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Vaca: My biggest take from this cc:
"Wave is providing authentication support for Vista . Vista currenty on the MSFT VISTA OS does not currently provide authentications support for the TPM on the current OS. They are provide tools to manage this."
Even though we knew this it was nice to hear it from Steven.
Also, Steven has obviously been following the consumer vs enterprise banter on this board. I liked his response. Shows he cares about what the Wavoids think and feel. Jeff
GoKite:
"How many media center PCs have been sold, total, since 2002? (hint: not many). How many of those have been sold to someone that also bought XBOX360?"
Have you looked at the Dell website lately? Even the lowest end Inspiron's are Media center PC's. I believe Dell only offers one Inspiron without it being a media center pc. How many do you think Dell will sell this Christmas season? I bought the high end one earlier this year and just ordered two more for my teenagers. Take another look. Jeff
Doma: The consumer authentication network will be built sometime in 2009. LOL. Jeff
Barge: So much for having to wait for the "infrastructure" to be put into place?! XBOX Live has over four million subscribers. I'm thinking that subscriber base will exponentially grow with the premium content about to be released to the consumer? What do you think? LOL. Jeff
PC maker fumes at Vista price hike
http://www.pcpro.co.uk/news/96566/pc-maker-fumes-at-vista-price-hike.html
Leading PC manufacturer Acer has accused Microsoft of ratcheting up the cost of Windows by effectively forcing consumers to opt for the Premium version of Vista.
Acer claims that the Vista Home Basic - the new entry-level Windows - is so poorly featured that consumers will simply reject it. "The new [Vista] experience you hear of, if you get Basic, you won't feel it at all," said Jim Wong, senior corporate vice president at Acer. "There's no [Aero] graphics, no Media Center, no remote control."
Wong claims that Microsoft's own marketing machine has undermined Vista Home Basic. "Right at the beginning they started talking about the experience of [Vista Home] Premium. Premium is the real Vista," he said.
Furthermore, Wong claims that the manufacturer's licence for Vista Home Premium is 10% more expensive than for XP
Home. "We have to pay more but users are not going to pay more," Wong said. As a result, he claims the total cost of building a PC has risen by 1-2%, which is a significant increase in such a low-margin business.
Acer isn't the first PC manufacturer to complain about the inadequacies of Vista Home Basic. Other OEMs, including Evesham Technology, have told PC Pro that they have no plans to ship that version on their PCs as they feel there will be no consumer demand.
A Microsoft spokesperson said: "Our OEM partners will offer PCs configured with the various editions of Windows Vista to meet customer needs. They are free to make their own determinations about which Windows Vista editions they will offer, and to set the prices they will charge for their PCs.
"Microsoft is committed to keeping prices low for customers, and Windows Vista editions will be offered at the same prices as comparable Windows XP versions.
"Windows Vista Home Basic is a great choice for consumers who want to simply use a PC to browse the internet, correspond with friends and family over e-mail or perform basic document creation and editing tasks. Windows Vista Home Basic will deliver a safer, more reliable and more productive computing environment."
Jon Honeyball in Taiwan and Barry Collins in London
Exactly... Maybe we'll hear something about Hitachi in the CC or right before if you know what I mean? Jeff
No Vista Ultimate upgrade: has Microsoft lost the plot?
Just maybe Microsoft will offer a secret sauce for that hamburger that everybody will aboslutely have to have?? Jeff
http://www.itwire.com.au/content/view/6692/983/
No Vista Ultimate upgrade: has Microsoft lost the plot?
By Stan Beer
Sunday, 29 October 2006
Microsoft as predicted months ago finally announced last week that it would allow PC buyers from now until March when Windows Vista is released to the public to upgrade for a substantial discount or for free, depending on the version. However, Microsoft will not give new PC buyers any discount if they upgrade to the new premium product Vista Ultimate indicating that the software giant has lost the plot.
As it stands, in many countries upgrades from Windows XP Media Center Edition 2005 to Windows Vista Home Premium, and upgrades from Windows XP Professional, Windows XP Tablet PC Edition and Windows XP Professional x64 Edition to Windows Vista Business and Windows Vista Business 64, can upgrade for free plus shipping and handling costs.
Upgrades from Windows XP Home Edition to Windows Vista Home Basic and to Windows Vista Home Premium can be had for about a 50% discount from the boxed product upgrade price, once again plus the cost of shipping and handling.
Basically Vista Ultimate is nothing more than a hamburger with works product, offering users the functionality of both the business and home Vista products. One would think therefore that users who pay good money for a business or home XP version and who would get either a discount or free swap over to their Vista equivalents would therefore get at least some credits toward Vista Ultimate. No way Jose, says Microsoft.
"There is currently no upgrade path under the Tech Guarantee programs from Windows XP to Ultimate, since Vista Ultimate is an entirely new high end product with significant functionality and value-added compared to existing high end Windows XP product," stated Microsoft in an emailed answer to our question.
So let's see if we can get this straight. A user who buys a PC now with a top of the range high-end business or home Windows XP operating system should expect to pay the full price if they want the new top of the range Vista product? No credit at all for the operating system they just bought?
That sounds like an awfully good reason to do one of two things: hold off buying a new PC until Vista is available, or go ahead and buy your PC but hold off upgrading to Vista for a few years until you've got full use out of the operating system you've paid good money for. If Microsoft really expects users to pay twice for an operating system within a few months, then the software company really has lost the plot.
That's not my opinion. That my friend is a fact! Jeff
Doma: Whether it's consumer, enterprise or both.... By the end of 2007 you and I will have already realized enough wealth not to care anymore. Jeff
cosign: Interesting to say the least! Wow! Jeff
trust: That in itself is the true selling feature of this technology! I believe the Japanese will jump on it first then the US. Jeff
Orda: The debate is timing. History has proven that things can change over night. Wave has gone from talking about phase one of their business plan for how many years? Now they've gone from phase one to phase three literally within six months. One day nobody knew what an Ipod was and the next day the market was flooded with Ipods. That's how the consumer market plays?! Nobody knew who YouTube was and then one day everybody knew. TV Tonic is ONE deal away from consumer ubiquity. Barge has supported his theory with decent DD that 2007 COULD be the year? A handful or many may laugh at that possibility but I personally think that it's a joke to think that Wave has plans to fund WAVXPRS until 2009 in hopes of turning some significant revenue. I wouldn't be suprised if 2007 was the year. I wouldn't be suprised if it was 2008. But 2009 (to me) is laughable. I will go on record and predict that by the last half of 2007 we will see wavxprs generating revenues that will make us all admit that the Spragues had their ducks in a row all along. Jeff
Doma: Why dont you support your consumer 2009 theory?? At least Barge has provided some DD to support the possibility (IMO reality) of consumer TPM adoption in 2007. The scale of the consumer TPM uptake is questionable in 2007 but how the H do you support 2009? Your minimally a year off bro. Your 2009 prediction is more far fetched than Barges 2007 by a long shot IMO.
So I have been wiring funds from my bank account directly to my etrade account with the ability to trade immediately for years. So two Fridays ago in the early morning before the market opened I transfered several K to my etrade account to buy in that morning when the market opened. After fifteen minutes I noticed my funds were not showing on my account for trading as they typically would after a wire transfer. So I call etrade and they inform me that they changed their wire transfer policy from immediate access to a 5 business day waiting policy. No notice whatsoever?! Needless to say I had them cancel my wire transfer. Of course..... Wave's share price went ape S... that morning and i've been pissed off since then! Add me to the etrade hater list will ya! Jeff
Barge: Can you hear the crows in the near distance? Better fire up the barbie! Gonna be cookin up some crow for some friends! All in fun of course! I know I've had my fill of crow more than once! Jeff
Red Hot Maaaaggggmmmmmmaaaaaaaa!
Probably posted last year by CM:
http://gpf.nacha.org/docs/may2005/reston_2005_Executive_Summary.doc
GLOBAL PAYMENTS FORUM
HYATT REGENCY RESTON
RESTON, VA
10-11 May 2005
Executive Summary
"Next Steps: NACHA worked with large global banks to develop a white paper that included the definition of International ACH Transactions and number of payment scenarios to illustrate what was or was not an International ACH transactions. The white paper is currently being reviewed by OFAC. As part of the NACHA rule making process a Request For Comment (RFC) will be distributed to members of the NACHA family. The RFC is being finalized and will be distributed in July for a 60 day comment period. A business case will be sent to the NACHA Board of Directors and the distribution of ballots should occur in the Fall. An implementation date is currently being discussed. Realistically, it will probably be September 2006 or March 2007. It is understood that there will need to be significant reorganization of systems and many will have to throw out what they have and begin again. Training implications means contacting all of the RDFIs in the U.S. to explain responsibilities and warranties.
International Collaboration on Electronic Authentication Panel
Iana Bohmer, Northrop Grumman
The Federation for Identity and Cross-Credentialing Systems (FiXs)
Ashley Evans, Pfizer, Inc.
Secure Access for Everyone (SAFE)
Jane Hennessy, Chair EAP, Wells Fargo
The Electronic Authentication Partnership (EAP)
Patrick Curry, TSCP
Transatlantic Secure Collaboration Project (TSCP)
Moderator: Helena Sims, NACHA
Iana Bohmer, Northrup Grumman
FiXs Overview
FiXs: In 2003, the Department of Defense (DoD) issued common access cards to (CAC) personnel within the military and to contractors who work on military bases. They needed an authentication system for the bases and base facilities for physical access at their respective facilities without issuing an additional set of credentials. It was decided to deploy the project in a cost effective manner, but the DoD would not be responsible for managing the system. Therefore, FiXs was created to manage the system that was deployed as a commercial system. Uniqueness of the DCCIS/FiXs System: Only operational pilot for physical access using cross-credentialing system; only program with very strong vetting requirements with the use fingerprinting authentication. There are plans for adding network authentication to integrate physical and logical access into a single system.
FiXs works now because the authority and customer demand is there. The DoD wanted and needed the system and they were willing to fund it. There are market, technical, and organizational factors to regard. There is an initial market to deploy the infrastructure and make it successful. There are 180,000 vendors in a timed market with a definitive deployment schedule. There are similar needs and the possibility for expansion into logical access, but it is the structure that provides a platform for more robust functionality. The model works best when a number of many participants operate their own piece and share the infrastructure. There will be more deployment to military bases and contractors in the next few years. Beyond that it has to be used in many different places and in many different ways (add logical access functionality). The model mimics the payment card business model technically and business-wise. The association’s model is one based on dues and transactions fees All members sign single intermediary rather than multi-lateral contracts."
Having said all that.... I think Barge has posted significant proof that TPM's and the Trusted OS are well on their way to being utilized by the consumer market in 2007. To what degree I suppose time will tell. Jeff
Which of the irons in the fire are going to make us wealthy in the shortest amount of time? Is it the government iron? Enterprise? Consumer? Culmination of all three? My opinion is Seagate alone will get many of us where we expect to be with this investment next year all by itself. Wealthy. I know I'm not alone with this opinion. Nothing new here. The only difference between enterprise and consumer is the difference between being wealthy and disgustingly wealthy! The consumer market will make many of us disgustingly wealthy. Will we be wealthy or disgustingly wealthy in 2007? That is the true question. I believe that is the point Barge is truly driving here. I happen to know Barge invested in Wave to be disgustingly wealthy. Me too. Hell, I know we all deserve to be disgustingly wealthy considering the years we've all put in here! Jeff
Gotta love it! "One simple way to understand what TVTonic is all about is simply by reviewing its name! The Tonic in TVTonic is to be understood in two ways: Tonic as in a refreshing stimulant AND Tonic as in virtual monoTONIC counters, which is fancy term for Metering Applets." Nice angle Barge! Jeff
Nice work Barge!
An interesting blog about Diebold:
http://avi-rubin.blogspot.com/2006/09/diebold-should-let-us-analyze-new.html
Saturday, September 16, 2006
Diebold should let us analyze the "new" system
As most of you who read this blog know, Ed Felten and his students at Princeton have implemented the attacks that we described in our paper back in 2003 and some new attacks as well. I was aware of this work and was an early peer reviewer of their paper. I have watched Diebold's reaction to the Princeton paper, and they are reacting as expected based on their track record. Doug Jones has posted a very good commentary about the Diebold response.
Here's what I recommend. Diebold's defense against our paper and against Princeton's paper is that we looked at an old version of the system. Well, my response to that is, let us look at the new one! Every election administrator in the country who uses the Diebold machines should want Ed's team and mine to perform a security assessment of their voting technology. If Diebold's system is not vulnerable to Princeton's virus, then wouldn't they welcome such a public analysis? If they fear that the new version is vulnerable, then isn't that a question that needs to be answered publicly?
Diebold maintains that they now use AES for encryption, and that for this reason, they are immune to the Princeton "hack". Their responses always demonstrate to me how little they understand about security. The Princeton malicious code is running on the machine with access to all of the data and memory. There is nothing in this system preventing malicious code from accessing the AES keys on the machine, and Diebold has never used any kind of key management. They always use the same key in all of the machines.
Why is it that in this country, vendors can get away with this? Shouldn't it be part of the process to have competent and independent security reviews? I think that vendors should have to post their security mechanisms, algorithms and protocols publicly, and let the security community evaluate them. The computer security community eschews security by obscurity. If the voting machines have good security, we'll say so, and if they don't, we'll point out the flaws so that they can be fixed. Secrecy creates legitimates doubts and suspicion. Diebold is not acting like a company that wants to get it right. They act instead like a company that is afraid to have their weaknesses exposed.
So what if Diebold's "new system" now offers key management (Wave) and secure execution of AES encrypted keys within the secure partition or TPM???? Maybe Diebold knows a little more about security now then they have in the past? Jeff
On a volume of 108K shares today? I would be more inclined to agree with you if you doubled that number.
I still agree with you guv! It's green all over the ticker tapes today!
My apologies to all!!! LMAO
You mean agree with something Guv has to say or market trending? LOL.
guv: I think your right on here!
Barge: Best point ever made on behalf of WXP! jEFF
Because it's critical to also attest to the platform and then authenticate the correct user to that platform. From your article:
"Selling digital content is becoming more complex as the demand and variety of digital content has increased in the past three years," said Paul Hughes, Vice President from the Yankee Group.
"Amdocs' Qpass 6.0 provides the necessary set of tools to help digital content providers, such as service providers and media companies, manage complex digital partner relationships, sell digital content and turn a profit."
I hardly think Disney would have partnered with Apple a few weeks ago to offer their premium content without being convinced that content would be protected. It's simply not coincidental that Apple and Intel have partnered up after all these years to provide a hardware protected virtual solution. Anybody on this board who thinks otherwise is sadly mistaken.
Aside from Apple, most if not all of the PC OEMS are offering hardware protected virtual technology.
Qpass will be a good customer for Wave someday IMO. Jeff
Vacationhouse: How can that news be off topic???? A year ago the board would be flipping out over news like this?
"verified with Intel Viiv technology will enable consumers to access and enjoy new experiences that combine the best of the TV with the best of the PC."
"Our strategic relationship with Intel, and joint commitment to an industry standards-based approach for securely delivering a premium TV experience on multiple devices, will ensure that DIRECTV customers have the flexibility to view content when, where and how they want it."
Unbelievable.... I know, I know.... Steven keeps saying the consumer market in 2008. I'm not buying it AT ALL. Jeff
cm: The only quaking going here is from excitement! Just trying to help guv. Jeff
There are encryption requirements such as Triple DES and AES with specific bit requirements from what I understand. CM? Jeff
Scorpio: Excellent points... I will only add that TPM's at the client level are a requirement to make NAC,NAP or TNC functional. Wave provides the only interfacing firmware and software that's functional with all TPM's. Wave will get a piece of every NAC, NAP or TNC customer win because of the above facts. IMO
I completely agree with you Scorpio! Thanks for your perspective! Jeff
Apple to roll-out iTunes movies and 'one more thing'
By Kasper Jade
Published: 03:00 PM EST
The charismatic leader and co-founder of Apple Computer, Steve Jobs, plans to summon the worldwide media to a special event this month in which he'll usher in a new chapter in the company's digital media strategy, AppleInsider has learned.
Although the semi-official word out of Apple Americas is that invitations to the event have "not been sent" out, a seemingly inadvertent leak out of Apple Europe last week pinned the affair for Tuesday, September 12. It will be hosted by Jobs in a yet-to-be disclosed California location and beamed via satellite throughout the world.
Jobs will have much to talk about during the event, sources familiar with the chief executive's plans have said, including new iMacs and a much-anticipated update to the iPod nano. But the real push, they say, will be tied to the big screen.
After what has seemed like nearly two years of rampant speculation and unbridled enthusiasm on the part of its fans, the Cupertino, Calif.-based Apple is ready to introduce its al la carte feature film download service as part of iTunes.
Though slightly battered in his negotiations with major motion picture studios, Jobs is expected to announce that flicks from at least one major studio will be immediately available for download starting at just $9.99 a pop. In very much the same way national television networks elected to join the iTunes video bandwagon after some initial hesitation, additional studios are likely to follow suit in the coming months.
For some time now, published reports have insinuated that Apple and Jobs would be unwilling to launch a movie download service without a wide, touch-screen video iPod player to coincide. But as he reclines with his feet perched on the sprawling Apple boardroom conference table, Jobs is likely enjoying a chuckle or two -- he's been planning something bigger, something better, something everyone will want.
Just as he asserted that consumers are more eager to own their music tracks for 99 cents a piece rather than rent them on a monthly basis, he realizes that few are willing to plunk down ten bucks for a two-hour movie that they'll have to watch with their neck cranked towards a miniature screen resting in the palm of their hand. As someone at the forefront of the motion picture industry, he knows films are designed for the big screen and later adapted for the home living-room theater.
For these reasons, Jobs many months ago commissioned an elite group of Apple engineers to get the ball rolling on an intuitive hardware solution that would more closely tie the company's digital media strategy to the living-room. And so AppleInsider has been told, Apple has been quietly developing a video streaming device that will interface with an updated version of its iTunes jukebox software.
It's arguably been one of the most closely guarded secrets at Apple since the evolution of the first iPod digital music player, which forever altered the landscape of the music industry when it was introduced in October of 2001. Only a select bunch inside Cupertino have heard of the latest device and even fewer have seen it. Therefore, further details are few and far between.
Insiders can only presume the device will take up the form of a video-enabled version of Apple's existing AirPort Express wireless base station, which lets users stream their iTunes music tracks from their computers to their home stereo receivers. It also acts as a wireless 802.11 router and printing hub.
Though largely unconfirmed, there has been anecdotal evidence to support the notion that the streaming device may find its way into the AirPort Express product family. In particular, Apple last month began to constrain new shipments of AirPort Express modules to its US-based retail distributors, promising fresh shipments at a later date. In an August 6th filing, the company also reapplied for an 'AirPort Express' trademark with the United States Patent and Trademark Office.
Still, it should be noted, that although the streaming device has been targeted for an unveiling during this month's affair, it has yet to receive Jobs' official stamp of approval. Insiders say spotted development of the device, most likely related to its embedded firmware, is still undergoing tests. And unless completely satisfied with its performance, Jobs could delay roll-out until a slightly later date.
Nevertheless, this month's media event will bear the fruits of several other Apple product initiatives. First and foremost, insiders have said, will be an introduction of the company's largest and most stunning iMac to date: a widescreen, possibly high-definition model, built around what appears to be a 23-inch display. As AppleInsider reported last week, existing iMac models will also be refreshed around Intel Corp.'s new Core 2 Duo mobile processors, formerly reference by the 'Merom' moniker.
With dozens of tractor-trailer-mounted container ships seen leaving Foxconn's Far East manufacturing facilities over the past week, Apple's next-generation iPod nano digital music players also appears to be a lock for the event.
As AppleInsider exclusively reported back in April, the company has been toiling away on a redesigned iPod nano that will feature controller chips from Samsung, at least double the storage capacity of today's models, and come clad in non-scratch metal alloy enclosures. Despite rumors of delays, it was also reported that the new players remained on track for an introduction this month.
This September promises to be the start of exciting new times for Apple, one of the self-proclaimed pirates of Silicon Valley. And it better be -- Jobs and Co. are betting on it big time.
http://www.appleinsider.com/article.php?id=2041
Apple previews iTV set-top device
By Slash Lane
Published: 05:00 PM EST
Media junkies will have another item from Apple on their wish list when 2007 rolls around: iTV, or at least, the set-top device currently being referred to as iTV.
True to last week's whispers, Steve Jobs took advantage of the "It's Showtime" media event to offer a glimpse of the new product, which is scheduled to ship in the first quarter of 2007. Boasting a slew of connectors, from the computer-centric USB, ethernet, and 802.11 to yester-year's RCA video connectors and today's more advanced HDMI and optical audio, Jobs & Co. are putting every television in your household in Apple's cross-hairs.
Mimicking the Mac mini's enclosure, the iTV (Jobs said it will be renamed later) features the same shape and aluminum accents, but at less than half the height. It will also sell for half of what a low-end Mac mini goes for, or $299, making media streaming a more affordable endeavor.
In a demonstration to the invited guests at the Yerba Buena Center for the Arts Theater in San Francisco, Jobs showed off the new iTV, which features a more polished Front Row-like interface, undoubtedly a sign of the improvements yet to come to other Front Row-supported Macs when Mac OS X 10.5 Leopard ships next year.
The iTV will seemingly pull content from other computers on a network. Rather than simply list what media one has access to, as is currently the case with Front Row, Apple's media hub will go a step further, listing a movie's synopsis, stars, and cover, for example.
While Apple is hoping the iTV will encourage more customers to purchase television programming and movies from the iTunes Store, the iTV will not be limited to playing purchased media only. Photo slideshows with accompanying music will be be supported, for example, as is the case with current Front Row Macs.
Weby, take a look at this as well...
http://www.apple.com/macosx/features/bonjour/
http://www.apple.com/airportextreme/
I think Job's may be looking at a seamless universal home, work and play wireless network?
bluz: You say:
"Wave's business is in securing enterprises, not consumers."
Steven says:
"So the company is making great progress. I think we’ve made a lot of the right investments in the technology. I think we have a good strategy for how we ultimately reach out and encompass the rest of the market beyond enterprise. And I think we’ll see more of that ultimately in 2007. But, I think we’re seeing the Trusted Computing market expand."
Last CC. Jeff
Excellent points Ramsey. How will Apple secure the premium content? I know for a fact Disney wanted an answer before they signed on with Apple ITV. The following article was from 2004. Wonder what the $ total is now almost three years later? Jeff
Time Warner, Disney, Viacom Lose $3.5 Billion to Film Pirates
June 30 (Bloomberg) -- Sitting at a table for eight in his personal dining room, beneath a vintage poster for ``The Treasure of the Sierra Madre,'' Warner Bros. Entertainment Inc. Chief Executive Officer Barry Meyer rails against people who download his studio's movies for free from the Internet.
During a three-course lunch with President Alan Horn, he even takes issue with the term piracy for fear of ennobling the pests who have devoured much of the music business and are moving to films. ``It's not swashbuckling,'' Meyer says. ``It's theft.''
Meyer, 60, and the heads of other big movie studios are eager to define the terms in this fight. Otherwise, they may end up like the record labels -- with a generation of kids who think copyrighted music is free if can you find it on the Web.
U.S. movie companies lose $3.5 billion a year to piracy, not including the burgeoning trade on the Internet, according to the Motion Picture Association of America. The Encino, California- based group represents the seven biggest U.S. moviemakers, including Time Warner Inc.'s Warner Bros., Viacom Inc.'s Paramount Pictures and Walt Disney Co.
DreamWorks SKG's ``Shrek 2'' opened in theaters on May 19. A copy of the animated motion picture -- about an ogre and his bride -- which had been shot in a theater with a digital camcorder hit the Web a day later. Viewed on a laptop computer, the pirated version looked as good as a DVD.
`Harry Potter' on the Web
``Harry Potter and the Prisoner of Azkaban,'' a film from Warner Bros. about a teenage wizard in training, turned up on the Internet three days after it premiered in England on May 31. Some theaters there used night-vision goggles to watch for pirates.
Paul Kocher, a cryptographer from San Francisco who spends half his time in Los Angeles working with the studios, describes a dire ending for his clients. As Internet access gets faster and video compression improves, downloaders may steal a third of the studios' annual revenue -- that would be $3.7 billion for Time Warner alone -- making many of them unprofitable.
``Then you would get massive consolidation,'' says Kocher, 31. ``The movie industry knows this storm is coming.''
Encryption specialists like Kocher are just one weapon the studios are marshalling to fend off pirates. They're pushing consumer electronics companies to add security features to DVD recorders and personal computers. They're lobbying in Washington for stricter copyright laws, and they're suing companies that violate a 1998 federal law making it a crime to circumvent anti- piracy systems.
`Stealing a Hotel'
Suits against individuals who download movies may be next, says Jim Gianopulos, co-chairman of News Corp.'s Fox Filmed Entertainment. The Recording Industry Association of America, the record companies' lobbying group, took that step against music downloaders last year.
``When someone steals a movie that cost you $120 million, that's theft on a scale that's unimaginable,'' Gianopulos, 52, says. ``It's like stealing a hotel.''
Free-speech advocates, consumer electronics makers, small businesses, entrepreneurs and some members of the U.S. Congress are lining up against the studios. They charge Hollywood is trying to deny them an inalienable right: fair use. In simple terms, that's the ability to duplicate copyrighted material for one's own consumption, like taping ``The Apprentice'' TV show to watch later.
The Supreme Court guaranteed that right in 1984 when it ruled that Sony Corp. could not be held liable for copyright infringement by selling its Betamax video recorder.
The digital age has upended the fair-use concept. With file- sharing software like Kazaa, distributing a song to the world is as easy as loading it onto your computer to enjoy it yourself. Stopping the first act often means stopping the second.
`Gray Area'
``It's a major gray area, and it's getting grayer every day,'' says Christopher Chaudoir, a lawyer at Pillsbury Winthrop LLP in Los Angeles who specializes in copyright law.
Jason Schultz, a lawyer at the Electronic Frontier Foundation, a San Francisco Internet privacy organization, says viewers will lose if Hollywood has its way. He predicts the studios, in concert with Microsoft Corp. and other computer- related companies, will curtail the ability of a personal computer to copy and share music and movies. ``They're going to take away the record button,'' Schultz says.
The studios' struggle with piracy goes back to the 1980s, when criminals started manufacturing and selling knockoff videocassettes of movies. The threat exploded with digital technology. Each digital copy is as good as the original, making the duplicates attractive to viewers. Factories in Russia pump out 20 million illegal DVDs a year, according to the Russian Anti- Piracy Organization in Moscow.
`Follow the Bread Crumbs'
DVD piracy threatens the studios' biggest source of revenue. Sales and rentals of DVDs totaled $16.1 billion in the U.S. last year, according to Los Angeles-based Digital Entertainment Group. That topped North American box office revenue for all movies of $9.27 billion.
Online piracy is worse than counterfeit DVDs because it's harder to trace, says Gianopulos, sipping a Red Bull energy drink in his Los Angeles office. ``You can follow the bread crumbs to a warehouse of pirated cassettes,'' he says. ``When it's virtual, it's more anonymous.''
TorrentBits.org typifies the stealth, ingenuity and speed of Web sites that traffic in feature films. According to the site, it's run by ``Redbeard'' on a computer server in the Netherlands. According to the Public Interest Registry, the domain name is owned by Ben Dover in Bencity, New York, which doesn't exist.
The site connects people who want a film with those who have it, dodging copyright issues that would come up if TorrentBits had its own copy.
Downloading `Troy'
Four days after Warner Bros.' ``Troy'' -- a $175 million adaptation of Homer's Iliad starring Brad Pitt -- reached theaters, it was the most popular download on TorrentBits, according to rankings on the Web site.
A pirate who identified himself with an avatar -- in this case, a cartoon image of a 1970s hipster with a feathered hat and a gold tooth -- posted the copy. His notations on the Web site show the film came from a camcorder pointed at a screen in a movie theater. The audio was better than usual because the camera operator had plugged into the audio jack at his seat, which some theaters make available for the hearing impaired.
Simon92922
After viewing ``Troy,'' TorrentBits customers weighed in. Simon92922 said the download was decent for a first release on the Internet. ``I could probably re-encode the video and stop the glare slightly,'' Simon92922 wrote on the Web site.
The MPAA says camcording is on the rise. Trumpeting one of the rare arrests, the association said security officers at an AMC theater in Burbank, California, caught Orlando Castro, 22, recording ``The Day After Tomorrow'' on May 31, three days after it opened in theaters. Castro was charged with one felony count of commercial burglary and will be arraigned on July 13, according to the Los Angeles County District Attorney's office.
Many times, pirates get the film before the release date -- often from a studio insider or an agency promoting it.
Universal Pictures' ``The Hulk'' hit the Web two weeks before its release on June 20, 2003. Universal had sent the film to a Manhattan ad agency, where a worker lent it to an acquaintance. In turn, that person gave it to Kerry Gonzalez, a Hamilton, New Jersey, man who made a copy and posted it on the Internet, according to the U.S. Justice Department.
Universal said it contacted the FBI after learning the film was on line. Last year, Gonzalez, then 24, pleaded guilty to copyright infringement in U.S. District Court in Manhattan. He was sentenced to three years of probation and fined $7,100.
Hollywood's Advantage
Hollywood has several advantages over the music industry when it comes to fighting Internet pirates. Its biggest may be that it got to watch the record industry deal with them first.
The RIAA, which represents EMI Group Plc, Warner Music Group, Madonna's Maverick Records and others, say sales started falling after college student Shawn Fanning figured out a way to help people find MP3 files on the Web. MP3 is an abbreviation for Moving Picture Experts Group, audio layer 3, a standard used to compress audio files into digital packets that can be shipped around the Internet.
Fanning started his file-sharing company, Napster Inc., in 1999. The RIAA sued Napster on behalf of 18 record companies that same year. It declared bankruptcy in June 2002. Software maker Roxio Inc. bought Napster for $5 million and set it up as a paid service in October, mimicking Apple Computer Inc.'s online music store. Apple charges 99 cents a song and has sold more than 70 million since April 2003.
Moving on to Kazaa
People looking for free music have moved on to networks such as Kazaa, owned by Sharman Networks Ltd., a closely held company based on the Pacific island of Vanuatu and operated from Australia. Unlike Napster, Kazaa doesn't use a central computer to help users find songs. Customers connect directly to one another and share whatever they like.
Peer-to-peer systems like Kazaa differ from Napster in another way: They've beaten the entertainment companies in court.
In April 2003, Judge Stephen Wilson of U.S. District Court in Los Angeles said that two file-sharing-service companies, Streamcast Networks Inc.'s Morpheus and Grokster Ltd., didn't contribute to copyright infringement by users. Although they make file-sharing software, the companies aren't liable for what people do with it, Wilson ruled.
The RIAA, Sony and Time Warner had argued that Streamcast and Grokster had a responsibility to prevent infringement. The MPAA and 20th Century Fox joined the suit because peer-to-peer file sharing is the preferred method for movie swapping, too. The entertainment companies appealed to the Ninth U.S. Circuit Court of Appeals, which heard oral arguments in Pasadena, California, in February. A decision is pending.
Changing Strategy
Four months after Wilson ruled, the RIAA changed strategy and started suing downloaders directly for copyright infringement. The association drew public ire when it accused 12- year-old Brianna LaHara of New York with infringement for offering a thousand songs on a family computer through Kazaa. Her mother, Sylvia Torres, paid $2,000 to settle the case, according to the RIAA.
Michael Shamos, an intellectual property lawyer and professor of computer science at Carnegie Mellon University in Pittsburgh, says the studios are crying wolf to protect the prices they charge for theater admissions and DVD sales. ``Any industry that has gotten fat on monopoly profits can't imagine fighting again,'' he says.
People will keep going to the movies because they like the communal feeling and the big screen, Shamos says. ``Troy'' grossed $45.6 million in its first weekend and another $23.8 million in the second although it was available on the Web.
Overnight Downloads
So far, the time it takes to download a movie works in the studios' favor. People often set up their computers to run overnight. ``It's not unusual to wait 16 hours to get a feature film,'' says Eric Garland, CEO of BigChampagne LLC, a Los Angeles- based company that tracks movie downloads. ``That's not really a consumer experience.''
As the Internet gets faster, download times will shorten. Last year, scientists at the California Institute of Technology in Pasadena said they had developed a way to retrieve a full- length DVD movie in less than five seconds.
For most movie pirates, the process of putting a movie onto the Web starts with a digital camcorder. A camera selling for as little as $500 is small enough to smuggle into the multiplex. The best ``theater rips'' come from the projection booth, where the pirate can plug into a sound jack and enjoy a straight shot at the screen. Getting into the booth requires an accomplice on the inside.
`Leeching' and `Seeding'
Next, the pirate loads the movie onto a computer and compresses it, so the file takes less time to upload and download. For distribution, many pirates use BitTorrent, a computer protocol for transferring files. Bram Cohen, a 1993 graduate of Stuyvesant High School in New York, invented BitTorrent as a faster way to send big files.
BitTorrent, which isn't affiliated with the TorrentBits movie site, encourages sharing because it takes less time to download a movie when you're simultaneously uploading one. Uploading a film is called ``seeding,'' and downloading is known as ``leeching.''
Cohen, 28, tailored BitTorrent for the etree community: followers of bands like the Grateful Dead that let fans tape concerts and swap the music on the Internet as long as they don't sell it. Cohen says he opposes trading copyrighted movies. ``You unleash a technology on the world, and you can't control it,'' he says.
Cohen says he supports himself with donations from BitTorrent users. He invites contributions on his Web site, www.bitconjurer.org, and says he has no plans to turn his software into a business.
Creating eDonkey
EDonkey, another popular movie-trading program, would like Hollywood to use its software. Sam Yagan, 27, president of New York-based MetaMachine Inc., the maker of eDonkey, says the studios would do better selling movies to downloaders than suing them.
A 1999 Harvard graduate, Yagan created SparkNotes in his dorm room as an online competitor to Cliffs Notes, the yellow-and- black summaries of classics. He got English majors to write outlines of ``Moby Dick'' and ``The Scarlet Letter'' to start his series. He sold SparkNotes to Barnes & Noble Inc. for an undisclosed price in 2001.
Better File Sharing
A year later, Yagan hooked up with Jed McCaleb, 29, a physics major who had dropped out of the University of California, Berkeley, in 1994 to devote himself to computer programming. Disappointed with the speed of Napster, he set out to build a better file-sharing system. In 2001, he came up with eDonkey, named for the program's ability to haul big files around the Web.
Like BitTorrent, eDonkey is software for sharing any file -- music, movies or software -- and Yagan says he doesn't condone piracy. ``There's nothing I want more than people paying copyright holders,'' he says.
Another technology that's rattling Hollywood is the personal video recorder, or PVR. TiVo Inc.'s system is the best known. It records shows onto a computer hard drive. Ron Wheeler, who became Fox's first chief of content protection in 2001, foresees a day when PVRs contain trillions of bytes of storage space. Cable and satellite customers will be tempted to fill up on movies and then cancel their service, he says.
Such concerns are creating a rift with consumer electronics makers, who argue that Hollywood's anti-piracy efforts discourage manufacturers from putting out new products.
Digital Millennium Copyright Act
The locus of their discontent is the Digital Millennium Copyright Act, signed by President Bill Clinton in October 1998 at the studios' urging. The DMCA makes it a crime to circumvent anti-piracy measures built into electronic equipment.
Wheeler says that without the DMCA, anti-piracy technologies wouldn't stand a chance against the legions of hackers eager to duplicate and distribute movies.
Before the studios started selling DVDs in 1997, they agreed to protect them with the Content Scramble System, or CSS. Two years later, a Norwegian teenager named Jon Johansen cracked the code. He wrote a program that decrypts the CSS and posted the software, called DeCSS, on his Web site.
Using Johansen's DeCSS program, a user can copy a DVD onto the hard drive of his computer and burn a new DVD or compress the movie and put it on a site like TorrentBits.
Wheeler says the only thing that keeps more people from decrypting DVDs is that it's against the law. Copying DVDs for commercial use may bring a punishment of five years in prison and a $500,000 fine.
`Ripper' Software
St. Charles, Missouri-based 321 Studios, a father-and-son operation that makes software for copying DVDs, has felt the studios' wrath. In February, Judge Susan Illston, in U.S. District Court for the Northern District of California, sided with Metro-Goldwyn-Mayer Inc., Sony and other studios.
She issued a permanent injunction stopping 321 Studios from selling its ``ripper'' -- software that breaks the content- scrambling system on a DVD, thus allowing a movie to be copied.
Julia Bishop-Cross, a 321 Studios spokeswoman, says most buyers are parents who want to copy DVDs like ``Finding Nemo'' in case the original is stolen from the minivan. ``We're blue in the face from telling people we're not pirates,'' she says.
U.S. Representative Rick Boucher, a Virginia Democrat, says the law is too punitive for ordinary people. He's sponsoring a bill to amend the DMCA so consumers can circumvent privacy protections if they're doing so only for personal use.
Case in point: DVDs won't work on a computer using Linux, the free operating system that competes with Windows. Using Johansen's DeCSS decryption program, a Linux user can make them work. Trouble is, doing so is a felony under the DMCA, Boucher says.
Going Too Far
Boucher's bill also would help companies avoid lawsuits that charge they contribute to piracy. ``The DMCA went way too far,'' he says.
In another tack, the studios are pursuing ways to make movies copyproof. In November, the U.S. Federal Communications Commission approved a rule that MGM and other studios pushed, which lets them embed ``broadcast flags'' in digital programming. The flags tell TiVo machines and DVD recorders if content can be copied.
Starting in July 2005, makers of TVs and computers must program their products to recognize the flags. Pioneer Corp., for one, has combination TiVo-DVD recorders that read them, says Chris Walker, a manager at the Tokyo-based company.
Alex Curtis, a policy analyst at Public Knowledge, a Washington, D.C., advocacy group, says the law may render obsolete VCRs that can't read protected digital content.
PCs Compromised
PCs may be compromised, too, if the studios have their way, says Ross Anderson, a professor of computer science at Cambridge University in the U.K. Microsoft is working on a new system called the Next Generation Secure Computing Base, or NGSCB, previously known by the code name Palladium.
With it, the studios could decide which videos will play on a PC, Anderson says. Disney could deny access to a downloaded version of ``Snow White'' if the viewer's PC and everything attached to it didn't have approved security, he says. A lawfully purchased copy of ``Snow White'' on DVD may stop playing on your laptop if you don't install the latest security patch from Microsoft, he says.
Mario Juarez, a product manager on NGSCB, says Microsoft isn't designing the system to augment security for the entertainment companies. It's aiming at companies that want to ensure information on PCs remains safe.
Steal It
Sumner Redstone, CEO of Viacom, the third-largest U.S. media company, would rather avoid such fights with his customers and embrace the Internet. He says the music industry blew it.
``There was no legal way to buy music on the Internet,'' Redstone said in a panel discussion sponsored by the Milken Institute in Los Angeles on April 28. ``The only way to get music on the Internet was by stealing it.''
Viacom's Paramount Pictures is a partner with MGM, Sony Pictures, Universal and Warner Bros. in Movielink LLC, a company started in 2002 that lets people download new movies onto their computers for $5 and watch them as much as they like for 24 hours. Then, access to the movies expires. The service has less appeal than pirate sites because it gets new films after they've been out on DVD.
`Top Gun' Dilemma
Viewed on Microsoft's Media Player or RealNetworks Inc.'s RealPlayer, the picture is the same quality as on digital cable, says Movielink CEO James Ramo, 57. ``On pirate sites, you might go looking for `Top Gun' and get an adult movie or one that doesn't have an ending,'' Ramo says.
RealNetworks and Liberty Media Corp.'s Starz unit started selling an Internet movie service in June. For $13 a month, customers can download from a rotating menu of 100 films.
Such services may become more compelling once more people can beam movies from their PCs to their televisions. It's possible today using WiFi, the wireless standard that PCs use to connect to the Internet in airports and coffee shops. Or they can use a cable to connect a laptop to a newer TV.
Microsoft plans to release software this year that will connect PCs and TVs. The software will run either on a set-top box or inside the TV itself, says Amir Majidimehr, vice president of Microsoft's Windows Digital Media division.
`Rendezvous With Rama'
Lori McCreary, CEO of Revelations Entertainment, agrees that the industry needs to embrace the Internet. From an office in Santa Monica, California, piled with scripts and videotapes, she and her partner, actor Morgan Freeman, 67, are plotting Hollywood heresy. In the next 18 months, they plan to release a movie online and in theaters at the same time. And they plan to charge customers to download it, betting would-be pirates will pay.
McCreary, 43, who worked in repairs at a Computerland store while getting a bachelor's degree in computer science from the University of California, Los Angeles, says she and Freeman are deciding which of the 25 films they have in the works will go on the Web.
``Rendezvous With Rama,'' based on the eponymous book by Arthur C. Clarke and a favorite of Freeman's, would be perfect, McCreary says. The science fiction story about a massive object hurtling toward earth would appeal to hard-core Internet users. It's unlikely to be ready in time, though. ``We need to move soon,'' she says.
Cool Reception
McCreary says she and Freeman have been talking about their idea around Hollywood and have met skepticism. The fear is that putting a movie on the Web first would disrupt Hollywood's lucrative ``windowing'' system, she says.
Feature films hit the theaters first and then go to home video four to six months later. New video-on-demand systems from cable companies get them a month or two later. Premium cable stations like HBO follow in three months. At every stage, the studios get paid, albeit a little less each time.
Hollywood executives worry that putting a movie on the Web will anger theater owners and preempt the release windows, McCreary says, adding that since that's already happening with movies on the Internet, the studios should capture the dollars.
History suggests that Hollywood will rant. Then, through something like Movielink or even eDonkey, it will find a way to make money with the Web. When the VCR made its debut, MPAA head Jack Valenti, now 82, said the player and videocassettes would mark the death of American movie making.
Boston Strangler
``The VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone,'' Valenti, who is retiring as head of the MPAA this year after almost 40 years, told the U.S. House of Representatives in 1982. Then Hollywood started putting movies on videocassette and DVD -- inventing an industry.
Garland at BigChampagne, the download-tracking firm, says studios will fare better than the music business in their clash with pirates. People were angry at the music labels because they overcharged for CDs and made consumers buy the whole album to get the song they wanted, he says.
DVDs are a better value. They have features you don't get in a theater or on cable, like interviews with the director and outtakes, he says. ``All they have to do is keep us from getting off the couch,'' Garland says.
Hollywood can't bank on movie lovers' staying put -- be it on the sofa watching a $25 DVD or paying $10 to enjoy the latest Harry Potter film at the multiplex. With thieves already siphoning off $3.5 billion a year, and the time to retrieve a film from the Web heading toward seconds, the studios must figure out how to make money from downloads themselves or stop the pirates' raids.
Barge: What everybody seems to be missing here is that APPLE is initiating a frenzy amongst the Wallstreet analysts and the media. In a nutshell, Apple told the world yesterday that DVD's will be obsolete and web services is the new game in town AND THEIR HARDWARE MAKES IT ALL POSSIBLE. The analysts immediately turned their eyes on Walmart who is the leading DVD sales company in the world to discuss the financial implications Walmart would potentially realize as a result of this new technology. APPLE is pioneering worldwide acceptanceof trusted web services with their deployment of ITV. That in itself is extremely significant to Wave.
From a technical standpoint, I agree with you in your belief that Wave will be tied to APPLE thru the Intel platform. I believe we'll see more evidence of this next year. Jeff
September 12, 2006
Will Apple's 'Showtime' Play in Living Rooms?
By David Needle
SAN FRANCISCO -- At a media event here billed as "It's Showtime," Apple revealed more of its strategy to capture the living room with the company's products and services.
In a break from typical practice, Apple (Quote, Chart) CEO Steve Jobs previewed a product that won't be ready for release till next year.
Code-named "iTV" the simple-looking square device is designed to let consumers play their movie and TV downloads on the living room TV.
It will include 802.11 (define) wireless connectivity, USB, Ethernet, HDMI and component video connections in back, iTV is
The system connects wirelessly to Apple computers or PCs in the house. An Apple standard remote control device can be used to navigate movie downloads and transfers.
Jobs said a typical movie will take about 30 minutes to download fully, but consumers will be able to start watching the movie after the first minute while the download process continues.
"We think iTV is going to be pretty popular," said Jobs. "It's the most stunning graphics we've seen on a television." Apple said it expects iTV to be priced at $299.
Jobs had earlier drawn applause for his announcement that resolution on all its video downloads is being upped from the current 320 x 240, to 640 x 480 pixels (define).
Noting that Apple is already in people's cars and pockets with the iPod and the den with the Macintosh, Jobs said the iTV "completes the picture" getting Apple in the living room.
"It's a pretty elegant solution and at $299, consumers can buy it and not worry about having to subscribe to another service," Gartner analyst Jon Erensen told internetnews.com.
Erensen is especially impressed with what Apple has done to simplify the process of getting multimedia to different devices throughout the home, or even update an office PC connected to an iPod with the latest content that's been purchased.
"I'm going to be interested to see how easy it is to set up the wireless connection for the living room TV," said Erensen. "Apple always does well in this area, but wireless technology hasn't always proved to be reliable.
But the Apple announcements fell short of some analysts' expectations in a few areas.
First, that iTV won't come out until sometime during the first quarter of 2007 means it will miss the holiday selling season.
Second, only Walt Disney Pictures (and affiliates, Pixar, Miramax and Touchstone) have signed on to Apple's new movie download service.
Disney is huge studio with numerous hits, but with Jobs now on Disney's board, the deal was a given.
Disney bought Job's Pixar Animation Studios earlier this year.
Then again, ABC was the only network to sign on to Apple's iTunes store for TV shows last October and now 40 networks are a part of it.
In a brief appearance onstage, Disney CEO Bob Igur called the partnership a marriage of Apple's great technology and user interface and Disney's great content.
"Apple really gets it in terms of giving consumers a reliable and easy way to access content online," said Igur.
Movies will be available at the iTunes store the same day they are released on DVD, priced at $12.99 if pre-ordered and during the first week of availability, and $14.99 thereafter.
Titles from the Disney library will sell for $9.99.