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Battle of the seat back has airlines scrambling
Budget carriers try to win passengers with video, audio offerings
By Louis Aguilar
Denver Post Business Writer
Article Published: Wednesday, January 21, 2004
Special / JetBlue
JetBlue planes with video screens kicked off the in-flight entertainment battle in 2000; it plans to expand to 100 channels. Denver-based Frontier Airlines also offers seat-back video monitors, and United’s Ted plans to offer customers audio and viewing choices as well.
After years of fighting for customers on price, discount airlines have discovered a new battleground: in-flight entertainment.
"The seat-back video monitor is now as important as the meal once was," said Henry Harteveldt, vice president of Forrester Research, a technology consulting company.
About 25 percent of leisure travelers and 32 percent of business travelers say in-flight entertainment, particularly audio and video choices, is important to them and influences which airline they will fly, according to Forrester.
Among the new in-flight options from airlines flying out of Denver International Airport:
JetBlue will soon expand its current lineup to offer 100 music, movie, sports and other TV channels through its seat-back video screens.
United's Ted, which begins flying from Denver on Feb. 12, will offer an array of TV programming and music choices, and may possibly offer passengers a handheld video device to rent for the flight.
Denver-based Frontier Airlines, which offers 24 video channels for $5 from DirecTV on many flights, is considering ways to show first-run movies.
Delta's Song, which doesn't fly to Denver, is working on a video game that lets passengers play against one another without leaving their seats.
David Barrett, a Denver-based manager for a copier company, said he tries to fly Frontier Airlines as often as he can because of its TV offerings, including the A&E and ESPN cable channels.
"You can get competitive prices from a lot of airlines. But I just get tired of watching the same movie on other flights," Barrett said.
David Neeleman, JetBlue chief executive officer, recently described new in-flight entertainment options as "a kind of a revolution."
"The industry was kind of stuck in the '70s, in terms of in-flight offerings, for a long time," he said in a recent interview with The Denver Post. "We live in a day and age where we are used to being stimulated on the ground. There is no reason we can't have that while flying."
JetBlue helped start the in-flight entertainment war in 2000 when the airline installed seat-back video screens. That same year, JetBlue also purchased LiveTV for $41 million in cash. It offers up to 24 channels of DirecTV programming.
Frontier offers the same service for a price.
JetBlue upped the ante this month when it announced that it will soon offer XM satellite radio, Fox TV programs and a library of 20th Century Fox movies to its passengers.
Discount airlines have an advantage because they are typically ordering new planes with seat-back video technology installed.
It would take major carriers such as American Airlines and Continental many millions of dollars to retrofit older planes with such devices, analysts said.
"You try to look out two, three to five years from now. And my assumption is that every airline is going to have something like this," said Frontier CEO Jeff Potter.
Ted, United's discount airline, does not have seat-back video because it is using United's older fleet to launch its airline service. Ted, however, is branding its in-flight entertainment as Tedevision and Ted's Tunes.
The race to offer new entertainment options may also be a way to distract passengers from new in-flight safety regulations that restrict movement.
"It used to be you could get up and stretch your legs; now airlines tell you they don't really want you to leave your seat," Harteveldt said. "That means a traveler's personal space is much more important."
LOW-COST LURES
Offering in-flight entertainment is a new battleground for low-cost carriers. A look at offerings by some carriers that serve Denver International Airport.
JetBlue
Soon to offer XM satellite radio
Also will offer Fox TV programs and movies
Currently offers 24 channels of DirecTV programming
United's Ted (Feb. 12 launch)
Tedevision - a mix of music videos, stand-up comedy, sitcoms on overhead video monitors every few rows
Ted's Tunes - 15 music channels
May offer a handheld video device that travelers can rent
Frontier Airlines
Seat-back video monitors (on most planes)
24 channels of DirecTV programming at cost of $5
May offer first-run movies
Wow rr, real "dd"! That is an interesting article. Wonder if the powers that be will buy them out? What a direct threat to all that they would like to protect. All it would take is about 10 superstars to join them and all hell would break loose...
Intel Outlines Broadband Wireless Vision
Wednesday January 21, 1:00 pm ET
SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 21, 2004--Broadband wireless technologies will help bring the next five billion users to the Internet, an Intel Corporation executive explained today at the Wireless Communications Association (WCA) annual symposium.
Sean Maloney, Intel executive vice president and general manager of the Intel Communications Group, outlined the company's plan to work with the industry to dramatically drive down the cost and increase the availability of broadband wireless technologies, including 802.11 wireless local area networking (WLAN) and 802.16 wireless metropolitan area networking (WMAN). This effort will help attract the next wave of Internet users, particularly those in emerging markets such as China, India and Latin America.
Specifically, 802.16 technology, often referred to as WiMAX, complements WLAN by connecting 802.11 hot spots to the Internet and provides a wireless alternative for last-mile broadband connectivity to businesses and homes.
"The wireless service provider and telecommunication equipment industries are rallying around WiMAX technology because of its tremendous cost advantages to provide last-mile connectivity to large parts of the world that are too expensive to serve with wired technologies," said Maloney. "WiMAX-certified systems will provide the building blocks to connect the next five billion users to the Internet and truly usher in the broadband wireless revolution."
The vision outlined by Intel includes delivery of standards-based silicon for both WLAN networking and cost-effective and interoperable 802.16 WMAN hardware. The 802.16 silicon -- which will be certified by the WiMAX Forum that oversees the compatibility and interoperability of 802.16 technology -- will be developed and deployed by a growing ecosystem of wireless equipment makers and service providers.
"We see a three-phased deployment of 802.16 technology that will begin with fixed outdoor antenna installations, quickly bringing wireless to emerging markets and speeding the installation of broadband services without the need to lay wire or cable," said Maloney. "The technology will then rapidly progress to indoor antenna installations, broadening its appeal to carriers seeking simplified installation at user sites. Finally, in the third phase, WiMAX-Certified hardware will be available in portable solutions for users who want to roam within or between service areas."
In addition to providing last-mile connectivity for WMAN networks, WiMAX-Certified(1) systems will also be used to connect 802.11 hot spots and enterprises to the Internet. Intel's initial WiMAX-certified silicon will be based on the IEEE 802.16d standard, which provides a method for high-speed wireless connections used in fixed antenna installations.
Equipment Manufacturers and Service Providers Working with Intel on 802.16
Maloney announced that Intel is working with leading telecommunications companies, including Airspan Networks, Alvarion, Aperto Networks and Redline, to develop and deploy WiMAX-certified 802.16 equipment based on Intel silicon. Siemens Mobile and Proxim are also separately having discussions with Intel on areas of collaboration for the WiMAX technology market. Intel's 802.16 silicon is scheduled to be introduced in the second half of this year.
In addition, Maloney announced that several large telecommunications carriers are assessing WiMAX technology for trials and implementation in the markets they serve. These carriers -- including BT (United Kingdom), Iberbanda (Spain), MVS Net (Mexico), Neotec (Brazil), PCCW (Hong Kong), Reliance Infocomm (India) and UK Broadband (United Kingdom) -- represent millions of customers around the world and show the technology's broad appeal in emerging markets.
Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.
Intel is a trademark of Intel Corporation or its subsidiaries in the United States and other countries.
* (1) Other names and brands may be claimed as the property of others.
------------------------------------------------------------------------
Contact:
Intel Corporation
Daniel Francisco, 916-801-2265
daniel.j.francisco@intel.com
AtomFilms debuts full-screen video
By Stefanie Olsen
CNET News.com
January 20, 2004, 11:20 AM PT
AtomShockwave's AtomFilms began reeling short films in high-definition format Tuesday, in one of the industry's first demonstrations of the technology online.
AtomFilms, a hub for independent films and animations, launched "AtomFilms Hi-Def," an advertising-supported service that lets people watch full-screen Internet video in high-definition Windows Media 720p format.
To deliver the service, AtomFilms teamed with technology provider Maven Networks, which provides the software infrastructure to help manage content, produce and deliver the video. It also embeds a system to sell related products and deliver advertising and marketing programs.
"We are at a crossroads in the evolution of digital entertainment," AtomFilms founder Mika Salmi said. This "represents a giant leap forward, for audiences and advertisers alike."
The new service comes at a time when Internet users are hungrier than ever for broadband content--but are still put off by having to pay for it. According to research, more than 20 million U.S. Internet users have high-speed Internet connections that give them the ability to enjoy music and video online with relative ease. Subscription and downloadable music services have proliferated in recent years, but few paid video services, with the exception of RealNetworks' RealOne, have caught on with more than a million people. As a result, Internet operators are struggling to meet consumer demand for content while developing a business model that works.
"People now want to look at video on their PC, but one of the complaints is that they want to look at it in full-screen (mode), and you can't get it," said Gerry Kaufhold, principal analyst at In-Stat/MDR, a research firm in Scottsdale, Ariz.
Maven is helping AtomFilms and others do that and is "wrapping a business model around it that gets them paid," Kaufhold said.
Virgin Records, National Geographic and Fox have all used Maven's technology to promote video content online.
AtomFilms is supporting the service with advertising. Game company Nintendo and Microsoft are two of its first major advertisers. Maven's technology lets advertisers track visitors and ensures that they watch the commercials; ads play before each film and cannot be skipped.
To use the service, people must download a small application. Then, they will receive a weekly desktop delivery of three AtomFilms movies. These films are delivered at a speed of 850 kilobits per second, which rivals the quality of DVDs. Customers can receive two films each month that are viewable at almost three times the resolution of DVD video in Windows Media high-definition video (WMV HD), at 720-pixel resolution.
But the service is available only for users of Windows XP-based machines. Another pitfall of the Maven technology is that it requires a 500MHz or faster processor with a graphics card set at 1,024-by-768 minimum resolution.
"AtomFilms is a pioneer in using WMV HD to enable the first online delivery of HD short-film content to consumers," Dave Fester, general manager of Microsoft's Windows Digital Media Division, said in a statement. "The quality of WMV HD means movie fans get a great experience, and the compression efficiency of WMV HD makes it the most cost-effective way of delivering HD content online."
The Sundance Film Festival is featuring AtomFilms Hi-Def this week. The company said that while testing the service in December, it drew about 10,000 users.
The Airline World Turned Upside Down
BY JOE BRANCATELLI
January 8, 2004 -- They say that British General Cornwallis ordered the band to play The World Turned Upside Down when he surrendered to George Washington after the Battle of Yorktown in 1781. Neither of them knew it for sure at that particular moment, but the Revolutionary War was essentially over.
I think it may be time to cue the band again. A few heartfelt choruses of The World Turned Upside Down would be the perfect soundtrack for this week's developments in the airline world. The Big Six may not fully understand it, but it's over for them.
In case you've been too busy trying to keep track of how many holiday flights were canceled for security reasons, let me offer you a quick recap of this week's startling events:
Delta Air Lines cut mainline jet capacity at its Salt Lake City hub by 17 percent yesterday. That's on top of a 20 percent cut that Delta has engineered in the last four years at Salt Lake City. And it comes just a few weeks before Delta further downsizes its now shriveled hub at Dallas/Fort Worth.
On Tuesday, Northwest Airlines cut flights by about 18 percent at its Memphis hub. Where once there were 242 daily flights, there are now just 198. At its other hubs, Mesaba, a Northwest Airlink commuter carrier, is facing a strike by pilots on Saturday. That would ground about 600 daily flights and cut or eliminate service to more than 100 cities on the Northwest route map.
On Wednesday, American Airlines rolled out a fly-two-get-one-free promotion on the same day that JetBlue Airways launched its first flights from Boston to Florida, Denver and Long Beach, California. American, a big player in Boston, is desperate to staunch JetBlue's growth, especially after failing to run JetBlue off its transcontinental routes from New York/Kennedy. Hence the free-ticket bribe, which only applies on American routes from New York or Boston to Florida and California.
And over at US Airways, chief executive David Siegel cancelled his traveling "give me salvation" show after being told by his employees that they have no more givebacks to give the airline's thuggish management. And word leaked out that the carrier, which is hemorrhaging $1 million a day after a trip through the bankruptcy courts, nearly $1 billion in federal loan guarantees and two rounds of employee concessions, has hired Morgan Stanley to find buyers for its few remaining assets.
Meanwhile, the alternate carriers were making stunning inroads on the battlefield.
Besides JetBlue's advance into Boston this week, it also announced the March launch of nonstop flights between New York and Sacramento, California. And it even revealed plans to add free XM satellite-radio and pay-per-view video programming to its in-flight live-television service.
AirTran, which has been munching Delta's lunch at their shared Atlanta hub, was preparing for its expansion at Dallas/Fort Worth, where it will be moving to four gates in Terminal B. It also announced it would add XM radio service on flights. Southwest is adding a slew of new, nonstop routes in the next two weeks and is gearing up for its May assault on US Airways' Philadelphia hub. America West will soon be adding flights to six cities at its Las Vegas hub. And Frontier will be launching service to three new cities from its Denver hub and beginning point-to-point flights from Los Angeles.
Like I said, fellow travelers, time to strike up the band and play The World Turned Upside Down. And I didn't even mention Ted, United's idiotic foray into low-fare service that launches next month. After all, why bother talking about another attempt at a low-fare airline from a Big Six carrier when the low-fare start-up isn't even well thought out enough to offer low fares?
This startling turn of events--the big, powerful evil empires of the Big Six being humbled by gnats who've turned themselves into 800-pound guerillas--should come as no surprise.
Ever since Northwest stranded thousands of travelers on the snowbound runways of Detroit in January of 1999, average travelers have begun to understand that the alternate carriers offer more and charge less than the Big Six. Ever since the United Airlines meltdown in the summer of 2000, frequent flyers have begun to realize that the Big Six really do not deliver what they promise and no longer even try. Ever since 9/11, after we've given the Big Six billions of tax dollars only to watch them fritter it away on egregious executive compensation packages and dishonored and dishonorable business models, we've begun to feel that it is over for them.
And this week, finally, we can all see that the airline world has turned upside down. Soon we'll be free of their convoluted fare structures, their overpaid managements and their arrogant assumption that business travelers will never fight back against rapacious fares and repulsive service.
The next few years will be tricky, but we'll survive. Like the remnants of the British Army after Yorktown, the Big Six won't go away right away. There might even be another battle or two to fight before we're rid of them.
But we know now that the airline world has turned upside down and that the Revolution has been successful. We'll all be free soon.
What do you think? I'd like to know. Contact me at JBrancatelli@aol.com
PluggedIn: Digital media on TV, anywhere and anytime
Tuesday January 20, 1:58 pm ET
By Ben Berkowitz
LOS ANGELES, Jan 20 (Reuters) - It's as though every electronics company that knows anything about data and networking had the same idea: Build a box to connect the TV to a home network and pull digital audio and video off the PC.
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At the Consumer Electronics Show in Las Vegas recently, conventioneers could not turn a corner without seeing a device -- wired or wireless, with a hard drive or without, audio only or audio and video -- to transport digital music, photos and videos to the home entertainment center.
While the idea is not necessarily new, a combination of new and faster wireless technologies, lower costs for hard drives and other components and the growing popularity of digital media has combined to create a land rush in the category.
And those rushing in to grab a piece of what could be very lucrative territory acknowledge that the new technology is daunting and must be made as user-friendly as possible.
"We need to make this dirt-simple," Paul Otellini, the president of Intel Corp. (NasdaqNM:INTC - News), said at CES.
Analysts, who look at the technology world with an eye toward business, are also clear on the implications.
"Consumer use of ... digital media over the last few years continues to accelerate, creating enormous demand for ways to share, edit and archive the media," American Technology Research said in a CES summary. "We see a 'rendezvous with destiny' between the (consumer electronics) world and PC world to address this demand."
NEW PRODUCTS
TechTV, the cable technology channel beloved by digital geeks, voted Denon's upcoming NS-S100 server, which can feed audio, video and still photographs throughout the home, the "Best of Show," despite a price tag that may push $5,000 when it is released.
Home-networking company Linksys showed off a DVD player that also pulls content off a PC. Last year's CES darling Prismiq showed a new unit that records TV to a remote hard drive, and consumer electronics heavyweight Philips (Amsterdam:PHG.AS - News) showed off two wireless media receivers.
Virtually every electronics company at the show embraced the idea of what Microsoft called "seamless computing" -- data anywhere, anytime, on any device in the home.
But as seamless as the computing experience may be, the choice of what kind of device to buy will be anything but.
Some will opt to simply look at their pictures and listen to their music from their TV, in which case existing adapters like a $149 unit from Linksys will do. Others will want their server to incorporate DVD playback and will opt instead for models from Gateway Inc. (NYSE:GTW - News) or GoVideo.
Meanwhile, there will be those who opt for the Denon unit or similar devices that can archive existing content, record new content, and act as a server to distribute media throughout the home.
PC COMPANIES GET IN GAME
But it was not just traditional consumer electronics companies showing off these media receivers at the show. PC makers are pushing aggressively into consumer electronics as a new source of profits, and they have set their eyes on media receivers as a logical first step.
Hewlett-Packard Co. (NYSE:HPQ - News) announced an "all-but-the-kitchen-sink" hub that will record and play live TV and store audio and video, while both Dell Inc. (NasdaqNM:DELL - News) and Gateway lined up to support new Microsoft Corp. (NasdaqNM:MSFT - News) technology to extend the multimedia Media Center PC to televisions in the home.
Meanwhile, Intel Corp. (NasdaqNM:INTC - News) demonstrated a reference design for an "Entertainment PC" that will cost less than $800, be operated without the use of a keyboard and, in theory, replace every device in a traditional home entertainment center (other than the television, of course).
With prices for such devices plunging, both PC and electronics companies are banking on them being hot holiday gifts later this year.
"We believe that these multimedia networked boxes could be the next great wave to hit the home entertainment market," Pacific Growth Equities analyst Brian Alger said in a report. The convergence of these technologies in one simple-to-use device should enable the products to tap into a market beyond that of the early adopters."
OT USPTO grants Calif. lawyer patent over entire WWW naming scheme
How could Albert Einstein have ever been one of these cretins?
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posted 8:43am EST Tue Jan 20 2004 - submitted by J. Eric Smith
NEWS
Do you know about United States Patent No. 6,671,714? You should. The patent, recently granted to one Frank Weyer of Beverly Hills, California, grants the patent holder full rights to:A method for assigning URL's and e-mail addresses to members of a group comprising the steps of: assigning each member of said group a URL of the form "name.subdomain.domain"; and assigning each member of said group an e-mail address of the form "name@subdomain.domain;"
Sound familiar? Well, it should, because the patent describes what is essentially one of the most basic, most crucial underlying structures of the World Wide Web, namely the domain naming system.
The concept of domains and subdomains, as well as the e-mail addresses associated with them, has been around for a long time but apparently has escaped being patented prior to now. Meyer, a lawyer by trade, has capitalized on that oversight, and as of December 30, 2003, Meyer owns it. And now he's using it where it'll do the most good--in court.
On January 17, 2004, Meyer brought suit against Internet heavyweights Network Solutions, Inc. and Register.com, claiming the two services are infringing upon Meyer's newly-granted patent. In the suit Meyer claims damages of an unnamed amount and requests an immediate injunction against the two companies. Meyer states that he hopes to "work with" NSI and Register.com to license his patent. NSI and Register.com don't seem to be cooperating thus far, however.
You can read the text of the patent at the USPTO.
ERIC'S OPINION
I've often railed about the idiotic screwballs who run the USPTO, and now they've gone and made my case for me. What kind of fool granted this patent? Clearly, whoever reviewed it has no working knowledge of the World Wide Web, otherwise the obviousness of the patent would be clear to all. Must we go out and patent breathing lest someone decide to license the technology to us poor humans?
Now comes the real test. Will Register.com and NSI fight this patent, or will they settle? Legal experts seem to think that, if fought, Meyer would lose. However, such fights cost money, and if Meyer's thinly-veiled extortion plot "requests" only a small license fee, the registrars may decide to pay him off and save themselves the trouble.
I sincerely hope they do not. Already, our very way of life has been irretrievably altered by companies that settle rather than fight; the cumulative effect is that everything everywhere comes with warning labels, and everyone who slips and falls immediately thinks not of bruises but of dollar signs. Lawyers have bred a business generation of appeasers, and like all appeasement, giving in once leads to giving in more and more often.
I'm not a big fan of NSI (quite the opposite, actually), but I hope it and Register.com put up a good fight.
Millions of Europeans Pay for Music Downloads
1 hour, 31 minutes ago Add Technology - Internet Report to My Yahoo!
By Bernhard Warner, European Internet Correspondent
LONDON (Reuters) - Europeans purchased over three million song downloads in 2003 from the continent's primary online music store, OD2, raising faint hopes the lacklustre music industry is on the road to recovery.
A few million downloads is not going to immediately turn around an industry bracing for its fourth straight year of declining CD sales.
But the emerging download market offers a glimmer of hope for record label executives who have struggled for years to thwart free file-sharing services like Kazaa.
"I have to believe electronic distribution of music will be an increasingly important part of the business for record labels, but unfortunately I don't think this is an instant cure," Charles Grimsdale, chief executive of Britain's OD2, told Reuters Tuesday.
"The market is growing fast for sure, but new markets take time," said Grimsdale, who co-founded the company with rocker Peter Gabriel.
Still, the volume of downloads is growing 25 percent month on month, Grimsdale said, which would mean download sales should grow more than three-fold in 2004.
The more mature U.S. market is growing even faster. American music fans purchased 30 million download tracks in 2003 as online stores such as Apple Computer's iTunes proved a big hit with consumers.
The success of iTunes, combined with some encouraging reports that online piracy may be tailing off in the U.S., has helped propel shares of EMI, the largest stand-alone music company, more than 40 percent higher since the beginning of the year.
At 4:07 a.m. EST Tuesday, shares in EMI were trading down 0.3 percent at 225.5 pence.
For OD2, which licenses its download service to 30 European retail and Internet partners including HMV and Microsoft's MSN, the volume of downloads picked up in August when it introduced through MSN a tariff scheme allowing users to buy downloads without a subscription.
"Our sales increased in some cases as much as 900 percent at that point," Grimsdale said.
Grimsdale acknowledged competition will be much more fierce in 2004. Industry officials expect the big U.S.-based online stores such as iTunes and Roxio's Napster (news - web sites) will make their European debut by summer.
OD2 is the most established player in Europe, having arranged licensing deals with all five major music labels, giving it a catalog of 260,000 songs.
Grimsdale said it was the process of adding to its library several hundred thousands songs it has under license, giving it a catalog of one million songs. "We are furiously trying to fill the gap," he said.
Music Fans Find Online Jukebox Half-Empty
Mon Jan 19,11:03 AM ET Add Technology - washingtonpost.com to My Yahoo!
By Frank Ahrens, Washington Post Staff Writer
The world's largest music company had been hectoring rock singer Tom Petty since last summer. You've got a big and popular catalogue of albums, Universal Music Group said. We've got to put them up for sale on the Internet -- they're being traded free every day on the Web and we're all losing money.
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He should have been an easy sell. The Internet-savvy Petty let fans download one of his songs back in 1999. After some haggling, he and Universal agreed to make almost all of his songs available for purchase online.
But Petty's fan's did not get everything they wanted. Online buyers will not get their hands on Petty's outtake songs, studio tunes that rarely made it onto albums and are craved most by many hardcore fans. Petty controls the rights to those songs, unlike the bulk of his songs, which are owned by Universal, and he held them back for fear of diminishing the value of a 1995 CD boxed set that included them.
The Petty case underlines the complexity of buying and selling music online. A hornet's nest of performance and publishing copyright laws, marketing decisions, artists' egos and negotiating power plays can stop people from legally buying songs on the Internet, just as millions are trying to do so for the first time.
One of the hotter holiday gifts was the iPod, Apple Computer Inc.'s MP3 player, a device about the size of a cigarette pack that can hold as many as 10,000 digital songs. The iPod and other MP3 players are used to play music downloaded from Internet services such as Apple's iTunes, launched last April.
By the end of 2003, iTunes had sold more than 30 million songs at 99 cents each. Similar services, such as the revamped Napster (news - web sites), BuyMusic.com, Musicmatch, Rhapsody and even one on the Web site of Wal-Mart sprang up, some with lower prices, most with strong sales numbers.
But fans who venture onto any of the pay music sites will not find the most popular band ever, the Beatles. They will not find other top-selling acts, such as the Dave Mathews Band, Garth Brooks, the Grateful Dead, AC/DC and the Cars.
They will find that top-selling acts Madonna (news - web sites) and Red Hot Chili Peppers sell their songs by the album, but not as singles.
They will find some musicians on one service, but not on others. They will find puzzling choices: Led Zeppelin fans can buy a 47-minute spoken-word biography of the band online, but no Zeppelin songs because the band has not licensed them for sale on the Internet.
Petty's fans, however, are mostly happy now. Fans will be able to buy and download beloved hits such as "Don't Do Me Like That" and "You Got Lucky." The songs went up for sale on Napster last Monday.
"Basically, it was Universal that was driving me crazy for the last six months" to put Petty's catalogue on the Internet, said Tony Dimitriades, Petty's manager for the past 28 years. "From our point of view, we wanted to make sure the business model had no unfair implications for the fans or for Tom."
But Napster had no say in the decision by Petty and his management to hold back the outtake songs.
"I got a call from Universal Music Group saying, 'You can't make these songs available,' " said Aileen Atkins, Napster's chief counsel and negotiator.
Atkins's job, and the job of Napster President Michael J. Bebel, was to persuade Petty to choose Napster over the other online services for his launch. They did so by promising the rocker prominent placement in an extensive print and Internet promotion campaign; in exchange, Napster got exclusive rights to sell songs in the catalogue for two weeks before it appears on other online services.
Petty's picking and choosing illustrates why trying to buy music over the Internet can be alternately satisfying and frustrating. It is fairly easy to buy a song, but it can be much harder to find a song worth buying. That is why unauthorized services, such as Kazaa and LimeWire, still have millions of users, despite the music industry's lawsuits designed to stop unauthorized sharing. Computer users who flout copyright laws by using such services have been able to download all of Petty's songs free for years. They also can often find their favorite musician's videos, live performances and television appearances.
New Deals for Digital Rights
Contracts between musicians and labels signed before about 1998 do not include language spelling out how the parties should be paid for Internet music sales, or the digital rights, so contracts must be renegotiated, which often takes months. Best-selling musicians who have more control over their songs can hold out for more money from their labels before agreeing to sell their songs on the Internet. Many musicians have trepidations about the Internet because they think of it as the place where their songs get stolen.
"Every time a major artist signs on [to sell music online,] record companies use it as leverage to get other holdout artists to sign on," Dimitriades said. "You can be sure the Universal people are calling up whoever their holdouts are and telling them, 'Tom Petty just signed on.' " The artists are not the only subject of such negotiations. Each song has a performance-rights royalty, which is paid to the musician when a song is played, and a publishing-rights royalty, which is paid to the songwriter. A performer may want to sell a song on the Internet but the songwriter may not.
Songs that include samples of other songs, particularly rap songs, can involve a tangle of rights. The performer who sampled a song may want to sell his song online, but the sampled performer may not; likewise, the songwriter who wrote the sampled music may not.
No Tunes by the Beatles
Music companies have more luck with some of their artists than with others. England's EMI Group, the world's third-largest music company, gave Courtney Love's latest single, "Mono," to Napster, iTunes and Musicmatch for sale in the second week of December at the same time it was given to radio stations for play.
But EMI's biggest act, the Beatles, remains intransigent. EMI distributes the Beatles' songs but the group's performance rights are owned by the band members and spouses. (Michael Jackson owns the publishing rights.) EMI has held numerous meetings with Paul McCartney, Ringo Starr, Yoko Ono and the rest of the tight group that controls perhaps the most-loved songs in the pop canon. So far the group remains unswayed. It is not surprising; the Beatles were among the last artists to license their songs for sale on CD, in the 1980s. "We hope they agree to make their works available very soon, " EMI spokeswoman Jeanne Meyer said.
EMI managers have met around the world with many of its artists' lawyers and managers over the past 18 months in an effort to convince them that they should allow their songs to be sold on the Internet. To demonstrate how much money artists may be losing to unauthorized song sharing, EMI executives will search Kazaa for songs by an EMI artist they are scheduled to meet. At the meeting, EMI shows the artist a snapshot of their pirated works, demonstrating that at any particular moment, hundreds of the artist's songs were swapped among millions of Kazaa users.
Record companies and online services must also secure a song's publishing rights, also known as "mechanical rights," a term that was spurred by the invention of the player piano, the first device to reproduce a musician's work.
There are two major music publishing companies -- EMI and Warner/Chappell Music Inc., owned by Time Warner Inc. -- and at least 27,000 smaller ones. When attempting to release a CD for sale on the Internet, record companies must go song by song and contact each songwriter to negotiate for the online rights. Sixty-five to 70 percent of the publishers are represented by the Harry Fox Agency, established in 1927 to protect its members' rights and collect and disburse royalty payments to them.
But the rest of the publishers are not represented by Harry Fox, which means they cannot be easily located through a central database. And if found, some are unwilling to sell their rights. Some are unable to sell because they are dead.
"You can be sure the heirs are a son and daughter who aren't talking to each other and one of those two is getting divorced," joked a music company executive.
Maintaining Artistic Integrity
Some artists, such as cerebral Brit-rockers Radiohead, believe their albums should be listened to in their entirety and will not sell them online as singles.
Securing rights to the band's songs reflect the many cracks that exist in a system that encompasses sprawling music companies, far-flung publishers, temperamental artists and mega-retailers to be on the same page. Until last Monday, several songs from Radiohead's "Kid A" CD were for sale for 88 cents each on Wal-Mart's online music site. A day after Radiohead's label, EMI, was informed of that by a reporter, the singles were gone, replaced with a note reading, "song not sold individually." EMI said it noticed the Wal-Mart transgression the previous week.
Madonna may be the ultimate singles singer and is also among the most powerful. She can dictate that her albums be sold online as whole works or not at all.
"There is the philosophy that it cannibalizes album sales," said Caresse Henry, Madonna's manager for the past 14 years. Madonna probably will begin selling singles online in the coming months, Henry said, but maybe not through one of the existing services.
Another factor holding up Madonna's singles: royalty rates. Musicians should be paid a higher royalty for songs sold online than those sold in CD or album form, Henry said, because in the online world the record companies do not bear the costs associated with manufacturing CDs. When iTunes sells a song for 99 cents, 70 cents is paid to the artist's record company. The artist typically gets 10 to 15 cents; the songwriter, about 8 cents.
Though Henry said she is not happy that her client loses money to free online song sharing, "thank goodness Madonna has had a successful career and made money."
Wal-Mart and BuyMusic have agreed to Madonna's terms -- her recent "American Life" album is sold online -- but iTunes and Napster have not. Apple Computer Inc. founder Steve Jobs (news - web sites) is so adamant about selling singles, as is Napster, that he would rather keep Madonna off iTunes until she agrees to sell her songs individually.
"It's not that we don't respect the concept of the album as art, but particularly in light of fact that all the tracks are available individually on every illegal free service, it doesn't seem to make sense that they're not available in other than on album format on the legitimate services where the artist actually makes money," said Napster's Atkins. "To compete with the illegal sites, we need to at least offer consumers what they can get there, so maybe the artists have to look at that and make different decisions."
PMPs come out in Las Vegas
Personal Media Players are the next big thing. Or that's what electronics companies are hoping.
January 19, 2004: 10:31 AM EST
By Peter Lewis, Fortune Magazine
LAS VEGAS (Fortune Magazine) - Las Vegas is surely the world capital of What Could Have Been. I could have hit the jackpot on the slots if only I hadn't stopped feeding it silver dollars. Britney Spears could have had a long, happy marriage if not for the annulment.
And Microsoft's new MSN Premium online service could have had the coolest new product introduction at last week's Consumer Electronics Show, if only there had been a way to affix MSN butterfly wings to the Flying Elvi, the skydiving Elvis impersonators. But, alas, it was not to be.
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It was that kind of show. Unlike Las Vegas, which has elevated weirdness to an art form — there are celebrity impersonators here who have themselves surgically altered to look like Michael Jackson — CES is merely strange. More than 100,000 people come to the CES show to see the newest gizmos and gadgets the world has to offer. (And a few thousand more come to see the Adult Entertainment Expo, which is held at the same time, and sometimes their paths cross, but that's another story.)
With the seriousness of nuclear plant engineers examining a malfunctioning control panel, grown men (and women) at CES examine digital toys that make barfing noises, or automobile subwoofers that cause one's ears to bleed, or wristwatches that double as the world's worst video cameras. They're all looking for the Next Big Thing that will capture the imaginations and the dollars of the world's consumers, the way that big-screen TVs, DVD players, and digital cameras have done in the past year.
It's strange because all of a sudden, with little warning, 500 companies will decide en masse that consumers want to be able to transfer their digital photographs wirelessly from the media server in the closet to the TV monitor in the living room while pulling a musical soundtrack off the laptop computer in Jimmy's room. Never mind that consumers STILL haven't figured out how to program the clock on their VCRs, and that setting up a simple home network can reduce a veteran computer scientist to a ranting psychopath.
No, at CES the companies decided that this will be the year of convergence, when Joe and Jane Sixpack will miraculously be struck with a vision of transferring their digital media files from one smart appliance to another, sort of the way Richard Dreyfus was imbued with a vision of weird-looking mountains in "Close Encounters of the Third Kind."
Maybe it's something in the Las Vegas water supply.
Chasing the gizmos
This really was a show about convergence, but for industries more than products.
CES is now the premier annual event for the PC industry as well as for the consumer electronics business. PC sales have been flat for a few years, prompting computer companies to go searching for new avenues of growth. Although there appear to be signs of growth once again in the PC business, the fastest-growing product areas are in consumer electronics — DVD players, digital cameras, mobile phones, flat-panel TVs, and portable MP3 players.
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Apple reported better-than-expected financial results Wednesday, driven mainly by sales of its iPod portable music player. Gateway flubbed its numbers last week, but the drag on profits was from the PC side of the business (selling laptops at a loss); sales of consumer electronics products including plasma TVs and digital cameras were brisk, company executives said. HP announced last week that it will get into the flat-panel TV business, too, but the bombshell was its surprise alliance with Apple to sell an HP-branded version of the iPod (no name yet, but I'm guessing the HPod) and to put a link to Apple's iTunes Music Service on new HP home computers. (It's still unclear whether the Hpod will support Windows Media Audio files, which would allow it to work with online music services other than iTunes.) Dell is slapping its label on TVs, DVD players, MP3 players, and other CE devices.
Six months ago, a visitor to one of Gateway's retail stores would stroll past rows of computers until finding, at the back of the store, a lonely plasma TV. Today it's the reverse; the computers are at the back of the store. Consumer electronics is the company's new focus, because that's where the profits currently are found. Or, to be more accurate, potential profits.
Intel, best known for supplying the microprocessors and chipsets that power desktop and portable computers, seemed most excited at CES to show off its Xscale processors, which are used in CE devices ranging from bigger-and-cheaper TV sets to portable media players.
Pumping up the PMPs
Portable media players were the new-gizmo-du-jour at CES, with more than a dozen companies showing off prototypes, ranging from Samsung and Sanyo to companies little known beyond the hutongs of Beijing. The idea behind PMPs (pronounce it however you like) is, basically, that just as millions of people have bought portable audio players like the iPod as a way to download and enjoy music on the go, bazillions more will want to download movies and TV shows and music videos onto a pocket-size device for enjoyment outside the house or office. The prototypes I saw were slightly smaller than paperback books, with uninspiring color screens, and with projected prices ranging from $400 to $800.
Hmm. I don't see the appeal of these PMPs, at least not the ones on display at CES. They're too expensive. They're too big and heavy, unless you wear cargo pants. Battery life is probably going to be inadequate. Hollywood is going to stroke out over the idea of people trying to rip their movies onto portable players. And while there have been times on a long flight when I thought it would be amusing to have, say, last night's "Daily Show" or Yankees game on hand, I'm more likely to prefer the big screen of my laptop computer to the relatively dinky screen of the PMP.
On the other hand, I'm unlikely to use my laptop on the subway or on the train coming into the office. But to me the biggest killer is this: I can listen to my iPod while doing other things, like driving or reading or writing. Video, in contrast, is a brain-bandwidth hog. PMPs are more demanding of their owners. It's an entirely different experience.
Maybe I'll get interested if PMPs ever get down to iPod-level pricing, and when it's as easy to record and transfer my favorite TV shows to a PMP as it is to get my music collection onto my iPod. Or, maybe I'll get interested if I decide to take a long bus or train ride to work every day. But in that case, being an old fart, I'd probably read a newspaper or magazine.
Someday, some company — maybe a PC company! — will unveil a thin, lightweight electronic media reader that can morph as needed into an e-book or magazine, web browser, video display, audio player, game console, digital picture frame, crossword puzzle, high-rez radio receiver, e-mail manager, or whatever. It should consist of two high-resolution color display panels, about the same size and weight as the cover of a hardback book (with all the pages torn out), with the fuel-cell battery and radio data transceiver in the spine. And it should cost less than $500.
I was really hoping to bring home such a device from CES. But all I got was this lousy PMP.
KT, ReignCom to develop MP3 player
KT Corp., Korea's biggest fixed-line telecom operator, announced yesterday an alliance with ReignCom Ltd., the world's largest MP3 player maker, to jointly develop a portable music player that allows users to download music files wirelessly.
The wireless MP3 player will enable subscribers to KT's high-speed wireless Internet service Nespot to download music files when they are at "hotspots" near base stations.
The alliance should help KT promote its wireless Internet service, the telecom operator said in a statement.
KT so far has more than 12,000 hotspots nationwide and will add another 8,000 wireless-fidelity zones by the end of this year, according to company spokesman Cho Chul-jae.
The number of Nespot subscribers stood at 350,000 at the end of November, he added.
ReignCom, the Seoul-based digital music equipment maker that conducted the country's most popular initial public offering this year, is known worldwide for its snazzy MP3 player brand iRiver.
MP3 is a popular audio compression format on the Internet.
In the nation with the world's greatest high-speed Internet penetration rate, KT controls half of its broadband market of 10.5 million users and has 31 percent of its cell phone market through its subsidiary KTF, the country's second-largest mobile carrier.
2004.01.20
Yes, fred it is. And that makes it less relevant how? Have they suddenly recovered and signed a dozen customers? They are one of the premier RTOS companies out there and one often sited by posters of a slant such as yourself. They have burned thru tons of cash, have convertible debentures outstanding, and are running out of cash on hand...seems that hard times in this industry can be found in companies other than EDIG...that's the point which you characteristically "missed".
cheers
Everyone wants to be your hub
2 hours, 53 minutes ago
By Dean Takahashi, Mercury News
In the new world of digital home entertainment, a gadget is no longer just a gadget. It's either a hub or a spoke.
A hub's job is to gather all of the music files, movies, pictures and other digital entertainment scattered throughout the home. The hub then distributes that content to a particular television, music player or other device -- the spokes -- whether they be in the living room, bedroom or back yard.
Whoever controls this hub-and-spoke system will have the power to sell a whole family of gadgets to consumers.
Naturally, it's more prestigious and profitable to be a hub, much like Chicago is a hub for United Airlines. At the recent Consumer Electronics Show, everyone pitched a different idea for the ultimate digital hub. Some proposals called for making someone else's hub into a spoke for a much larger hub.
The hub's coming has been trumpeted for years. But waves of products are finally hitting the market as consumers trade old analog devices for sexy digital TV sets, MP3 music players or entertainment computers.
Meanwhile, the technology to connect all that gear is increasingly found in the home. Broadband Internet access and home wireless networks are spreading fast. And hard disk drives now are large enough to store entire music and movie libraries. That makes the entertainment hub a more practical product.
And the increasing popularity of online music and movies has led to a proliferation of digital entertainment devices. Those spokes include personal media players like a new music/video box introduced by Creative Labs, the iPod music player from Apple Computer, digital cameras from HP and digital camcorders from Gateway.
"It's happening now because the technology has gotten to the point where connecting things together is easier," said Jon Peddie, an analyst at Jon Peddie Research in Tiburon.
The search for the Holy Grail of gadgets to meld computers, consumer electronics and communications has been underway for years. In 1999, Sony declared that the PlayStation 2 (news - web sites) was going to be a hub for networked digital entertainment. Anchored by video games, it would combine DVD playback, compact disc listening, and online connectivity.
Microsoft responded with its own hub, the Xbox (news - web sites). But these consoles never were truly networked for much except online games. And so the Xbox has been reduced to a spoke for another hub, the Media Center PC, which is Microsoft's version of the über box.
Resolving some infighting at Microsoft, Bill Gates (news - web sites) clarified the status of the Xbox when he announced at the Consumer Electronics Show this month that the Xbox would be an extension of the Media Center PC, able to play video or music transferred from the PC on a TV set.
But other players at the show had different ideas in mind for the hub. Hewlett-Packard announced that the Media Center PC itself was just a spoke in a larger system, dubbed a "digital entertainment hub," which is a kind of centralized computer, or server, for all the media stored on devices throughout the home. Those devices would connect wirelessly or by wires to the Windows-based hub, tapping into its endless supply of media on multiple hard disk drives.
PC vs. TV "The PC or the TV won't do what's needed to integrate the content into a single system," said Chris Morgan, vice president of worldwide marketing at HP's imaging and printing group.
One camp favors the PC, another the traditional TV set-top box. Ancle Hsu, chief operating officer of Ontario, Calif.-based Apex Digital, said the PC still is too complicated for many users. His company, which sells the most DVD players in the United States, is deploying networked DVD players and a stripped-down version of a personal computer that plays games and entertainment on a TV set.
"Consumers want a product that they don't feel is a PC," Hsu said.
Sony said that the PSX, which combines a PlayStation 2 with a digital video recorder, would probably be sold in the U.S. market this year after making its debut at $800 in Japan. Devices like this, combined with the cable industry's efforts to establish standards for cable boxes, mean that the boxes could be sold at retail and be used with any local cable TV service, said Dick Komiyma, president of Sony's U.S. electronics business.
The case for TV Meanwhile, Digeo, a Paul Allen-funded start-up, has taken up the banner of Moxi Digital, a Palo Alto company it acquired last year. Digeo wants to make the cable set-top box into a networked digital hub capable of sending video, music and all sorts of other entertainment to multiple TV sets within the home.
Hooking up boxes to cable TV wires is a lot easier than networking a home to do the PC's bidding, said Peter Kellogg-Smith, Digeo's vice president of product marketing. Digeo's allies include cable TV companies Chartered and Adelphia.
"We think the big issue is complexity," said Kellogg-Smith. "That's the problem with the PC and how to network it. But coaxial cable is already there in the home ready to be used."
Who will win? For now, no one.
"Consumer adoption is a way off," said Vamsi Sistla, an analyst at market research firm ABI Research. "They will wait until the picture becomes clearer. There is always talk about an all-in-one box but it's not there yet."
Contact Dean Takahashi at dtakahashi@ mercurynews.com or (408) 920-5739.
Perspective...Ill wind blows for Wind River
Outlook for vaunted embedded vendor appears grim
Interim CEO Gupta
By Alexander Wolfe
August 6--Is once proud embedded-software vendor Wind River, of Alameda, Calif., teetering on the brink? With $544 million in losses since 2000 and only about $50 million in cash on hand, things don't look rosy for this real-time technology pacesetter, best known for its respected VxWorks R/T operating system and the Tornado integrated development environment.
Now, as the company prepares for an August 14th conference call to discuss with analysts its financial results for the quarter ending July 31st, talk is swirling that the company may be looking to sell. (A call to Wind River for comment had not been returned at posting time.)
For the past month, rumors have been rife on the Yahoo Wind River message board frequented by investors. Such boards, of course, are frequently trafficked by both stock touts and by woefully uninformed outsiders. Nevertheless, some of material seems to make reasonable inferences from information which can be factually verified.
The talk kicked into high gear at the end of April, following a fiscal quarter in which three-month revenues dropped 27 percent to $48.5 million and the red ink which has plagued the company for the past three years showed no signs of letting up. On June 24, Wind River removed president Tom St. Dennis and brought in embedded luminary Naren Gupta as interim chief executive in a bid to stabilize operations.
Recent messages have also made much of the information that the company is down to only $50 million cash on hand--a fact borne out by examination of the financial statements it has filed with the Securities and Exchange Commission. (The company's complete financial position, in the turgid language of accounting statements sent to the SEC, reads like this: "As of April 30, 2003, we had $150.0 million in outstanding indebtedness under our 3.75% convertible subordinated notes and $40.0 million in other long-term debt. As of April 30, 2003, we had cash and cash equivalents of $25.9 million, short-term investments of $24.3 million, investments with maturities of greater than one year of $160.7 million and restricted cash of $46.1 million.")
Further, a detailed examination by EmbeddedWatch.com of some of Wind River's filings turned up a apparent robbing-Peter-to-pay-Paul item related to the company's cash position. It appears Wind River, which was leasing its office space, and thus showed the lease payments as a hefty expense on its operating statements, went out and bought the buildings. This turned the expense on the balance sheet into an asset--it now owned the buildings. Moreover, Wind River borrowed against the value of its newly owned buildings to improve its sagging cash position.
The relevant statement from its SEC filing states: "In January 2003, we notified the lessor of our intent to exercise the purchase options under the synthetic leases. In April 2003, we completed the transactions, terminated the synthetic leases and purchased the buildings for a purchase price of $57.4 million. As a result of our completion of the purchase options, we reflect the buildings as an asset on our balance sheet. Additionally, restricted cash of $60.3 million held under the leases was released...In connection with the termination of the synthetic leases, in April 2003, we entered into a loan facility for an aggregate principal amount of $57.4 million, consisting of a $37.4 million non-revolving loan commitment and $20.0 million term loan, both of which mature in April 2005. During the quarter ended April 30, 2003, we borrowed $40.0 million of the facility at an interest rate currently equal to 1.84%."
Amid the company's falling revenues and poor cash position, some investors are holding out hope that the company is either poised for a sale or on the verge of a major design win for VxWorks. There's been no talk about either prospect from Wind River itself, and no real sign from within the embedded community. Apparently, the Yahoo message board denizens are fueling their hope from the news that a company insider has made major stock purchases recently and thus must "know something."
The insider, board of directors member William Elmore, has purchased 235,000 shares of Wind River stock in the past month at an average price of $5.60. (Wind River stock closed on August 6 at $5.74.) Elmore is a venture capitalist who also sits on the board of e-commerce house Onyx Software Inc.
Some of the sales talk revolves around a possible Wind River link with "business technology optimization" (read: enterprise) software house Mercury Interactive. However, there's no explicit basis for such talk. It has been driven by the July 24th appointment to Wind River's board of Ken Klein, chief operating officer of Mercury.
There's also speculation that next week's conference call may be used as a coming out party for a new CEO to replace interim chief executive Gupta.
Unpromising past
Regardless of what happens during Wind River's upcoming conference call, there's no easy fix for the troubles of the venerable embedded software house.
After a heady run-up during the tech bubble of the late '90s during which Wind River purchased embedded competitor Integrated Systems Inc., networking software house Rapid Logic and compiler vendor Diab, the company has been on a slide.
Over the past three years, revenues have continued on a downward trend while the company has lost gobs of money. Fiscal 2001 (calendar-year 2000) revenues were $438 million, producing a net loss of $76 million. Fiscal 2002 revenues of $351 million, in a year which saw several acquisitions, yielding a mind-blowing loss of $375.6 million. Revenues for fiscal year 2003 were $249 million, a 29% decrease from the prior year, with a net loss of $107 million.
As mentioned, things haven't improved recently. For the 3 months ended 4/30/03, revenues fell 27% to $48.5 million. (On a mildly positive note, the net loss fell 40% from the year-earlier quarter to $10.8 million.)
So, just what the heck is going on here? Despite the fact that Wind River booted out president Tom St. Dennis this past June, the problems besetting the company aren't management driven.
Unfortunately for Wind, the storm buffeting the company is stoked by more than just the poor tech economy. If that were the case, Wind could tough things out until the business cycle righted itself.
The big problem for Wind, which won't change, is that Microsoft has forever changed the fundamental economic rules of the commerical embedded-tools market. That's ironic, because Wind--along with Integrated Systems Inc. a company it acquired in 2000--helped found that market back in 1981. (Prior to the emergence of Wind and a coterie of other companies, embedded software was done on a "roll your own" basis by individual developers.)
Throughout the 1980s and 1990s, embedded houses such as Wind built up a small but lucrative software market where tools commanded typical license fees of $20,000 per seat. In the '90s, Microsoft made several false starts toward entering the embedded market, each time slinking back to Redmond to lick its wounds after being rejected by the majority of experienced embedded developers.
But around the turn of the century, through a combination of persistence, the release of an acceptable version of Windows CE, and the graduation from college of the first generation of software developers brought up on Microsoft products, Microsoft began to gain traction in the embedded market. And it began to offer complete software development environments for $995. This in one fell swoop redefined the price tools vendors could charge and also pulled the rug out from the $20,000-per-seat Wind Rivers of the world. And that's where things stand today.
Finally, the rise of the open-source software movement has buffetted Wind River, and its customers have become increasingly acclimated to the idea of free tools.
As Wind River sums up the sorry situation in another of its SEC filings: "During the first quarter of fiscal 2004 and during fiscal 2003 and 2002, some of our customers have decreased research and development budgets; sought to increase the value they receive from vendors, including us; attempted to leverage a more competitive bidding process when spending research and development budgets; and deferred or canceled projects."
Wind River's explanation continues: "We [also] believe that some of our customers have undertaken development in-house, selected solutions they perceive to be less expensive or have relied on existing licenses rather than making new product purchases from us. Also, we cannot anticipate or calculate the potential adverse impact of open source or in-house software on our revenues or market share particularly where our customers' budget constraints may make such software, which is royalty-free, more appealing than our products for their initial project development."
--(c) 2003 EmbeddedWatch.com
Harris Interactive has reported that more than two-thirds of US adults are users of the Internet. The figure represents around 146 million people and is up slightly from year-end 2002 figures. In 1995 only about 9 percent, or some 17.5 million people, used the Internet in America.
Did Big Music Really Sink the Pirates?
JANUARY 16, 2004 • Editions: N. America / Europe / Asia / Edition Preference
Surveys showing that lawsuits have greatly reduced file-sharing may be seriously flawed. By some measures, swaps are actually escalating
The Recording Industry Association of America's lawsuits against online song swappers are aggressive, but do they work? Two widely cited surveys seemed to show that legal action, which began in September, was chilling file-sharing activity. In December, a phone survey by the Pew Internet Project of 1,358 U.S. Net users found music downloading had dropped by half since May. And in November, comScore Media Metrix, monitoring 120,000 U.S. users, saw big yearly declines at four popular file-sharing services -- KaZaA, Grokster, BearShare, and WinMX. Advertisement
Trouble is, those surveys provide a relatively narrow view of the file-swapping universe. BayTSP, a Silicon Valley watchdog that works for three of the major record labels, tracks the number of songs available for download worldwide. It sees just a 10% drop since July and also notes steady migration from older, virus-ridden programs like KaZaA to hipper peer-to-peer networks such as eDonkey and Bit Torrent -- which were absent from comScore's tally.
And Los Angeles-based researcher BigChampagne, which monitors millions of global file swappers, actually sees a 35% increase in illegal traffic from 2002 to 2003. Given BayTSP's and BigChampagne's broader sample sizes, says John Palfrey, of Harvard Law School's Berkman Center for Internet & Society, "They're going to have more accurate empirical data."
FLEXIBLE ARCHITECTURE. What explains the apparent discrepancies? Many analysts point to Pew's methodology -- phoning U.S. adults, who may be reluctant to self-report an illegal activity. Concedes Pew analyst Mary Madden: "It's quite possible that some people simply didn't want to admit to downloading now."
And comScore analyst Graham Mudd says he would expect different results had the study included overseas users and more services, whose constantly evolving network architecture make detection more difficult. Still, BigChampagne CEO Eric Garland says, "The Pew study underscores the dramatic and definitive effect" of the RIAA campaign. Indeed, the RIAA declined to comment on the surveys but says its own studies show increased public awareness of the lawsuits "and the consequences."
If the perceptions have changed, the reality is that the RIAA's suits have targeted only uploaders of music -- that is, people who make files available for others to copy. No one has yet been sued for simply downloading an MP3 file to his or her PC.
"TALMUDIC QUESTION." And amid the continued resilience of the file-sharing set, the decline in record sales is abating. According to Nielsen SoundScan, in 2003 CD album sales slipped 2% -- a less dramatic drop than the 9% slide the previous year. Also, fourth-quarter 2003 sales picked up 5.6% over 2002. So what does that do to the record industry's long-held argument that online piracy is killing music sales? "That's almost a Talmudic question," muses Michael McGuire, a Gartner G2 analyst.
Some observers, such as BigChampagne's Garland, believe it punctures the myth that downloading a song and buying a CD are mutually exclusive events. "This really is forceful evidence that those are independent variables," he says. In fact, Garland points out that BigChampagne's list of the most-downloaded songs tracks closely to the Billboard charts, which in part rely on sales totals.
Others, such as McGuire, maintain that file-trading is but one of many factors that conspired to dampen music sales. Others include pricing issues, the ubiquity of CD-recording drives on PCs, and fewer new CD releases.
NOT FADE AWAY. What's clear, though, is that until the music industry gets fully behind online music sales, file-swappers will flock to next-generation sites like eDonkey -- which has seen 150% growth in the past year, according to independent tallies by both BayTSP and BigChampagne.
"This stuff is not going to go away," Gartner's McGuire says. "The industry needs to provide a compelling legal alternative." Until that happens, pirates will continue to rule the online music seas.
By Brian Hindo in New York
Microsoft to Untie Link To Its Own Web Browser
1 minute ago Add Technology - washingtonpost.com to My Yahoo!
By Jonathan Krim, Washington Post Staff Writer
Microsoft Corp. will change the way an online music feature of its Windows XP (news - web sites) operating system works to satisfy Justice Department (news - web sites) concerns that the feature violated an antitrust settlement with the company.
In an advisory yesterday for the federal court overseeing the settlement, Justice Department lawyers said that Microsoft's "Shop for Music Online" feature, which directs Windows users to an Internet site where they can buy music from retailers, violated the settlement struck in late 2001.
The settlement requires Microsoft to allow computer users to choose which non-operating system programs they want to use, such as programs for browsing the Internet, listening to music or viewing digital videos.
Under Windows XP's configuration, when users set their machines to use a rival Web browser, the shop-for-music feature invokes Microsoft's Internet Explorer browser. According to the advisory, Microsoft disputed that this violated the settlement, but agreed to change it through a Windows update patch that will be released in February or March.
A Microsoft spokesman, Stacy Drake McCredy, told the Associated Press that the company agreed to the change for business reasons.
"While we differed in our interpretation of the consent decree, we are pleased that he changes we'll be making also address government concerns about this feature," she said.
Microsoft critics have complained about the way the shop-for-music feature works, arguing that it demonstrates the company's continued efforts to force users to use its software.
Sources said that representatives of RealNetworks Inc., which makes a media player that competes with the Windows Media Player, testified about the problem at recent closed hearings before European Union (news - web sites) regulators.
The case against Microsoft in Europe could result in the company being forced to separate its media player from the Windows operating system, a move Microsoft is fighting.
Seattle-based RealNetworks also sued Microsoft last month for civil antitrust violations, seeking more than $1 billion in damages.
Futuremedia Electronic Co., Ltd.
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Data Players > Micro Disc Player
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Description Of Micro Disc Player
Product Name: Micro Disc Player Model Number: FDP-100
Place of Origin: China Brand Name: Future Media
Quality/Safety Certifications: CE, FCC Minimum Order: 500pcs
Payment Terms: T/T Delivery Lead Time: Within 15 days
Supply Ability: 20,000pcs/month
Features:
1) Support MP3 each layer decode and playback
2) FM tuner (87.5MHz-108.0MHz)
3) Vision of power when charge
4) Menu operation
5) Song information display
6) EL backlight
7) Aluminum Case
8) Crystal clear digital recorder (LP, SP, HP)
9) Recording file compatible with Windows format
Technical specifications:
1) Dimensions: 90 x 64 x 18mm
2) Weight: 137g
3) Battery: 1 x 3.7V Lithium battery 960mA (including)
4) Tuner range: 87.5MHz - 108.0MHz
5) Signal to ratio: >90dB
6) Harmonic distortion: <0.1%
7) Output frequency range: 20Hz - 20kHz
8) Earphone power output: 5mW
System requirements:
1) Microsoft Windows 95/98 or higher
2) Pentium 233MHz or faster
3) 1 CD-ROM drive
4) 1 available USB port
5) 10MB free hard disk space
Supplied accessories:
1) Data player
2) Wire control earphone
3) USB cable
4) Installation software CD
5) Carrying bag
6) Neck strap
7) User's guide
Disc Specification
1) Dimensions: 32 x 32mm
2) Memory: 500MB, 1GB
3) Supports Fat32
4) Supports read/write
Contact Information
Company Name: Futuremedia Electronic Co., Ltd.
Contact Person: Arthur Lin, Simon Lou, Audra Wu
(Your inquiry will be sent to the supplier directly)
Address: 3/F, No 41 Yilong Road, Jingxia Village, Changan Town, Dongguan, Guangdong Province. China
Zip: 523582
Telephone: 86-769-5375190(191,192,193)
Fax: 86-769-5375195
Web Site: http://www.futuremedia.cn
OEM strategy breathes new life into DataPlay
Company renamed DPHI; platform now available for USB
By Caron Schwartz Ellis
News Story originally published in Boulder County Business Report, Jan. 09, 2004
BOULDER -- Like the mythical Phoenix, former data storage wunderkind DataPlay Inc., which went down in bankruptcy flames about a year ago, is emerging from the ashes lean, mean and ready to rumble as DPHI Inc.
"Things are going pretty well," said President and Chief Executive Bill Almon Jr. The new version of the company has about 40 employees, 16 U.S. patents awarded and more than 100 pending, about a half-dozen new applications and two customers with more in the pipeline.
DPHI provides micro-optical storage technology -- known as the DataPlay platform -- for digital recording, playback and distribution. The DataPlay platform features a tiny optical engine and removable media about the size of a quarter that securely stores about 500 megabytes of digital content for portable electronic devices.
Almon, along with his father Bill Almon Sr. and Hexagon Investments of Milwaukee, purchased the physical and intellectual property assets of DataPlay for an undisclosed amount in February 2003. They had made a $1.5 million bid to buy the company outright, but bankruptcy judge Donald Cordova turned down the offer and instead ordered the company's senior creditor, Silicon Valley Bank, to liquidate DataPlay's assets to try to recover its $1.06 million investment, Boulder County's $215,000 in back taxes and $14.1 million owed to junior creditors.
According to Duncan Barber, of the Denver-based law firm Bieging Shapiro & Burrus LLP who represented Silicon Valley Bank, the bank and back taxes were "paid in full" as a result of the liquidation. He did not know whether junior creditors, including displaced employees, received payment, and a Silicon Valley Bank spokeswoman said the bank would not comment on clients.
Under DataPlay founder and former chief executive Steve Volk, the company had focused on the consumer electronics industry. The company's core market was to have been pre-recorded albums and movies, but content proved to be hard to come by because of difficult negotiations with the music industry.
Almon's business model is based on an original equipment manufacturer strategy. "The old DataPlay was too focused on trying to create a new brand and actually produce their own players," Almon said. "Our strategy is to act like an OEM. Our technology has a broad set of applications and versatility, and we'd rather sell drives and media rather than try to be the next music player."
DPHI's primary contract is with z-kat Inc., a Hollywood, Fla.-based company that produces image guided surgery technologies for orthopedic and neurological surgery, interventional radiology/cardiology and general surgery. DPHI is supplying z-kat with the DataPlay micro-optical system for use in its z-box digital surgery platform.
"We chose DataPlay for a number of reasons including its storage capacity and digital rights capability," said Doug Alcorn, a z-kat software engineer. The digital rights capability has to do with the security of the stored data, especially a concern given HIPAA privacy regulations, he said.
According to Alcorn, z-kat was a DataPlay client prior to the bankruptcy and DPHI's first client after Almon restarted the company. "Even after they came out of bankruptcy we've had a lot of discussions about whether to stay with DataPlay," Alcorn said. "We think they have longevity to last as long as our product. We feel good about the company. It's never been a question of cool technology, just who's their customers. I think Bill's focus on OEMs rather than end users is a good strategy."
Executives at z-kat could not be reached for comment.
As part of the company's OEM strategy, DPHI's DataPlay platform is now available for the USB 2.0 interface. USB (Universal Serial Bus) is a plug-and-play industry standard interface between a computer and add-on devices and supports a data speed of 12 megabits per second; USB 2.0 can provide throughput of 480 megabits per second.
Market applications for USB-ready DataPlay solutions include secure portable storage and multi-media content distribution.
New products in 2004
In 2004 DPHI will have a few new OEM products, Almon said. One is an MP3 player manufactured by Future Media Electronic Co. LTD of China that is being demonstrated at the Consumer Electronics Show, Jan. 8-11 in Las Vegas. "It works just like an iPod for downloaded music or taking your own CDs and putting them on a small disc," Almon said.
According to Almon, DPHI is spending 10 times less per month than the former DataPlay, which went through about $120 million in funding with a workforce of some 160 in its four-year history.
The 140 patent applications alone probably cost upward of $5 million, he said. The reborn company can get by with much less expense because "the technology was already done," Almon said. "We're leveraging that with a finished product. Now we're talking about recognition of the technology and making it valuable. It doesn't require nearly as much in terms of cash burn."
Licensing the technology should continue over the next few years, and DPHI is working with Superior-based IP Partner LLC in order to maximize licensing revenue opportunities the patents represent. Eve Zhou, IP Partner principal, said her main goal is helping DPHI "to get organized and in position to sell the value of its patents. I believe there's some really great technology, but DPHI alone won't be able to take it to market. They need partners willing to take a risk."
Contact Caron Schwartz Ellis at (303) 440-4950 or e-mail csellis@bcbr.com.
Music exec says "Hey Ya!" to music downloads
Thursday January 15, 11:50 am ET
By Bernhard Warner, European Internet Correspondent
LONDON, Jan 15 (Reuters) - A top music executive on Thursday said strong music download sales over Christmas from artists like chart-topping hip-hop Outkast with their hit "Hey Ya!" have set the beleaguered industry up for a promising year.
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"The market is exploding, and as more significant retailers join the fray, we expect this market to continue to grow," said Larry Kenswil, president of eLabs, the new business and technology division of the world's largest music label, Universal Music Group (Paris:EAUG.PA - News; NYSE:V - News).
"And Europe is next. Just about all the players roaring in the U.S. are preparing to come here. There is no reason to think they won't be just as successful here," he said, addressing a gathering of media and technology executives at a conference hosted by the Royal Society for the Encouragement of Arts.
Industry observers say it is far too soon to call a recovery. The $30 billion industry is bracing for a fourth consecutive year of declining sales as they struggle to find a solution for online piracy and win over a consumer base that spends more on DVDs and video games.
Still, the small, but growing demand for music downloads on such online music stores as Apple Computer's (NasdaqNM:AAPL - News) iTunes and Roxio's (NasdaqNM:ROXI - News) Napster and RealNetworks (NasdaqNM:RNWK - News) Liquid Audio offers a rare glimmer of hope for the battered industry.
THE FIRST MEANINGFUL YEAR
Outkast's "Hey Ya!" was the most downloaded song for 2003, with over 110,000 downloads, Kenswil said. The artists, signed to the BMG label Arista, hold the new distinction of topping the virtual and real-world charts.
In the Christmas week, 2.5 million songs were downloaded by U.S. consumers and 30 million songs were downloaded for the full year, said Kenswil, citing data from Nielsen Soundscan, which tracks U.S. music sales.
Last year, Kenswil said, was the first significant year for music downloads. Major industry-backed download services began in previous years, but were largely ignored by consumers as they carried a meagre song library and a confusing array of tariffs.
The European market is small, too, as the likes of Britain's OD2 struggle to win over paying consumers from file-sharing networks such as Kazaa and eDonkey. Industry executives believe the likes of iTunes and Napster will arrive in Europe by summer. With an average price of 99 cents per song, the U.S. download market, far and away the world's largest, represents a minute fraction of total sales. But record executives are optimistic the recent success of online music stores in America will catch on in other territories.
"Record companies cannot compete with free, unless we have compelling consumer services," Kenswil said.
Kenswil said the best-selling bands in stores are also topping the charts online. But, he added, obscure artists who rarely sell a CD in stores are selling online.
"Apple has sold almost every track they have. Even the most obscure thing -- someone has bought it," he said. "All of this data, we're just starting to dig into it."
Silicon, Not Just Software, Key To Pervasive Media
January 15, 2004 (11:22 a.m. EST)
By Richard Wallace, EE Times
Las Vegas -- The Next Big Thing in electronics made a slew of appearances at the 2004 Consumer Electronics Show here but may not have been widely recognized for the rising star that it is - and the new generation of small, fast, cheap, connected semiconductor architectures at its foundation was barely acknowledged beyond the environs of a few exhibitors' booths and suites.
Even the CES keynoters gave short shrift to the critical role of high-performance silicon in today's booming consumer sector. Bill Gates referred more than two dozen times to software's role in “defining new devices and how those devices work together,” but neither the Microsoft chairman and chief software architect nor any of the five other CES keynote speakers so much as uttered the word silicon.
The irony is that while software gets the glory, it's silicon that's at the heart of the industry's next darling: pervasive media. And with the tech industry's shift from a compute- to a media-centric model, fundamental electronics design - particularly for the consumer markets on which many global economies are staking their turnaround hopes - is enjoying a renaissance.
Pervasive media refers to the electronic extension and expansion of the human senses through the ubiquitous presence of intelligent software and silicon systems. The concept relies on a mix of technologies, from digital signal processing to computer networks and information management. Its adherents envision, and in some cases are beginning to deliver, a spectrum of content, applications and services that enable improved information access and communications across a range of rich interfaces, displays, smart output devices and terminals.
Having turned the traditional media business on its head, pervasive media is extending its influence to mobile computing, e-learning, e-commerce and interactive entertainment.
Consumer electronics, for one, “is poised for a huge, significant change, the magnitude of which I don't think most people are capable of appreciating,” Andrew Lippman, senior research scientist and director of the Media Laboratory at the Massachusetts Institute of Technology (Cambridge, Mass.), said in an interview conducted on the CES show floor. Lippman called the integration of wireless into hi-fi and other consumer devices a “threshold event,” adding that the barriers to interfacing heretofore incompatible devices are crumbling as the enabling electronics get cheaper and faster.
“All parts of the system are opening up, and things are going to become even more open and more distributed,” Lippman said. “This opens the door . . . to big capabilities.”
The Media Lab unveiled an initiative at CES that keeps the pervasive-media concept squarely in its sights. Aimed at injecting media technology from the fabled lab into the mainstream of consumer electronics, the initiative will augment MIT's existing sponsor program, giving small and mid-sized companies access to technology across a spectrum of emerging media disciplines. The lab's CES booth offered a glimpse of just some of the media and sensing devices the initiative might cover.
In the past “technology from the lab has been hard for a small company to access,” said V. Michael Bove Jr., director of the Consumer Electronics Lab at MIT. The initiative, Bove said, “will make it easier for these companies to develop applications from the lab's technology.” It will encourage hands-on collaborations with industry to explore new technologies, devices and, most important, ways of thinking about consumer products and services.
Initially the research will focus on five areas: material and design/fabrication methods; power technologies, including wireless, parasitic and self-generated power sources; innovations in sensors, actuators and displays; self-managing ecosystems and smart devices; and cooperative wireless communications.
“It's now possible to embed enormous amounts of data- and signal-processing power into virtually any type of device,” opening the door to the pervasive-media phenomenon, Bove observed. That, he added, begs some questions: “How do you make ecosystems of these devices, and how do you create these ecosystems so that each thing knows what the others know and so that they all can interface to each other?”
Advances in materials research, power technologies, smart sensors and design methods are destined to extend the human senses across many thresholds and drive pervasive media to levels we can only imagine today. These advances will be realized in such realms as safety and security, smart homes and intelligent workspaces. In the PC and Internet arenas, Microsoft and hundreds of other CES exhibitors are already delivering software and devices that tie PCs to televisions, DVD recorders, set-top boxes and a wealth of graphics, audio and imaging systems.
The technologies underlying pervasive media have been staples in the videogame market for years. Today, wireless communications and other media technologies let millions of gamers across the globe hook up with one another through cell phones and the Internet. Pervasive media at the grassroots level has even been credited with advancing Howard Dean's quest for nomination as the Democratic party's presidential candidate.
The role of chip architectures in driving the pervasive-media phenomenon hasn't been lost on everyone. Dozens of chip makers exhibited their latest architectures on the CES show floor and in private suites. In one of the most ambitious and far-reaching projects to date, Royal Philips Electronics and Visa International jointly unveiled an RFID-based contactless transaction-processing technology that promises to change the way digital content and services are distributed, paid for and accessed.
The fruit of a previously announced alliance, the system exemplifies the paradigm of sense extension and embodies many of the building blocks of pervasive-media technology. It's based on Philips' Near Field Communications (NFC) technology, which uses a tiny RFID chip embedded in a smart Visa credit card that can simultaneously enable user authorization and transaction processing when a user brings its into proximity with a variety of card readers.
The approach hammers home the concept of an “ecosystem of devices,” each of which is cognizant of, and able to interface to, the other devices in its ecosystem. Near Field Communications is an ISO 18092 standard for exchanging data between consumer electronic devices, such as PCs and mobile phones, at a typical distance of 10 centimeters and a frequency of 13.56 MHz. When two NFC-compliant devices are brought within range, they detect each other's presence and begin to determine how they can exchange data. For example, bringing an NFC-enabled camera close to a TV fitted with the same technology could initiate a transfer of images, while a PDA and a computer would know how to synchronize address books or a mobile phone and an MP3 player would be able to transfer music files.
Using NFC, consumers can quickly establish wireless links between devices. It provides a more natural, human-sense-based method for connecting and interacting with devices, thus broadening the scope of networking appliances.
In a private suite off the CES show floor, Philips and Visa officials showed a demonstration setup involving a Compaq I-Pac PDA equipped with an RFID reader and an advertising poster for a music concert containing an embedded NFC device. When brought within comms range of an NFC logo on the poster, the PDA was able to execute a transaction through Visa to purchase concert tickets.
Both Philips and Visa noted that this incarnation of pervasive media is a real technology that's in use today. Project partner Universal Music France, a unit of media giant Vivendi, offers an authorization and transaction service based on the approach.
Component costs for the NFC chips that form the embedded-media portion of the system run in the “tens-of-cents range,” while the bill of materials for embedding a reader into a cell phone, PDA or other device is “less than five dollars,” said Scott McGregor, president and CEO of Philips Semiconductors. The data exchange rate at contact for the chip and reader is 1 Mbit/second.
Philips plans to build the new, intuitive pervasive media technology into its Nexperia line of phones and other consumer devices.
Keynoter Gates wasn't wrong when he called software key to “defining new types of devices and how these devices work together.” But the intertwining roles of software and hardware cannot be ignored. Indeed, in many industry segments - particularly in complex consumer products such as digital video recorders, which require massive amounts of digital and MPEG coding and decoding - chip makers must also be software gurus.
“We do everything for our customers, from silicon to huge amounts of coding and other integration and packaging - everything right up to the plastic package,” said Didier Le Gail, vice president and general manager of home media products at LSI Logic Corp.
Many chip companies are supplying key software, along with their silicon, to Microsoft, though the company is hardly forthcoming about its suppliers. Microsoft's Portable Media Center, a showpiece of Gates' keynote demonstration, is powered by Intel's Xscale architecture. And Analog Devices' BlackFin DSP architecture is the processing engine for the hardware extensions to Microsoft's Media Center PC.
At the silicon architecture level, scalability and portability figure highly in the equation for media-rich applications. Never before has so much data and signal-processing power been available - and so easily connected to the outside world - at such tight levels of integration, for such low cost and with so low a power budget. Companies that showed breakthrough silicon technologies last week included LSI Logic, Analog Devices, Intel, Cirrus Logic, Texas Instruments, Motorola, Philips, STMicroelectronics, Invidia and Broadcom.
“What we're seeing is 'digital media anywhere,' and next year at CES it will be even more pervasive,” said John Croteau, general manager for Analog Devices' media platforms and services and DSP and system products operations. Croteau and marketing director Robert DeRobertis last year authored a white paper, “The Rise of Embedded Media Processing,” outlining DSP's role in the pervasive-media phenomenon. The authors cite a “renaissance in digital signal processing” that they say has resulted from quantum performance leaps in processing performance and steep declines in silicon cost. In its CES suite, Analog Devices demonstrated platforms that employed its Blackfin processors to enable applications that previously would have been handled by custom ASIC implementations.
The tech world today is swapping out the computing-intensive model for a media-intensive one. That might explain the sudden surge in interest by companies like Gateway and Hewlett-Packard in developing plasma TVs and devices to construct a bridge between the workhorse PC and the so-called media center computers poised to invade the living room as the locus of digital life in the home.
Even mighty Intel is looking to lessen its dependency on the microprocessor. Intel announced late last year that it plans to make chips for the projection television market, taking on TI, which already occupies an entrenched position in the segment. And at CES, Intel revealed it will look beyond internal development and products to further the progress of its digital-home concept.
The chip giant disclosed plans to invest more than $200 million in companies developing digital-home hardware and software. Observers have estimated that as much as $150 million of the new fund will be made available to new companies.
The fund will be managed by Intel Capital and is designed to “drive the convergence of personal computers and consumer electronic devices on a seamless, wireless home network,” the company said in a statement.
DSP Technology: Pivotal To Consumer Electronics
Will Strauss
ED Online ID #5053
June 16, 2003
RELATED ARTICLES:
• Home Entertainment Gets "Real" With Audio/Video Advances
Consumer electronic equipment constitutes a substantial market for DSP technology, second only in size to the communications segment. However, consumer electronics implementations are not necessarily in the form of off-the-shelf DSP chips. The ubiquity of DSP technology in the consumer market is not well known because of the several forms it takes and the different names given to devices that employ it.
For example, the biggest consumer market for DSP silicon from a dollar standpoint is in the many products that include audio or video compression. Well known industry-standard algorithms are implemented using DSP technology. That technology, in turn, is embedded in a wide variety of consumer devices, from Internet audio players (MP3 and WMA) to digital still cameras (JPEG); camcorders (MPEG-4) to DVD players and set-top boxes; and A/V receivers to HDTV consoles (MPEG-2 and AC-3).
Although MP3 decoding is often done using a low-end programmable DSP chip, MPEG implementations are usually executed on hardwired (finite state machine) silicon implementations of the key algorithms. The hardwired approach is appropriate when the computation rate is too high for conventional DSP chips and the algorithm is invariant. But DSP also comes into play in audio systems. It can be used to enhance the listening experience through "surroundsound" and digital effects algorithms. Also, video gaming chips in products like Sony's Playstation 2 and Microsoft's Xbox also employ embedded DSP cores for sound and hardwired DSP algorithms for graphics filtering. Furthermore, DSP is used for control of CD and DVD disk rotational speed and laser tracking.
More recently, DSP has become the heart of advanced car AM/FM receivers, providing superior reception over longer distances and under nighttime fading conditions. Plus, DSP enables the new high-fidelity digital audio broadcast (DAB) services, both satellite (like XM Radio and Sirius Radio) and terrestrial (such as HD Radio). Location-based telematics services based on the DSP-enabled GPS are assuming greater importance on the automotive dashboard. Downloading of localized maps for vehicle navigation will also be possible via future DAB services.
Continuing advances in DSP technology are enabling our ever richer consumer electronics experiences. It's worth remembering that without DSP technology, "multimedia" would not exist.
Apple Computer Posts Profit on iPod Sales
43 minutes ago Add Business - Reuters to My Yahoo!
By Duncan Martell
SAN FRANCISCO (Reuters) - Apple Computer Inc. (Nasdaq:AAPL - news) on Wednesday posted a strong profit compared with a year-earlier net loss, boosted by robust sales of its popular iPod digital music player and PowerBook notebook computers.
Even though Apple's profit and revenue topped forecasts, its stock fell about 5 percent in after-hours trading amid what analysts said were even rosier expectations and possible disappointment with results at other leading tech companies.
"Apple three weeks ago was at $19," said Shannon Cross, an analyst at Cross Research. "The stock had run up substantially prior to Macworld and after."
Shares of Apple rose 10 percent since Chairman and Chief Executive Steve Jobs (news - web sites) unveiled the iPod mini on Jan. 6 and said the company had sold more than 730,000 iPods in the December quarter. Before that, shares had gained 12 percent from Dec. 19. Shares of Intel Corp. (Nasdaq:INTC - news) and Yahoo Inc. (Nasdaq:YHOO - news), which also reported results on Wednesday, fell in trading after the regular close of U.S. markets.
Apple is best known for its Macintosh (news - web sites) computer, popular among graphics and creative professionals as an alternative to personal computers that run on Windows operating software from industry leader Microsoft Corp. (Nasdaq:MSFT - news)
Cupertino, California-based Apple reported net income for its first quarter ended Dec. 27 of $63 million, or 17 cents, compared with a year-earlier net loss of $8 million, or 2 cents a share, which included a restructuring charge and an accounting adjustment.
Revenue rose to a four-year high of $2.01 billion from $1.47 billion a year earlier.
STRONG QUARTER
Excluding an after-tax investment gain of $3 million, or 1 cent per share, Apple made a per-share profit of 16 cents, matching the most optimistic forecast from Wall Street.
Analysts had forecast Apple to post a profit of 14 cents per share, on average, within a range of 13 cents to 16 cents, on revenue of $1.93 billion.
Despite the after-hours stock decline, analysts said it was a strong quarter for Apple. Sales of its PowerBook notebook computers increased 70 percent to $399 million from a year earlier, as iPod revenue more than tripled to $256 million.
"It was a good, solid quarter," said Barry Jaruzelski, lead partner in Booz Allen Hamilton's global technology and electronics practice.
Since its introduction in October 2001, the iPod has been a runaway hit, selling more than 2 million units. Apple also scored a success with its online digital music store, introduced in April 2003, and late last year Apple rolled it out to Windows users as well.
Overall Macintosh computer shipments rose 12 percent to 829,000 from 743,000 while Mac revenue climbed 15 percent to $1.27 billion from $1.10 billion, accounting for 63 percent of the company's total sales.
Shares of Apple rose 8 cents to close at $24.20 on Nasdaq before results were released, which came after the close of regular U.S. trading. In after-hours trading, the stock slipped to $23.00.
For the second quarter, Chief Financial Officer Fred Anderson said he expects second-quarter net earnings per share of 8 cents to 10 cents on revenue of about $1.80 billion.
Those forecasts are above the consensus per-share estimate of 7 cents, and the revenue forecast of $1.71 billion, according to Reuters Research. Profit forecasts ranged from 5 cents to 12 cents.
XM Satellite goes back to the market
Jeff Clabaugh
Staff Reporter
For the fifth time since going public in 1999, District-based XM Satellite Radio plans to sell more stock to the public. It did not say how much the offering was intended to raise.
The company says it will sell 7 million shares of common stock and existing shareholders will sell another 11 million. XM did not say what the new proceeds would be used for, although the company continues to spend more than it makes despite a target to break even by the end of 2004.
XM Satellite has said it intends to end the year with 2.8 million subscribers, and earlier this month struck a deal with Jet Blue and AirTran to offer its service as free in-flight entertainment.
Low-costs in IFE stampede
January 7, 2004 – US low-cost carriers are piling into inflight entertainment as never before as it dawns on managements that IFE is becoming a service fundamental rather than a frill for budget travellers.
Atlanta-based AirTran Airways has announced that it will offer XM Satellite Radio digital audio free of charge to its passengers. New York’s JetBlue is adding XM, two pay-per-view film channels and a further 12 free DirecTV channels to its existing LiveTV offering. And Ted, the United Airlines low-cost that enters service next month, will have a multichannel IFE offering dubbed Ted TV.
AirTran will equip all of its Boeing 717s and 737s to offer the new service at every seat, starting this summer and aiming to complete installations by the end of the year. A pair of AirTran’s business-class seats outfitted with XM technology is currently on display at the XM Satellite Radio booth at the Consumer Electronics Show in Las Vegas.
XM Satellite Radio offers listeners in the home, in cars and in the air a total of 101 digital audio channels covering live news, sport, weather, talk and a wide range of music programming.
Explaining his company’s decision to upgrade its IFE content to include XM Radio and additional TV channels, JetBlue chief executive David Neeleman said in an interview earlier this week that with ever more carriers matching its cheap domestic fares, it had become increasingly important to offer unique service, and that entertainment was one way to do that.
Neeleman described the upgrades as preferable to adding other amenities such as food, which he vowed never to offer on JetBlue. He said that supplying a “soggy sandwich” to each passenger would cost the airline $20 million a year. Other cost-control measures include sticking to the existing headsets, which Neeleman said cost the airline about 20 cents each. Passengers looking for better audio quality should bring their own equipment, he said.
The JetBlue link gives XM Radio access to some 12 million listeners whom it hopes will one day become subscribers. The company currently has about 1.2 million subscribers.
The two pay-per-view channels – one for first-run films, the other for classics – and additional TV channels will be provided by News Corporation through its Fox Entertainment Group subsidiary. The service will cost about $3 per film, payable by in-seat credit-card swipe, and will break even at that price level, according to Neeleman. The range of new entertainment is due to be available across the JetBlue fleet by the end of the year.
United Airlines’ Ted will set out to beguile passengers by combining a multichannel entertainment offering called Ted TV with its own brand of beer and colourful headsets when it launches service between Denver and the West Coast and Florida next month.
Meantime, the low-cost daddy of them all, Southwest Airlines, continues to sit on the fence, formally holding out against all embellishments while studying whether to offer inflight entertainment. The main criterion is cost, according to company spokesman Ed Stewart. Unlike the newer carriers, which began or will start service with IFE systems already installed, Southwest would have to retrofit its Boeing 737s.
“We’re looking at the systems but we’re by no means saying we’re going to do it,” Stewart said. Should they prove too expensive, he said, Southwest would stick with its traditional inflight entertainment - jokes from the crew.
That's technology for ya eh berge. They oughta get sued by the attendees and especially the exhibitors. That would improve their thought process when they put together next years program...
Didn't we learn this in grade school? A pan to the incredibly sadistic person at the Consumer Electronics Association who came up with the diabolically confusing booth-numbering system. It lacks any logic and has crowds literally going in circles. Why is booth 21528 followed by booth 21733, followed by booth 21547? Go figure. One vendor at an orphaned booth complained people came either a half-hour late for meetings or didn't show at all. --Michael Lasky and Rebecca Freed
Philips, Visa push contactless payments in consumer devices
By Junko Yoshida
EE Times
January 12, 2004 (7:43 p.m. ET)
LAS VEGAS — Philips Semiconductors and Visa International joined forces at the Consumer Electronics Show (CES) last week to demonstrate contactless payment and connectivity applications based on a Philips-developed technology called near-field communication.
Their goal is to build an infrastructure for universal payment card readers in consumer electronics and mobile telecommunication devices. Philips will embed NFC chips in various consumer devices while Visa provides an authentication service. Under the plan, consumers should be able to download data or pay for digital services through the NFC interface using a contactless card or device with NFC-equipped consumer equipment.
Scott McGregor, president and CEO of Philips Semiconductors, said in an interview at CES, “We'll seek to put NFC [chip] in all the major handsets.” Secure universal commerce based on contactless technology “is coming to life, as [NFC-based] goods and services will start rolling out later this year,” McGregor said.
NFC technology is capable of reading two different contactless smart card interfaces: Philips-developed Mifare and Sony-developed FeliCa.
Gaylon Howe, Visa's executive vice president of consumer product platforms, said Visa hopes to maintain its presence in “anything to do with payment,” whether in a physical or virtual world. Visa hopes to grow its business beyond traditional plastic cards by leveraging the NFC technology.
Once the Visa payment service based on the contactless technology is embedded in mobile handsets, PDAs, set tops, remote controls or TV sets, NFC card readers in theory will become so widespread that consumers will have universal access to Visa's payment service.
In a demonstration here, Philips and Visa along with with Vivendi Universal showed how PDA users could download the right to listen to a song to the device or a Visa payment card either by holding the PDA near a smart poster or by holding his contactless Visa card near a kiosk. The kiosk's "smart poster" used a chip that sends information to the PDA via NFC technology. The kiosk also uses RFID technology to capture payment information from the card.
Contactless payment combined with Visa's verified-by-Visa application aims for easy authentication of consumer data by merchants while making it easier for consumers to purchase digital content. “Many consumers are willing to pay for content and services if it easy to do so,” said Philips' McGregor. “We make it easy [for consumers] to play by the rules.”
McGregor estimated the cost of embedding the NFC chip into the smart poster, card or device would be “tens of cents.” Chip cost varies, however, depending on the level of encryption integrated into the silicon, he added.
Although there have bee many attempts to integrate a smart card reader inside a PC or PC keyboard, they've never succeeded. “The NFC is the first to drive a card reader into a consumer device,” solving the persistent problem of a lack of a ubiquitous smart card reader infrastructure in the consumer market, McGregor said.
McGregor said the NFC chip can be embedded inside a handset or its cover, or into a separate SIM card that fits inside a handset.
The NFC, standardized into ISO 18092, operates at 13.56 MHz frequency. It's radio-frequency interface technology exchanges data between consumer electronics devices at a distance of 10 cm. Beyond using a contactless card on a contactless smart card reader, two NFC devices can communicate with each other for data transfer.
The technology can be also used to trigger Bluetooth connections. With two Bluetooth-enabled devices in close proximity, NFC can automatically initialize Bluetooth connectivity. “That's one of the interesting NFC applications,” said McGregor. Eliminated is the chore of scrolling through a long menu to identify the device and set up the initial Bluetooth connection.
Wow MH, you must really savor that airline food? Do you really linger that long over the stale croissant sandwich?
Delphi Shows Satellite Video For The Car
By Amy Gilroy
TWICE
1/9/2004 3:48:00 PM
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LAS VEGAS — Car electronics supplier Delphi continues to make inroads in the consumer market with new products, including a portable navigation system that will be available at Circuit City and satellite video for the car.
The company boosted its presence in the car stereo aftermarket in the past two years through its dominance in XM hardware. Dave Wohleen, president of Delphi’s electrical, electronics and safety division, said it shipped 1.8 million XM units since it began production and that three out of four current XM users own Delphi hardware.
Delphi showed prototypes of several advanced products that are slated for the aftermarket within three years including a 200-channel, satellite video system with an antenna built-in to the car roof (without changing the form factor of the car) at a target price of $1,000. Also on view is a CD receiver with a 20GB hard drive that can rip CDs and 'pause' songs on the radio for playback later. Both products are expected to be available in new cars within five years.
Delphi's new navigation unit recently began shipping at $800. The turn-by-turn map-based GPS system offers 'the brightest 3D display on the market,' according to a spokesman. It has a flash memory slot and ships with two CDs containing maps of the United States.
Also new is an 8-inch overhead monitor with built-in DVD slot.
Delphi also announced it will begin building Sirius-ready radios for Ford.
MP3 Players Add Storage, Shrink Size
Mon Jan 12, 7:00 PM ET Add Technology - PC World to My Yahoo!
Anush Yegyazarian, PC World
Apple's recently announced IPod mini may be getting plenty of attention, but it's not the only new digital audio player making a splash. Many of Apple's rivals on the PC side used last week's Consumer Electronics Show to announce music players with features and price tags similar to the IPod Mini's.
Archos, Creative Technology, Philips, RCA, Rio, Sony, Aiwa, and Samsung are among the companies touting new and recently released digital audio players.
4GB to Go
If a flash memory MP3 player just doesn't hold enough music for you, but a 20GB to 60GB jukebox feels too heavy, you're in luck: 4GB versions of Creative's MuVo2 and Rio's Nitrus players are on the way, upping capacity from the 1.5GB of earlier models.
You can already buy Creative's product on its Web site, and the unit should be in stores this quarter in the familiar square package.
Rio's player, at about 2 ounces, is the lightest in this class (most units weigh about 3.5 ounces). It will be available later in January, both online and in retail stores. It retains its predecessor's wedge-like, slim profile.
The two products should each cost about $249; both support USB 2.0 for faster transfer and play back WMA or MP3 files.
Philips and Samsung are each getting their foot in the door of this portable player class. Both entries are square-shaped, 1.5GB players that support WMA and MP3 formats.
Philips is readying its hdd060, due to ship in February and priced at about $200.
Samsung's Yepp YH-800 is scheduled to ship in April and has a suggested retail price of $299. You'll be transferring your music faster with the Samsung unit, though, because it supports USB 2.0, while the Philips sticks with USB 1.1.
Samsung will follow up the YH-800 with the YH-860, scheduled to ship in June at a suggested retail price of $320. This unit has a 2GB capacity and adds an FM tuner and recorder.
More to Come
Thomson RCA will follow its existing 1.5GB Lyra with a 2GB model, the Micro Jukebox RD2762, scheduled for release in late spring. That $229 unit will feature an FM tuner from which you can record, and it will support USB 2.0.
Sony doesn't have a hard drive-based product in this class, but it competes with its new Hi-MD players. The family consists of four new models ranging in price from $199 (for the MZ-NH600D) to $400 (for the MZ-NH1). These new units use high-capacity 1GB removable mini discs and support the ATRAC3plus format. The SonicStage 2 software that comes with the system also supports more familiar formats, including WMA, MP3, and WAV. The players will all read standard mini discs, so you don't have to move your older music onto the new format.
The entry-level MZ-NH600D is a standard player. As you move up the models, you get additional features like AM/FM/TV/weather tuners, a microphone, LCD remotes, and USB cradles. All of the units are scheduled to become available in April, along with the new 1GB discs, which should sell for about $7 each.
Bigger and Better?
Archos is delivering a 20GB player that maintains a fairly compact size, rivaling the 1.5GB and 4GB players above. The Gmini220 is expected to be available by the end of January and priced at about $350. The black-and-silver unit weighs just 6 ounces, can read CompactFlash media, and supports USB 2.0.
In February, Philips expects to release a competing product, the $349 hdd120, also with a 20GB capacity.
Thomson RCA will have its own entries in March, with capacities of 20GB and 40GB. The silver 20GB Lyra Jukebox RD2850 should sell for $349, while the black RD2854 should cost $449. Each unit weighs about 5.5 ounces, has a built-in FM tuner and recorder, and supports USB 2.0.
Sight and Sound
Both Philips and Samsung are also releasing new devices that offer both video and audio playback.
Available midyear, Samsung's YH-999 will run on Microsoft's Portable Media Center platform and should put your videos, still pictures, and music in the palm of your hand. The device has 20GB of storage and a 3.5-inch color TFT LCD so you can see and hear music and video in a variety of formats, including WMV at 700 kpbs and 320-by-240 resolution. The unit weighs about 8 ounces and measures 3.8 by 4.2 by 0.8 inches. Pricing has not yet been set.
Philips opted for a smaller package for its KEY019 multimedia device. This compact unit is just a little bigger than a standard USB thumb drive and comes with both a video camera and a 2-megapixel still camera; it can also store and play MP3 files. It has 128MB of RAM, which enables you to capture up to 24 minutes of continuous MPEG-4 at 360-by-480 resolution, and a small LCD lets you frame your shots so you know what you're capturing. The downside: The unit connects via USB 1.1. Devices should be on sale in May for about $249.
Get Flash
Aiwa, now a subsidiary of Sony, is readying two new lines of audio players, including the Pavit series, which will feature the company's proprietary Pavit USB flash drive. The removable drive will allow users to shuttle MP3 music between Aiwa Pavit players and any USB-enabled device such as PCs and laptops. Pavit drives will support USB 2.0, and can be used as stand-alone storage to save documents or shuttle them among systems.
Most of the Pavit line will make its debut in April, according to Aiwa. The new models include the ruggedized AZ-RS128 MP3 player, the headphone-based AZ-FS128 MP3 player, and the water-resistant AZ-BS32 shower stereo (scheduled to ship in May). The MP3 player and headphones will come with a 128MB Pavit drive, and the shower stereo will include a 32MB drive.
The company is also introducing two hard disk drive-based players, each priced at $239. The line is called Giga Pavit and will include the sporty and water-resistant HZ-DS2000 and the ultrathin HZ-WS2000 MP3 player that is about the size of business card and weighs less than 3 ounces. Both models will include a 2GB hard drive and will not be compatible with Aiwa's Pavit drives, despite the Pavit name in the series title.
See PC World's ongoing CES coverage.
Or a rewind to catch that punchline you missed due to slight air turbulence...good point milplease
A Charged-Up Consumer Electronics Show
At this year's event, big crowds turned out to explore scads of hot new products, many from info-tech companies
JANUARY 12, 2004 • Editions: N. America / Europe / Asia /
REPORTER'S NOTEBOOK
By Stephen H. Wildstrom
I knew it was going to be true trade-show craziness at the end of the first day of the Jan. 8-11 Consumer Electronics Show in Las Vegas. I planned to stop by my room at the Las Vegas Hilton, which adjoins the Convention Center, before picking up my car to head for a reception and dinner. Alas, I found what looked like about a 15-minute line just to get onto an elevator. So, I wearily headed for the evening's activities, still in my rumpled clothes and show floor Rockports.
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Not since the pre-crash heyday of Comdex has the technology industry had a trade show quite like this year's CES. Auto traffic was immobilized, and cab lines seemed to stretch into Arizona. Over 129,000 attendees filled more than 1.38 million square feet of display space, creating the general ambiance of a shopping mall two days before Christmas, only a lot noisier. Every exhibitor I talked to was convinced that the crowds and the optimism of buyers who swarmed the "booths"(which can take up thousands of square feet) portend a boffo 2004.
As recently as 2001, CES seemed to be in danger of becoming yet another computer-industry show, as traditional consumer-electronics companies such as Sony (SNE ) and Panasonic (MC ) sought to establish their PC bona fides. This year, the most prominent PCs were those provided for visitors to check their e-mail.
HP AND APPLE. Even the exhibits of companies far more closely associated with information technology than consumer electronics now have a very strong CE focus. Intel (INTC ) made a big move into entertainment with the announcement that it was entering the display business with a new chip designed to lower the cost of high-definition projection TVs. Microsoft (MSFT ) focused on a new portable video player and a technology that will let content from Windows Media Center PCs be watched on TV around the house.
The biggest news of CES was the surprise announcement by Hewlett-Packard (HPQ ) that it would sell an HP-brand version of Apple Computer's (AAPL ) iPod music player and would pre-install Apple's iTunes as the default music-management software on HP consumer PCs.
Each of the past several years has been heralded as "the year of HDTV" at CES. The big difference in 2004 is that it finally feels real. With prices down sharply and the availability of HD content rising, HDTV seems poised to become a mainstream product.
OUTSIZE DISPLAYS. Accordingly, big screens were everywhere at CES. South Korea's LG Electronics proudly declared that it was showing the world's largest plasma display, a 76-inch monster. But another Korean display maker wasn't about to let LG claim the bragging rights and came up with an 80-inch plasma display for its nearby booth. Samsung, which claimed honors for the largest liquid-crystal TV last year, with a 42-inch model, this year showed a 57-inch LCD panel, nearly twice the area of last year's champ.
Another indication of HDTV's popularity is the number of companies jumping into the display business. Motorola (MOT ) started out as a consumer-electronic company but exited the TV business decades ago. Now it's back. Seeing displays as a natural adjunct to its cable set-top boxes, Motorola has introduced a new line of flat-panel displays.
Info-tech companies with little or no historic connection to the CE business are also coming aboard. Gateway (GTW ) led the charge by introducing plasma TVs more than a year ago, and nearly every product it showed was entertainment-oriented, including a Media Center PC cleverly disguised to look like a piece of audio equipment. Dell (DELL ) and HP are also offering flat-panel TVs, and Epson introduced its Living Stations, a pair of projection TVs with built-in photo printers and CD recorders.
OLDIES BUT GOODIES. This flood of new products is leading to the revival of some dormant brand names, now generally licensed to give Chinese or Taiwanese companies a way to break out of the no-name pack. Polaroid never made TVs when it was a photographic powerhouse, but you can now buy a Polaroid-brand display.
And Westinghouse, a name absent from consumer-electronics ranks for years and now owned by Germany's Siemens (SI ) for industrial and power products, is back with a line of LCD TVs. A Taiwanese group has acquired not only Westinghouse's famous "W" logo but it's promoting its products with a slogan familiar to consumers of a certain age: "You can be sure...if it's Westinghouse."
Wildstrom is Technology & You columnist for BusinessWeek
Airborne amenities are back in business
Carriers wooing passengers with array of luxuries
David Armstrong, Chronicle Staff Writer Sunday, January 11, 2004
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Cushy airplane seats that turn upside down and morph into beds. Instant e-mail and Web surfing at 35,000 feet. Trendy martini bars in the sky. More leg room and wider seats. More channels of interactive entertainment than you can use in one lifetime -- at economy-class seats.
The U.S. and international airlines are sounding those bells and whistles loud and clear this year in an attempt to lure passengers back to the sky. This country's airlines, rocked by fears of war and terrorism and grounded by a low-flying economy, lost an estimated $20 billion in 2001 and 2002 combined, with smaller losses projected for 2003.
With the start of the new year, though, airline officials say they are beginning to see a glimmer of financial hope on the horizon that is encouraging them to roll out new technology and in-flight amenities. Lifted by a recovering economy despite security worries that still dog the industry, U.S. airlines could break even this year, according to Air Transport World, a leading industry trade journal.
"Even though the market has been weak, we're making a conscious decision to invest now in new products and new planes to take advantage of the returning market,'' said Richard Branson, the founder and chief executive officer of Virgin Atlantic Airways.
Whether passengers are going to want to use all the new gizmos and how the airlines are going to pay for them remain to be seen.
JetBlue, the innovative low-cost carrier that pioneered free DirectTV and leather seats, said Wednesday that it will install 100 channels of satellite radio, movies and Fox TV shows such as "The Simpsons'' on seatback TV monitors this year. The next day, fellow low-cost carrier Air Tran said that it, too, will install satellite radio on its planes.
JetBlue has used amenities previously unseen on no-frills carriers since it started flying in early 2002 in a successful attempt to distinguish itself. JetBlue founder and CEO David Neeleman, a former board member at Southwest Airlines, bought new Airbus planes for his fledgling airline. The airline also created a sense of style and offered one-way fares as low as $99 between Oakland International Airport and New York's John F. Kennedy International Airport, The new electronic offerings are JetBlue's attempt to stay one step ahead.
That's all well and good, said Terry Trippler, an airline expert with Cheapseats.com, but many travelers would forgo the fancy electronics if it meant they could just cross their legs.
"To the best of my knowledge, no passengers have ever developed phlebitis by listening to satellite radio,'' said Trippler, noting that JetBlue, like most other low-cost carriers, flies all-economy class planes with cramped leg room.
"The (low-cost carriers) obviously think this (electronic gizmos) is what people want,'' Trippler said. " I don't know what the return on investment is. ''
Neeleman said that JetBlue, which operates 15 daily departures from Oakland Airport, has worked out a deal with XM radio that will provide the radio company with valuable exposure and cost JetBlue virtually nothing. As for Fox movies and TV, which will supplement rather than replace free DirectTV, he said a $2 or $3 charge per title would make up any shortfall.
Pay or free TV?
"We haven't decided yet whether to charge for that,'' Neeleman said in a telephone interview with The Chronicle. "If we do, we already have the credit card swipes in our seatback screens.''
Unlike JetBlue, which is based in New York and flies only domestically, long-haul international carriers have had movies and video on demand for several years.
Now, market leaders with global air routes are supplementing that with in- flight e-mail and Web-surfing aimed at both the family leisure market and the high-flying, high-paying business travelers that sustained the industry before war, SARS and recession kept many fliers on the ground.
Lufthansa, Singapore Airlines, All Nippon Airways and other international carriers have signed deals with Connexxion by Boeing for an in-flight e-mail and Web system powered by an onboard server with broadband capacity. The airlines say they will begin installing the system, designed by aircraftmaker Boeing Co., on their long-haul flights this year. Lufthansa will equip its San Francisco-to-Frankfurt flights with the Connexxion service in early April, according to airline spokeswoman Jennifer Urbaniak, and will charge users from $25 to $35 per flight.
United Airlines, meanwhile, is rolling out a competing e-mail and telephone service from Seattle software company Tenzing (which is partly owned by Boeing's rival, Airbus Industries). Called JetConnect, the system uses Verizon Airfone's phones. Passengers on United, which is on the verge of emerging from bankruptcy, pay $15.98 per flight to access JetConnect.
Such innovations can be winners with business travelers who need to stay connected to the office and get work done during their flights, said Kevin Mitchell, chairman of the Business Travel Coalition, which represents corporate travel planners.
"There's a whole new younger generation of business travelers coming up who want all the electronics,'' Mitchell said. "That's what they expect to do on an airplane. Some business travelers want to read or just put on the headset and have some quiet time, but that portion is dwindling.''
But while the concept is sound, such systems are still too new to evaluate, he said. Consumers haven't used them enough: "It's wait-and-see in terms of how much they'll be used, and when use should be reimbursed and not reimbursed. There will be a lot more feedback after the first half of this year,'' Mitchell said.
The seats to beat
In addition to adding electronics to planes, airlines are trying to re- engineer one of the most basic features of travel: the airplane seat.
Industry leaders in this seemingly mundane matter, Trippler said, have gained a competitive edge over rivals.
"United came in with better equipment and better seats and took a lot of business away from Northwest on Pacific routes,'' he said. "Northwest had been flying 15- to 20-year-old seats. There's no way, with their (extensive) route structure, that Northwest shouldn't own that market.''
The airline that claims to be reinventing the airplane seat is British carrier Virgin Atlantic. It is using a new seat design as an integral part of a strategy to woo business travelers and first-class customers away from its much larger rival, British Airways, especially now that British Airways has grounded its aging but glamorous supersonic Concordes.
It may be many years before another aircraft can match the panache, let alone the speed, of the Concorde, in which the fuselage was warm to the touch, the sky blackened at the highest altitudes and passengers could glimpse a slight curvature of the earth. When British Airlines retired its last Concordes on Oct. 24, the final flights, complete with a stately procession of three planes over the River Thames, had the solemn air of a state ceremony.
Virgin counters stateliness with brashness and hip styling. The carrier's Upper Class Suites, installed on half of its daily flights between San Francisco International Airport and on its New York-London routes, feature swank stand-up bars that would not look out of place in Soho or SoMa. Established features of Virgin's popular business class, such as in-flight massages and ordering meals at any time, are incorporated into the new service.
The most distinctive feature of Upper Class Suites, which will be installed throughout Virgin's fleet, are its new seats, which flip over and can be made into beds, airline spokeswoman Wendy Buck said.
"It resolves the ongoing question of how to create a seat that converts into a fully flat bed,'' Buck said. "By flipping over, the underside of the seat becomes a real bed with foam mattress. We have a patent on the technology. The other unique technology is in-seat belt air bags, and the ability to take off and land in the reclined position.''
Such initiatives are designed for the affluent traveler who can afford to pay for them. Business travelers could well respond to the innovations, seeing them as more necessity than luxury on flights between North America and Europe, which can run 10 hours or more, said the Business Travel Coalition's Mitchell.
"It's very much an appreciated comfort,'' Mitchell said. "Business travelers are not taking as many trips, but when they do take a trip, it's more important.''
Room with a view
Another way to lure lucrative long-haul travelers is to carve out more room on the planes, which some carriers are doing.
Singapore Airlines, long a leader in the fast-growing transpacific market, is dramatically reconfiguring Airbus 345 planes for ultra-long flights between Singapore and London and Singapore and Los Angeles. Other markets, Singapore Airlines spokesmen say, may get them if the reconfigured Airbus, called the A345 LeaderShip, catches on with high-end travelers.
The A345 LeaderShip will have dozens of seats removed, reducing capacity from more than 300 passengers to 181, according to spokesman James Boyd. The plane will consist entirely of business class and premium economy cabins, and is designed to relieve tedium and increase productivity on the world's longest nonstop air routes. The flight from Singapore to Los Angeles, for example, takes 18 1/2 hours.
The airline plans to introduce LeaderShip service from Los Angeles on Feb. 3, and Boyd is promising a whole new experience for premium economy fliers, who pay 5 to 10 percent more for their tickets:
"We're increasing the pitch (leg room) in premium economy from 32 inches to 37 inches, widening the seats from 17 inches to 20 inches, and installing wider armrests. Those are small changes, but what you get when you sit in the seat is a lot of difference.''
For U.S. and international airlines, such new wrinkles represent a calculated risk in a commercial climate still threatened by fears of terrorism, worries about a recurrence of SARS and an encouraging but uncertain economy.
"What all the airlines need now is a period of stability, free from any new turbulence, to allow an improved return on investment,'' said Branson. "Fortunately, for the first time in months, the early signs are that better times may be ahead.''
HP Deal Latest Boost for Apple IPod
Friday January 9, 6:58 pm ET
By May Wong, AP Technology Writer
Hewlett-Packard Deal Latest Boost for Apple IPod, Digital Music's Runaway Star
LAS VEGAS (AP) -- From snowboarding companies to soda conglomerates, marketing-savvy multinationals that worship at the altar of hip are fixated on wooing the iPod generation. PepsiCo, Burton Snowboards, Volkswagen and America Online have all struck branding deals with Apple Computer in a quest to capitalize on the gadget's massive popularity.
Now, with a freshly inked deal with Hewlett-Packard, the world's No. 2 computer maker, Apple may have scored its most significant marketing coup yet. It also gets a crucial boost onto Windows-based computer desktops.
HP's decision to scrap its own development plans for a portable music player and online music store in favor of the shiny iPod and its iTunes pay-per-song Internet store paints another coat of luster on the consumer electronics' sensation of the moment.
In less than a year, iPod and its iTunes support sheath have broken open the world of digital music, drawing dozens of rivals into the market as the music industry surrendered its Internet inhibitions.
Apple has now sold more than 2 million iPods, making it the top seller of hard-disk portable audio players with more than 50 percent market share. ITunes has dispensed more than 30 million songs at 99 cents a pop.
Coated in HP's signature blue huge, the iPod will get a new name under the Hewlett-Packard brand. But everyone will know it's an iPod.
"We looked at the music space and said, `There's a great digital music player and a great music store out there, so it's logical for us to partner,'" HP CEO Carly Fiorina said in an interview at the Consumer Electronics Show in Las Vegas.
The drawing board for an HP-developed portable player and online music store were shelved after Apple called about a possible deal -- and the game plan changed hastily just as attendees converged on Las Vegas, Fiorina said.
The deal means the iTunes music jukebox program will be pre-installed on all of HP desktops and laptops beginning this summer, a plus for Apple, whose computers are limited to a niche of less than 5 percent of the worldwide PC market share.
"The second largest manufacturer of Windows computers, for digital music at least, is standardizing on the Apple platform, and that has never happened before," said Phil Leigh, an analyst with Inside Digital Media.
HP's pricing has not been announced, but Apple's iPods start at $299. Apple's new, cheaper, compact model is not part of the HP deal.
"This is a big step for Apple," said Phil Schiller, Apple's senior vice president of worldwide product marketing. "We're trying to grow the market for iPods and iTunes and to reach more Windows users, and HP brings a lot of Windows customers."
Other executives say Apple wields tremendous influence when it goes to the bargaining table with other companies.
Cupertino, Calif.-based Apple has a record of product and marketing innovation, a top-tier brand and a charismatic chief executive in Steve Jobs who last year persuaded record label executives to get over their copy-protection worries and make more of their music available on the Internet with fewer restrictions.
In October, Pepsi signed a deal with Apple to give away 100 million songs from the iTunes Music Store, making one of every three Pepsi customers a winner.
The marketing campaign begins Feb. 1 with a Super Bowl commercial -- a rare instance of the soda giant promoting another's company's product, said Katie Lacey, Pepsi's vice president of colas and media.
Others are also trying to capitalize on the iPod juggernaut.
Burton Snowboards announced this week that it would make the first wearable electronic jacket with a built-in iPod control system, allowing users to control their music from right on the sleeve without fumbling with zippers, gloves or pockets.
In December, America Online added a direct link to the iTunes Music Store from its AOL music Web page, and Griffin Technology developed an adapter designed specifically to mount onto the iPod and turn the player into a portable FM radio station.
Back in July, it was iPod on wheels.
Volkswagen and Apple launched a marketing campaign dubbed "Pods Unite." During the three-month promotion, iPods were shown in VW showrooms, and VW sold an iPod connectivity wiring and cradle tailored for the New Beetle.
Heineken USA And RealNetworks Team Up To Offer Free Digital Music Downloads This Summer
MusicDish Network SponsorHeineken USA and RealNetworks, Inc. have joined forces to heat up the summer for digital music fans by giving away millions of free songs. Slated to kick-off during the Memorial Day holiday period and run through July, 2004, every specially marked 12-pack of Heineken will include a unique code redeemable for 2 free songs from RealNetworks. Heineken will support the promotion with a comprehensive marketing program. The Heineken USA/RealNetworks partnership marks the first major sponsorship of a digital music service by the nation's largest beer importer.
Consumers will receive their free downloads through he RealPlayer Music Store, which is integrated into RealPlayer 10, the new media player from RealNetworks that makes it easy for digital music fans to find, play and manage all the digital media on the Web -- including the ability for them to play content in every major format.
"2004 will be the year digital music takes off and Heineken is proud to work with a pioneer like RealNetworks to deliver the best digital music experience to consumers," said Steve Davis, Senior Vice President of Marketing for Heineken USA. "The combination of great beer and great music can't be beat, especially when the songs are free."
"Heineken's tremendous marketing savvy and deep commitment to the music industry makes them the ideal partner to promote RealNetworks," said Dan Sheeran, Senior Vice President of Marketing, RealNetworks. "Heineken's ability to reach millions of consumers and deliver free music to their lives is a great way to help celebrate the ten-year anniversary of RealNetworks."
The RealPlayer Music Store is expected to include 400,000 songs by the end of January 2004 in the highest quality of any download store: 192 Kpbs RealAudio with AAC.
Heineken USA Inc., the nation's largest beer importer, is a subsidiary of Heineken N.V. (Netherlands), which is the world's most international brewer. Brands imported into the U.S. include: Heineken Lager, the world's most international beer brand; Heineken Special Dark; Amstel Light, the largest-selling imported light beer brand; and Buckler non-alcoholic brew.
OT Federal Court Finds Ecast Has Infringed TouchTunes' Patent
Thursday January 8, 5:27 pm ET
LAS VEGAS, Jan. 8 /PRNewswire-FirstCall/ -- TouchTunes® Music Corporation ("TouchTunes") (OTC Bulletin Board: TTMC - News), the world's leading provider of interactive music-on-demand digital jukeboxes, announced today that it was vindicated by the Federal Court's ruling that Ecast, Inc.'s jukebox technology has infringed TouchTunes' U.S. Patent No. 6,308,204. On December 18, 2003, TouchTunes won a summary judgment ruling from the U.S. District Court for the Northern District of California, agreeing that Ecast infringed TouchTunes' patent in connection with the NetStar and StarLink jukebox systems. In granting summary judgment, the Court found that the infringement by Ecast was so clear that there was no need to have a jury trial on the issue of infringement.
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"Ever since the onset of this lawsuit, we were so convinced of Ecast's infringement of the TouchTunes' patent that it came as no surprise to us when, in rendering its verdict, the Federal Court found that the facts were so clear, that a jury trial on infringement was not even needed. Now the same Court will have to decide the damages that Ecast will have to pay TouchTunes," said John Perrachon, President and CEO of TouchTunes. "It's good to know that after having invested over 40 Million Dollars to bring truly novel ideas to this industry, TouchTunes can rely on US patent law to encourage and protect such innovation."
In late 2001, Ecast first filed a lawsuit against TouchTunes claiming that TouchTunes resorted to unfair trade practices by notifying Ecast and its customers that they were infringing TouchTunes' patent. On October 15, 2003, Ecast voluntarily dismissed its own claims against TouchTunes for interference with contracts and unfair competition, thereby confirming TouchTunes' belief that such claims had no merit. This dismissal was done with prejudice, which prevents Ecast from ever bringing such claims against TouchTunes again in the future. Ecast also requested that the Court declare that Ecast has not infringed TouchTunes' patent.
In January 2002, TouchTunes filed a counterclaim that Ecast infringed TouchTunes patent rights by incorporating technology into jukebox systems that was invented by individuals at TouchTunes and owned by TouchTunes. On December 18, 2003, the Court rejected Ecast's non-infringement arguments and agreed with TouchTunes that Ecast has infringed its patent. TouchTunes is now seeking an injunction against Ecast to prevent further infringement and an award of money damages to compensate TouchTunes for all of Ecast's infringement to date. TouchTunes is also seeking a ruling that Ecast's infringement was willful, based on the fact that Ecast never had a good faith basis to believe its technology did not infringe, despite Ecast's contrary representations to its customers. These issues are expected to go to trial in early 2004.
"Although TouchTunes has repeatedly invited companies to negotiate a license of its technology, this case serves as a sign that TouchTunes will not tolerate the unlicensed use of its hard-earned patents" added Mr. Perrachon.
As leader in the field of downloading music to its dedicated music-on-demand products, TouchTunes has racked up a portfolio in excess of 15 patents granted in the US and Europe. With its dedication to always innovate and be at the forefront in its field, TouchTunes continues to protect its investments by filing for patent protection over all of its proprietary intellectual property.
"It should be obvious to anyone in this industry that TouchTunes cannot simply sit and have others use our proprietary intellectual property. As Co-Inventor of the infringed patent, I have gone on record for almost ten years now that TouchTunes will ardently defend all of its intellectual property," declared Tony Mastronardi, TouchTunes' Co-Founder.
"Having the US Federal Court side with us in its ruling that Ecast did indeed infringe on our granted patent just serves to re-ignite our commitment that TouchTunes should continue to lead in innovation!" said Guy Nathan, TouchTunes' Co-Founder and Co-Inventor.
About TouchTunes
TouchTunes is involved in the digital distribution of music content to interactive, music-on-demand applications. The first such interactive, music-on-demand application is its digital jukebox.
TouchTunes is currently the leading provider of interactive, music-on-demand, digital-downloading jukeboxes to the coin-operated machine industry across the United States. TouchTunes has signed agreements with Sony, EMI, BMG, Universal, Warner and their music subsidiaries, which permit the secure transmission, storing and playing of digitized copies of music masters on TouchTunes' central database and throughout its network of digital jukeboxes. TouchTunes also has signed agreements with various independent labels such as: Jive, Beggars Banquet and Epitaph Records. TouchTunes is traded on the NASDAQ OTC BULLETIN Board under the symbol TTMC.
Important Legal Information
Certain statements made herein that are not historical are forward-looking within the meaning of the federal securities laws. The work "expects" and similar expressions are intended to identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of TouchTunes to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, the factors described in TouchTunes' filings with the Securities and Exchange Commission. TouchTunes undertakes no obligation to update publicly any forward-looking statement to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
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Source: TouchTunes Music Corporation
Optimism Runs High At Las Vegas Consumer Electronics Show
Friday January 9, 5:23 pm ET
By Mark Boslet, Of DOW JONES NEWSWIRES
LAS VEGAS (Dow Jones)--The belief that a new era of digital entertainment is finally on the consumer horizon has fueled a broad sense of optimism at the Consumer Electronics Show this week.
But exactly how soon a wave of product sales will turn these upbeat feelings into expanding revenue and profits is a matter of less agreement. Many say accelerated growth could still be another year or more away.
The show has clearly given electronics companies a sense of anticipation. The Consumer Electronics Association forecast last week that sales across the industry will grow 5% to $101 billion in 2004, a noticeable improvement over the 2% growth in 2003 and the best performance in four years.
Sales of new flat-screen and projection televisions, a key component of the transformation from analog entertainment to digital, will rise significantly faster, growing 33%. Prices for the products will continue to fall.
There is a huge new wave coming, predicts Sony Corp. (NYSE:SNE - News) President and Chief Operating Officer Kunitake Ando. There's also fierce competition building as computer and consumer electronics companies target the same market.
This year's show offers plenty of interesting gadgetry. Digital cameras have shrunk to palm size and plasma screens now span up to 60 inches. DVD recorders boast wireless, instead of wired, connections to other devices, and set-top boxes for TVs come with recordable hard drives for saving programming.
Sony captivated the show's imagination with four synchronized dancing robots, an experimental design referred to as Qrio. The nearly 3-foot, plastic-skinned models have 38 internal motors, get up if they fall down and perform a series of complex steps in unison.
Sony also displayed a wireless 12-inch LCD television monitor that can be carried around the home or even to the backyard.
Panasonic turned heads when it said it expects to have high-speed home- networking technology available for the first quarter of 2005 to work over a home's electrical wires and outlet plugs. At 170 megabits a second, the speed would be adequate for multiple streams of high-definition TV, the company said.
Sanyo Electric Co. showed off a slim cellular phone that can receive digital TV. The product also is not expected before 2005.
Analysts say consumers are eager for digital entertainment. An October study conducted in the U.S. by the NPD Group found an increasing number of consumers who were interested in installing home networks were motivated by the prospect of sharing movies, music and photos.
This next wave of buyers will have bigger expectations than earlier home network users, who put up with the complexities of the equipment to share printers and Internet connections, said Stephen Baker, director of industry analysis.
These greater expectations will confront the industry with a challenge that is receiving too little attention today. The installation of new digital products needs to be simplified, and, to do so, standards are required. But the industry has yet to set standards for connecting devices together, as well as among the competing formats for high-definition television and DVD recording.
"The real issue is how do we get there," said Louis Burns, a vice president at Intel Corp. (NasdaqNM:INTC - News) . The consumer will benefit from expanded choices "if we can figure out how to collaborate before we compete."
Even without standards, new opportunities are coming. Choong Hoon Kim, chief executive of Daewoo Electronics Co. (QD-DWE), said the real growth in sales is a year away. The move to digital will be driven by the television as the volume of digital broadcasts increases, he said.
In the interim, Kim said he's excited by the growth prospects for digital TVs and recordable DVDs.
"It's going to be the access to content" that sparks the market, agreed Christopher Morgan, a sales and marketing vice president at Hewlett-Packard Co. (NYSE:HPQ - News; HPQ). Entertainment is going to be a big opportunity in 12 to 18 months, he said.
The hottest products in 2003 - digital cameras, MP3 players, movie jukeboxes and home network gateways - should continue to be big in 2004, said Scott Reedy, a vice president at Buy.com Inc. But so should personal video recorders that are replacing VHS recorders and are beginning to include DVD recorders, he said. During the year, DVD writers should increase in speed, making them more attractive as well.
Many believe personal computer companies will have an advantage in the coming battle because they know the digital marketplace better by having built computers. They also are eager to exploit their knowledge. During a keynote address, Microsoft Corp. (NasdaqNM:MSFT - News) Chairman Bill Gates unveiled products to connect his company's Windows Media Center software for the PC to televisions and the company's Xbox game machine.
"The home is going digital," Gates said. And "it's an incredibly competitive environment."
But the belief in the PC company's advantage is not unanimous. "To me, it's not really a given that we should be betting on the PC being the center of the universe in home entertainment," said Michael Katz, a senior vice president at Booz Allen Hamilton (News - Websites) . Big-screen TVs and the stereo are where people go to be entertained, he said.
Like other observers, Katz is convinced the digital home is going to be a massive opportunity for the industry. "When it catches on, it's going to be a hockey stick" sales chart, he said, with revenue shooting up rapidly.
-By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com
Download songs for 10 cents
No kidding!
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posted 10:15am EST Fri Jan 09 2004 - submitted by Joshua
NEWS
MusicRebellion.com, a small, little-known music download company, announced on Thursday that it is offering most of its songs for as low as 10 cents. The new promotion is part of the company's overall goal of gathering data on the social impacts of digital file transferring, such as Peer-to-Peer (P2P) networking.
The new pricing structure being introduced is based on a demand-driven pricing system developed by MusicRebellion's parent company, Digonex. As the demand for specific songs increase and decrease, their prices will fluctuate to match the demand.
The prices won't be staying that low for long, though. Since the company still has to pay the normal prices to music labels for each song, it is taking quite a hit on the price cut. As soon as the allocated funds are gone the promotion will end.
Check out CNET's coverage and the MusicRebellion press release for more.
Thanks to Jebaki for the heads-up.
JOSHUA'S OPINION
Yes, it's a promotional scheme. Regardless of that fact, this has to be the best attempt to date at implementing a real capitalist approach to music sales. And I must point out that it is not the music labels that are doing this--it is a no-name music download site that is actually trying to gain sociological data from its efforts.
Could you imagine what would happen if all music were priced this way? Imagine walking into a store and picking up a new CD by an artist that no one has ever heard of and being able to purchase it for under US$5. Imagine only paying $15 or $18 for a CD by a well-known artist, but also being able to download individual songs from that same album for less than $1, depending on how much other listeners like it.
MusicRebellion is a pretty interesting company. The business information on its website makes a point of showing the company's distaste for illegal file-sharing, even referring to KaZaA as a "pirate community." It also rewarded the 12-year-old girl who quickly paid the RIAA $2,000 in copyright fines last year (see our coverage) by giving her an open account with a $2,000 credit. That move was orchestrated as an attempt "to show online music fans that a legal alternative exists."
Anyway, I seriously doubt that MusicRebellion's opinions on legalities will dramatically reduce the certain rush to purchase cheap songs.
What are you waiting for?
USER COMMENTS 5 comment(s)
Wow, time to bulk up on music! (10:34am EST Fri Jan 09 2004)
I checked out the site and they seemed to have a decent selection. When I get home I may sign up and download as many albums as I can get my hands on. At less than two bucks per album I could buy a year's worth of music for less than $60! - by MSP
Not bad... (10:39am EST Fri Jan 09 2004)
but no one has been able to beat ITunes with burn and transfer limitations. But then again, you can't beat that 10c price. I will probably buy a bunch over this weekend. - by Zank
interesting... (11:05am EST Fri Jan 09 2004)
"As the demand for specific songs increase and decrease, their prices will fluctuate to match the demand."
They make it sound as if the songs will be in limited supply. It's not like they are selling CDs and will run out, they are selling copies of files of which infinite number of copies can be made. The only supply that is going to run short is bandwidth.
just my 2 bits. - by EvilCaptainKirk
Stock price on a song (11:29am EST Fri Jan 09 2004)
This sounds like some kind of price structure like the stock market. The author of the song can have an initial public offering (IPO). A collection of songs can be like a mutual fund. Options would be the right to get what ever the author puts before the 3rd friday of a certain month at a certain price.
- by DS
Still costs more (11:31am EST Fri Jan 09 2004)
..
..
Still costs more than newsgroups, k++ or overnet.
..
.. - by StealMoreMusic
IBM, RealNetworks, link to deliver media services
Friday January 9, 12:00 am ET
SEATTLE, Jan 9 (Reuters) - Internet media and software company RealNetworks Inc. (NasdaqNM:RNWK - News) and International Business Machines Corp. (NYSE:IBM - News) said on Friday that they would jointly provide services for content providers that want to set up their own Internet video and audio businesses.
Companies and organizations that aim to sell and distribute content over the Web will use RealNetworks's media server and player software to send video and audio over the Internet while IBM will provide its electronic commerce, transaction and database know-how.
"It can work with any kind of commercial model and any kind of distribution," Rob Glaser, chief executive of RealNetworks, told Reuters.
The deal, which is not exclusive, was announced at the Consumer Electronics Show in Las Vegas.
Glaser said that the deal was not meant to be RealNetworks' answer to a recent agreement between digital media firm Loudeye Corp. (NasdaqSC:LOUD - News) and Microsoft Corp. (NasdaqNM:MSFT - News) which offered a similar way for businesses to provide a fast and relatively cheap way to launch digital music stores.
With the success of Apple Computer Inc.'s (NasdaqNM:AAPL - News) iTunes online music store and growing numbers of broadband high-speed Internet users, technology companies have been scrambling to offer such know-how to consumers and businesses.
The companies said that they wanted to tap into a market that they expect to be worth as much $1 billion by 2007.
Financial terms of the deal between IBM and Seattle-based RealNetworks, which is embroiled in a lawsuit against longtime rival Microsoft, and IBM were not disclosed.
RealNetworks and Armonk, New York-based IBM said that they would design the service to be open so that other software vendors could integrate their services with the digital media platform.
RealNetworks earlier this week launched the latest version of its media player, RealPlayer 10, which has a built-in digital music store.