(entry last updated: 2003-09-04 18:02:14)

• Sony’s going to resolve its schizophrenia? We’ll see — the real question may be who won, the electronics division or the entertainment division. Sony to launch Net music service

  Sony will launch its own digital music service next year, in a project that will see its music, movie and electronics divisions work closely together, the company said Thursday.

• Since we’re on the subject of DRM, we have this heartwarming CNEt News article: Microsoft moves forward on DRM

  Microsoft moved forward on its digital rights management strategy this week, releasing the first of several Windows add-ons associated with the technology and revealing pricing on its server software for corporate rights management.

  A key part of the company’s strategy involves limiting access to digital files ranging from office memos to software applications.

  Primary components of the plan include Windows Rights Management Services (WRMS), server software that will manage access to corporate documents, and new Information Rights Management tools included in Office 2003, the forthcoming update of the company’s widespread productivity package.

  The software giant also has spoken of broader plans for building “next-generation secure computing base” technology, formerly known as Palladium, into a range of products.

• Slashdot’s discussion of the Universal price decrease on CDs: Universal Music To Cut CD Prices

• ExtremeTech reports that Phoenix Developing DRM-Equipped BIOS (Slashdot: Phoenix Bios to Incorporate DRM)

  Phoenix executives said Wednesday that they’ve developed a prototype version of its Core Management Environment (cME) using DRM technology in conjunction with Orbid Corp., a DRM technology provider. The software was designed to assist content providers to authenticate and track software moving from PC to PC.

  Although DRM technology has moved steadily forward, consumers have had some choice whether to implement it. Selected software providers in various markets, such as Intuit and Macromedia, have chosen to implement DRM, allowing consumers to choose DRM-less alternatives.

  Phoenix’s efforts, however, represent a more fundamental sea change. Phoenix is a manufacturer of BIOS software, the underlying code which ties together a PC’s operating system and the system hardware. Since a personal computer must have BIOS installed to boot, a user could be forced to use the DRM technology whether he or she chooses to or not.

  Here we go - who’s ready to buy a machine with such a BIOS? And how long will it take for a firm with lots of cash and no love of DRM to offer an alternative? And how long before such machines are declared illegal in the US? And how long before the US computer industry implodes from black/gray market imports?

• Slashdot discussion of the Ernest Miller interview of Ian Clarke: Ian Clarke, Ernie Miller On Free Speech, Privacy

• Benny Evangelista must have enjoyed this: RIAA decries drop in CD sales

  But analyst Phil Leigh said the record industry has to realize that sales of prerecorded music CDs will probably never recover. Indeed, Leigh said, the industry’s own sales figures indicate a crackdown on file sharing may actually hasten the decline of the CD.

  “The prepackaged CD, without a shadow of a doubt, is over the hill, and it’s all downhill from here on,” Leigh said.

  Leigh, an independent digital media industry analyst, said the “fear factor” caused usage of file-sharing programs to drop about 22 percent in the seven weeks after the RIAA announced its plans to sue individuals.

  Yet Leigh noted industry sales reports show the drop in CD sales accelerated during the same period.

  [...] Later, through an RIAA spokeswoman, Sherman said the “issue is not the decline in CDs; it’s the decline in people paying for the music that they acquire. We need to get people back into the habit of paying for music, whether it’s from record stores or a legal online service.”

  Slashdot discussion: RIAA Sales Compared to Download Statistics - with a worthwhile explanation (for those not up on the AHRA) of what "music cd-r media" are all about.

• The Register: 99c iTunes song auction bids top $100,000 - well, not anymore, but still…..

(entry last updated: 2003-09-04 08:02:22)

(Announcement: FWIW, I’m getting within striking distance of moving FurdLog over to WordPress - for those interested, the dummied up site is here. I will be keeping this version of the site running, with appropriate nod_rewrite directives, for the forseeable future to preserve links, although I expect eventually to be able to put together the appropriate mod_rewrites to handle finding past entries with the new setup. I’ll announce the change for those of you using RSS to access when the time is ripe.)

• InfoWorld on the industry’s belated realization that the Eolas patent litigation will require action by firms other than Microsoft, too: Microsoft’s patent loss rattles tech community

  Computer security experts initially hailed the announcement, speculating that the ruling might spell the end of Microsoft’s ActiveX controls, notoriously insecure software components that allow software developers to integrate specialized functionality with Web pages.

  But technology and legal experts agree that the ruling could affect a wide range of technology companies with products that interact with Web browsers, or services that rely on customer interaction through Web browsers.

  “Fundamentally, (the Eolas patent) describes a way of implementing plug-ins in a Web browser,” said Richard Smith, an independent technology expert in Boston. “People who use plug-ins like (Macromedia Inc.’s) Flash or Java applets are covered by the Eolas patent,” he said.

  [...] [Hector] Santos [of Santronics Software] feels that there is plenty of evidence that his company’s product used Eolas’ patented techniques before [Eolas' president Michael] Doyle filed for his patent in 1994 — an argument known as “prior art” that can be used to defuse patent infringement claims. If anything, Santos is surprised that Microsoft wasn’t able to successfully use such claims in its own defense.

  One of the problems may be that technologists routinely underestimate the reach of patents, according to Smith.

  “Technology people don’t understand what patents are and they make big claims, like, ‘Oh, it’s just like this or that. There’s prior art.’ But there was none produced by Microsoft,” Smith said.

• The NYTimes points out that, even though the FCC’s media consolidation regs have been stopped for the moment (U.S. Court Blocks Plan to Ease Rule on Media Owners [pdf]), there are plenty of reasons to rethink how the FCC thinks about media regulation overall: Must-Own TV [pdf]

  The proposed [Vivendi-NBC] deal says as much about how the rapidly changing media landscape is shaped by regulatory policy as it does about Hollywood’s timeless ability to seduce outsiders.

  [...] Competing in this universe of vertically integrated media giants, it is understandable that NBC’s management would want to pick up a studio, once one could be had for the right price. It must be painful for G.E.’s accountants to tally up those $10 million checks for each “Friends” episode, or the $8 million Universal wants for each “Law and Order” installment. Because studios have the right to sell shows’ reruns in syndication, the pressing question for NBC is: Why rent when you can buy?

  [...] Instead of debating how many of their local affiliates networks should be allowed to own - an anachronistic concern - Congress and the F.C.C. need to consider new rules to foster creativity in the new media landscape. Some new variation on the “fin-syn” rules may be needed at a time when more of these media giants own their shows, and control their distribution over cable or satellite television.

• A reminder that technology helps and hurts the music industry: 26,000-Hit Wonder Keeps It Hopping

  ON a rainy Monday night at 7, when most of the East Village bars in Manhattan are empty, a steady crowd is rolling into Hi Fi. Drinks are two for one until 8, but that is only one of the reasons many patrons choose the otherwise nondescript watering hole out of the many on Avenue A. They are there for EL DJ, an MP3 jukebox with 26,000 songs to choose from.

  Mike Stuto, the 36-year-old owner of Hi Fi and the co-creator of EL DJ, says it has the biggest selection of any jukebox in the world. “The reason it’s a great idea is because it’s a simple idea,” he said.

  Mr. Stuto’s basic idea was to digitize his music collection and make it available in a jukebox that held far more than the standard 100 albums. EL DJ, or Extra Large Digital Jukebox, includes tracks from 1,798 full-length CD’s in Mr. Stuto’s collection. Record companies might be pleased to know that he copied the albums individually onto the hard drive rather than downloading them Napster-style.

  The artists range from the Replacements to De La Soul to Wilco. As with conventional jukeboxes, Mr. Stuto said, royalties are paid on the songs played.

  [...] “Outside of the charming bartenders, it’s the major draw,” said Galen Polivka, a Hi Fi bartender himself, drinking there on his night off. During happy hours, “it’s kind of a scholarly vibe,” he said. “People want to impress their friends by picking the most obscure thing they possibly can.”

  If a song is excessively chosen it will be marked “overplayed,” sparing anyone from making a choice considered common. Victims of overplay include Coldplay’s “Yellow” and the Pixies’ “Debaser.”

  The idea of identifying such songs was one of many originating with customers. From the response, Mr. Roven and Mr. Stuto concluded that there were two marketable products in EL DJ: a software program to equip home computers with similar capabilities, and a commercial version of the jukebox for bars, complete with computer hardware and kiosk.

• Unreasonable search and seizure? An interesting argument to try to understand if it’s made - the RIAA claims it’s nonsense:

  In court papers, the lawyers said they may argue that the RIAA violated state and federal laws by intercepting the woman’s Internet address as its investigators scoured file-sharing networks looking for songs to download.

  The woman, identified in court papers only as “nycfashiongirl,” is contesting a copyright subpoena served by the music industry on her Internet provider, Verizon Internet Services, to turn over her name and address in preparation for filing a lawsuit.

  [...] The defense team said it also may argue that the music industry was improperly affiliated with law enforcement and thus its perusal of music files on the woman’s computer violated Fourth Amendment protections against unreasonable searches.

• Wired News: I’ll Take My Music a la Carte

  The popularity of Apple’s iTunes song service has demonstrated that customers like to pick and choose their songs online. New statistics from the music industry indicate that labels are shipping more singles to stores, too.

  But whether the stats signal the return of the single is still a bit of a puzzle.

• Kevin’s tracked the eBay response in this CNet News article on the auction offering of an iTunes song:

  iTunes auction treads murky legal ground

  Informed of the auction by a CNET reporter, an eBay representative said the item would be removed, since “it does indeed violate eBay’s listing guidelines on the sale of products delivered electronically through the Internet.”

  I personally like Fred von Lohmann’s commnet:

  By contrast, von Lohmann said it’s unclear whether Hotelling’s auction is legal or whether it’s allowed under Apple’s terms-of-service contract for iTunes Music Store sales.

  “It’s a little bit of a murky area,” he said. “It would make a pretty interesting law school exam question.”

• As a followup to yesterday’s links on Chamberlain v. Skylink, Andrew Sitzer writes:

  IP Justice just released an information page regarding Friday’s

  landmark decision in Chamberlain v. Skylink which denied Chamberlain’s

  motion for summary judgment claiming that the Skylink garage door opener

  violated the DMCA. This is the first real ‘win’ against the DMCA in quite

  some time, and as such, is an excellent opportunity to re-excite people

  for the cause.

  See, in particular, the IP Justice press release: Court Rejects DMCA Claim Against Garage Door Manufacturer: ‘Common Sense’ Prevails in US Copyright Case (Thanks, Andrew!)

• Today’s Boston Globe announces that the record companies are going to try some conventional methods to stimulate demand: Universal Music slashing CD prices in hopes of reviving sales [pdf]

  Universal Music Group said it would cut the suggested sale price on a majority of its CDs by $6 to $12.98. The company hopes retailers will follow its lead and drop their CD prices to around $10 or less. The price changes would go into effect by Oct. 1.

  [...] t was not immediately clear how retailers or other record companies would respond to the move, which comes as music sales are picking up on the Internet with Apple Computer Inc.’s breakthrough 99-cent-a-song offering. Company officials said they had not discussed the pricing strategy with retailers, who would be notified formally on Thursday.

  [...] UMG’s current wholesale price for a CD album is $12.02, with a manufacturer suggested retail price of $18.98. Under the new pricing structure, the wholesale price would be $9.09. The wholesale price for CDs by a handful of performers, including Eminem and Shania Twain, would be about a dollar more, said Jim Urie, president of Universal Music & Video Distribution.

  [...] The recording industry blames its sales slump largely on illegal music swapping over peer-to-peer networks. The industry has begun to aggressively target people who share music using software by Kazaa and others.

  But industry critics say the record companies have, for more than a decade, ignored the effects of soaring CD prices on sales. They also contend the artistic quality of music has deteriorated.

• Amy Harmon’s article on the same subject from the NYTimes: Universal to Cut Prices of Its CD’s [pdf] The article includes an important statistic, buried inside the industry’s standard claims:

  The deep price cut - the only one to apply to new CD’s since the format was introduced in the early 1980’s - represents a gamble by Universal that more consumers will buy more CD’s once the price dips below $13. It also reflects the profound degree to which Internet file-trading has managed to undermine the music business, Universal executives said.

• The CNet News article has a snotty lead: Music giant plans to drop CD prices

  The day after a report suggested the compact disc is heading the way of the 8-track tape, the world’s largest music label conglomerate promised a steep cut in music CD pricing.