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By: wolfpackvoltare $$$$$
10 Aug 2002, 11:33 AM EDT Msg. 1026168 of 1026185
Please note e.Digital mentioned at bottom of article. (In bold)
Outsourcing Fulfillment May Be Company‘s Smartest Move
By Kurt C. Hoffman
SmartBargains, entering its second year of combing overstock, liquidation and closeout sales for products to post on its web site, felt it made good business sense for someone else to shoulder the cost of warehousing and fulfillment infrastructure.
Relinquishing control of its fulfillment operation to an outside party may turn out to be one of the smartest moves that SmartBargains ever made. Finding deals and putting them up on the web is its strong suit, not fulfilling orders.
The company’s buyers scour its network of manufacturers, retailers, discount houses, liquidators and jobbers in search of overstock, closeout and liquidation sales. Items are presented to customers at deep discounts on the SmartBargains web site. Rapid growth continues to help SmartBargains maintain a high level of customer service and optimize its cash flow as the Boston-based company forges its way into its second year of operation, but fulfillment clearly is not a core competency.
“There’s a huge infrastructure cost involved in creating a warehouse and fulfillment center as well as a significant staffing requirement and dedication of management time,” says Rich Secor, manager of operations for SmartBargains. “By outsourcing the entire fulfillment operation to APL Direct Logistics, we now have a single point of contact for fulfillment, which simplifies our management challenge and allows us to focus on our business.”
For its part, APL Direct links its successful role in acquiring and conducting the SmartBargains business to the complex order management capability it provides customers via an execution and fulfillment IT solution from Yantra. “The software is a differentiator in the marketplace, as we now have a more robust solution than our competitors,” says Sally Miller, account manager for APL Direct. “The way the third-party fulfillment business first started, execution was the issue. Now most companies have resolved that and are moving outside the four walls to provide additional services designed to help their customers generate more revenue. Yantra gives us the ability to make that extension.”
Capital freed from fulfillment obligations can be turned right back into the business, Secor says. “Our configuration is very similar to a traditional retailer in that we have a merchandising staff. Our specialty is procuring liquidation merchandise that we can offer to customers at the lowest price in the world — on the internet or in a retail store.”
Outsourcing seemed to be a natural fit for the start-up, says Secor. “The value proposition in our business model was to make these opportunistic merchandise buys so we could provide the best value to consumers,” he explains. “Management urgently wanted to release the site to the public and begin selling, and outsourcing the fulfillment operation accelerated the ability to launch the site.”
The consumer gets an e-mail with projected shipping information once the order has cleared the payment/credit approval process.
--------------------------------------------------------------------------------
It also was a matter of sticking to one’s corporate knitting, adds Bob DiChiro, manager of logistics. “As a company you have to realize what your core competencies are and focus on those. Leaving the fulfillment operation to the experts allows us to focus on the things we do well.”
SmartBargains launched its site in September 2000, filling its first order from an Arkansas facility operated by Keystone Logistics. However, a consolidation plan by Keystone’s corporate family soon closed the facility. After a search and evaluation process, SmartBargains selected APL Direct and the company’s new Hebron, Ky., facility to perform the fulfillment operation.
The DC, across the river from Cincinnati, opened in January 2001 under the flag of the former GATX e-Logistics during the time when the purchase of GATX by APL was under way. Miller, who came to APL Direct from GATX, notes that the distribution center is within easy reach of the interstate highway system and adjacent to the Greater Cincinnati Airport. “We selected Hebron because we can reach 80 percent of the U.S. population within three days ground service,” she says. The facility’s 300,000 square feet includes fewer than 5,000 square feet for administrative space and provides employment for nearly 30 permanent APLD employees as well as up to 25 additional temps. The automated facility has a conveyor network designed by HK Systems and uses its Irista WMS for the warehouse management function and Yantra for order management and fulfillment.
The Yantra solution, a recent addition to the APL Direct operation, attests to the changing demands customers are placing on third-party service providers. “When we initially launched the e-logistics business, our whole infrastructure was based on receiving a ‘shippable’ order from our customer,” explains Miller. “As we evolved and third-party fulfillment has become more of a commodity service, we became involved with complex order management as a means to differentiate ourselves and provide a better service to our customers.”
Increasingly Miller and others within the e-logistics unit had been hearing customer requests for the 3PL to shoulder additional order management duties, such as payment processing and the ability to take orders from multiple channels against one inventory table. “We weren’t able to handle some of these requests and ended up passing up opportunities because we couldn’t manage drop shipments or do credit card transactions,” Miller says. “Additionally, we really felt we needed to be able to give our customers greater web visibility into inventory and order status. We needed a highly flexible system that would enable us to easily collaborate with our client’s supply-chain partner.”
The software search by the e-logistics unit began in December 2000 by Miller and a cross-functional team that included Kim Cerrato, Mike Relyea and Beth Stellrecht. Cerrato, senior project manager, ultimately was responsible for documenting the unit’s business requirements and ensuring that the software solution had the functionality to meet those requirements. As manager of technical infrastructure, Relyea was responsible for the network, hardware, data base and operating system issues. Stellrecht, manager of integration, ensured that the solution would integrate not only with APLD’s Irista WMS but could integrate with other existing customers.
Over a six-week period, the team evaluated software packages and had vendors in for product demonstrations. Scrutiny was given not only to developers’ offerings but to an in-house product called Pipeline View.
After a fairly thorough search of the feature functionality of those systems, they selected the Yantra solution. “Yantra had the best out-of-the-box functionality and the greatest number of installs of their product,” says Miller. The purchase was made in February, and the implementation took six weeks, measuring from the time of purchase to the launch date in April with APL Direct’s first customer to use the new solution, SmartBargains.
According to Miller, the installation went very smoothly as the program installed directly from the CD and required no rewriting of code. “The software has user exits that enable us to make modifications without touching the baseline code.”
The potential was attractive enough for SmartBargains, which decided to outsource a large chunk of its supply-chain operation to APL Direct. Now, approximately 80 percent of products SmartBargains sells on its web site move through the Hebron facility; the remaining 20 percent is sourced directly from suppliers. Though most of its sales and sourcing is domestic, the company intends to continue expanding its global sourcing activities beyond its current imports of ceramics and leather products from Spain and Portugal.
Here’s how it works. Buyers for SmartBargains locate items for purchase. Once a purchase order is written by a SmartBargains buyer, the order is faxed to the vendor. When the goods are ready to be shipped, the vendor sends an advance shipping notification to the Hebron warehouse. At the warehouse APL Direct, which manages all inbound freight, has 24 hours to respond back to the vendor’s ASN with routing information. SmartBargains publishes its routing guide on the internet so vendors already have the general routing and packaging information. Freight moves inbound to Hebron at rates negotiated by APL, which uses its buying power to leverage rates far more attractive than SmartBargains could on its own, DiChiro says.
At the distribution center, inbound freight is matched to the purchase order, received into the information systems, and prepared for sale. That process may involve packaging, repackaging and/or the removal of pricing information and name-brand labels. A modest photo studio at the Hebron site provides for accurate product photos for posting on the sales sites, and inventory levels automatically are updated as new products hit the racks. SmartBargains maintains a full-time employee at the Hebron site to help resolve any issues that arise.
With Yantra’s ability to integrate to multiple order channels, SmartBargains now sells its products via telephone, with SmartBargains staffers directly keying order information into the system; from customers placing orders at the company’s web-based storefront; and through online sites operated by AOL and half.com, a recent acquisition of eBay.
Orders from web portals are received as XML files, and a device mounted atop the Yantra inter-operability framework examines those XML orders and, where necessary, massages them into an XML format Yantra can understand. Orders arriving via EDI or flat file transfers are translated into XML communications when they hit the Yantra system, and are translated back to the outside user’s format as return messages exit Yantra.
Once an order is received and it clears payment/credit approval, the consumer receives an e-mail notification advising receipt of the order as well as projected shipping information. Orders are shipped within 24 hours regardless of whether the product is housed in Hebron or at one of the supplier locations. The process, says Secor, is seamless to the customer, as all e-mail communications and packlists flow from one system.
Orders dropped to the warehouse are picked and prepared for shipment; all value-added services such as gift wrapping and gift card printing is performed; and the outbound packages are tendered to FedEx, United Parcel Service or another small package service provider. Yantra interacts with the WMS to provide visibility into the process. Once an order is filled, APL Direct issues to the customer a shipping confirmation with tracking number, and APL Direct monitors the shipment through delivery.
SmartBargains also handles product returns through a reverse logistics program with APL Direct. Customers receive a pre-printed address return label as well as return instructions as part of the packing list. If there’s nothing wrong with the product, the customer ships it back at his or her expense to Hebron, where the return is processed and either returned to stock or disposed of in accordance with pre-established business rules. In the event of a product that is inoperable or damaged in transit, the customer is sent a return label with postage prepaid.
The APL Direct partnership extends as well to customer relations, as the 3PL also manages SmartBargains’s first level of customer service. APL Direct takes all inbound customer calls at an affiliated call center in Jacksonville, N.C. Operators have detailed training, but more difficult issues can be elevated to a direct contact at SmartBargains headquarters. “We’re able to resolve the great majority of customer service issues at that first level,” says Secor. “This allows us to maintain a much smaller customer service staff without compromising our goal of providing very prompt and thorough service to solve problems on the first customer call.”
Rapid growth during 2001 substantially transformed the SmartBargains operation, as sales for the privately held company are well ahead of the business plan. Growing volumes have tested the flexibility of the Hebron facility. “When we first started business 16 months ago, 90 to 95 percent of our product moved inbound via parcel delivery or LTL freight,” says DiChiro. “Now we’re seeing a steady shift to full truckloads, which now account for a third to half of our inbound activity. The business has changed so much that the original layout at the Hebron facility has been radically altered —everything from the way the racking is configured to the scheduling of inbound trucks — to allow for easier flow and a more efficient process.”
3PL Is Music to E-tailer's Ears
Perched on the edge of the next generation of personal sound machines, e.Digital Corp. also looked to APL Direct and its distribution facility in Hebron, Ky., as the 3PL to manage the company's e-tail fulfillment operation in a new business-to-consumer market venture.
A technology applications development company based in San Diego, e.Digital designs, develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of digital media with a primary focus on music players/recorders and portable digital voice recorders. This is cutting-edge technology. For example, in December e.Digital introduced the TREO 10, a portable digital jukebox with an embedded 10GB hard disk drive that can hold up to 3,000 songs, or more than 200 CDs' worth of music.
Though the company's focus traditionally has been a B2B model, e.Digital management last summer decided to launch its own product line by adopting a B2C e-tail channel model. "Our intent was to outsource 100 percent of the distribution, warranty/returns management and call center operations, so we were looking for a fulfillment service provider who could instantly provide the integrated logistics infrastructure we needed to launch our products in the e-tail space," says Heidi Langbein-Allen, director of logistics for e.Digital.
"APL Direct not only offered these services across a web-based platform with real-time visibility to inventory and transactions, but also had other valuable attributes that were attractive to us." Specifically, says Langbein-Allen, APL Direct has the global presence to facilitate international deployment of e.Digital's products as well as the scalability to accommodate rapid growth. The 3PL's buying power helps leverage attractive outbound freight rates, she says, and its international transport presence offers "full visibility through the supply chain, all the way back to the manufacturer in Asia."
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=1026168
culater
ot-Wade Cook Issues Statement about Bloomberg Reporter David Evans
http://biz.yahoo.com/bw/020808/80379_1.html
culater
ot-Bootleg culture
Powerful computers and easy-to-use editing software are challenging our conceptions of authorship and creativity. As usual, the entertainment industry doesn't like this one bit.
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By Pete Rojas
Aug. 1, 2002 / When the British DJ duo 2ManyDJs were creating their own album of "bootlegs" -- hybrid tracks that mix together other people's songs to create new songs that are at once familiar yet often startlingly different -- they decided to get permission to use every one of the hundreds of tracks they mashed together. The result: almost a solid year of calling, e-mailing, and faxing dozens and dozens of record labels all over the world. (Creating the album itself only took about a week.) In the end about a third of their requests were turned down, which isn't surprising. Many artists and their labels have become reluctant to allow any sampling of their work unless they are sure the new work will sell enough copies to generate large royalty checks.
What is surprising are the names of some of the artists who turned them down: the Beastie Boys, Beck, Missy Elliott, Chemical Brothers, and M/A/R/R/S -- artists whose own careers are based on sampling and who in some cases have been sued in the past for their own unauthorized sampling. For whatever reason these artists decided not to license their material, the net effect is that more entrenched, "legitimate" sampling artists are preventing lesser known, struggling sampling artists from doing what the legitimate artists probably wish they could have done years ago: sample without hindrance to create new works.
Typically consisting of a vocal track from one song digitally superimposed on the instrumental track of another, bootlegs (or "mash-ups," as they are also called) are being traded over the Internet, and they're proving to be a big hit on dance floors across the U.K. and Europe. In just the past couple of years, hundreds if not thousands of these homebrewed mixes have been created, with music fans going wild over such odd pairings as Soulwax's bootleg of Destiny's Child's "Bootylicious" mixed with Nirvana's "Smells Like Teen Spirit," Freelance Hellraiser's mix of Christina Aguilera singing over the Strokes, and Kurtis Rush's pairing of Missy Elliott rapping over George Michael's "Faith." Bootlegs inject an element of playfulness into a pop music scene that can be distressingly sterile.
While there have been odd pairings, match-ups and remixes for decades now, and club DJs have been doing something similar during live sets, the recent explosion in the number of tracks being created and disseminated is a direct result of the dramatic increase in the power of the average home computer and the widespread use on these computers of new software programs like Acid and ProTools. Home remixing is technically incredibly easy to do, in effect turning the vast world of pop culture into source material for an endless amount of slicing and dicing by desktop producers.
So easy, in fact, that bootlegs constitute the first genre of music that truly fulfills the "anyone can do it" promises originally made by punk and, to lesser extent, electronic music. Even punk rockers had to be able write the most rudimentary of songs. With bootlegs, even that low bar for traditional musicianship and composition is obliterated. Siva Vaidhyanthan, an assistant professor of culture and communication at New York University and the author of "Copyrights and Copywrongs," believes that what we're seeing is the result of a democratization of creativity and the demystification of the process of authorship and creativity.
"It's about demolishing the myth that there has to be a special class of creators, and flattening out the creative curve so we can all contribute to our creative environment," says Vaidhyanthan.
The debate over what bootlegs are and what they mean is taking place within the wider context of a culture where turntables now routinely outsell guitars, teenagers aspire to be Timbaland and the Automator, No. 1 singles rework or sample other records, and DJs have become pop stars in their own right, even surpassing in fame the very artists whose records they spin. Pop culture in general seems more and more remixed -- samples and references are permeating more and more of mainstream music, film, and television, and remix culture appears to resonate strongly with consumers. We're at the point where it almost seems unnatural not to quote, reference, or sample the world around us. To the teens buying the latest all-remixes J.Lo album, dancing at a club to an unauthorized two-step white-label remix of the new Nelly single, or even hacking together their own bootleg, recombination -- whether legal or not -- doesn't feel wrong in the slightest. The difference now is that they have the tools to sample, reference, and remix, allowing them to finally "talk back" to pop culture in the way that seems most appropriate to them.
The recording industry instinctively fears such unauthorized use of copyrighted materials. But instead of sending out cease-and-desist orders, it should be embracing bootlegs. In a world of constantly recycled sounds and images, bootleg culture is no aberration -- it's part of the natural evolution of all things digital.
Bootlegs don't contain any specific audible element of originality in the track, in the sense that one can identify any specific original vocal or musical composition created by the remixer. The only original element of a bootleg is the selection and arrangement of the tracks to be blended into a new work. Scottish bootlegger Grant Robson, who goes by the name Grant McSleazy, responsible for such tracks as Missy Elliott versus the Strokes, readily admits this: "There is a creative aspect, because not all songs work well together, but all the lyric writing and music composition has been done for you. You may rearrange the segments of an instrumental/a capella, but that's just production work."
Even so, isn't production work what constitutes most of what goes into crafting most hip-hop, electronic music, and pop these days? Because of this, bootlegs highlight the increasing difficulty in distinguishing between musicians, DJs and producers. Is there really all that much difference, on a technical level, between McSleazy, DJ Shadow, Moby and P. Diddy? Putting aside any qualitative judgments, on one level or another they are all just appropriators of sound. They are all combining elements of other people's works in order to create new ones, in effect challenging the old model of authorship that presupposes that the building blocks of creativity should spill forth directly from the mind of the artist.
Already we've seen that our notion of what makes a song "creative" has widened in the case of hip-hop. Early on, hip-hop -- constructed largely with snippets of other songs -- faced similar charges that it lacked a creative element. Eventually, because a great deal of arrangement is involved (usually a large number of samples are blended together to create just a single hip-hop track), and because the rapping itself contributes an original element, pop culture at large has found it easier to acknowledge some aspect of originality and creativity within hip-hop. Bootlegs challenge this notion even further, but it is almost inevitable that as they grow in popularity, something similar will happen, and our definition of creativity will expand to accommodate them.
Existing copyright laws mean that, for the most part, this movement will remain underground. Consequently bootlegs may be the first new genre of music that is almost entirely contraband, and most bootlegs now can only be found on a few Web sites or on file-sharing networks like KaZaA and Gnutella. The bootleggers behind these audio mismatches know they will never get permission from the artists they sample and haven't even bothered to try to get it. Though 2ManyDJs tried to go legit and get permission for as many songs as possible, they still were unable to get clearance for a significant number of samples they used on their album -- and even the permissions and clearances they do have are so restricted that it will be impossible to release the album in the United States. Despite the tremendous amount of energy poured into these desktop productions, the fact remains that because the original works cut and pasted together are used without the original artists' permission, bootlegs have stayed, well, bootlegs.
While everyone (particularly the companies touting the technologies that make all this possible) predicted a flood of original movies and music spewing forth from the desktops of bedroom auteurs, no one anticipated that large numbers of people would be more interested in using their computers to combine, mash together, or remix other people's work. Sharing one's unauthorized creations via the Net is even easier. It's a dramatic change from just a few years ago, when a bootlegger's sole option would have been to have vinyl or CDs manufactured and then distributed, something that would risk arousing the attention, and legal action, of the record labels of the remixed artists.
This phenomenon hasn't been limited to music: Remixing has begun to infect film as well. Last year copies of a home-edited version of "Star Wars Episode 1: The Phantom Menace" began circulating on the Internet to widespread acclaim from fans who declared "Star Wars Episode 1.1: The Phantom Edit" the superior of the two versions. It's probably only a matter of time until someone creates a fan edit of "Attack of the Clones." Inspired by the "Phantom" edit, DJ Hupp, a freelance film editor in Sacramento, Calif., has created his own "Kubrick edit" of Spielberg's "A.I.," and it is unlikely that his will be the last fan edit we see of a major motion picture.
Such fan edits are also, technically, illegal, but from the perspective of the turntablists, remixers, and home editors at the forefront of the explosion of bootleg culture, copyright laws don't look like anything other than the means by which one group of artists limits the work of another.
Illegality can actually be a large part of the allure of bootlegs. Much underground cultural expression takes place at the margins of the law -- rave culture, for example, has its origins in illegal warehouse parties. Using other people's music without permission used to be the point of mash-ups. Back in the '80s and early '90s, when culture-jamming sound collagists like Negativland and the Evolution Control Committee released their first works, mash-ups had a decidedly subversive edge to them. Mash-ups were typically created as statements about pop culture and the media juggernaut that surrounds us, not as fodder for the dance floor. Pasting together elements swiped from the top 40 and placing them together in a new form was supposed to snap us out of what these sonic outlaws saw as our media-induced trance and make a point about copyright in the process.
Traces of that element remain in the bootlegs being made today. One Australian bootlegger, a 26-year-old who goes by the name Dsico, and for legal reasons prefers that his identity be withheld, sees bootlegs as akin to the kitschiness and pastiche of pop art. "The reinterpretation and recontextualization of cultural icons like Britney Spears or the Strokes is fun and good for a laugh. But if I can grab an a cappella track of Mandy Moore and mix it with something like "Roxanne" by the Police, while that juxtaposition may be trite, it still works as a commentary on pop music today."
And at a time when it has become increasingly difficult for pop music to be shocking (witness the mainstream acceptability, however grudging, of Eminem), it may be that the only way to write a transgressive pop song is to flat-out steal it from someone else. In other words, the only way left to shock is not through controversial content, but by subverting the very form and structure of the song itself.
Even though making music out of other people's songs without permission may appear to pose a threat to the business model of the recording industry, killing off this nascent genre may not ultimately be in the industry's best interests. Radio stations in Britain that have played bootlegs have found themselves on the receiving end of cease-and-desist orders. Hip-hop got its start using pre-existing music in innovative and not always legal ways. It is arguable that had the music industry clamped down on sampling earlier than it did (it wasn't until a 1991 suit against rapper Biz Markie that sampling without permission was established as illegal), the industry's top-selling genre would never have gotten off the ground commercially. Now legendary hip-hop albums, such as Public Enemy's "It Takes a Nation of Millions to Hold Us Back," and the Beastie Boys' "Paul's Boutique," would be impossible to release today.
Just as with every other subcultural movement that has threatened the status quo, the music industry's best response may be to let the genre flourish online and on the margins. So far no one is really making any money from bootlegs, -- if anything, bootlegs stimulate demand for the original songs. Rather than threaten bootleggers with legal action, a sounder strategy would be to co-opt the scene by skimming the best ones off the top and re-releasing them as "official" bootlegs. This has already produced one No. 1 hit, with Richard X's mash-up of new waver Gary Numan and soul singer Adina Howard. The track follows in the footsteps of DNA's bootleg dance remix of Suzanne Vega's "Tom's Diner," which Vega ended up authorizing and re-releasing to much chart success in 1990.
As computers and software programs get more and more powerful with each passing year, as file-sharing networks make it simple for anyone to share their work with the world, and as it is next to impossible to outlaw digital editing software (which has plenty of legitimate uses), bootlegs and remixes will likely be a part of the cultural landscape for years to come. Bootlegging may even evolve into something of a hobby for tens of thousands of desktop producers who will spend their free time splicing together the latest top 40 hits for kicks, like model-airplane builders. The record industry could even respond by selling its own do-it-yourself bootleg kits, complete with editing software and authorized samples. In a sense bootlegs are music fans' response to the current disposability of pop culture. Effortlessly easy to create, with an infinite number of combinations possible, bootlegs are even more perfectly disposable than the pop songs they combine -- by the time the novelty and the cleverness have worn off there will always be new hit singles to mash together.
Eventually recombining and remixing is likely to become so prevalent that it will be all but impossible to even identify the original source of samples, making questions about authorship and origins largely irrelevant, or at least unanswerable. We're already seeing the beginnings of that, like the hip-hop song that samples an older hip-hop song that samples a '70s funk song. Some artists, most notably David Bowie, are already proclaiming the death of authorship altogether. Technology has not only expanded who can create; in blurring the distinction between consumers and producers, these new digital tools are also challenging the very ideas of creativity and authorship. They are forcing us to recognize modes of cultural production that often make it impossible to answer such once simple questions as, Who wrote this song? The cultural landscape that emerges will be a plural space of creation in which it may even become pointless to designate who created exactly what, since everyone will be stealing from and remixing everyone else. The results might be confusing, but it'll probably be a lot more fun and worth listening to than a world where only those with the financial resources to pay licensing fees (e.g., P. Diddy) get to make songs with sampling.
http://www.salon.com/tech/feature/2002/08/01/bootlegs/index.html
culater
ot-More Microsoft Reader eBooks
By: Jørgen Sundgot, Monday, 05.08.02 13:29 GMT
In response to increased consumer demand, online eBook retailers eBooks.com and Fictionwise say they have expanded their inventory to include books in Microsof Reader format.
Handheld users are taking a growing interest in eBooks these days, and some formats have proved more popular than others. That includes that of Palm's Reader format - derived from a format used by PeanutPress which Palm acquired in 2001, Franklin's eBookMan, Mobipocket's - well, Mobipocket format, and last but not least Microsoft's Reader format.
In what the companies say is a response to increased consumer demand, online eBook retailers eBooks.com and Fictionwise have now expanded their inventories to include hundreds of titles in Microsoft Reader format. Mobile users can browse and purchase best-selling titles from leading publishers such as McGraw-Hill, Random House, Harper Collins and many others, and eBooks in the format can be read on both desktop platforms and Microsoft's own Pocket PC 2002 platform in Microsoft Reader 2.0.
eBooks.com was founded in 1997, and has been selling electronic books exclusively in Adobe Acrobat PDF format for over two years. "We decided to add Microsoft Reader titles to our inventory because it is the format of choice for our mobile and connected customers," said Suzanne Cole, Manager of eBooks.com's Acquisitions & Publisher Relations.
Fictionwise.com has on its side has been publishing eBooks in a number of formats, including Palm Reader (for Palm, Visor and Win CE), Adobe Acrobat, Rocket/REB1100, Microsoft Reader (Pocket PC and PCs), and Franklin eBookMan, and is generally considered to be the leading provider of eBooks for handheld devices. http://www.infosync.no/news/2002/n/2145.html
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ot-Demand for ebooks Heats Up Among PDA and Handheld Community
Independent Online Booksellers Respond and Add Microsoft Reader eBooks to their Retail Storefronts
CLEVELAND--(BUSINESS WIRE)--Aug. 5, 2002--In response to increased consumer demand, leading online retailers, eBooks.com and Fictionwise.com have expanded their inventory to include hundreds of titles in the popular Microsoft Reader(TM) format.
Mobile users can browse and purchase best-selling titles from leading publishers such as McGraw-Hill, Random House, Harper Collins and many others. After purchasing, customers can download and read their eBooks on desktop PCs, laptops and Pocket PC 2002 devices with Microsoft Reader 2.0 installed. Both companies are part of OverDrive Content Reserve -- a worldwide marketplace of eBook retailers who can choose from thousands of premium eBook titles for secure online distribution through their stores.
Clifford Guren, Group Product Manager, eReading, Microsoft said, "We're delighted that two pioneers of eBook retailing are now selling Microsoft Reader titles, enabling their customers to experience the ease and clarity of reading eBooks with ClearType. Their support adds significantly to the growing momentum of the eBooks industry."
eBooks.com has been selling electronic books exclusively in Adobe Acrobat PDF format for over two years. "We decided to add Microsoft Reader titles to our inventory because it is the format of choice for our mobile and connected customers," said Suzanne Cole, Manager, Acquisitions & Publisher Relations at eBooks.com. "The small file sizes are perfect for fast downloading onto a Pocket PC. We are delighted with the enthusiastic reception for our current inventory of Microsoft Reader titles that we've received from our customers," she added.
"Fictionwise is excited to be working with OverDrive. By participating in Content Reserve, we can offer and deliver thousands of quality titles in Microsoft Reader format through our eBookstore," said Scott Pendergrast, co-owner of Fictionwise.com. "We have over 50,000 members growing at a rate of 2,000 to 3,000 per month. As a result we're seeing steady double digit growth in sales and OverDrive is helping Fictionwise keep up with demand," he said.
About eBooks.com
eBooks.com was founded in January 1997 by Stephen Cole, a lifetime bibliophile. The commercial launch of the site was successfully completed in September 2000. eBooks.com is an Australian company with a global focus. We are building an exciting range of business books from specialist and general publishers. At the same time, we are developing our inventory in other key topic areas including travel, general reference, computing and popular fiction. eBooks.com aims to be the pre-eminent eBookstore on the Internet, selling whole books, chapters and pages of books online from the world's leading publishers. eBooks can be purchased and downloaded immediately by customers anywhere in the world at prices that are cheaper than printed books, with no postal charges and no waiting for delivery.
About Fictionwise
Fictionwise.com is a leading independent eBook publisher and distributor. The company publishes award-winning and high-quality fiction eBooks by top authors in multiple formats, including Palm (for Palm, Visor and Win CE), Adobe Acrobat, Rocket/REB1100, Microsoft Reader (Pocket PC and PCs), and Franklin eBookMan. Fictionwise authors include Isaac Asimov, Larry Niven, Harlan Ellison, Robert Silverberg, Nancy Kress, Damon Knight, Gregory Benford, Mike Resnick, James Patrick Kelly, Lois Bujold and Kate Wilhelm, amongst many others. Fictionwise also distributes eBooks by other high-quality publishers. It is believed that Fictionwise.com has the largest eBook collection of major award-winning and nominated science fiction stories on the Internet. For further information, contact Scott Pendergrast at scott@fictionwise.com.
About OverDrive
OverDrive, Inc. (www.overdrive.com) is a leading provider of eBook, DRM and media marketplace technologies enabling the secure management and distribution of digital media over global networks. As a strategic partner with Microsoft Corporation (Nasdaq:MSFT - News), Adobe Systems, Inc. (Nasdaq:ADBE - News) and Palm Digital Media (Nasdaq:PALM - News). Through Content Reserve (www.contentreserve.com)OverDrive delivers proven technology for trusted fulfillment and resale of premium content from the world's leading media companies. As a Principal Member of the Open eBook Forum (OeBF), OverDrive is strategically focused on driving specifications and standards for the emerging and rapidly evolving electronic publishing industry. The company was founded in 1986, and is headquartered in Cleveland, Ohio.
http://biz.yahoo.com/bw/020805/52033_1.html
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iPod's on the prize
Apple's portable jukebox is the class of the field
Benny Evangelista Monday, July 29, 2002
If music is your life, then you probably have hundreds of CDs lying around the house. But imagine if you could stuff all of those songs into one tiny box that fits in your pocket, making your music available every place you go?
Thanks to the same MP3 revolution that brought us Napster Inc. and do-it- yourself CDs, those pocket-sized jukeboxes are here, with an increasing variety of choices, led by the iPod from Apple Computer Inc.
Introduced in October, the iPod was the first of its kind to be small enough to fit comfortably in a shirt pocket, yet big enough to store a music fan's library of songs. In its first two months on sale, the iPod grabbed nearly 5 percent of the entire portable MP3 player market for 2001, according to the research firm In-Stat/MDR.
The problem was the iPod only worked with the Cupertino computer-maker's own proprietary Macintosh operating system, which excluded the other 95 percent of the computer world.
That left the window wide open for competitors like Santa Clara's Sonicblue Inc. and Creative Technologies Inc. in Milpitas to jump in with portable digital music jukeboxes for the PC crowd. Both Sonicblue's Rio Riot and Creative's Nomad 3 are competitive iPod alternatives, but still don't measure up to the iPod, either in size or ease of use.
But Apple has finally decided to produce iPods for Windows. And after getting an early peek last week at the latest models, it's clear the iPod will continue to set the pace.
Whether they fly off the shelves is a different matter. The iPods still cost two or three times more than a CD player that also plays MP3s.
The iPods also require Windows ME, Windows 2000 or Windows XP, and they can't be converted easily if you switch to a Mac.
And the iPods still require FireWire, a high-speed data connection developed by Apple, which complicates things for Windows users who only have a Universal Serial Bus or even the new USB 2.0, which is slightly faster than FireWire.
Having high transfer speed is a big factor when you're talking about sending 400 albums from computer to a portable device. With FireWire, data transfers at up to 50 MB per second. But with a USB 1.1 connection, it's only 1.5 MB per second.
One CD that took 6 seconds to transfer to an iPod took 8 minutes to beam over to a Nomad 3 using a USB connection.
You have to ask yourself whether you really need 4,000 songs on the road. If all you want is two to six hours of music, then a flash memory player like the new 192-MB, $250 Rio 900 or Creative's $170, 128-MB MuVo -- as small as a cigarette lighter and less than 1 ounce -- are more than sufficient.
Yet any music lover would find it compelling to have an entire CD collection -- or all the songs he or she has downloaded -- at the ready, prepared for any musical mood shift. That is when a portable jukebox like the iPod shines.
First, a brief history rewind: When portable MP3 players hit the market in 1998, they were a breakthrough because they had no moving parts like a spinning CD or cassette tape. MP3 music files were stored on flash memory, making players compact, light and skip-proof.
But the high cost of flash memory limited storage capacity, meaning you either had to keep listening to the same tunes over and over, or keep reloading new music. With the growing popularity of recordable CD burners, portable CD players that also play MP3 files are now on pace to outsell flash- memory players by 2003, In-Stat analyst Cindy Wolf said.
Fast forward to October 2001, when Apple introduced the iPod with a 5-GB hard drive, enough capacity for about 1,000 songs. The iPod wasn't the first hard-drive portable music player, but the iPod was the first that was small and light enough to rival flash-memory players.
APPLE'S LATEST CROP
Apple's new iPods have improved on the original, with a 10-GB model priced at $400 and a 20-GB model costing $500. Both will be available in early August for Mac users and late August for Windows users. Apple has dropped the price of the original 5-GB model by $100, to $300.
The new iPods have the same ivory-and-silver case, but Apple has replaced the center controller wheel with a touch-wheel similar to a laptop touch pad.
The touch wheel acts and feels the same as the physical wheel, but without the moving part. The touch wheel also enabled Apple to make the 10-GB iPod slightly thinner than the original.
Navigating through the iPod's functions remains easy and can be done with one hand, unlike other jukebox players.
There is now a protective case and belt clip included with the 10- and 20- GB models and a cover to keep dirt out of the FireWire port. Also new is a small remote control attached to the headphone wires.
Instead of Apple's own iTunes program, the Windows iPods will use MusicMatch, a popular music playback and organizing program that already has about 25 million users. MusicMatch will include a handy feature found in iTunes that synchronizes playlists and songs on the computer and the iPod.
Apple upgraded iTunes with Smart Playlists, which among other functions creates song playlists for the iPod that automatically compiles songs by favorite artists, genres or music most (or least) frequently played.
SONICBLUE'S RIO RIOT
That feature isn't entirely unique: Sonicblue's $350 Rio Riot, which also has 20 GB of storage, has a feature called Rio DJ that creates playlists instantly without having to connect to a computer, as long as you have enough songs already loaded.
I particularly liked the "Entertain Me" selection, which gives you a random list of songs tailored to whatever length of time you need. You can also tell the Riot to pick from specific eras, such as "Sounds of the 1940s."
The Rio Riot, which is Windows and Mac compatible, is a decent portable jukebox and comes from the Santa Clara company that makes the market-leading flash MP3 players.
But two iPods easily fit into the same space as the paperback-book sized Rio Riot, which weighs 10 ounces. The 20-GB iPod, the size of a deck of cards, weighs 7.2 ounces.
Although the Riot is fairly easy to figure out, its navigation buttons and scroll wheel are not nearly as manageable as the iPod's. And one glaring design flaw is the combination USB port-headphone jack, which is placed right next to the AC adapter jack. Neither is marked, and two or three times I mistakenly tried to charge the battery by plugging the AC adapter into the headphone jack.
CREATIVE'S NOMAD 3
That isn't a problem with the $400, 20-GB Nomad 3, which also has features that go far beyond the iPod. In fact, Creative Technologies intentionally designed the Nomad 3 for the high-tech gadget set. There's even a 40-GB version that costs $500.
The Windows-only Nomad uses both FireWire (Sonicblue labels it SB1394) and USB for file transferring, and can record directly from a CD without having to first convert and store the song on a computer.
The Nomad 3 also has two line-out connections to tie into a home stereo system and an optical line-in connection that can be used to to record directly from a variety of sources.
But the Nomad 3 is the size of a regular CD player and weighs 10.5 ounces without the batteries. Both the Nomad 3 and the Rio Riot fit into a coat pocket, but they wouldn't be comfortable to wear while jogging.
There are other players in the hard-drive jukebox player category, such as the $200, 10-GB Roq-It from D-Link Systems Inc. of Irvine. And San Diego's E. Digital Corp. announced it will have a $350, 20-GB, voice-activated jukebox that closely resembles the iPod ready in the fall.
But for now, the iPods have it.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/07/29/BU197129.DTL&type=b...
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ot-DivX for the Zaurus
By: Larry Garfield, Thursday, 01.08.02 03:33 GMT
theKompany has released a new video player for the Sharp Zaurus, with support for the popular DivX format. Just the thing for boring meetings, er, plane trips.
theKompany has released yet another application for the GNU/Linux-based Sharp Zaurus SL-5500, this time a DivX video player named tkcVideo. The program supports video files encoded using MPEG 1, MPEG 2, MPEG 4 (DivX), MJPEG, or AVI files, and accompanying audio streams in mp1, mp2, and mp3 format.
"The Matrix" on The Zaurus, courtesy of tkcVideo
DivX is an increasingly popular video format, not to be confused with the ill-conceved DVD-like self-destructing video disks from a few years ago. The new DivX (sometimes called "DivX " to differentiate it from the earlier disks) is based on the MPEG 4 video format, which offers the same level of quality as DVD movies (which use MPEG 2 video) with a higher compression rate, resulting in a smaller file size. It supports multiple audio-track formats, including the popular mp3 audio format. Though not supported by the major movie studios, who prefer DVD due to its copy-prevention features, DivX has become increasingly popular on the Internet for archiving old TV shows, out-of-circulation movies, and family videos. Its small size also makes it ideal for mobile devices, such as the Zaurus. A 128 MB Compact Flash card should be able to hold about one hour of video at 240x320 resolution.
tkcVideo includes both preview and fullscreen modes, as well as fast-forward / rewind and pause/resume functionality. Due to issues with the Secure Digital driver currently used in the Zaurus, which is the only part of the core system that is not Open Source, tkcVideo only works for video files stored on a Compact Flash card. It also works only for files that are 240x320 resolution or smaller. Larger files will be cropped and only the top-left corner of the movie will be visible, though the user can freely rotate the movie in 90-degree increments. theKompany is currently working on compiling a list of recommended video editors for the desktop to allow users to optimize files for the Zaurus.
tkcVideo is available for download now from theKompany's web site. It costs $14.95 USD, and there is unfortunately no demo version available.
http://www.infosync.no/news/2002/n/2130.html
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ot-SONICblue gets A in Economics
By Ana Letícia Sigvartsen
InfoSatellite.com
August 01, 2002
While many manufacturers experienced losses or very small gains, SONICblue reported more than satisfactory results for its second quarter. The company said it had year over year revenue growth of over 80 percent.
SONICblue announced results for the second quarter this week that should make many other manufacturers jealous. The company reported growth in the demand for its video product line followed by reduction of operating expenses, which led to a net revenue of $61.7 million - a year-over-year increase of more than 80 percent in like kind businesses.
Moreover, SONICblue said it has "achieved a second quarter gross margin of 21.0 percent, up from 18.2 percent in the first quarter, and reduced pro forma operating expenses to $18.1 million from $18.8 million in the first quarter." Its actual net loss for the second quarter was $23.5 million or $0.24 per share, compared to a net loss of $312.5 million or $3.88 per share for the second quarter of 2001.
“Our second quarter results are in line with analysts’ expectations and we are pleased with our continued improvements,” said Ken Potashner, the company's chairman and CEO. “The expansion of our product offerings, distribution channels, and sales in the second quarter, has laid a foundation for the second half of the year.”
SONICblue's interim chief financial officer commented that "overall economic conditions and market challenges continue to create future uncertainty," but that the company would remain optimistic. Factors that might have contributed for the growth include the manufacturing partnership with LG Electronics and its first venture with the Coca-Cola Company
http://www.infosatellite.com/news/2002/08/a010802sonicblue.html
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Pressplay gives in, offers unlimited downloads
By Ana Letícia Sigvartsen
InfoSatellite.com
August 01, 2002
When Pressplay and MusicNet were announced, analysts were skeptical. Could these legal (but paid) services beat the free file-sharing networks? After Pressplay announced the limited number of streams and downloads that subscribers would be offered, many thought the service would not succeed.
Seeing that consumers may not be willing to pay for a limited number of downloads and streams when they can have unlimited for free, Pressplay decided to give in and is now planning to offer umlimited supply of music for a single fee.
Sources reported that the company should announce the new pricing plan and software package today. It is known that subscribers will likely get unlimited number of downloads or streams for a single annual fee of $179.40. At launch, Pressplay was offering several subscribtion plans. A Platinum Plan, the most expensive, was said to cost $24.95 and offer 100 downloads, 20 burns and 1000 streams. The company then offered a 14-day free trial to attract consumers.
After the new plan is announced, Pressplay users will have unlimited downloads and streams, as well as 120 burns. Packages that allow more songs to be burned will be available for individual purchase, Cnet informed.
http://www.infosatellite.com/news/2002/08/a010802pressplay.html
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Concerto in cheap
PREVIEW: Music chip should lead to sub-$50 audio players
Maury Wright, Editor-in-Chief -- CommVerge, 8/1/2002
Even as the recording industry languishes in a largely self-afflicted slump, music fans have enjoyed a banner year in terms of compelling new flash-, hard-disk-, and CD-based digital audio players. Moreover, those players are getting downright cheap. With its new CS7410 music processor, Cirrus Logic plans to keep the trend moving for CD-based portables and bookshelf systems.
The company claims the new chip will enable sub-$50 CD-based portables that can play standard audio CDs and compressed digital audio in MP3 and Windows Media formats. The chip itself costs $7.50 in high volume, and the company claims that the entire bill of materials for a portable player could come in under $30 in high volume. The chip includes a MIPS-based RISC processor, a 16-bit audio DSP, RAM, ROM, and a digital-to-analog converter.
Ironically, the CS7410 is a departure from the architecture Cirrus has ridden to success in its Maverick products for portable audio players. While Maverick relied on an ARM RISC core, the 7410 includes the work of LuxSonor Semiconductors, which Cirrus acquired last fall. While Cirrus won't comment on licensing terms, I'd speculate that a favorable MIPS license is one reason that the new chip can deliver lower-priced players. Otherwise it would be a curious move for Cirrus to turn away from a proven and well-understood platform.
The CS7410 does lack some features that many customers might demand in a portable player. In trying to hit a cost minimum, the designers left out an LCD controller and a flash/hard-disk interface. The company claims a CD-based configuration will prove most popular and could be delivered at the lowest cost. Perhaps, but users of players that can deliver hours of music like user interfaces that allow them to organize their music. So an external display controller will be necessary in most products, and I'd argue that a disk interface would also have been justified.
Still I can see the sub-$50 players streaming off the shelves come the holiday season.
http://www.e-insite.net/commvergemag/index.asp?layout=article&stt=000&articleid=CA236122&...
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"Everyone seems to be enamored with MPEG-4. But other technologies can squeeze your video too."
Crush story
Paul G Schreier, Contributing Editor -- 8/1/2002
CommVerge
Digital video holds huge possibilities as a convergence application. Unfortunately, the adjective "huge" can also be applied to raw digital video files. Over the years, the ingenious work of compression wizards has resulted in tools that crunch those files down to manageable size. That's why today's consumers can, for instance, store a feature film (plus extras and several soundtracks) on a DVD or view adequate video images over the decidedly video-hostile Web.
But get ready, because compression technologies about to explode on the scene will make it possible to play digital video everywhere, even on PDAs and cell phones. Among these emerging formats, MPEG-4 has created by far the most buzz. However, it has also created a lot of confusion. Though MPEG-4 is promising and is gaining momentum, the standard everybody loves to hype is not the only game in town.
When examining technologies in use today and looking to the future, it's important to separate Internet-based video from non-PC applications. Today, virtually every DVD player or set-top box uses an MPEG-2 decoder. Meanwhile, a large number of chip vendors make MPEG-2 chips, which vary widely in how they implement the scheme, trading off among key parameters such as file size, video quality, and processing power.
Online extras:
A many-splendored thing: An expanded explanation of MPEG-4
One-stop licensing: The MPEG-4 brouhaha
On the PC side, in contrast, the vast majority of the streaming video coming over the Internet today uses proprietary compression schemes. The leading contenders are RealNetworks with its RealVideo format, QuickTime from Apple Computer (long ago made available under Windows as well), and Microsoft with its Windows Media Player, which works with Microsoft's own ASF (advanced streaming format) and AVI (audio/video interleaved) formats.
Both the Microsoft and Real players can work with a variety of formats, and can even download additional codecs to deal with new ones. Often this process is transparent to the end user, who doesn't know or care—as long as the streaming video works.
Such accomplishments notwithstanding, there are limits to what today's codecs can accomplish. Unless you're satisfied with matchbook-sized display windows and stuttering videos, you'll likely agree that we need a better way to move video. And you'll feel even more strongly about the issue if you're among those who hope that video will one day flow to handheld devices over relatively low-bandwidth cellular links.
MPEG-4 has been widely hyped as the standard that's supposed to save us, thanks to stronger compression and nifty features like the ability to send streams of different quality levels out from a single stored file. "MPEG-4 creates the basis for all future developments in digital video," predicts Ben Waggoner, president of digital-video consulting firm Interframe Media and author of the upcoming book, Compression for Great Digital Video: Power Tips, Techniques and Common Sense .
That may very well be correct, but it's still to early to tell; we're only starting to get our first taste of MPEG-4. In June, Apple released a public preview of QuickTime 6, the first generally available MPEG-4 player. So we can soon expect to see individuals and companies making MPEG-4-encoded video available for streaming.
But hang on, you might say, isn't MPEG-4 video already available? After all, many companies have been talking about their MPEG-4 products for some time now. However, until recently, true MPEG-4 video hasn't been available, Waggoner notes.
What about the hugely popular DivX format, which has a large user base and is touted as "MPEG-4-based?" Waggoner has conducted interoperability tests with a large number of players, including some prerelease versions, and found that DivX files won't run on MPEG-4 players.
"Although it leverages some MPEG-4 technology, DivX does not make a true MPEG-4-compatible file," Waggoner says. "It creates an AVI file using MPEG-4 video and MPEG-3 audio." Even the FAQ file at www.divx.com admits the incompatibility: "While we test the DivX Player on a wide variety of third-party MPEG-4 files, we cannot claim full compatibility with all MPEG-4 files due to the wide breadth of the MPEG-4 standard. (We do claim compatibility with MPEG-4 files created with the DivX codec.)"
“MPEG-4 creates the basis for all future developments in digital video.”
—Ben Waggoner, Interframe Media
Even so, DivX has become the format of choice for sharing lengthy video files, such as feature films, on the Internet. In fact, it has reached a status almost equivalent to that of MP3 for audio. One reason is that its compression can pack a typical feature film onto a single CD-R disk. Another plus is that it's free for personal usage. DivX estimates that 50 million users worldwide have its software on their systems.
PC-based video players that work with DivX files are readily available, but unless your graphics card has a TV port, you're stuck on the small screen. The only alternative is to convert the movie to a VCD or SVCD format, burn a CD-R, and play that disc on a conventional DVD player (although hackers have reportedly discovered how to modify Microsoft XBox consoles to play DivX videos). In an effort to expand its core technology into other areas, such as net appliances, DivX is working with Texas Instruments to develop a DivX-enabled DSP that supports DivX playback at full video frame rate and frame size.
Mixed vibrations
Returning to MPEG-4, even though true MPEG-4 video content is just starting to appear, there's plenty of buzz about that codec—and just as many questions. Will its additions and improvements be enough to attract attention from developers and users?
"In the profiles people are working with today, MPEG-4 doesn't add any new functionality to the video world," Waggoner says, referring to the standard's usage profiles, which define subsets of features tailored for various applications (see the sidebar, "A many-splendored thing"). "Later, though, developers will be able to add interactivity to their content. Next year you can expect to see lots of interesting functionality emerge."
A few more specifics come from Didier LeGall, vice president for home media products at LSI Logic. "The MPEG-4 Simple Profile isn't really a breakthrough compared to MPEG-2," he says. "Instead, it's roughly equivalent. A more advanced solution is coming in other formats. For instance, the Advanced Simple Profile offers at least a 15 percent compression advantage compared with MPEG-2."
If 15 percent doesn't sound overwhelming, don't despair. There's another promising format out there, which isn't currently part of MPEG-4 but will likely become so down the road. "The technology of the future is based on the work of the H.26L project of the ITU [International Telecommunications Union]," LeGall says. "This breakthrough achieves a 45 to 50 percent gain in compression efficiency compared with MPEG-2."
This is a case where the technology and the associated groups are evolving so rapidly that it can be difficult to tell the players without a scorecard. H.26L began its life in 1977 under the auspices of the ITU-T Video Coding Experts Group. Today, it appears to be far superior to MPEG-4 as presently defined. Most of the performance gains come from improved motion estimation.
“To have a format broadly accepted, you must freeze the format at some time. And once MPEG-4 Part 10 becomes widely available, the competitive advantage of proprietary codecs will go away.”
—Rob Koenen, MPEG-4 Industry Forum
Studies by UBVideo, which is working to implement this technology on a Texas Instruments DSP, show that compared with MPEG-4's Simple Profile, H.26L permits an average reduction of 50 percent in bit rate for a similar degree of encoder optimization. At the same time, it offers consistently high video quality at all bit rates. Furthermore, it can operate in a low-delay mode to adapt to real-time communications applications and is also error-resilient, with the ability to deal with packet loss and bit errors.
The scheme shows such promise that the ITU has joined with another standards body, ISO/IEC (International Organization for Standards/International Electrotechnical Commission), to coordinate activity on video coding. The new working party is called the Joint Video Team (JVT), and its work will likely produce two key results. The first is a new ITU-T Recommendation, which, if it follows standard naming conventions, will become H.264. The second is an addition to the MPEG-4 standard, likely to carry the name MPEG-4 Part 10. For now, H.26L, H.264, and MPEG-4 Part 10 all refer to the same work.
As for a timeline, Rob Koenen, president of the MPEG-4 Industry Forum (M4IF), predicts that the standard, including H.26L, should be frozen by the end of this year. We should see software shortly thereafter, with hardware following later, he adds.
However, warns Doug McIntyre, CEO of compression-technology supplier On2 Technologies, "H.26L won't be commercially viable for a couple of years. Yes, it will be possible to compress video to a high degree, but the rate today is a frame per minute. It's good technology, but it has not yet been optimized and it will need a couple of years before it sees productization."
LSI Logic's LeGall, agrees—somewhat. "Yes, some vendors of proprietary codecs point out that H.26L runs very slowly on PCs and it's impractical today," he says. "But in two years it will work in real time and compete strongly with those suppliers."
Bucking the standard
While considerable work is taking place on the MPEG-4 front, proprietary codecs continue to attract considerable usage. "Proprietary codecs are still somewhat better," admits the M4IF's Koenen. "Their developers can release new versions every half year, taking advantage of the latest research. But to have a format broadly accepted, you must freeze the format at some time. Consider the example of MP3 for audio, whose adoption has been great for the overall market. Once MPEG-4 Part 10 becomes widely available, the competitive advantage of proprietary codecs will go away."
“Every two weeks there’s a press release on a new breakthrough in a proprietary codec—or is it a breakthrough in marketing only?”
—Didier LeGall, LSI Logic
LeGall echos that sentiment. "Every two weeks there's a press release on a new breakthrough in a proprietary codec," he says. "Or is it a breakthrough in marketing only? You've got an international standard, and then Microsoft, and you want to compete against that pair with a proprietary codec? Good luck."
LeGall's mention of Microsoft brings us to Corona, the code name for an enhanced media toolset and codec slated for release by the end of this year. Unsurprisingly—considering Microsoft's history—Corona won't play MPEG-4 files and instead will use proprietary technology. Microsoft is making some aggressive claims about Corona's video quality and capabilities, many of which have yet to be borne out in practice. Nonetheless, the technology can't be ignored. "It looks very promising," Waggoner says, "and this year I believe it should perform better than MPEG-4."
In addition, most industry observers believe that Microsoft will ultimately incorporate some level of support for MPEG-4 when the company can no longer ignore the large amount of video content that the standardized codec will attract.
That's a common tack for vendors of proprietary codecs to take. "We all believe that our codecs are far superior to MPEG-4, but we must also ensure interoperability," says Dave Cotter, group products manager in the media-systems division at RealNetworks. "How do we do so? By creating standards in the delivery protocols. In fact, we at RealNetworks agree that the delivery system is the future; design engineers don't really have to worry where the codec train is going."
RealNetworks and Microsoft are not going to go away, says On2's McIntyre. "So any codecs that interoperate with these players have a better chance of survival," he says. "I'd be betting on a distribution system—not on which codec works in it. Those two companies will always try to push the best codecs or use their considerable engineering staffs to write good ones."
Given these comments, it's interesting that On2 hasn't made its own latest codec technology compatible with Windows Media Player. "Support for Apple and RealNetworks is good enough," McIntyre says. "As of yet, there's no commercial reason to move to Windows Media Player. We believe that 90 percent of all PCs have both RealPlayer and Windows Media Player installed, and as long as we run on one of them, I'm fine."
In the hand
The idea of being able to upgrade or enhance a media player with multiple codecs is easy to envision in the PC world. But the concept doesn't transfer quite as well to closed devices, where codec code is burned into memory. Certainly, MPEG-4 won't be limited to streaming applications on PCs any more than is MPEG-2, which today is incorporated into virtually every DVD player.
“I’d be betting on a distribution system—not on which codec works in it.”
—Doug McIntyre, On2 Technologies
"The key that will drive this market consists of the MPEG-4 chips being developed," comments Kent Libbey, vice president of marketing at iVast, a vendor of MPEG-4 software. "Chips made the MPEG-2 market what it is today, because DVDs, PVRs [personal video recorders], and satellite boxes all use them." iVast supplies the codec technology behind e-Box, an effort among seven companies, including Sharp and Pioneer, to bring MPEG-4 to set-top boxes. Cable provider Comcast is also collaborating and will be the first to test the system on its release next year.
A market shakeout in the number of codecs, led by MPEG-4, will also help chip vendors. "We don't want to deploy 50 codecs," says LSI Logic's LeGall. "We do about a dozen now, and each must be a value proposition." The company's DoMiNo architecture supports a range of codecs, including DV (for camcorders), MPEG-1, MPEG-2, and MPEG-4 Simple Profile. In the future the family will also support the Advanced Simple Profile as well as Part 10 and even Microsoft's Corona. "We're not sure that just one format will be a winner, and we look at solutions that accommodate multiple formats," LeGall says.
That sounds like good advice for any player eyeing the digital-video space.
Author information
Contributing Editor Paul G Schreier (pgschreier@amitechmarketing.com) is waiting for the compression algorithm that can efficiently compact weeks of research into a 3000-word feature article.
A many-splendored thing
If you've seen the term MPEG-4 thrown around in seemingly incompatible contexts, don't be surprised. Rather than a single, universally applicable standard, MPEG-4 is best understood as a multimedia framework that addresses the needs of a wide variety of applications—including but not limited to studio editing, interactive broadcasts, Internet streaming, and playback on wireless devices.
Today, MPEG-4 is broken down into eight separate major parts (ISO/IEC-14496-x), two of which address visual and audio functions. However, because the standard is object based, it extends far beyond those two areas to support interactive multimedia, which will play an important role in the future.
You may hear that MPEG-4 and Apple's QuickTime are the same, but that's not really the case. The MPEG-4 group selected the QuickTime file format to start with, so MPEG-4 software does share a deep level of compatibility with QuickTime. However, the standard has evolved in scope and functionality, so the two are no longer directly compatible.
While the MPEG-4 standard includes hundreds of features, no application will need all of them. Depending on the target application—be it digital cinema or cell-phone video—only a subset of capabilities will be invoked. To help developers of encoders and decoders work under some common assumptions, the standards group has defined a number of profiles (which define features from a qualitative aspect) and levels (which nail down specific performance requirements for these features).
The formal specification lists 19 different Visual Profiles, "only a few of which will actually be used," says Rob Koenen, president of the MPEG-4 Industry Forum.
Here are some details on the profiles you're most likely to encounter in the wild:
Simple Profile: Provides a technology baseline upon which the other profiles build, and is suited for use on mobile or other low-power devices.
Advanced Simple Profile: Adds enhancements for better visual quality, such as global-motion compensation and quarter-pixel motion estimation (Simple uses half-pixel motion estimation).
Simple Scalable Profile: Allows a server to modify the bit rate depending on demands on image quality, frame rate, or resolution. Useful for applications that provide services at more than one level of quality due to bandwidth or decoder limitations.
Fine Granularity Scalable (FGS): Will allow for extremely high quality video.
Core Profile: Adds support for coding of arbitrary-shaped and temporally scalable objects. Useful for applications such as those providing relatively simple content-interactivity (Internet multimedia applications).
Core Scalable Profile: Adds variable frame rates and resolutions.
Main Profile: Supports interlaced video and appears to be a candidate to support interactive HDTV. To the Core Visual Profile, adds support for coding of interlaced, semi-transparent, and sprite objects. Useful for interactive and entertainment-quality broadcast and DVD applications.
The profiles spell out some generic functions and requirements, but also leave plenty of room for interpretation, such as how intensively the underlying technology will operate. But developers need to nail down more specifics for implementation. This is where the levels come into play.
In any given profile, each level dictates a least-common-denominator with regard to key operating specs, such as the maximum frame rate, data rate, resolution, and number of objects. With levels, a developer can make certain assumptions about the ultimate system.
For example, within the Simple Profile, Level 0 targets the wireless industry, where screen sizes are small and processing power is low. The level allows a maximum frame rate of 15 frames/sec, limits luminance pixel resolutions, supports 99 macroblocks (16-by-16-pixel areas), and caps overall screen size at 176 by 144 pixels. Other levels don't dictate a max image size, but they can specify the number of macroblocks. For example, Level 1 allows 99 macroblocks that can be configured as 1584 by 16, 176 by 144, or any other rectangular size divisible in each direction.
Despite these commonalities, MPEG-4 products designed to the same profile/level can vary dramatically in how they trade off speed and visual quality. For instance, the standard does not specify how to transport bits over various networks. "The standard defines a bitstream," explains Ben Waggoner, president of digital-video consulting firm Interframe Media. "But there's a tremendous amount of room for innovation at either end of the stream. At the encoder end, you can trade off quality versus speed. On the playback side, the developers can look for ways to get smoother playback. When MPEG-2 first came out, we needed 4 Mbits/sec to achieve DVD quality, but that has since improved to 2 Mbits/sec for a good picture. We'll likewise see MPEG-4 improve as the encoders get better."
And if all this isn't complicated enough, note that the ISMA (Internet Streaming Media Alliance, www.isma.tv) has also defined a common set of requirements and functions—and has unfortunately chosen to use the "profile" nomenclature. For instance, the ISMA's Profile 1 is the equivalent of the Advanced Simple Profile at Level 3 combined with the Audio Profile at Level 2.
This is an important combination, Waggoner says. "The ISMA Profile 1 will become what everyone means by MPEG-4 this year," he says, adding that Profile 1 isn't as good in quality as proprietary codecs and that companies won't migrate toward it for that reason. Instead, they'll like the broad interoperability it affords. "Given MPEG-4, I don't see that somebody like AOL Time-Warner will want to get tied down with a proprietary codec," he comments.
Streaming at windmills?
One hears a lot of hype about streaming video to cell phones and other wireless handhelds, but it's going to be a while before that application becomes a reality. In the meantime, the PC streaming market offers a potentially sobering lesson. To wit: It's not clear whether anyone can turn a profit streaming video to PCs.
"There are very few business models for streaming video that make any money," says Doug McIntyre, CEO of compression-technology supplier On2 Technologies. "Perhaps the only one is porn. Will people watch long-form video on PCs? I think not. In fact, the amount of streaming video on the Web, particularly on multimedia sites, is contracting. People are retreating from this side of the market because there's no way to make money. In the future, I also see decreasing use of video players because consumers will use PCs as a gateway to move video data to a set-top box or PVR [personal video recorder] for more comfortable viewing."
People are more likely to use PCs for specific applications, such as videoconferencing and distance learning, he continues. "For those applications you'll want interaction and a more sophisticated GUI," he says. "Those programs will be far more than simple video players."
Not surprisingly, a representative from RealNetworks has a different viewpoint. Dave Cotter, group products manager in the company's media-systems division, argues that it will be possible to make money with streaming video. "It's not that the model is flawed, but that the technology has been too expensive," he asserts. Higher-quality content that will attract users is becoming available. "In addition, bandwidth costs are dropping, in conjunction with our compression, making streaming video more cost-effective," he says.
One-stop licensing
MPEG-4 is a complex scheme that exists thanks to the work of many companies, which hold patents for various portions of the underlying technology. Rather than make users of the technology approach each company individually for a license, a company called MPEG LA offers a one-stop licensing service. It collects fees on behalf of the patent owners and distributes the proceeds. MPEG LA has successfully shown how this approach works by creating a patent portfolio for the MPEG-2 video compression standard, which it began licensing in 1997.
In January of this year, the company announced its intentions to do the same with portions of the MPEG-4 standard, specifically patents essential to MPEG-4 Visual (Simple and Core Profiles), which involves patents owned by 20 companies. MPEG LA also disclosed a proposed fee structure, under which licensees would pay 25 cents each for MPEG-4 decoders and encoders, with fees capped at $1 million a year for each licensee. The company also suggested charging a per-minute rate with no cap.
These terms created an immediate uproar, with some companies believing they would make MPEG-4 nonviable and open the door for proprietary formats. Other companies were more sanguine. "We took MPEG LA's initial proposal as an opening round of negotiations, while others took it as a fait accompli and overreacted," says Kent Libby, vice president of marketing for iVast. "We analyzed it and reported our findings to the company, as did other responsible parties. It's a living scheme, and things will work out fine. The same process happened with MPEG-2."
True to this prediction, MPEG LA has softened its stance. In mid-July, the company announced the terms for the licenses it will officially roll out in September. The revised terms feature "reasonable" annual limitations on certain royalties, royalty options that require no royalty reports, and threshold levels below which some use-based royalties would not be charged, according to MPEG LA.
"This sounds the starting bell for the whole broadcast and multimedia industry to start releasing MPEG-4 products and services," said Rob Koenen, president of the MPEG-4 Industry Forum, in the press release announcing the terms. "The licenses are the long-expected prerequisite for MPEG-4 being fully accepted and deployed."
But the fact that MPEG LA has revised its license fee structure hasn't removed all objections to the scheme. In fact, Doug McIntyre, CEO of On2 Technologies, a developer of a proprietary codec, argues that there's an even bigger problem. He asserts that MPEG LA is running an illegal patent pool that has not been approved or sanctioned.
"While the MPEG-2 group did get provisional approval for their activities, to my knowledge the MPEG-4 group has not even applied for approval," he says. "It's simply illegal to set pricing in this fashion. It creates a barrier-to-entry for others. We've filed complaints with all 50 state attorneys general, as well as the US Justice Department Antitrust Division and the Federal Trade Commission."
Meanwhile, you may wonder how companies that are talking up MPEG-4 codecs can do so without having signed licensing agreements. "Technically," notes Larry Horn, MPEG LA's vice president of licensing and business development, "they're violating the patents, because the license covers MPEG-4 video in any form or shape. All uses are liable to the patent holders." Meanwhile, MPEG LA looks upon the use of MPEG-4 as a vote of confidence in the technology and the licensing scheme.
"We hope to have a product that allows users to get whatever they need from one place," he concludes.
The main text of this article indicates that the future may lie with H.26L (Part 10), which, Horn notes, is completely divorced from MPEG LA's efforts.
Also, there may be questions about codecs that are billed as "MPEG-4-based" yet don't play on MPEG-4 decoders. "If they use MPEG-4, they will need our license," he says. "But otherwise you have to take a closer look at what 'MPEG-4-based' means. They might need a license for some of the underlying patents from individual patent holders."
http://www.e-insite.net/commvergemag/index.asp?layout=article&articleid=CA236131&pubdate=8/1...
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ot-Hearing is Believing
Woody Norris wants to tell you something—and he can put the words inside your head from 100 yards away. Is his invention sound, or just a pipe dream?
By Jamie Reno and N'gai Croal
NEWSWEEK
Aug.5 issue — In this post-Enron era, there aren’t too many CEOs who will cheerfully volunteer to a reporter, “My company’s never made a dime!” But the American Technology Corp.’s Elwood (Woody) Norris isn’t your typical CEO.
BLESSED WITH THE bone-crunching handshake of a used-car salesman, the R-rated vocabulary of a drill sergeant and the potential innovative genius of a Thomas Edison (Norris’s previous claim to fame was creating a forerunner to the sonogram), Norris has an enthusiasm for his latest contraption that’s infectious.
He’s standing in a corner of his cluttered San Diego office, holding a gizmo that looks something like a retro-futuristic waffle iron with a portable CD player Velcroed to its back. “Are you ready?” he asks, then points his invention directly at the head of someone who’s just entered the room 10 feet away. “Now, can you hear it? Can you hear it? Isn’t that unbelievable?” What the person across the room hears is, well, unbelievable: all of a sudden, the sound of a waterfall has materialized in his head. And, it turns out, no one else in the room can hear it but him. It’s as if the sound is coming out of thin air. As Keanu Reeves said in “The Matrix”: whoa.
After more than a decade of trial and error and about $30 million in R&D, the 63-year-old Norris may be on the verge of changing the world as we hear it—and making some major money to boot. The Hyper-Sonic Sound System (HSS), as he calls it, can take an audio signal from virtually any source—home stereo, TV, computer, microphone, etc.—and convert it to an ultrasonic frequency that can be directed like a beam of light toward a target up to 100 yards away. Picture a car where parents can listen to the Eagles while their kids wild out to Eminem in the back seat. This is big audio dynamite—possibly the biggest breakthrough since modern speakers were conceived 77 years ago—and Norris knows it. “It’s rare when you have a Thomas Edison who actually gets fame and success in his own lifetime,” he says with customary modesty. “This is a big, honkin’ hit.”
What’s the secret? In the range that human beings can hear, sound scatters in all directions, like the light from an open flame. Traditional speakers work by moving air; they rapidly vibrate the flexible cones in your speakers to form sound waves. But no single speaker can accurately reproduce the —full range of audible sound (approximately 20Hz to 20,000Hz), so loudspeakers rely on separate units—large woofers for low frequencies, small tweeters for high frequencies and midrange speakers for the middle of the audio spectrum—to re-create the whole range of sound. That works fairly well, but it also has some drawbacks, most notably distortion from the multiple sound fields that become increasingly apparent as you pump up the volume.
Instead of using a vibrating membrane like traditional speakers, the HSS technology electronically converts audible tones into a pair of ultrasonic waves at frequencies far beyond human hearing. But when the ultrasonic waves interact after being processed by Norris’s creation, they reproduce the original audible frequency. Even better, since the audible frequency is being carried by those ultrasonic signals, it’s highly directional. That means you can effectively “shine” a spot of sound wherever you want it. What Norris has done over 10 years is to figure out a relatively inexpensive way to combine the two ultrasonic signals to produce the desired sound. Two weeks ago ATC start- ed limited production, and the company’s small lab is already strewn with the devices. Prices are expected to range from $600 to $900 per unit, depending on size.
It’s easy to see how HSS could make some magic. Imagine a home theater system optimized not for your entire living room but for the club chair that you kick back in. Or a giant nightclub with several different music areas on the dance floor, none of them overlapping. But Norris has $30 million in costs to recoup, and HSS isn’t yet perfected for the lower tones prevalent in music. So some of the cooler stuff will have to wait while he hooks up with retailers and the U.S. military for “Minority Report”-style applications: vending machines that call out to you as you walk by; sonic “guns” that can incapacitate the enemy with 150 decibels of sound without deafening the good guys. One person who came away impressed is U.S. Marine Capt. Todd Gillingham, after a recent demonstration for more than 40 military and law-enforcement representatives. “For instance, it can send the tape-recorded sound of a tank or explosion to another area to throw the enemy off,” he says. “I don’t know about us acquiring this technology in any large quantities at this point, but I do think it has great potential.”
Elwood (Woody) Norris may be on the verge of changing the world as we hear it
That’s music to the longtime inventor’s ears. After Norris sold his first patent for $330,000 in the early ’60s, he quit college and never looked back. His subsequent efforts range from an all-in-one earpiece-microphone for hands-free mobile-phone use (sold to another company for $1.5 million), the world’s smallest AM-FM radio (a modest success) and a personal aviation device (a James Bond-like mini-helicopter that has gotten off the ground, but has yet to truly take off). All this and more can be perused at woodynorris.com, his hilariously self-promotional Web site, where every article ever written about him or his products—from publications like Popular Mechanics and BusinessWeek to Playboy and Gallery—has been carefully scanned and posted. And Norris’s outsize dreams extend to Hollywood; he likes to show off his sci-fi screenplay about—surprise—the world’s greatest physicist.
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Not everyone is a believer in the San Diego inventor. A local newspaper characterized him as “a dream spinner who regularly disappointed Wall Street with glowing predictions for various electronic products that subsequently flopped.” Floyd Toole, vice president of acoustical engineering at the high-fidelity audio company Harman International, met with Norris several years ago and remains skeptical. “It’s a party trick,” says Toole about HSS. “We don’t believe it represents a paradigm shift in mass-market audio.” Perhaps Norris’s harshest critic is former MIT Media Lab researcher Joseph Pompei, who’s developed a rival product under the name Audio Spotlight (automaker DaimlerChrysler is evaluating it in some concept cars) and accuses Norris of everything from taking credit for the work of others to dubious business practices, all of which Norris denies. “For over a decade, [Norris has] promoted impressive-sounding technology of which he has very little evidence of real understanding,” says Pompei. Norris shoots back: “His unit is where we were five years ago.”
“You know Panasonic’s slogan ‘Just slightly ahead of our time’?” Norris asks. “Everything I’ve ever invented has been about 10 years ahead of its time. I know the reputation I have in San Diego: that I take too long on these things, that nothing I’ve invented has ever made money. Well, this will be my vindication.” The world will be watching—and listening.
© 2002 Newsweek, Inc
http://www.msnbc.com/news/786016.asp
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Sour notes
The legal crackdown hasn't squelched MP3 trading -- it's just made it more of a pain. But the music industry would still rather fight than give its online customers what they want.
- - - - - - - - - - - -
By Farhad Manjoo
July 30, 2002 / The fight against online music piracy entered the realm of the bizarre last Thursday, when Rep. Howard Berman, D-Calif., proposed giving the recording industry sweeping new powers to do what, for the rest of us, would be illegal: hacking computer networks.
Berman's bill, the Peer to Peer Piracy Prevention Act, allows record companies to respond to the "theft" of copyrighted materials by "disabling, interfering with, blocking, diverting, [or] otherwise impairing" a peer-to-peer file-trading network. As long as record companies do these things to prevent the trading of their copyrighted works, they couldn't be prosecuted under computer crime statutes.
Nobody knows what specific attacks copyright owners would carry out, but the bill seems to allow companies to do what many "hackers" have been jailed for -- denial-of-service attacks, for example, that would prevent users from accessing a Web site or other online service. Berman's efforts are being championed by the Recording Industry Association of America, the industry's trade group. In a statement, Hilary Rosen, RIAA's CEO, called the measure an "innovative approach to combating the serious problem of Internet piracy."
Because the bill has almost no chance of becoming law in the short term -- just a few weeks remain in the congressional session, and there is not yet any companion legislation in the Senate -- file traders and civil libertarians responded to its introduction with a bit of bemusement. For some, the bill is just more furious hand-waving from an industry that fears it's going under. "It's not that different from making it legal to break into someone's house to make sure they don't have any illegal Mickey Mouse posters on the wall," says Adam Fisk, a Gnutella developer who works on LimeWire, a popular file-trading software application.
The Berman bill could be seen as a new low for the industry -- further indication that it sees the fight against MP3s as its defining cause and will go to any length to pursue it, no matter how outrageous. During the last three years, the battle against file sharing has become the entertainment industry's version of the War on Drugs, an expensive, protracted, apparently ineffective and seemingly misguided battle against a contraband that many suggest does little harm. The labels' main strategy -- busting the biggest dealers in an attempt to strangle the supply of free MP3s, while offering few palatable solutions to stem the demand -- is a classic tactic from the War on Drugs book, and it has failed just as clearly. Despite the RIAA's recent settlement with AudioGalaxy -- in which the trading service agreed to make available only those songs that it had formal permission to list, an agreement that renders AudioGalaxy useless -- researchers believe that more people are trading music than ever before.
But the RIAA's latest moves -- the Berman bill as well as rumored legal action against individual file traders -- are nevertheless curious, because they come at a time when the industry ought to be declaring victory. Precisely measuring the traffic on peer-to-peer networks is difficult, but there is at least anecdotal evidence to show that trading services no longer offer the cornucopia they once did and, at the very least, are much more challenging to use than was true during Napster's heyday.
While it's still easy to download some of the music you want, finding all the music, these days, is near impossible. Downloading a whole album? Even on a fast connection, even if it's a popular album, even if you have tricks up your sleeve, you might have to spend as much as a half hour of your workday. Then there are the increasing, and increasingly annoying, concerns posed by the file-trading applications themselves: the adware, spyware, Trojan software, and even possible security holes.
If the industry were smart, it would seize this moment. Instead of trying to hack its customers, it would seduce them with a pitch that goes like this: Getting free music is a dodgy affair -- pay us a little bit, and we'll give you a Napster-like free-for-all. But the music business isn't doing that; instead, through its antiquated, complicated and allegedly anti-competitive licensing practices, the labels have given us subscription services that fall short of fun. Even the good ones lack many useful features -- like CD burning, or the ability to play your downloaded music on many machines, or to listen to as many songs as you like for your monthly fee -- that any online music fan needs. And that's a shame, because a good service, released now, could cash in big.
The demographics of file-trading are boom and bust. Until it was shut down, Napster constituted nearly the entirety of the file-sharing market. "Then we saw a huge uptick in at least 10 other services, and there weren't as many consumers in any one of those services as there were in Napster," says Aram Sinnreich, an independent music industry analyst in Los Angeles. But some of those networks started getting more attention than others, and they came out ahead. "Morpheus and AudioGalaxy really became the leading inheritors of Napster's user base," Sinnreich says. Then the two services lost their footing. In February, Morpheus suffered a technical glitch that booted it off its network -- which it shared with users of KaZaA and Grokster -- and it was forced to switch to Gnutella. And AudioGalaxy began blocking more and more files until its RIAA-imposed crippling in May. Now it seems that KaZaA, a client called WinMX, and the various clients on the open-source Gnutella network handle the bulk of file sharing.
And they all have their problems. Salon spent several days trying to download all sorts of songs from these services. The main test was this: How much elbow grease would it take to get a recently released, barely known -- though not obscure -- album? The album that seemed to fit was "Come Away With Me," the debut release from the "pop jazz" singer Norah Jones. Jones, who's 22, has a voice that critics seem incapable of describing without using the word "sultry"; she's generally received the sort of critical acclaim that most young musicians would sell a kidney for. Some radio stations play Jones' music, though not the stations that play top tracks from Billboard Hot 100 -- precisely the situation that made her a good test subject.
File trading has long been justified on the grounds that it lets people listen to new music before purchasing. Whether people are actually more likely to buy the new music they like after they've downloaded it is a question that still hasn't been resolved (there are several conflicting studies) -- but it nevertheless stands to reason that for artists like Jones, artists whose "distribution channels" are limited, file trading might be more help than harm.
So which was the best trader? At various times all of them seemed, on average, to be worth what you pay for them -- which is near, but not exactly, nothing. You pay with your time, and you pay with your computer's processing power and your network's bandwidth, which some of the clients gobble up madly. (One popular Gnutella client, QTraxMax, seemed to stop all other local network traffic into my computer each time it did a search.) The process was fraught with the usual hassles of trading -- the songs are there but the downloads hang, terminate inexplicably or, if they come through, sound as if they were recorded on wax cylinders.
"It's the black market," notes Sinnreich, "and the black market should feel like the black market. I don't think file sharing is decreasing, but there's never a lot of stability there. It's a world where every six months people have to choose new software."
For the brief period that AudioGalaxy was in its prime, its elegant Web-based system did away with these frustrations; maybe that's why it was killed. But still, in Salon's research -- even if it took a bit of time and a lot of micromanaging -- the Jones album was, in the end, ultimately available from every trading network.
And the numbers reflect that. According to Ipsos-Reid, an independent market research firm, there are many more people downloading MP3s today than there were when Napster was around. At the root of it, researchers say, is a consumer sense that there's nothing morally wrong with using the systems. Edison Media Research recently asked people what they thought of this statement: "You no longer have to buy CDs, as you can download the music for free from the Internet." Twenty-two percent of people between 12 and 44 agreed with it. When you just ask teenagers, says Jayne Charneski, an Edison vice president, the results are even more dismaying for the record industry. "Seventy-four percent said there's nothing wrong with downloading or burning music," she says. "Then when we put it in form of, 'Well, do you know musicians aren't being compensated?' that number comes down a little. They cared more for the musicians than the record labels, but only a little bit."
Asked whether such research indicates that RIAA's legal pursuit of file-trading services has been ineffective, Jonathan Lamy, a spokesman, said no. In an e-mail, he wrote: "We believe that our legal strategies are having success. We have never lost a case and two of the most popular, easy-to-use sites are either now offline or finally respecting intellectual property. The online shoplifting of music does continue to plague the industry, but our legal track record so far is clearly having an impact." Lamy agreed that many consumers don't think that music trading hurts anyone, and he said that the RIAA would do more to change that attitude. "It's more than just protecting our legal rights through the courts," he wrote. "It's also educating people about the reasons why unauthorized file sharing hurts the music they care about in the long run. That's a key component of any long-term effort to change people's behavior."
But if the industry tries to educate people, will they listen? The Wall Street Journal recently reported that in addition to going after file-trading services, the RIAA is planning to take legal action against individual file traders. Like the news of the Berman bill, the report immediately caused a stir in file-trading circles, and the RIAA appeared to step back from the issue. (Lamy declined to comment on it.) But many people say that such proposals have created such a distaste for the music industry that it's going to take more than the hazy notion of "hurting music" to get them to change their attitudes toward file trading. "I don't think 10 years ago consumers thought much about record labels one way or the other," says Sinnreich. "These days you have a music-buying populace that is completely disenchanted by the people selling it to them. Is that a healthy business?"
The Berman bill won't help the industry win any more friends, either. Although Berman -- whose top benefactor is the entertainment industry, from which he received more than $180,000 for his 2002 reelection campaign -- suggests, in a statement, that his bill is "narrowly crafted, with strict bounds on acceptable behavior by the copyright owner," critics say it's anything but. Fred von Lohmann, an attorney at the Electronic Frontier Foundation, says that the way he reads the bill, victims of the industry's hacking "don't get to go to court unless the attorney general signs off on it. And you have to prove that they knowingly or intentionally crossed the line, which is exceedingly hard to prove."
Sinnreich, the music analyst, says that some people in the industry are fine with their anti-consumer line. "They think the only way to go against file trading is to bash consumers into submission," he says. Perhaps that's not an unreasonable initial reaction to the scourge of file trading. After all, it's obvious that music buyers don't have any qualms about stealing music -- and what business person wouldn't want to stop the outright theft of product? But after a while, says Sinnreich, "You have to think 50 million consumers can't be wrong. Actually, you're talking about half a billion application downloads of file traders. How can half a billion downloaders be wrong? They can't. The consumers set the tone for the marketplace."
In other words, there's no way out of this mess for the recording industry other than to implement real subscription services. And with all these many rifts in the music industry, it's amazing how many people seem to agree that legitimate music subscription services can become a viable alternative to free trading. According to the RIAA, there are now nine such pay services, and as they become "more and more appealing to consumers, they will draw users away from the illegitimate sites," Lamy wrote.
Civil libertarians, too, say the same thing. "The reason the [Berman bill] is not a long-term solution to the problem," says the EFF's von Lohmann, "is that if you want to stop casual piracy you have to offer a compelling legal alternative." Sinnreich says that there's "overwhelming year-over-year survey data" to show that people will pay for a subscription service that has all the perks, and none of the hassles, of a free system. "We've asked them in 10 different ways, in ways that they didn't even know they were being asked, and always there's a huge number saying they'll sign up."
But fewer than 5 million people have tried such systems, and it's easy to see why. The services differ widely, with varying price scales, music catalogs and options for downloading, and none offer both the range and flexibility of the free file traders.
Some services, like Listen.com's Rhapsody service, offer "streaming," meaning that the music doesn't reside on your computer. Others, like Pressplay and MusicNet, offer downloads instead, but they limit the number you can have each month.
"None of these services seems to know what the consumer demand is for," Sinnreich says. For a subscription service to work, he thinks it needs to offer four features: content from all five record labels; the capacity to play songs from as many computers as you like; CD burning, for an incremental fee; and "no limitation on the number of songs you listen to in a month -- you have to make them feel like they're getting a lot."
As they're currently designed, none of the services let you feel that way. Listen's $10-per-month Rhapsody service has a fantastic interface, and, since it has content from all five labels, you can find much of what you'd like on it. The Norah Jones CD was there, and with a broadband connection it streamed over beautifully. You can listen to any song as often as you'd like -- an option that gives a taste of what a perfect subscription service would feel like. The only trouble is, Listen won't let you burn -- and, as one file trader asked, "Who wants to be stuck listening to shit at their computer?"
A Listen spokesman says that the company is working on offering CD burning, but the licensing issues make it difficult right now. Pressplay, on the other hand, does let you burn a limited number of tracks, depending on how much you pay. The $15-per-month plan, for example, lets you burn 10 tracks, though you can't have more than two from the same artists per disc. (Though he didn't provide details, a representative for Pressplay said that the company would soon unveil a new version, and the company's pricing model would change "significantly.") Pressplay's catalog is lean, though, too lean to pay much for. And its many rules, like the many rules of all these systems, have a way of sticking in your craw; as you keep using the system, and it keeps telling you how much less "credit" you have, it's hard not to get annoyed and wonder why you ever left the land of the free.
According to the subscription services, their limitations can be traced back to licensing deals with the record labels. There isn't any uniformity to it; different labels release different catalogs to different services, with varying restrictions and at confusing price scales. For example, subscription services must pay more to the labels to offer a download than a stream, even though, on a broadband connection, there is hardly a difference between the two -- and the stream, which can be played on many machines, may in fact be preferable if the download can only be played on one machine, which is a common restriction. Why do the labels have these restrictions? It smacks of old-style thinking -- an inability to recognize that the longer they delay these services, the bigger, and more out of control, trading will become.
You can understand why the music business is frightened. In 2001, CD sales declined 10 percent. Musicians -- and not just the crazy ones -- are accusing labels of placing them under "indentured servitude." Perhaps a tad unfairly, music critics blame the industry for the quality of today's music. (It's probably more appropriate to blame Carson Daly.) And fans? Music fans, for a litany of slights, some perceived and many real, can't stomach the labels.
For the music industry, file trading has become the convenient cause of all its ills. CD sales down? Must be due to Napster. Fans don't like us? Must be Morpheus. It's come to the point that even some artists believe that line. Moby, a guy known for his business and techno savvy, recently blamed the poor sales of his latest album, "18," on his fans' facility with trading apps. "I described the 'Pearl Jam Effect' as being a phenomenon wherein bands who have very technically savvy fans will see their records do poorly in the charts, whereas bands/artists who have less technically savvy fans will do quite well on the charts," he wrote on his blog. "This is owing to the fact that bands/artists with technically savvy fans will have a lot of fans who will end up downloading music or burning CDs where as less tech-savvy fans will end up buying their CDs ... Pink outsells Weezer in the States not so much because she's more popular, but because her fans are more likely to buy, as opposed to burn, her CDs." It couldn't possibly be that "18" just isn't as good as his previous release, "Play." Nope -- it's gotta be those CD burners out there.
The downturn in CD sales could just as easily be explained by the overall economic downturn, and the end of the boy band teen-pop cycle. But that's not to say there isn't a real threat to the way the recording industry does business right now.
"Obviously, any market can become a zero-dollar market if the supplier ceases to provide to the demanders what they want -- and there is danger of that occurring here," Sinnreich says. On the other hand, people like music and they're willing to pay for music. But will they pay for something they can get for free?
Christopher Allen, an executive at MusicMatch, a company that offers a subscription radio service, answers that question this way: "You can get free coffee at work, but there's a ton of people going to Starbucks."
http://www.salon.com/tech/feature/2002/07/30/file_trading/index.html
culater
DataPlay lays off over 100 workers
Slow market in IPOs spurs cuts; 70 to 80 in Boulder lose jobs
By Janet Forgrieve, Rocky Mountain News
July 30, 2002
Boulder-based DataPlay Inc. slashed about half of its 240-person staff on Friday, after failing to raise additional operating capital.
The company, which makes quarter-sized discs that hold music, movies and text, as well as the tiny drives that read them, laid off more than 100 people, including between 70 and 80 in Boulder, said spokeswoman Suzanne Stephens.
The cuts were also necessary to appease potential investors, said founder and Chief Executive Officer Steve Volk.
"We had targeted investors who are into later-stage investments and mezzanine (funding) rounds," he said. "But those investors are looking for a near-term IPO, within 12 to 24 months.
"But the IPO marketplace is completely dead - that was our biggest problem. To get the financing done, we had to cut our burn rate. That translates to head count, unfortunately."
The company has raised about $119 million in venture capital investment. Volk declined to say whether, with the layoffs, DataPlay was any closer to securing funding.
He also did not say how much the company needs to raise.
DataPlay originally planned to have products on the market last fall, but manufacturing glitches repeatedly postponed the launch.
DataPlay makes the drives that read the discs, selling those to appliance makers.
Those sales to manufacturers began last quarter, and finished appliances have been available for sale on the Internet for several weeks, Stephens said, and will be in some retail stores this week.
Recorded music to play on them isn't expected to be out until the fall.
http://www.rockymountainnews.com/drmn/technology/article/0,1299,DRMN_49_1294617,00.html
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Long and Bumpy Road to 3G Car
Cars appear an ideal application for mobile and 3G services. Yet, history is not promising...
By Steve Wallage
Using wireless technologies, and particularly 3G, would appear to offer limitless opportunities to car manufacturers. Just look at some of the statistics. In the US, it is estimated that around 70% of cellular minutes are used in cars.
Car-drivers have an absolute need for real-time information and navigational aids. Much of the journey is 'idle time' - ideal for many mobile applications. Safety and security are also key, and were the killer applications in a study of 20,000 Japanese drivers for Nikkei Business Publications. Specific applications included finding missing cars and requesting emergency assistance.
The automotive industry is also busy migrating towards electronics. According to Gerhard Hettich of Daimler Chrysler, "Today the added value of electronics is becoming the most important part for a vehicle manufacturer."
Yet, automotive telematics – the merger of telecoms and infomatics – has had a distinctly turbulent introduction. Despite, a host of new announcements and alliances – such as the recent unveiling of a Mercedes S-class car fitted with a UMTS system - the markets remains very embryonic.
Not So Fast
The 'grand-daddy' of the industry is OnStar. It was launched in the US in 1996 by General Motors. Based on analog cellular and GPS, it offers a variety of navigational and informational services although its focus is clearly on safety and security. It currently has more than 2.5m subscribers and is available in 36 out of 54 General Motors models plus selected Lexus, Subaru and Audi models.
Yet, some competitors claim that only two-thirds of OnStar-equipped vehicles are ever activated despite the fact that the service is free for one year. Deutsche Bank estimates the second-year renewal rates at a pitiful 13%.
Ford's venture in the area was Wingcast, a joint venture with Qualcomm. The 18-month old venture never brought a product to market and has now been ignominiously canned. Ford is still officially re-thinking its telematics strategy, although it has worked with Vodafone to offer telematics functionality on luxury models in the UK and Germany.
The bottom line is that consumer demand for telematics is still unproven. Despite the obvious interest in safety features, consumers are reluctant to pay for something they hope they will never have to use. Automotive manufacturers are currently looking to cut costs rather than invest in unproven areas. There are also a number of other obstacles such as ownership of the customer, terminals, standards and entry price.
Goodies on the Move
So where does the market go from here. Wingcast and OnStar were based on analog cellular. The market starts to look much more interesting in a world of Bluetooth, WLAN and 3G. Here, a lot of alliances and interesting partnerships are being formed.
DaimlerChrysler has now unveiled its in-car 3G system which offers average data transmission speeds of 128kbit/s from a moving vehicle. It offers services such as music and video downloads, video telephony and an off-board navigation system which can transmit maps, directions and pictures from traffic cameras to drivers. Partners include Siemens, Sun Microsystems, T-Mobile, Jentro and MBDS/Nice University Sophia Antipolis. Interestingly, the company is not just targetting the affluent consumer but businesses which can install the system in the cars of travelling employees.
Unsurprisingly, much of the innovation is coming from Japan and Korea. KDDI of Japan, which counts Toyota as a major stakeholder, has been working with Cisco to offer WLAN services to its 3G customers. The system involves an in-car LAN system with a PC and an IP camera. There will certainly be demand for WLAN hotspots in areas such as motorway service stations, although such offerings should be considered as a complementary, rather than substitutive, service for cellular systems.
At the Tokyo car show in May, Toyota displayed a service, called G-BOOK, designed to let users download contents on networks and to play them over the vehicle-exclusive terminal. Content to be provided include real-time traffic information, shopping and restaurant information, entertainment information such as music and karaoke pieces, games, and news. The service will be available later in 2002. There are two ways to download content. Users can use wireless communication that uses the bandwidth allotted for mobile phone service or can download information by inserting a SD memory card into a terminal located at convenience stores by KDDI.
NTT DoCoMo has been working with Nissan for a number of years on telematics. It plans to launch a service in 2003 providing a console ready to guide the driver, provide customized information and replace the radio, directly downloading desired music from Internet. Nissan's new telematics service, called CarWings, will be available with its economy, rather than just luxury, models.
Bluetooth proponents have also seen the car as another market for the technology. There is a Bluetooth Car Working Group, which has designed 'Hands-Free profile' specifications for a hands-free phone application using Bluetooth. Later in 2002, Chrysler will begin offering a Bluetooth system called UConnect for $299 plus installation.
As well as other mobile vendors and operators interested in this market, Microsoft also aims to be a major player. Its technology is used in 12 car models from five different manufacturers. It has also developed a Car.NET architecture, as a component of its .NET platform, and its Windows CE platform at the forefront of telematics.
When Will Demand Take Off?
Despite all the alliances, car manufacturers are still quite cautious on future telematics and the arrival of the 3G car. According to Hettich of Daimler Chrysler, "safety and reliability are key issues in the automotive industry." The car industry is very wary of installing new systems until it knows they work, and will not impair safety. It is also very wary of adding additional costs to its customers.
Optimists believe that 3G services and additional functionality will entice customers. For example, Bob McKenzie, general manager of the Automotive Business Unit at Microsoft believes that, "once consumers become accustomed to telematics products and services in the car, opportunities will soar."
However, although researchers have been criticized for previously over-hyping the technology, they are actually fairly cautious. The Telematics Research Group believes that only 5.1% of cars worldwide will be using telematics in 2007. For the US, the figure will be 12.4%. The figures are lowered by the long replacement cycles for cars.
According to Telematics Research Group, by 2007, 42% of cars in the US will be sold with telematics and, by 2010, 81% of all cars sold. The Strategis Group is more confident, predicting that 49% of US car will be sold with telematics by 2005. The Nomura Research Institute predicts that 22m Japanese cars will have telematics by 2006, putting it just ahead of the US.
The 3G Car
Lots of trials are taking place in telematics, and the 3G car will become a reality as the services are deployed. Bluetooth will be used increasingly as a complement for cellular services in cars. Japan and Korea look set to lead the market, with Europe lagging behind partly due to the public transportation system and higher car costs making consumers more reluctant to buy in-car services.
On the positive side, some of the standards issues seem to be resolving themselves with the formation of groups such as Telematics Suppliers Consortium (TSC), and the Automotive Multimedia Interface Collaboration (AMIC). There may be less competition between the car and mobile industries, as the automotive vendors realize that they need each other and that they need to avoid being bypassed by mobile services directly aimed at motorists. However, the car manufacturers are unwilling to lose any of their branding power.
On the negative side, the car manufacturers are as risk-averse as any telecoms operator, and services will tend to be restricted to the high-end of the car market.
The 3G car will be there – just not for a long while for most of us.
http://www.thefeature.com/index.jsp?url=frontpage.jsp
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IBM voice recognition technology makes driving easier and safer
IBM has announced it has provided enhanced voice recognition technology for a new navigation system that will be a standard feature in select 2003 model Honda Accords. (7/30/2002)
With this system, drivers can ask for directions and hear responses over the existing car audio system, allowing them to reach their destinations without compromising safety because their eyes never leave the road.
The new Accord, will include the "Touch by Voice" navigation system powered by IBM's Embedded ViaVoice technology and software developed jointly by IBM and Honda R&D. The new system has a vocabulary of approximately 150 English-language commands and can recognize a range of accents.
To get directions, the driver uses the "talk" button, located on the steering wheel. The system recognizes commands such as "find nearest gas station," "find nearest ATM" or "find the nearest Italian restaurant." It also provides driving directions to and from any specified address or location.
The technology is integrated into the car's audio system, so driving instructions can be heard over the speakers. The Touch by Voice human voice recognition system minimizes need for keyboard entry and also links to climate control systems for added driver convenience.
The new Accords are due to begin reaching Honda dealerships Sept. 9.
With this system, drivers can gain access to a range of services without taking their hands off the wheel," said Robert Bienenfel, senior manager of product planning for American Honda. "It's more advanced than anything else in the market today. IBM has over 25 years of experience in voice recognition technology, and we're delighted to be working with the forerunners in this area."
IBM Embedded ViaVoice delivers IBM speech technology to mobile devices such as smart phones, handheld personal digital assistants (PDAs), and automobile components. It supports a variety of real-time operating systems (RTOS) and microprocessors. The Touch by Voice system uses IBM speech technology in its command and control (C&C) form of Automatic Speech Recognition (ASR) that uses human speech to input commands into a mobile device. In other applications, IBM speech technology also operates in text-to-speech (TTS) mode, using synthesized human speech to output text and other information from a mobile device.
According to Joanne Downie, Director of Strategy Analytics In-vehicle Telematics and Multimedia Service, "the commercial vehicle sector has emerged as a clearly defined target market for telematics players. We estimate that the sector generated US$898M in telematics service and equipment revenues in the US and W. Europe in 2000, and market growth is expected to reach over US$1.7BN by 2007."
"Computing is entering a phase that goes beyond the PC and into devices and places not normally associated with heavy computing power. This innovative navigation system, jointly developed by Honda and IBM, is just one example of how IBM works with our industry partners to push the envelope in the emerging area of pervasive, wireless and mobile computing, " said Raj Desai, Director, Global Automotive and Telematics Solutions.
"IBM is helping companies in the petroleum, insurance, telecommunications, heavy equipment and transportation companies, as well as governments around the world, take advantage of the new capabilities telematics technologies offer. From hardware to software solutions to consulting expertise that aligns business processes for greater efficiency and profitability, IBM is helping world-class customers like Honda break new ground."
http://www.telematicsupdate.com/homepage2.asp?news=30563
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ot-The Dark Side of Hacking Bill
By Michelle Delio
2:00 a.m. July 27, 2002 PDT
Coming soon to a computer near you -- Hollywood Hackers.
Watch as they rifle through your files, dismantle your network, and delete all those songs and movies you can't prove have a legal right to exist on your hard drive. Hope the special effects don't include the accidental destruction of your data when your computer becomes a stunt double in Hollywood's latest blockbuster attempt to protect its copyrighted material.
California Congressman Howard Berman introduced his "Peer-to-Peer Piracy Prevention" Act in the House of Representatives Thursday. If the bill (PDF) passes, copyright owners could -- at least conceptually -- employ a variety of technological tools to prevent the illegal distribution of their copyrighted works over a P2P network such as Kazaa or LimeWire.
Security experts said the bill's wording is too vague and wonder exactly what sort of "technological tools" will be permitted. They also fear that approval of the bill could result in a multitude of clumsy and ill-conceived "hack" attacks that could have widespread, system-damaging effects on both file traders and those who have never downloaded a single song from a file-trading server.
"Basically, Berman is going to legalize all of the antisocial Internet activities that we have been trying to stamp out for the last decade," said Paul McNabb, chief technical officer of security firm Argus Systems Group.
While not specifically prohibited in the bill, Berman insists that media companies will not be allowed to unleash viruses or other malicious code or destroy personal, non-pirated files.
"Contrary to widespread, if uninformed speculation, our legislation is narrowly crafted, with strict bounds on acceptable behavior by the copyright owner," Berman said in a statement. "It gives copyright creators a very limited safe harbor from liability when they use technological tools for the narrow purpose of thwarting P2P piracy. It does not allow copyright owners to send viruses through P2P networks, destroy files, hack into the personal files of P2P users, or indiscriminately block lawful file-trading."
The tools Berman specifically suggested that companies might use include "interdiction" -- flooding a P2P file server with fake requests in order to slow or stop the system; "spoofing" -- providing slews of corrupt, damaged or incomplete files to P2P servers; and "redirection" -- faking the location of files to force traders to perform many futile system-resource-wasting searches.
But media companies wouldn't be limited to just those options.
"The bill is pretty vaguely worded so it's hard to know what Hollywood might do," security researcher Richard Smith said.
Smith guessed that, at minimum, media companies could overwhelm P2P servers with "ghost files," tying up the servers' resources as people try to download files that don't really exist.
"Another possibility would be to overload someone's computer by repeatedly requesting the same illegal file to be downloaded," Smith added.
Denial-of-service attacks, flooding servers with many requests for nonexistent files in order to crash or dramatically slow network performance, is specifically permitted under the bill. But P2P networks are created on the fly from whatever computers are logged on at any given time, so experts fear that innocent bystanders could also be smacked in a service attack.
"Berman is opening the door to massive denial-of-service attacks against perceived pirates, without the attacker having to get prior authorization to launch the attack," Argus' McNabb said. "This could have devastating effects on computers on the same network or in the line of fire.
"For instance, if everyone on your block has a cable modem, and someone is thought to be a pirate, a denial-of-service attack against that perceived pirate could take the entire neighborhood cable network down."
Security experts also wondered how Hollywood would come up with a battalion of skilled hack attackers. Would the pirate-battling forces be unassuming programmers, now ordered to come up with malicious programs to foil file traders? Or would Hollywood soon be hiring real hackers?
"If you hire average programmers and set them to work coming up with ideas on how to punish a pirate, you'll eventually get into trouble if you don't know what you're doing and don't strictly control them," said George Smith of virus information site Vmyths.
"There is no set definition of a 'virus' in the Internet mind, so it is easy to imagine a corporate programmer convincing his bosses and the legal department that his copy protection scheme is not a virus, only to find that when it gets into distribution and is taken apart by someone in the industry the first time it swats an innocent, it is labeled as something very bad."
Hackers said that very few of their skilled colleagues would consider taking pirate-persecuting jobs.
"I don't think Hollywood has a hell of a lot of support within the hacking community, so finding real talent might be a bit tough," hellNbak, a member of hacker laboratory Nomad Mobile Research Centre said. "That being said, there are always those who will, if the price is right, offer help and training."
Security experts also agreed that the Berman bill could serve as encouragement to a whole new class of criminals, drawn from the lowest common denominator of the computer underworld.
Under what security consultant and author Richard Forno calls the "Hollywood Hacking law," computer criminals could probably make the case that any malicious programs they wrote and released were actually intended to scour the Net to enforce copyrights.
"What a wonderful cover-your-arse law this will be for script kiddies and other cyber-cretins," Forno said.
Forno also wondered whether network administrators and computer owners would eventually be penalized for running secure systems.
"Will having a firewall -- or implementing strong system security practices or being a good system administrator -- become illegal and prosecuted as circumventing copyright controls under the existing Digital Millennium Copyright Act? If Hollywood can't easily inspect your system in their quest for copyright enforcement and world control, are you now a criminal suspect?"
"Be afraid." Forno added. "Be very afraid."
ahttp://www.wired.com/news/print/0,1294,54153,00.html
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ot-Hard Drive for the Car Lets You Rip CD's on the Way to Work
By IAN AUSTEN
With its hard drive for storing music, the Sony MEX-HD1 is a bit like a built-in Apple iPod for the car. But unlike an iPod or other similar portable music players, the MEX-HD1 can download music from CD's without a computer.
Songs can be downloaded through the unit's CD player to the hard drive at up to eight times their normal speed. The player will also accommodate MP3 files recorded on CD-R or CD-RW discs.
The same compression technology used in Sony MiniDisc players enables the MEX-HD1 to hold 165 hours' worth of music.
Bill Lee, Sony Electronics' general manager for product development, expects that most owners of the unit will gradually download their music collections during the daily commute to work. If a disc is still downloading when its owner pulls up at the office, the device will complete the job and then shut down, even after the car's ignition is switched off.
The MEX-HD1 is now available at retailers for $1,500. Installation, of course, is extra.
http://www.nytimes.com/2002/07/25/technology/circuits/25GEE1.html
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The New Napsters
There's more free downloading of music than ever. The big labels hate it--but shutting down the outlaw networks won't be so easy this time.
FORTUNE
Monday, August 12, 2002
By Melanie Warner
To the big record labels, Napster wasn't just a nuisance; it was their worst nightmare--the online equivalent to everyone storming into record stores and making off with armfuls of CDs. So when an appeals court issued an order last July forcing Napster to shut down, there was a sigh of relief throughout the recording industry. It was the day free music died.
Or so it seemed. Napster as we knew it is gone. But what's taken its place is a lot scarier for the music industry--and perhaps unstoppable. They're called file-sharing services, or P2P networks in geek-speak, and the three most popular ones--Kazaa, Grokster, and Morpheus--have a combined 70 million active users, compared with only 20 million for Napster in its heyday. Oh, and it's not just music being zapped across the Internet anymore. The new Napsters house videogames, software programs, and movies, including ones now playing in theaters.
Not surprisingly, the big labels and the movie industry are trying to do to Kazaa, Grokster, and Morpheus what they did to Napster--litigate them out of existence. Only this time the outlaw networks may not be so easy to shut down. Kazaa, Grokster, and Morpheus work much the same way Napster did, but they're technologically smarter and, in a legal sense, a lot more amorphous. The Recording Industry Association of America (RIAA), representing eight record labels, and the Motion Picture Association, working on behalf of 19 movie studios, are suing the companies that own Kazaa, Grokster, and Morpheus--Sharman Networks, Grokster, and StreamCast Networks, respectively. (All three deny the charges.) But those entities don't run their networks the way, say, Sony does its record label; they have little control over what they created and can't tell who's downloading what file, whether it's an Eminem song or Grandma's recipe for blueberry pie. Thus the legal question becomes: If you can't control or see illegal activity, how can you be liable for it? In a memo leaked last December, the RIAA's legal team acknowledged that its claims against Kazaa, Grokster, and Morpheus "are not as strong as those against Napster."
What's more, even if there were a court order to shut down the networks, it may be impossible to do so. Napster operated with central servers that tracked and controlled the transfer of files between users, but Kazaa, Grokster, and Morpheus are completely decentralized. Niklas Zennstrom, one of the two creators of Kazaa, says that the only way the system can be shut down is if every user elected to disable his program. That, of course, isn't very likely to happen.
The beauty (or menace, depending on which side you're on) of the P2P networks is that they've taken on a life of their own. No one understands that better than Zennstrom, 36, and his 26-year-old partner, Janus Friis. Working out of a small office in Amsterdam, they put Kazaa on the Web in the fall of 2000 as an experiment, expecting maybe a few thousand people would download it. But after the ninth circuit appeals court dealt Napster its first crushing blow in February 2001, millions of Napster users flocked to the site.
The stampede scared even Zennstrom and Friis. They began frantically searching for someone to buy Kazaa, ultimately finding a British-born woman in Australia named Nikki Hemming, who quickly rounded up a couple of investors and formed Sharman. Zennstrom and Friis are still on the hook legally because they kept the underlying software, called FastTrack, that powers Kazaa and Grokster. The RIAA and MPA recently added both men to the lawsuit as individuals.
Like Kazaa, Grokster and Morpheus also grew by themselves. None of the networks has ever done a stitch of marketing to lure users. Digital-music fans go wherever there's software that lets them get their MP3 files. Short of suing 70 million-plus people or encrypting every CD and DVD sold (an unlikely scenario), it's hard to imagine how to stop it.
Still, the music industry has to try. Global sales of CDs have been falling; last year they were down 5%, and for the first time blank CD sales outnumbered sales for recorded CDs. "You really have no choice,'' says Cary Sherman, the RIAA's general counsel. "If you don't bring lawsuits, then thousands more of these networks will develop rather than the handful that pop up periodically.''
Part of the RIAA's legal strategy is to show that Kazaa, Grokster, and Morpheus are guilty because they knowingly chose to design software that prevented them from having any control. "StreamCast was originally a centralized system, and after the Napster decision they became a licensee of FastTrack because they thought they could evade the court's judgment,'' argues Sherman. The RIAA also hopes to make an issue out of the fact that both Sharman and Grokster are incorporated offshore, the former in Vanuatu, a group of islands in the South Pacific, and the latter in Nevis, a 36-square-mile tourist paradise in the West Indies. (Morpheus is based in Franklin, Tenn.) "When Kazaa was about to get an injunction by a court in the Netherlands, it sold its assets to a company in Australia, and then they incorporated in Vanuatu, where there is no copyright law,'' steams Sherman. Hemming, speaking recently from her office in Sydney, says that the Vanuatu move was for tax purposes only, and that Sharman, whose headquarters are in Australia, intends to follow Australian law.
The RIAA is considering a far riskier strategy--suing individuals who share large numbers of files on Kazaa, Grokster, or Morpheus. It's a tactic guaranteed to infuriate and alienate music fans, and it underscores the awful bind record labels are in. "This is a time of crisis for the music industry, and the RIAA is trying to fight a battle on multiple fronts,'' says Susan Kevorkian, an analyst at IDC.
Unfortunately, the industry isn't putting up much of a fight on perhaps the most important front: creating Internet services that people actually like for legitimately licensed music. The RIAA can file lawsuits until it's blue in the face, but unless there are attractive legal alternatives, people will probably continue flocking to what record executives call the "pirates.'' P.J. McNealy, an analyst at GartnerG2, estimates that at least 15% of the people using P2P networks would be willing to at least consider paying for their music if it were packaged in an appealing way.
But it's not. Late last year several big record labels launched three online music subscription services, none of which is exactly the Amazon.com of online music. Pressplay and MusicNet have crippling restrictions on how much music you can download or burn onto a CD each month, and the songs that you do download basically self-destruct once you stop being a customer. EMusic, which is owned by Vivendi Universal, lets you own the music, but it uses the nonrestrictive MP3 format, and thus none of the major music labels want to deal with it, including, ironically, Vivendi's own Universal Music Group. The result is a narrow selection of obscure music from small, independent labels--more Nusrat Fateh Ali Khan than Moby.
Alan McGlade, CEO of MusicNet, which is a joint venture between RealNetworks, AOL Time Warner, Bertelsmann, and EMI Group, says that improving MusicNet's offerings is a top priority. But he admits that it's a slow, painstaking ordeal. "This is an industry in formation, and there's not an established infrastructure," he says. "Everyone from the labels to publishers to artists are trying to work out a process to license and service content for digital distribution."
Meanwhile, hundreds of thousands of new users join the P2P party every week. Today it's Kazaa, Morpheus, and Grokster, plus four or five others. And if those networks somehow get shut down, others will pop up in their place. "These networks are just tools to get what I want,'' a Kazaa user named ErikZ said in an e-mail. "If the record industry breaks these tools, you go out and find another.''
http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208834
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Audio-file downloads worth doing for leisure
Thank you, dear readers, for letting me know it's now possible to transfer audio books downloaded from Audible.com onto CDs.
That's a big improvement since I last wrote about audio literature in October. It must be time to survey the scene again to find out whether it's worth time and money to buy and burn CDs for listening in the car, lounging in the living room or falling asleep at night.
Conclusion: It is.
With 5,800 titles, Audible (www.audible.com) is the largest online-audio book seller permitting customers to download titles and transfer them to a portable player or CDs.
Audible permits one complete burn per title. After that, the audio book can't be burned to CD but can still be transferred to portable player or listened to on the computer.
According to an Audible representative, customers can decide if they want to make copies from the burned CD beyond personal use. He noted that Audible's publishing partners agree there isn't quite the same risk of widespread copyright violation as in the music industry.
At Audible, best sellers such as Sue Grafton's "P is for Peril" and John Grisham's "The Street Lawyer," cost around $18 to $34, depending on length and whether you buy the abridged or unabridged edition. Children's books range from $3 for "Beauty and the Beast" to $18 for "Island of the Blue Dolphins" and $23 for "Across Five Aprils."
A year's subscription to audio editions of The New York Times or The Wall Street Journal costs $60. So does a year's subscription to National Public Radio's "All Things Considered."
The process from buying to burning isn't difficult. To buy, you browse or search for the audio literature you want and then offer up your credit-card number. Or you can pay a monthly subscription fee of $13 to download any one book per month, or $16 for two.
After downloading the software that manages your purchases, you activate your CD burner (the CD-RW drive that plays and records CDs), transfer the audio books you bought to your computer and then to a portable player or CDs.
I selected a few titles for my younger daughter to listen to at night in her room. "Anne of Green Gables," for example, provides more than 10 hours of listening. "I Was a Sixth Grade Alien" lasts three hours, and "Grownups are Strange" is less than an hour. My older daughter chose "The Nanny Diaries" for the long drive back to college.
Besides Audible, there are a few other Web sites that offer downloadable audio literature:
MediaBay (www.mediabay.com) doesn't have as many titles as Audible but does have some of the same ones for a little less. For example, "P is for Peril" costs $16 abridged on MediaBay, compared with $18 abridged on Audible. "The Street Lawyer" costs $30 unabridged on MediaBay and $34 unabridged on Audible.
MediaBay includes a text description of each audio book title. So does Audible, along with an audio sample.
The flaw of MediaBay is that you can't burn the books you buy onto CDs. You're stuck listening to them as they play on the computer.
A reader told me about AudioBooksForFree (www.audiobooksforfree.com) and, as the title suggests, all its audio books are free. The site supports itself by inserting ads between chapters it claims never exceed 5 percent of book length. Selections specifically for children (there aren't many) contain no advertising.
So I sign up, look through the list — which includes "Call of the Wild," "Amistad" and "Cowboys Are My Weakness" — select "Dating Big Bird" by Laura Zigman and download it on my computer
Later, when I'm ready to listen, I can't find it and have to use my PC's search engine to locate the story on my hard drive. I listen and find the sound quality good, though the "humorous" story isn't all that funny.
After burning it on a CD, the sound quality is still quite good. I'll look for another title because, if it's free, it's worth the hunt.
A few other sites offer a limited selection of free downloads along with a catalog of CDs and cassettes for sale. For instance, www.booksonmp3.com offers free downloadable short pieces along with MP3 CDs at $20 each, including "The Hammer of Eden" by Ken Follett and "Hong Kong" by Stephen Coonts.
MP3 CDs don't play on a standard stereo, however. You have to play them on a computer, a MP3 portable player, or a MP3 CD player.
To find other sites, do an Internet search using keywords such as audio book downloads.
For people who spend a lot of time in the car and get tired of listening to the radio, audio books are a wonderful alternative. They're also great for kids and adults who have trouble sleeping at night, or who just like listening to stories rather than reading them when the lights are low and it's time to relax.
Some of my children's classmates use audio textbooks because they learn better by listening to information than by reading it. And, of course, people who are sight-impaired or have trouble reading for any reason, can benefit tremendously by the emerging popularity of audio books.
http://seattletimes.nwsource.com/html/businesstechnology/134501436_ptgett27.html
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MuVo Transfers Tunes Sans Cables
At last week's Macworld Expo, Apple announced new models of its iPod digital music player, featuring lower prices and Windows compatibility. As exciting as these devices might be for MP3 fans, they'll be obsolete this autumn. That's because several manufacturers have already announced players that will transfer music from a PC wirelessly.
The first, available in August, is Creative Technology's Nomad MuVo. According to CNet, which has already tested one of the devices, the $170 unit eliminates the cables and data transfer software that usually accompany a digital player. It does so via a removable flash memory pod that docks directly with a USB port.
On Macs and PCs running Windows 98 or newer, the pod is recognized directly as a removable storage device, without any drivers being required. Users can drag and drop music files to the flash memory via the Finder or Windows Explorer. Like some earlier wired devices, the Nomad MuVo can also store any other type of computer data file. Therefore, it acts as a solid-state equivalent to a floppy disk drive.
According to both CNet and IDG, which carried reports yesterday, Intel will shortly release a reference design for a digital player that goes a step further. Its proposed device is essentially a handheld computer customized for media storage: it will include an XScale processor, hard drive and liquid crystal display.
Wireless networking based on the 802.11b specification will also be featured, allowing consumers to get music from a PC to the device without using any cables. However, Intel is clearly worried about copyright concerns; its spokesperson told both CNet and IDG that the devices would not be able to send music directly from one to another. Instead, they will require each user to have a PC of his or her own.
Hoping that third-party manufacturers will produce the devices and sell them for about $400, Intel has no plans to place its own name on a music player. Last year, it closed a division that had produced an MP3 player and other PC peripherals.
By Jonathan Angel
http://www.technologymarketing.com/mc/article_display.jsp?vnu_content_id=1557064
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Sentinel-very thougtful post-thanks/
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DataPlay slashes one-half of staff
Industry experts say Boulder company's future is cloudy
By Matt Branaugh, Camera Business Writer
July 27, 2002
In DataPlay Inc.'s short, four-year history, it's promised to change the way people listen to music, read books and store photos. It snagged $120 million in venture capital to do it. It received local and national acclaim along the way.
But the company slashed half of its 240 workers worldwide Friday, including more than half of the 140 workers at its Boulder headquarters, suggesting that its revolutionary dream is struggling.
The privately held company told the Daily Camera in April that it was pursuing another $50 million in private funding. It didn't come through, and that's why the cuts occurred, said Todd Oseth, a senior vice president at DataPlay.
The decision better positions DataPlay for the future, he said.
Industry followers aren't so sure, though, with one saying the company's technology may be too little, too late and too expensive.
"It appears they're losing ground," said Mary Craig, a principal analyst following the market for Gartner Dataquest. "If they do not deliver on the promise — shelves full of DataPlay devices in lots of stores, with plenty of content to satisfy people at satisfactory price points by year's end — I would then be bold enough to say their chances of being successful in 2003 will be slim."
Oseth disagreed.
"Our future's not changing," he said. "It probably brings the ability to become cash flow-positive and break-even sooner by making these cuts."
All of the company's divisions were hit, although no executives were cut. Limited severance packages were given, Oseth said, and outplacement services were recommended to affected workers, but DataPlay can't afford to pay for them.
DataPlay created a technology buzz in 1998 when founder Steve Volk introduced the concept of digital discs about the size of a half-dollar that could store up to 500 megabytes of content — the equivalent of five music albums, hundreds of digital photos or a collection of novels. Manufacturers could customize a DataPlay-made engine into a music player, a digital camera or other miniature device to access that content.
Venture capitalists jumped on board. Local and national media publications, including the Wall Street Journal and USA Today, took notice. Awards followed.
Big-name music labels BMG, EMI and Universal Music signed on, as well as manufacturers Samsung and Toshiba.
But a technological glitch hit last fall, delaying DataPlay engines six months. And then legal hankering between musicians, agents and lawyers over content usage postponed album launches.
Cindy Wolf, an analyst with high-tech research firm In-Stat/MDR, said the industry has been promised a DataPlay product for 18 months now. Meanwhile, Apple's iPod came out and popularized the union between hard disk drives and portable music players. CD burners caught fire. And Flash-based players — pioneers in portable music — increased to 128 megabytes of storage.
"(DataPlay) just kind of lost their space in the market," she said. "Maybe — and who knows — if they had come to market last fall with the devices that supported the discs, as well as the discs, they may have had a better chance."
The funding deficiency caused the cuts, not the delays, Oseth insisted, adding investors want to see "break-even on the horizon," before giving more money. A smaller-sized deal may soon close, he said.
Next week, the company expects to see music players with its engines on store shelves, priced around $369. Music albums — priced at $15 a pop by the music companies — won't come out until the end of next month, with 50 to 100 artists available by Christmas, Oseth said. Blank discs used for recording will cost about $10 apiece.
DataPlay continues operating with the expectation consumers will love the technology, buy it later this year and even more so next year. Access to more interactive content, including direct Web links and ways to buy additional music from an artist on the existing disc, will justify the prices, he said.
A deal announced earlier this week, in which BMG's country music label will release some artists using the format, further validates DataPlay's progress, he added.
But Craig's not convinced, especially since competing technologies are already at or below DataPlay's prices.
"We think the price points are way too high," she said. "We think the idea is great. But they aren't delivering."
In-Stat's Wolf said this year's big audio breakthrough — a hybrid player meshing a CD player with an MP3 — is wildly popular and typically costs between $70 and $150.
Still, Wolf said there's always a chance DataPlay's format will win consumers' affections.
"I don't think (DataPlay's future) is cut-and-dried," she said. "New ideas sometimes go over and sometimes don't. That's just the way the business works."
Financial struggles and layoffs aren't new to DataPlay's creator. Volk saw his Longmont-based PrairieTek, a disk drive maker that once employed 500 people, file for bankruptcy and shutter in 1991.
Seven years later, his 300-employee Intgral Peripherals — another computer disk drive business — lost its venture capital funding from struggling Asian investors and filed for Chapter 11. Mobile Storage later acquired that company.
Volk, who was named Ernst & Young's 2001 Entrepreneur of the Year, was first scheduled for an interview with the Daily Camera on Friday morning but canceled. He wasn't available for further comment until next week, Oseth said
http://www2.dailycamera.com/bdc/business/article/0,1713,BDC_2400_1290614,00.html
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Looking back at DataPlay
July 27, 2002
DataPlay Inc., long considered one of this region's hottest startups, has always been plagued with the same question: When will its tiny 500 MB discs be on the shelf?
The company says, essentially, any day now. But after a series of postponements and its first fundraising failure, its future is unclear. Take a look:
May 1998 — DataPlay Inc. founded as SpinVision.
August 1999 — SpinVision changes its name to DataPlay.
April 2000 — DataPlay unveils its concept at the Internet World conference in Los Angeles. The 80-employee startup already has raised $14 million, and says products will be on the shelf in early 2001.
June 2000: DataPlay announces it received $50 million in venture capital from investors including Universal Music Group, Toshiba Corp. and Samsung Electronics Co.
October 2000: The Boulder Chamber of Commerce recognizes DataPlay as one of its "Hot Companies to Watch" as part of its Esprit Entrepreneur 2000 awards. DataPlay signs a deal to form a joint venture with Toshiba to market the tiny discs in Asia.
January 2001: DataPlay's product named Best Overall Lifestyle Product at the Consumer Electronics Show in Las Vegas. Weeks later, it announces it will spend $30 million to form manufacturing in Singapore.
March 2001: DataPlay announces it will be on the market in October 2001, and announces a deal with BMG for musical content.
June 2001: Firm, now with 160 employees, announces another $55 million in investment, this time from investors including Olympus, Kodak, and Boulder-based Sequel Venture Partners. Imation Corp. says it will manufacture the discs in the United States.
February 2002: DataPlay Inc. and Taiwan-based Kinpo Electronics unveil the first digital camera designed to use DataPlay's digital media.
March 2002: DataPlay announces content deal with Zomba Recording, with a stable of artists including Britney Spears, 'NSync and R. Kelly. Company hopes to raise another $50 million in venture capital, says it will be on the market in June.
May 2002: DataPlay Inc. said it finalized an agreement with BMGs Arista Records, with such artists as Pink and Usher.
Monday: DataPlay announces deal with BMGs RCA Label Group in Nashville, Tenn., with country music stars like Brooks & Dunn. Says it will be on the market as early as next week.
Friday: After failing to raise additional capital, DataPlay announces it is cutting its 240-member staff in half.
http://www2.dailycamera.com/bdc/business_columnists/article/0,1713,BDC_2466_1290017,00.html
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ot-The Bears Are Starting to Buy
By James K. Glassman
Sunday, July 28, 2002; Page H01
For years, Grant's Interest Rate Observer was noteworthy for being both exceptionally witty and consistently wrong. Times have changed. The newsletter, edited by James Grant, who has written wonderful books on such topics as the life of Bernard Baruch and the history of credit in America, is now both witty and right. Or as Grant put it in his July 5 newsletter: "Before this publication became profitably bearish, it was unprofitably bearish. It was unprofitably bearish for a very long time."
One of Grant's readers, Frederick E. "Shad" Rowe, who describes himself as a "recovering short seller," suggested to the editor recently that the newsletter, in Grant's words, "should turn bullish, just to be able to say we did it." But, Grant said, "We think we will wait." Why? The falling dollar, accounting scandals, a "political climate [that] is turning chilly toward enterprise," and prices that are even now "not cheap."
And yet, and yet. . . .
In the past month, Grant's has run two articles that are shockingly optimistic about stocks -- specifically, about e-commerce companies and biotechs. Some of Wall Street's most prominent bears in the 1990s -- including Barton Biggs of Morgan Stanley -- are acknowledging that with bargains multiplying and the U.S. economy recovering, it's time to buy. Even Barron's, which warned during the go-go years that stock prices were getting out of hand, told readers last week in a headline that it was "Time to Stock Up." Andrew Barry wrote, "Sober investors fortunate enough to be sitting on cash now have the opportunity to invest in stocks at valuations that look pretty reasonable by historical standards."
Most remarkable of all, however, is the changed attitude of Jonathan Cohen, who manages a hedge fund and a tiny mutual fund. Never heard of him? Grant's reminds us that Cohen is the guy who wrote in December 1998 that Amazon.com was "probably the single most expensive publicly traded company in the history of the U.S. equity markets." At the time, the stock was trading at $58 a share (adjusted for splits). A year later, it was over $100. The advice may not have endeared Cohen to his employer, Merrill Lynch & Co., and soon he had a successor -- Henry Blodget, technology's Bull of All Bulls. Times have changed. Amazon now sells at $12.49 a share and Cohen was vindicated, while Blodget, now also gone from Merrill, is the target of lawsuits.
The surprise is that Cohen is buying technology stocks. The mutual fund he manages is Royce Technology Value. In the six months after its launch in January, it beat the average fund in its category by more than 30 percentage points. But don't get too excited. One reason Cohen has done so well is that he took his time deploying his cash into stocks and, even so, he's down 23 percent since te fund's inception. Far more important than Cohen's short-term performance is his upbeat view on technology stocks -- or, at any rate, on some of them.
"I wish everything we owned was an absolutely hugely compelling value," he said. "Some of them are merely quite good values."
That's a start. In selecting tech stocks, Cohen looks not at projections of a company's profits but at its here-and-now balance sheet. Grant's notes, "He attaches more weight to the tangible net worth of an investment candidate than to anyone's guess of its three-to-five-year earnings prospects." Cohen wants to own companies that not only have good ideas and good management but that have a good chance of being around for a while. For that, they need cash.
One of his favorites is United Online Inc., a low-cost Internet service provider that, in the most recent 12 months, lost $45 million on $113 million in revenue. But United has $132 million in cash and short-term investments and has no debt. The stock price is up about two-thirds since January.
The largest holding in Cohen's portfolio is LendingTree Inc., an Internet marketplace that brings borrowers and lenders together. LendingTree is losing money, but it is also rapidly increasing its revenue and cutting its quarterly deficits. Over the past year, the stock has risen by about three-quarters.
Cohen owns, among bigger techs, E-Trade Group Inc., the online investment service, which has a cash hoard greater than its market capitalization (meaning its value in the stock market, based on its price). E-Trade stock has dropped 37 percent over the past 12 months, but the circumspect Value Line Investment Survey gives the stock its top rating ("1"), an accolade shared by only 100 companies out of 2,000. The latest Value Line write-up concluded: "These volatile shares are timely. The stock's three-to-five-year appreciation potential is also very attractive, though somewhat speculative at this juncture."
Another holding with a strong balance sheet is Adaptec Inc., which sells products that store computer data. The company has $8 per share in cash and short-term investments and no debt. On Friday, it closed at $6.01. Yes, the company is losing money, but it's got a business and real assets as a safety net. The stock doubled between September and January but has been on the skids lately.
Grant's said: "Cohen was right in 1998 -- just early. Our hunch is that he is right, and early, again."
Last week, Grant's featured another portfolio manager who was actually buying stocks: Dan DeClue, vice president of SF Investments, a Chicago money-management firm. DeClue, Grant's said, "is bullish on scientific orphans, and we are bullish because he is bullish." Specifically, DeClue likes biotech stocks. In the past, they were hot items. In 1998 and 1999, Amgen Inc., the largest biotech, soared sixfold in price. While the rest of the technology sector crumbled, biotechs held up through late last year, then succumbed. Today, as Grant's puts it, "though scientists continue to labor at their benches, the former bulls have developed the kind of laryngitis for which medicine will never find a cure."
This is precisely the environment in which to be buying biotech. And some people are -- including, significantly, insiders at biotech firms themselves. Meanwhile, Wall Street analysts are dropping coverage of the companies, and the companies are so cheap that they are becoming obvious takeover targets. Meanwhile, few doubt that biotechnology discoveries will dominate medicine in the decades to come.
Like Cohen, DeClue searches for companies that can stay the course because they have solid balance sheets. Consider Sonus Pharmaceuticals Inc., which is developing a cancer therapy. It has $25 million in cash and short-term securities and just $100,000 in debt. That's about $2 a share in net cash for a stock trading at $2.39 (down from $8.30 in January). Of course, Sonus does not yet have a profitable product, but it's getting there. The idea is to own a lot of stocks like Sonus -- DeClue lists Synaptic Pharmaceutical Corp., Pharmacyclics Inc., Corvas International Inc., Titan Pharmaceuticals Inc. and CuraGen Corp., among others -- in the expectation that some will come up with winning drugs or get bought by bigger firms.
The point about these companies is not that they are much more likely to become successful than they were a year or two ago, but that the risks are lower because the prices are lower. Could prices go lower still? Of course -- and in that sense, Cohen's high-techs and DeClue's biotechs aren't much different from the rest of the stock market.
A lot of stocks look cheap. For example, International Business Machines Corp., the world's largest technology company in terms of sales, now trades at about 16 times last year's earnings -- or less than two-thirds its typical valuation.
One quick-and-dirty calculation that points to values is to find a company's earnings per share in a peak year, multiply it by 10 and compare it to the current price. Apply that formula to Hewlett-Packard Co. and you find that peak earnings were $1.73 in 2000 for a target price of $17.30. On Friday, the company, having merged with Compaq Corp. and gained a new symbol (HPQ), closed at just $11.66. In other words, based on its profits in 2000, Hewlett trades at a price-to-earnings ratio of less than seven.
Smart investors with the discipline and long-range perspective to continue buying stocks find themselves with a tough choice: Should they buy tried-and-true brand names that have been whacked, such as Coca-Cola Co., which has dropped nearly 20 percent in the past few weeks? Or speculative techs and biotechs, many of which have fallen much more?
The simple answer is to own both, but to own the more volatile stocks in mutual fund portfolios. Royce Technology Value itself has some drawbacks, including a high expense ratio and, according to Morningstar Inc.'s Brian Lund, the fact that "Cohen has little money-management experience." In addition, Royce, which is a respected fund family with a leaning toward small-cap value stocks, is not known for its prowess in technology. But then again, hardly anyone else stands out these days either, and Cohen's relatively fresh eyes may be a good bet.
My favorite mutual fund picker, Sheldon Jacobs of the No-Load Fund Investor, gives high marks to Firsthand e-Commerce and Firsthand Technology Leaders. The funds have lost 44 percent and 40 percent, respectively, since the start of the year. (Ouch.) Turner Healthcare and Biotechnology, another of his recommendations, is down 24 percent in 2002. Another pick, Ryder Biotechnology, requires a $25,000 minimum investment. It's down 50 percent this year.
But that's the whole point. With the carnage piled high, so are the deals. At least, that's what some erstwhile bears are now beginning to think.
http://www.washingtonpost.com/wp-dyn/articles/A8604-2002Jul27.html
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Light At The End Of The Music Tunnel?
Perhaps, though, the music industry is getting the idea. Larry Kenswil, president of Universal's eLabs division, looks at it this way:
"We could be 100 percent correct morally and legally that it is wrong to trade copyrighted files, but from a business standpoint it doesn't matter. We need to construct legal alternatives."
Which is what they now seem to be doing, perhaps spurred on by the current Justice Department probe into the music industry's alleged anti-competitive behavior.
According to the July 1 New York Times (http://www.nytimes.com/2002/07/01/technology/01
TUNE.html?ex=1026530709&ei=1&en=f36a2b6f2b1c164e), Universal Music Group now plans to license its catalog to Listen.com, where people can pay $10/month to play some (but not all) songs from the "big five" labels (http://news.com.com/2100-1023-940841.html?tag=dd.ne.dht.nl-sty.0). And there are indications that Warner will be expanding the number of artists' works that they will make available for online sale at $1.00 per song through MusicNet. (There is speculation, though, that listeners aren't willing to pay much more than 25-cents per song.) Unfortunately, the music industry's disparate online services still don't offer the P2P networks' "one stop shopping" for songs from all labels, which makes them less attractive...
Perhaps the music industry is now pragmatically reading the handwriting on the digital, peer-to-peer wall. Which would be a really good thing for them, since they still, for a while, have a choice, least the 31-million (U.S. only) file-sharing listeners decide that they're just not interested in listening to such "hostile tunes," at all.
http://www.theharrowgroup.com/articles/20020715/20020715.htm#_Toc14328980
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ot-For TI, a Downturn Well Spent
Texas Instruments' R&D engine is humming
The semiconductor industry's past two cyclical slumps were not kind to Texas Instruments Inc. (TXN ) The Dallas company flubbed its planning for the ensuing recoveries--and paid for it with market-share losses. When sales plunged in 1996, TI was preoccupied with finding a leader to replace then-CEO Jerry R. Junkins, who died unexpectedly from a heart attack. Two years later, when demand waned again, TI was in the midst of divesting the bulk of its sprawling empire, including memory chips and defense electronics, so it could focus on products geared to the Internet.
Last year, however, when the industry slid into its steepest decline ever, TI played a much stronger hand. Sensing an opportunity to one-up its rivals, it tapped the $5 billion-plus in its coffers to buy new equipment and keep research and development humming. Now, it's revving up state-of-the-art production lines to spew out scores of new chips, which could bolster its leadership in digital signal processors (DSPs) and analog chips. Both are vital for products that handle real-world signals, such as digital cameras, MP3 players, voice-activated toys, and other multimedia gadgets. Of all U.S. chip companies, "TI has done the best job of managing this downturn," says UBS Warburg analyst Thomas A. Thornhill III.
There are signs that the gamble is paying off. When TI announces second-quarter results on July 22, analysts are expecting 9.5% growth in revenues, plus $104 million in income--its first quarterly profit in more than a year. Meanwhile, sales of TI's chips have surged 10% since the beginning of the year, double that of the overall industry.
Yet with demand for most high-tech gear languishing in the doldrums, TI could do everything right and still come up short. Just three months ago, chipmaker stock prices soared when execs began talking about a rebound on the horizon. It turned out to be a mirage. Many chip stocks are now testing 12-month lows. On July 3, Advanced Micro Devices Inc. (AMD ) cut its second-quarter sales projections for the second time in two weeks. More recently, suppliers of chipmaking equipment have also gotten slammed by Wall Street.
So what's buoying TI's sales? Skeptics say it's little more than a temporary uptick in chips for wireless phones as handset manufacturers recover from last year's inventory glut. That's lifting spirits at Qualcomm Inc. (QCOM ) and National Semiconductor Corp. (NSM ) as well. But since wireless-phone chips account for only about 10% of industry sales, and most other markets are stagnant, total semiconductor revenues will rise only 3% or less this year, barely topping $140 billion, according to market researchers. Says Needham & Co. analyst Dan K. Scovel: "This is not a year for recovery. This is a year for convalescence."
TI's fans, on the other hand, perceive a more fundamental shift. Merrill Lynch & Co. analyst Joseph A. Osha predicts that TI's cash position will swell by $2 billion over the next 18 months. Among the world's top 35 chipmakers, Osha sees only Intel Corp. (INTC ) throwing off more cash. Boasts TI CEO Thomas J. Engibous: "We've turned the corner."
The turnaround took some doing. Despite its cash hoard, TI wasn't beating its chest when the downturn began--it was beating down costs. In 2001, three aging plants were closed and 2,500 workers laid off. By spring, TI had slashed sales and administrative expenses by 34%. But certain budget areas were shielded from the austerity drive. One was a new factory on TI's Dallas campus that had been put on hold when business went south before. Even while cutting capital spending by 35%, TI continued plowing money into the Dallas wafer-fabrication plant, or fab--a total of $4.5 billion to finish it and revamp several other facilities.
Those investments could reap huge dividends, because "companies that spend money in the downturn gain market share in the upturn," says William J. McClean, president of market-watcher IC Insights Inc. in Scottsdale, Ariz. Last year, Intel CEO Craig R. Barrett made the same point. Successful companies, he said, don't save their way out of recessions--they spend their way out. European chipmaker STMicroelectronics employed that strategy and jumped from No. 14 in 1995 to the No. 3 spot worldwide last year.
For its comeback, TI is counting on more than just new capacity. In the second quarter, the Dallas fab shipped its first cell-phone DSPs produced on 12-inch silicon wafers. Compared with today's eight-inch wafers, the larger platters slash per-chip manufacturing costs 30% to 40%, because twice as many chips can be crammed onto each wafer. That means TI can undercut the prices of rivals using eight-inch wafers. Moreover, the new fab can print the smallest transistors yet--a mere 130 nanometers wide, or 700 times thinner than a human hair. These ultratiny transistors reduce power consumption, a major selling point among makers of mobile phones and other handheld gadgets. Finally, TI is switching from aluminum to copper wires so signals can zip through chips faster, boosting performance.
TI is hardly the only chipmaker adopting these new technologies. But Engibous asserts that only an elite group is tackling all three, including IBM (IBM ), Intel (INTC ), Taiwan Semiconductor Manufacturing (TSM ), and United Microelectronics (UMC ). DSP expert William I. Strauss, president of consultant Forward Concepts Co. in Scottsdale, Ariz., credits TI with grabbing a big head start over its chief rivals: Agere Systems, Analog Devices, and Motorola. What's more, Engibous claims, "a significant number of traditional semiconductor strongholds have opted out" of one or more of these technology upgrades--in particular, Japan's cash-strapped producers.
That's news to the Japanese. Even Roger C. Mathus, a former TI manager and now head of the Semiconductor Industry Assn.'s Asian Office in Tokyo, says Japan's chipmakers are not about to throw in the towel, despite huge capital-spending cuts in recent years. To offset skimpy individual budgets, Japanese companies are banding together in a new round of joint ventures reminiscent of those in the 1970s and '80s, which helped Japan drive many U.S. chipmakers to their knees. The consortiums working on next-generation chip technologies include most of Japan's powerhouses, from Fujitsu (FJTSY ) and Hitachi (HIT ) to NEC (NIPNY ) and Toshiba (TOSBF ). But TI COO Richard K. Templeton doesn't see a threat: "Technology development is not a team sport," he says.
Whatever happens across the Pacific, TI needs new products that tickle customers and stimulate demand. That's the mission behind its $1.5 billion R&D operation, which has produced some 500 new high-performance analog chips to be released this year. They'll be used in digital audio receivers, cable modems, other broadband-network hardware, and handheld computers. Together they should generate more than $1 billion in sales over the next five years. Meanwhile, TI's hot new DSP chips for next-generation cell phones are fetching twice the price of their predecessors. The company believes they'll account for 50% of wireless revenues by yearend, up from 15% today--and lift gross margins above 50%, vs. the current 35%.
The main short-term concern is the market for chips in wireless handsets, which represent 20% of TI's chip revenues. Engibous is hoping the recovery there has legs. But even if it doesn't, he paints a bright long-term picture. TI's trove of new DSP and analog chips are just what the doctor ordered for anything with images and sound. "These are what will drive electronic wealth over the next decade," Engibous says.
That vision is shared by TI's competitors. Last month, three biggies--Agere Systems (AGR.A ), Motorola (MOT ), and Germany's Infineon Technologies (IFX ), which has a 12-in. fab--announced plans to collaborate on DSP designs and manufacturing. And with PC growth stalled, Intel also wants to cut in on TI's dominant market shares: 44% of DSPs and 60% of wireless phones. "TI's position is weakening," says Raymond A. Burgess, Motorola Inc.'s chief of semiconductor strategy.
Clearly, DSP and analog chips, which are projected to outpace the overall market in coming years, are silicon's hot new poker game. The players are plunking down billion-dollar bets, and the winners may be those few companies with very strong stomachs.
By Andrew Park in Dallas, with Irene M. Kunii in Tokyo
http://www.businessweek.com/magazine/content/02_29/b3792085.htm
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MP3 rival Ogg Vorbis gets Real
RealNetworks, the most recent corporate convert to open-source religion, pledges to embrace streaming media's open-source stalwart in a move that could threaten the popular MP3 format.
RealNetworks, the most recent corporate convert to open-source religion, has pledged to embrace streaming media's open-source stalwart in a move that could threaten the popular MP3 format.
RealNetworks said Wednesday that it would support the Xiph.org Foundation's Ogg Vorbis format and audio codec, or compression formula, in its own open-source offering, the Helix DNA client, and that the RealOne Player and the Helix Universal Server would play and serve Ogg Vorbis.
That means that people could play Ogg Vorbis content through the widely distributed RealPlayer without having to download special Ogg Vorbis software, a potentially big win for the now-obscure technology.
RealNetworks claims 285 million unique registered users of the RealOne Player and RealPlayer.
"The ability to use RealNetworks technology to get our format into the hands of the masses presents a lot of potential," Xiph President Emmett Plant said in a statement. "Even more important, the fact that RealNetworks is making an investment in open source outside of their corporate walls is a good sign for the future of Helix."
Xiph released Ogg Vorbis 1.0 last week.
Open-source advocates hailed the news, saying it benefited not only the format itself, but the progress of open-source software into the mainstream.
That could come at a cost to other popular technologies encumbered by intellectual property claims.
"The fact that the user will almost automatically get Ogg on their desktop means that there is a patent-free and royalty-free audio format that everyone can play on every computer," said Bruce Perens, co-founder of the Open Source Initiative. "This means that MP3 may become a little less popular over the long term because there are patent issues on MP3."
While MP3 has become enormously popular thanks to its small file size and good quality, it remains subject to royalties paid to the Fraunhofer Institute for Computer Graphics and other members of the MPEG Consortium, which control the format.
RealNetworks and Xiph plan to release Ogg Vorbis plug-ins for the RealOne Player and the Helix Universal Server. The plug-ins will be small pieces of code that let the RealOne Player play back Ogg content.
RealNetworks gave no timeline for the plug-ins. The work with Xiph is just starting, with both development and certification that needs to be done, the company said.
By Paul Festa, Staff Writer, News.com
http://www.businessweek.com/technology/cnet/stories/946384.htm
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ot-Apple IPod
Expensive, sleek MP3 player has intuitive file management and navigation; Windows-compatible units will be available soon
Form and function in a consumer electronics device? What a novel concept. In the IPod, Apple delivers an MP3 player that's not only sleek and trim but also has an intuitive interface and easy-to-use, wheel-based controls. The IPod can double as a portable hard drive, as well; as such, it can store your contact lists, other types of files, and even applications. Add lightning-fast download capability through its FireWire (IEEE 1394) port and 10GB of storage (about 2500 songs at 128 kilobits per second) in the version we looked at, and the debate about which portable MP3 player to buy would appear to be over.
Though this version of the IPod is cumbersome for Windows-PC owners to use, Apple has announced both a $100 price drop for this 10GB model (making it $399) and the arrival in late August of truly Windows-compatible IPods in 5GB, 10GB, and 20GB drive sizes. (The new IPods will work only with PCs using Windows Me, Windows 2000, or Windows XP Home or Professional.) As soon as the new units are available, we'll review them and fill you in.
Meanwhile, to get the current version of the IPod to work with your PC, you'll need a relatively inelegant software workaround--either EphPod's EphPod and DataViz's MacOpener file-conversion software (the latter is $30 if ordered through EphPod) or Mediafour's $30 XPlay. (You can download EphPod and MacOpener from our Downloads library; for XPlay, go to Mediafour's site.) In our tests, these programs worked well once they were downloaded, installed, and set up, but they're obviously a compromise.
Additionally, this version of the IPod pulls power from the FireWire port, but most such ports on Windows-based notebooks are not powered. This means you have to boot up the player in a special mode to get it to work--a significant annoyance. You then need to use the included power adapter to charge the IPod from a wall socket.
If you want to use an IPod with Windows, we suggest you wait: The new IPods will ship with Windows-compatible software, a FireWire cable, and a FireWire adapter, all of which should make using an IPod as easy for a PC owner as it has been for Mac owners. (Note, however, that if your PC isn't FireWire equipped, you'll still have to buy and install a FireWire card.) The new Windows IPods will have Musicmatch Jukebox Plus, which should eliminate the need for third-party software. Prices on the new models have been announced as $299 for the 5GB version, $399 for 10GB, and $499 for 20GB. The two larger-capacity models will also come with a wired remote, calendar and clock software, and a carrying case, features that aren't currently available. Buyers who purchase or have purchased a current non-Windows-compatible IPod are stuck; Apple says there will not be any firmware or software upgrades available for these players.
UPSHOT: Apple has produced an MP3 player with a great look, an intuitive interface, easy-to-use controls, and fast transfers. At the moment, its high price and lack of Windows support will put off those who don't like the idea of having to run extra software to transfer their music. Check back for our review of the fully Windows-compatible versions due out in late August.
By Michael Gowan
http://www.businessweek.com/technology/content/jul2002/tc20020725_9163.htm
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Virgin Mobile Goes National, Teams With MTV Networks
By Joseph Palenchar
TWICE
7/25/2002 9:08:00 AM
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New York — Virgin Mobile USA celebrated its national launch with a Times Square stunt by Virgin Group chairman Richard Branson and an announcement that the youth-oriented carrier struck an exclusive multiyear content and marketing agreement with MTV Networks.
The deal includes the delivery of music, games and other content branded with the MTV, VH1, and Nickelodeon names to the phones of Virgin subscribers. It also includes plans for MTV-branded accessories, an MTV-branded phone, and promotional airtime on MTV’s channels and web site. In the future, subscribers will use the phones to interact with MTV and VH1 programs, including voting on songs they want to hear on MTV.
For the promotional stunt, Branson joined the Broadway cast of The Full Monty in a musical strip tease as he was lowered by crane from a landing above the Virgin Megastore in Times Square. Confetti showered the area as Branson and cast danced while wearing flesh-colored shorts and above-average-size cellular phones.
The stunt’s theme, "We have nothing to hide," was selected to underscore the simplicity of the carrier’s single prepaid airtime plan. The plan boats no hidden charges, and per-minute charges include long distance, taxes, roaming anywhere on the Sprint network, no peak or off-peak distinctions, call waiting, caller ID, voice mail, and incoming text messages.
The charges are 25 cents/minute for the first 10 minutes used each day, beginning 5 a.m., and 10 cents thereafter.
Although Virgin already offers youth-oriented content, the MTV deal will supplement that with additional content carrying MTV’s brands, said Virgin Mobile USA CEO Dan Schulman during a press conference after . Entertainment services, along with the industry’s "most affordable prepaid service" and absence of hidden charges, will tap a youth market whose wireless penetration rates are low, he contended. The price plan was built around the average youth’s use of 200-250 minutes per month, he said.
The MTV partnership marries two youthful, irreverent brands, Schulman continued, and will contribute to Virgin’s effort at turning a cellphone "into an entertainment device" that "can have a meaningful impact on the purchasing decisions" of consumers under 30 years old.
The Virgin Group’s mission, a fully clothed Branson said during the press conference, is to "go where something is not being done well" or where consumers "are being taken for a ride."
Virgin’s service is affordable, Schulman noted, because Virgin didn’t spend massive amounts of money to build its own network, choosing instead to resell Sprint PCS airtime.
Schulman declined to elaborate on his promotion and advertising plans, but he said, "Don’t expect a mainstream advertising approach." The promotion strategy will include advertising on MTV channels, promotion on college campuses, and "guerilla marketing."
http://www.tvinsite.com/twice/index.asp?layout=story&doc_id=96151&display=breakingNews
Music Bill Is Bully on IMs
By Brad King
2:00 a.m. July 26, 2002 PDT
Legislation meant to thwart unauthorized downloading on certain peer-to-peer networks will still allow major media companies to offer file-trading through their own systems.
Rep. Howard Berman (D-California) introduced his much anticipated peer-to-peer legislation in the House of Representatives on Thursday.
The proposal would give copyright owners, from Hollywood studios down to independent musicians, the legal go-ahead to employ a variety of technological measures that would stop computers hooked up to decentralized networks from trading. That would be bad news for users of Gnutella and Kazaa.
See also: • Why Audiogalaxy Case Matters Not
• A New Code for Anonymous Web Use
• Fear and Lockdown in America
• Hear how MP3 Rocks the Web
In the interim, it would allow companies like Overpeer, which floods decentralized networks with bogus files, to flourish. In the long run, it also would make any system that doesn't have a central location -- and most open-source networks don't have a central location -- vulnerable to attack.
Individuals affected by copyright owners' attacks would feel the effects of the legislation immediately, as their systems could be assaulted with no notice.
If the attack was somehow a case of mistaken identity, recourse would be difficult. Individuals would have to petition the Attorney General for a private investigation. After the initial request, the agency would have four months to look into the matter.
The unprecedented breadth of technology the copyright industry could use was welcome news to those in the music industry who have battled peer-to-peer networks since 1999.
"The current landscape for online music is dangerously one-sided, with the peer-to-peer pirates enjoying an unfair advantage," said Hilary Rosen, CEO of the Recording Industry Association of America. "It makes sense to clarify existing laws to ensure that copyright owners -- those who actually take the time and effort to create an artistic work -- are at least able to defend their works from mass piracy."
The five major record labels have struggled to launch their online music subscription services -- MusicNet and Pressplay -- over the last year, blaming the availability of networks that allow people to download music for free.
Along with making it open season on individual users, open-source programs and decentralized networks, the bill also gives a free pass to chat applications run by the very media companies that would most benefit from open-source networks being shuttered.
AOL Instant Messenger (AIM), MSN Messenger and Yahoo Messenger -- which each have specific file-trading options built into their systems that enable millions of users to trade their share without fear of electronic attack -- will continue to flourish. The recording industry and movie studios have largely ignored those three chat applications, which have financial ties to the major record studios and movie studios, in their litigation and anti-piracy activities.
"What this bill has said is that what is good enough for the Internet isn't good enough for AOL," said Fred von Lohmann, an intellectual property lawyer with the Electronic Frontier Foundation. The EFF is providing legal support to StreamCast Networks, the company that distributed the Morpheus file-trading software, in its legal battle with the Recording Industry Association of America. "This is hands-off for AOL's network. It's not a coincidence that AOL is a division of Time Warner."
America Online, which distributes AIM, is a subsidiary of AOL Time Warner. Yahoo signed a licensing agreement with the recording industry, giving it permission to create audio webcasts of popular music. Microsoft has developed a rights-management technology that several studios and record labels use to protect their products.
Not every messenger company escaped the legal wrath of the copyright industry. Aimster, which allowed AIM users to share files before the ISP created its own file-trading chat application, lost its domain name and teeters on financial ruin after facing a series of infringement lawsuits.
The spotty nature of litigation and selective targeting of companies has even supporters wary.
The Association for Competitive Technology, a trade organization representing information technology companies, including Microsoft, praised the spirit of the bill but offered tempered support for its specifics. It will continue to support the bill as long as it protects instant messaging products, ACT president Jonathan Zuck said in a letter to Berman.
Despite the popularity of file-trading applications, instant messenger programs may actually pose a bigger threat to record companies and movie studios concerned about curtailing downloading. At its height, the Napster network handled just under three billions files a month, where AIM has one billion files a day zipping across its system.
In his now infamous speech last March, Michael Green, the head of the Grammy organization, denounced file-trading as a threat to the music industry. He then announced that three students had downloaded over 6,000 files in three days at the behest of the National Academy of Recording Artists (NARAS).
It appeared to be a dramatic moment, until The New York Times reported that two of the three students hadn't used file-trading applications like Gnutella and Kazaa. Instead, they used AIM to download their music.
File-trading networks have little recourse with this legislation, as most have few resources in Washington, D.C. Like Napster before it, the companies must appeal to users, hoping to shroud themselves in a blanket of swappers who'll flood the halls of Congress with e-mails and letters demanding the government keep its hands off their computers.
While Napster unsuccessfully battled the record labels through federal district and appeals court, the company set up a website that allowed its users to communicate with their representatives. Today, Sharman Networks put out a similar call.
"We urge all users and supporters of technology innovation to contact Congress and voice strong opposition to this entertainment industry effort to gain exemption from the law and take malicious action against consumer's privacy and other rights," said Sharman Networks, the company that distributes the Kazaa file-trading application, which can be attacked under the Berman
http://www.wired.com/news/mp3/0,1285,54124,00.html
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OT-Analysts Predict Dell Will Offer Branded PDAs Later This Year
By Bob Sechler
Dow Jones Newswires
AUSTIN , Texas -- Speculation regarding Dell Computer Corp.'s plans in the hand-held computer market has begun taking a more defined shape, with one analyst contending Dell-branded products will be out this fall.
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First Albany Corp. analyst Walter Winnitzki said he has heard that Dell has a deal with Taiwan 's Compal Electronics Inc. to produce about 1.5 million Dell- branded personal digital assistants, or PDAs, in time for the holiday season.
"While we do not have all the details, we understand the product will be an Intel/Windows CE product ... and may include an option for cellphone capabilities," Mr. Winnitzki said in a research note.
Dell Computer officials have acknowledged that they are reviewing a number of potential new markets, including the PDA market, in an attempt to branch out from the company's traditional desktop base. Two weeks ago, for instance, the company confirmed that it is likely to enter the printer market by the end of the year by contracting with a manufacturer to produce Dell-branded printers.
But Dell has offered few details regarding its plans for PDAs, except to confirm they are among the products being considered, fueling speculation among analysts, investors and industry observers.
Company spokesman Mike Maher offered little in the way of new information Friday, declining to comment on the details of Mr. Winnitzki's research note.
"Hand-helds, and many other products, are constantly being reviewed by Dell," Mr. Maher said.
Still, some other analysts said they won't be surprised if Dell has a branded PDA out this fall.
"Dell's agenda is to add new product categories, whether it's this or something else," Bear Stearns analyst Andrew Neff said. "That's something they're focusing on."
Mr. Neff, who owns Dell shares, thinks there is "a good probability" that a Dell-branded PDA will be available by the holidays.
"That's when you've got to hit" with any new offering, he said.
Mr. Winnitzki said in his research note that Dell's PDAs will be targeted initially at consumers. He said Dell is hoping to price a color-screen unit at $ 299 -- "about $100 below the competition" -- although it's unclear if the company will be able to go that low.
Mr. Winnitzki also cautioned investors not to expect too much from Dell's PDA effort.
"While we would view this as an interesting incremental growth opportunity, we caution investors not to get carried away by this move in the near term, in that the size of the opportunity will be overshadowed by larger opportunities," Mr. Winnitzki said in his note.
The company's ongoing efforts in the computer server and storage markets represent a much bigger profit potential, he said.
http://biz.yahoo.com/djus/020726/200207261404000536_1.html
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Virgin talks to MTV
By: Oliver Thylmann, Thursday, 25.07.02 10:11 GMT
Music giant Virgin Group has bared it all, and is teaming up with MTV Networks to provide teen-targeted mobile phone services and content.
Sir Richard Branson, chairman of the Virgin Group, yesterday unveiled Virgin Mobile USA's national, youth-focused cell phone service and its partnership with MTV Networks at Times Square in New York, and he did so wearing nothing more than a mock cell phone to show that Virgin Mobile USA has "nothing to hide." American youths seems to be using cell phones a lot less than their European counterparts, a fact that Virgin wants to change.
Virgin Mobile USA is aiming at the youth market with hipper phones and a content deal with MTV.
Virgin Mobile USA will be offering service through Sprint and is the first mobile virtual network operator (MVNO) in the US, meaning an operator that does not have it's own network but rather buys air time from another operator. Analysts predict that there will be a lot more MVNOs in the future, especially around specialized 3G services.
Virgin Mobile's service includes long distance, voicemail, caller ID, call waiting, text messaging and directory assistance and their cell phones are now available at Best Buy, Circuit City, Media Play, Sam Goody, Target Stores and Virgin Megastores. The Company's Top-Up cards, which buy air time without the need for a contract, are also available at Circle K and 7-Eleven stores.
As MTV is owned by Viacom, which also owns VH1, CMT, Nickelodeon, and several other networks and studios, the deal also includes content from VH1, CMT, and Nickelodeon. Beginning later this summer, MTV Networks and Virgin Mobile plans to start rolling out a wide variety of branded content, including games, graphics, ringtones, text alerts and voicemails.
The services include interactive voting and text messaging, allowing customers to vote for their favorite videos from music programming like MTV's "Total Request Live" and send shout-out messages to air on shows like CMT's "Most Wanted Live." Customers also will be able to receive news about the latest happenings in the music scene on their phones as well as get new games with characters like Nickelodeon cartoon star Spongebob Squarepants.
The Virgin Mobile phones also allow for a rescue ring to be scheduled which will result in a call at an appointed time, which Virgin claims is a wonderful to break up an unwanted date. And of course, Virgin Mobile plans to integrate m-commerce capabilities so that its customers will be able to purchase the latest CDs.
Interested phone users can sign up at the new Virgin Mobile web site, or call what Virgin calls their "Virgin Mobile Central Intelligence Number" at 1-888-322-1122.
http://www.infosync.no/news/2002/n/2103.html
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e.Digital has released a revolutionary "twin" of Apple's iPod. The Odyssey 1000 is a 20 GB MP3 player that resembles the iPod. The Odyssey 1000 is compatible with both PCs and Macs, includes an FM radio, USB 2.0 connectivity, and a built-in microphone. The device should be released this fall for US$249. That is, only if Apple Legal doesn't get in touch with the company first. Thanks to O'Grady's PowerPage for the link.
USER COMMENTS 13 comment(s)
From "Coming to America" (10:49am EST Wed Jul 24 2002)
"They have the Golden Arches... WE have the Golden Arks!"
- by Cleo McDowell
Price correction (12:56pm EST Wed Jul 24 2002)
The price is $349, not $249.
http://www.macslash.org/article.pl?
sid=02/07/22/2017221 - by Macdude
to IPOD OR ODyessy (1:56pm EST Wed Jul 24 2002)
DOes it have updatable firmwear ???
DOes it have firewire, no just usb2
THe ipod is not just a mp3 player
theres so much you can do with it
- by THE YOKE
Apple should have... (3:53pm EST Wed Jul 24 2002)
...released the iPOD to be compatible with both Mac AND PC in the first place. With their whole 'Switch' campaign, it would have made sense to sell a PC user an iPOD that they can use on their PC AND on the Mac they're supposed to 'Switch' to once they realize that Apple products are so much more ________ . Instead, if you get a Mac you have to get another iPOD! - by mickeygeek
Apple legal? (3:56pm EST Wed Jul 24 2002)
Look, you can't patent a tin box, I like to see Apple try and whine about copyright infringement on this one. Asside from the fact that the odyssey is a box, and silver shouldn't be enough for Apple to get their knickers in a twist. The only thing Apple may have legal standing on is the GUI of the device.
As for the iPod doing so much more? Like what? Have upgradeable firmware (like 90% of all mp3 players), and USB 2.0 is faster then firewire. Most hard drive based mp3 players can be used as an external storage device too. - by Topher
usb 2.0 vs firewire... (6:13pm EST Wed Jul 24 2002)
has been debated many a times before. on paper, usb2 is supposed to be faster than firewire. so far, real world tests served only to otherwise.
although i doubt apple could sue the company for copying the looks of the ipod, it doesn't take away from the fact that the odessey is a knockoff. i wouldn't buy one for that reason alone.
also, if apple sues against copying of the gui and wins, then the odessey will lose one of the great things about the ipod--it's simplicity of use (assuming it copied the ipod's easy-to-use gui). - by pismeov
AGAIN! (7:10am EST Thu Jul 25 2002)
It shouldn't really come as a suprise that yet again the industry leader in product design is the target for visionless designers to crib from.
If that was my design work that had been half inched I'd be the first in the line to send their oddyssey on a one way ticket up their ass.
Looking at the item it does bear remarkable resemblence to the iPod in more than a few ways. In that there's a great deal to shameful of. If the Mac is so crap why copy it, I'm sure that there are designers out there that could give Apple's industrial design unit a run for it's money and come up with original and inspirational work.
e.Digital, if u are listening, get a fucking life. Do it on your own merits. The spec seems good so why not create something that deserves comments rather than a product that just takes thepiss. - by spacca
PRAT! or PILLOCK u decide. (7:14am EST Thu Jul 25 2002)
Jim Collier, President and COO of e.Digital said, "It combines an elegant, world class industrial design from Digitalway’s award-winning engineering team-"
who's he fucking kidding? World class my ass, I suppose if they did vacuum cleaners they'd look like a Dyson! - by spacca
get yoked (10:32am EST Thu Jul 25 2002)
I'm sure it has the Odyssey's firmware can be updated. I have an iPod now and love it, but what do you mean there is so much you can do with an iPod? This thing and Archos' mp3 player has a microphone for real-time mp3 encoding. - by interactive
hey mickeygeek (12:16pm EST Thu Jul 25 2002)
You can use an iPod with windows now.
to interactive
The iPod is and external hard drive that you can even load an OS on and boot off of it if you need to for starters.
- by MacMurphy
Off topic (2:19pm EST Thu Jul 25 2002)
But what the hey it never is on topic. Where would I get a replacement DVD drive for a G4 tower? (AGP graphics model, software decoding) Apple doesn't list replacement parts anywhere on their website I could find and I don't know if a standard PC drive would work. I imagine a few eyebrows got raised just about now. - by Ziwiwiwiwiwiwiwiwiwi
This just shows... (3:20pm EST Thu Jul 25 2002)
why Apple is slowly but surely dying. Half the performance, twice the price.
Sure firewire is better, but there's no excuse for not having a mic or FM tuner on the iPod, and there is little justification for the original prices. The 5Gb should've debut at 299 and should now be less than 250. Even now their prices are on the wrong side of too high.
And if we move to their computers, the situation is even worse. Want a consumer machine, Ok, Apple will charge you a prosumer price and still give you an 18 month out of date spec.
Want a professional machine? For twice as much money, Apple will sell you a machine that can almost keep up to wintel box when using velocity engine and absolutely gets blown out of the water by even $1000us PC's on tasks that don't use velocity engine. Truly pathetic performance at the prices Apple charges.
- by Apple is dying
Apple is dying (5:35pm EST Thu Jul 25 2002)
the last part about a $1,000 PC is what i have been saying. Also, if it is a knockoff, why does it have stuff apple ipods do not have? - by Warplex
http://www.geek.com/news/geeknews/2002Jul/bma20020724015567.htm
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ot-Fonix Releases Fonix SpeakThis 2.0; Now You Can Deliver Your Website in MP3
SALT LAKE CITY, July 25 /PRNewswire-FirstCall/ -- Fonix Corporation (OTC Bulletin Board: FONX - News), a leading provider of natural-user interface solutions for wireless and mobile devices, Internet and telephony systems, and vehicle telematics, today announced the availability of Fonix SpeakThis 2.0, a major update of the standards-based text-to-speech application for the World Wide Web.
Websites can now be mobile. Users can listen to any web content as MP3 audio files, so that websites can be heard online or downloaded to any MP3 player. With SpeakThis 2.0, when the user clicks on the SpeakThis button, the page's text is converted to MP3 and the SpeakThis audio player begins speaking. The site visitors also have the option of downloading the MP3 file and taking the webpage with them to listen to at their convenience. Using automatically generated HTML code, webmasters can add SpeakThis buttons to any page on their websites.
SpeakThis offers male and female voices and international language support for 10 languages, including U.K. English, Dutch, Finnish, French, German, Icelandic, Italian, Norwegian, Spanish, and Swedish. Webmasters receive complete, up-to-date usage statistics in online reports, and can select from three HTML options (text link, button, or auto-start).
Based on SpeakThis customer requests, SpeakThis 2.0 offers support for Windows Media Player and Apple QuickTime and continues support for RealNetworks RealPlayer. SpeakThis works with all web scripting and programming environments including Java, ASP, PHP, Cold Fusion and Perl.
SpeakThis supports the industry standard for speech synthesis online, the W3C (World Wide Web Consortium) level 2 CSS2 Specification for Aural Style Sheets, giving webmasters complete control over the content to be spoken and the voice selections. Complete documentation is available online at www.speakthis.com/help.cfm .
Subscription plans start at just $14.95 a year or $6.95 per month. And, for a limited time, webmasters may sign up for a free 30 day trial.
Does your website have something to say? Visit www.speakthis.com and deliver your website in MP3 format. Or, for additional information, visit www.fonix.com
http://biz.yahoo.com/prnews/020725/lath074_1.html
Tiny disc players finally coming
Posted on Mon, Jul. 22, 2002
By MATT BRANAUGH
Scripps-McClatchy
BOULDER, Colo. - Another music label wants DataPlay Inc.'s tiny discs for its artists. And despite several delays, DataPlay says the gadgets that play those discs could hit store shelves as early as next week.
An agreement announced Monday between Boulder-based DataPlay and BMG's RCA Label Group in Nashville, Tenn., adds country music stars such as Brooks & Dunn to DataPlay's growing roster of featured musicians, a list that already includes Britney Spears and 'NSync.
DataPlay owns agreements with music distributors BMG, Universal Music and EMI. Besides pursuing the two other industry heavyweights -- Sony and Warner -- DataPlay is chasing individual labels within each of the distributors, the Nashville group being one such example.
The 4-year-old company makes the discs, which measure the size of a half-dollar and hold up to 500 megabytes of content, and the engines that play those discs.
Manufacturers, including Samsung and Toshiba, buy the rights to the engines and build them as disc players for consumers.
But while Monday's news signals the company's continued success snagging music content for those discs, unrelated glitches have pushed back releases of the players as well as albums from musicians.
Todd Oseth, DataPlay's senior vice president of business development, said that's changing, though.
``It's real. It's no longer a dream,' he said. ``Now we need to make sure (products) get to market as best they can. We're no longer starting.
``We've already started.'
Players featuring the DataPlay engine should start hitting shelves as early as next week, Oseth said.
Originally, DataPlay engines were scheduled for a test run last fall before a technical glitch held them back until this spring. And manufacturers then took time customizing the engines.
An April release was pushed back to May, then to June.
Now, some players are on sale online. Manufacturer iRiver America Inc. in San Jose, Calif., for instance, sells its version via the Web. Its units are also en route to retailer shelves with a suggested price of $369, said Gary Byrd, an iRiver spokesman.
Oseth said another delay arose because musicians, distributors and lawyers all review how the content gets used. That's taking longer than expected.
DataPlay digital media can hold prerecorded music from a musician as well as record other music, hold videos and photos and access exclusive content.
Some musicians will release music on the discs the week of Aug. 26, with roughly 40 artists available by mid-October. Hopefully, new labels adding more acts will sign on every two or three weeks, Oseth said.
Besides musicians, DataPlay is bringing the discs into other arenas, including digital cameras and books.
The privately held DataPlay, with 140 employees in Boulder and 100 more worldwide, raised $55 million in funding last year. The company continues seeking more funding, and might close on another deal soon, Oseth said.
http://www.siliconvalley.com/mld/siliconvalley/news/editorial/3715272.htm
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