a BTQ official said Wednesday.
L.M. Ericsson Telephone Co. invented the Bluetooth technology. Bluetooth is becoming the de facto standard for close-range wireless communications for a wide-range of electronic devices, such as mobile phones, personal computers, printers, and personal digital assistants. The nominal link range is 10 meters.
But the technology still isn't widely used in Japan. One factor stunting the growth of bluetooth technology is that data can currently be easily transferred between mobile phones.
With the addition of such strong partners, BTQ will aim to actively promote the Bluetooth technology as a communications standard for consumer electronics and audiovisual equipment, the official said.
"We will seek to further increase the number of our (equity) partners," he added.
Toshiba Corp. (J.TOS or 6502), Taiyo Yuden Co. (J.TYD or 6976) and IBM Japan Ltd. jointly established BTQ in February 2001 with capital of Y40 million. The joint venture said Wednesday it has no plans to increase its capital.
Sony, Matsushita and Fujitsu each bought for Y1 million a 2.5% stake in BTQ from Toshiba. As a result, Toshiba's stake in BTQ fell to 73% from 80.5%. Taiyo Yuden holds a 10% stake, while IBM Japan, the Japanese unit of International Business Machines Corp. (NYSE:IBM - News) , has a 9.5% stake.
BTQ offers the formal qualifications needed for the use of the Bluetooth logo. The logo, which is mandatory for all products that claim to meet the Bluetooth standard, assures consumers that products they purchase are Bluetooth-compliant.
The expanded use of the Bluetooth would likely require new applications on a variety of devices, according to industry observers.
-By Kanji Ishibashi, Dow Jones Newswires; 813-5255-2929; kanji.ishibashi@ dowjones.com
Dow Jones Newswires
12-17-02 2246ET
OT Using High Tech for Fun and Games
by Bruce Benson
Think of the new Beetle, or PT Cruiser, or Thunderbird, and you get the idea of what Henk Rogers' Blue Planet Software is doing for computer games at Hawaii's Manoa Innovation Center.
"We take an intellectual property, mostly games, and we take the interesting parts and bring them up to date with a new look and feel, then we license people who take them to cell phones, or on-line, or other ways," he said.
The company's business plan is akin to picking up the rights to do a reprise of a famous marquee like the Thunderbird, but bring it out as a modern, sophisticated machine, with licensees doing the sales and marketing.
Several designers strip games down to their basic elements, brainstorming how to put them back together with a look and feel that appeals to contemporary players. "Then we bring in students to take them out for test drives, so to speak. We pay them $10 an hour. In the course of a year we will use dozens of kids, lots of testers," Rogers said.
Who makes a good tester? "Basically we look for someone who is observant and who has an opinion. We like someone who will say, 'This game stinks and this is whats wrong with it.' The target audience for games today is much broader than it used to be. So we need lots of opinions from our testers."
At the moment, Rogers turns to friends of his sons, ages 20 and 16, for recruitment, as well as word of mouth. Occasionally, if a situation demands a super tester, the company will fly someone to Hawaii.
Besides programming yesterday's games for today's market, Blue Planet also manages their quality control. "We manage a brand the way Disney would manage its licensees for Mickey Mouse," Rogers said. "We do the equivalent of checking the quality of the shirts, making sure they represent Mickey Mouse the way we want. We approve the product before its release, and then do sample checks afterwards."
Rogers' most famous game is Tetris, which is to computer games what Monopoly is to board games. Sales of Tetris have run well into the tens of millions of copies for what some gamers believe to be the better part of a billion dollars.
Blue Planet Software is a 50% owner in The Tetris Company, managing the Tetris brand and licensing Tetris to companies worldwide. "It's now being licensed into a number of new areas," Rogers said. "One is set top boxes that you find on top of the TV set. They are becoming more powerful, and are starting to be able to play games as well."
The biggest market, however, is online games, and nowhere is Tetris played more energetically than in Korea, where one Tetris Company licensee has a stunning 12.6 million registered members out of a population of 40 million. Rogers said membership is free, with users paying for premium services, such as an avatar. Avatars can be described as the screen manifestation of a person, who in turn can imbue his or her avatar with unique characteristics.
"For example, your membership comes with one avatar, but it is dressed only in jeans and a t-shirt. If you want him or her to wear anything else, you have to buy it, and that's where we get our royalties. These purchases for your avatar can include other clothes, hairdos, pets, even cyberspace plastic surgery."
Rogers said the licensee sells $200,000 worth of avatar clothing and accessories every month in the Korea market.
Another important market for Blue Planet and The Tetris Company is wireless, which includes granting licenses to play Tetris on the telephone. The company has divided the world up into four territories Europe, the U.S. and Canada, Japan, China and some of the other dragons except Korea, and of course Korea.
In addition to downloading ring tones or screen savers, the newest phones, sometimes called 3G for third generation or 2 1/2G, can now download graphics for games.
Rogers' newest venture, Blue Lava Wireless, is a group of local game designers and developers bent on putting Hawaii on the worldwide mobile game map. Blue Lava's first product was, of course, Tetris. Since then the company has been turning out "casual gamer" games at the rate of one per month.
"Blue Lava has proved its ability to make great games on quality and on schedule, and is now entering its second phase," Rogers said. "Our designers and developers will bring their deep roots in Role Playing Games, or RPG, to the next set of games. Who knows, maybe they will come up with the next Magic the Gathering, or Pokemon."
Rogers said Blue Lava is also entering into a reciprocal publishing arrangement with G-Mode in Japan and Come2Us in Korea, giving Blue Lava more than 100 game titles to sell in the US market as well as the ability to sell its products in the Japan and Korean markets.
Playing hardball with Tetris
In computational complexity theory, there are types of problems known as NP-Hard, meaning they are especially difficult because you cannot devise a shortcut or smart algorithm to solve them quickly. As a set, these tough puzzles are sometimes called the Traveling Salesman Problem, where the challenge is to find the most efficient route for a salesman who has to visit a lot of different locations.
A trio of scientists at Massachusetts Institute of Technology recently analyzed the game of Tetris to determine its computational complexity. They found the 17-year-old game to be NP-Hard, meaning you cannot efficiently calculate the moves needed to win, even if you knew the complete order of pieces and could take all the time you needed.
For Henk B. Rogers, learning that Tetris is NP-Hard must seem like a perfect allegorical analysis to describe the twists and turns of a significant part of his career. He is the traveling salesman who befriended Alexey Pajitnov, the Soviet computer scientist who invented the game, and Rogers today runs a Honolulu firm that is 50% owner of the Tetris Company.
Originally from Holland, Rogers lived with his family in New York City during his teen years. When his father, an international businessman, moved to Japan, Rogers enrolled at the University of Hawaii. "I was a computer science/dungeons-and-dragons major, and drove a taxi at night to take day classes," he recalls.
Rogers later lived in Japan, where he programmed a role-playing game called "Black Onyx." He formed Bullet-Proof Software and the game sold more than 100,000 copies in the Japanese market. BPS became a Nintendo Japan licensee with close connections to Nintendo chairman Hiroshi Yamauchi. Those connections helped Nintendo gain Western console rights to Tetris at a time when several other companies were involved in the same quest.
Rogers flew behind the Iron Curtain in 1989 and made a deal with the Soviet government for Tetris on hand-held game machines, and then licensed the Gameboy rights to Nintendo. This would be the first of a string of Tetris deals he was involved in.
Rogers befriended the author of Tetris, Alexey Pajitnov, during his Moscow negotiations. So when the rights to Tetris were set to revert to Alexey in 1995, he asked Henk for help. "Alexey basically made me an offer I could not refuse," Rogers said for this interview. So in 1996 Rogers company, Blue Planet Software, and the U.S. branch of the former Soviet ministry of software export Electronorgtechnika (Elorg), formed "The Tetris Company".
Like lighting an endless chain of rockets, Rogers' coup set off struggles of epic proportions that took him to corporate boardrooms and courtrooms around the world for years. Sparks of interest, as well as enmity, still fly. His role as the traveling salesman in helping bring Tetris to the world was reported at length in David Sheff's 1999 book, "Game Over, How Nintendo Conquered The World." Rogers will also be seen in an upcoming Discovery Channel-TTC-TV series on the history of the computer. And he is preparing for a BBC one-hour special on the history of Tetris. He might begin by telling them, "Well, this wasn't easy..."
Russian firm found innocent in copyright trial
Tuesday, December 17, 2002 Posted: 4:08 PM EST (2108 GMT)
Dmitry Sklyarov
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SAN JOSE, California (AP) -- A federal jury Tuesday acquitted a Russian software firm that was charged with digital copyright violation for creating a program that cracks the security features of Adobe Systems' electronic book software.
The case against Elcomsoft Ltd. was the most high-profile under the 1998 Digital Millennium Copyright Act, which many in the technology industry consider unduly restrictive.
If it had been convicted, Elcomsoft could have been fined $2 million, with additional penalties if intent was determined.
Lightning rod for hacker rights
The young Elcomsoft programmer who developed the software, Dmitry Sklyarov, became a lightning rod for hacker rights after his arrest last year after attending a hacker convention in Las Vegas.
Sklyarov, an assistant professor at Moscow Technical University, spent several weeks in jail before the government agreed to drop charges against him in exchange for his testimony at Elcomsoft's trial.
Prosecutors had tried to prove that the Elcomsoft software was illegal because it permitted owners to print, copy or otherwise distribute copyright material, encouraging piracy.
Prosecutor Scott H. Frewing told jurors that the Russians "were selling a burglar tool for software to make a profit." He quickly left the courtroom after the verdict and had no immediate comment.
Arguments impact jurors
The defense argued that the program merely enabled owners of Adobe eBook Reader software to make copies of e-books for personal use. If an owner makes a backup copy of an e-book or transfers it to another device he owns, they argued, that is permitted under the "fair use" concept of copyright law.
Jury foreman Dennis Strader said the argument made a big impact on the jurors, who asked U.S. District Judge Ronald M. Whyte to clarify the "fair use" definition shortly after deliberations began.
"Under the eBook formats, you have no rights at all, and the jury had trouble with that concept," said Strader.
The copyright act under which Elcomsoft was tried prohibits the production and distribution of any product that circumvents security features of digital media.
More prosecutions predicted
Defense attorney Joe Burton said the government failed to prove Elcomsoft intended to violate the law, but predicted more prosecutions.
"I don't see it as throwing a blanket on DMCA," Burton said, referring to the Digital Millennium Copyright Act. "It will take another case to test that."
Elcomsoft president Alex Katalov said the program is no longer being sold in Russia or anywhere else.
Missing RIAA figures shoot down "piracy" canard
By Andrew Orlowski in San Francisco
Posted: 16/12/2002 at 20:15 GMT
Research by George Zieman gives the true reason for falling CD sales: the major labels have slashed production by 25 per cent in the past two years, he argues.
After keeping the figure rather quiet for two years, the Recording Industry Association of America (RIAA) says the industry released around 27,000 titles in 2001, down from a peak of 38,900 in 1999. Since year-on-year unit sales have dropped a mere 10.3 per cent, it's clear that demand has held up extremely well: despite higher prices, consumers retain the CD buying habit.
Increasingly hysterical comments from RIAA chairperson and chief random-number-generator Hilary Rosen suggest that many billions of potential sales have been lost.
In August analysts Forrester attributed the decline in sales to the economy, citing historical precedent, and argued that music downloads could revive the industry.
So why isn't the RIAA trumpeting this affirmation in music sales, and something of a renaissance in its business efficiency?
Perhaps because the RIAA's version of the truth doesn't fit with the facts. Zieman points out that only 3,000 sales of each of the missing 12,000 titles would have been enough to see overall growth continue to grow.
Heavens, you'd be forgiven for thinking the labels slashed investment with the intention of seeing overall demand decline. Perhaps there's a more benign explanation, however: A&R budgets are set well in advance, and with Napster causing a mighty panic amongst industry executives a couple years ago, they decided to cut the rosters, close their eyes and wait for a bomb that never went off. But far from being besieged by CD-burning vandals, the music industry is seeing astonishingly resilient demand.
For years the independent labels chaffed at the RIAA's sanctioned monopoly on representing recording artists, and dreamt that a mighty, populist wave of artists seeking more equitable treatment, and a public seeking more interesting music, would wash it away overnight.
That doesn't seem necessary. The RIAA appears to be imploding without any assistance at all, under the weight of its own logic. ®