A Look At SunnComm

Is SunnComm a sham or the next, big DRM success? (Slashdot: SunnComm – Bomb or DRM Success Story?)

You might expect one of the world’s leading digital rights management (DRM) technology makers to have a rich history in either the computing or music fields or both. This is not the case for SunnComm International Inc. Instead, the firm’s experience revolves around a troubled oil and gas business, an Elvis and Madonna impersonator operation and even a Christmas tree farm.

[…] A less publicized but more complex battle has been taking place between SunnComm and what seems to be a small group of disgruntled shareholders. These apparent SunnComm investors have filled Internet message boards with detailed information that basically claims the company is at worst a sham and at best a deceptive business. The postings describe a string of odd acquisitions, somewhat misleading financial press releases and dubious product announcements that should have the US SEC (Securities and Exchange Commission) kicking off an Enron-like crackdown, according to the SunnComm haters.

Coopting University IS Departments

UCLA to stop short of P2P snooping

The University of California at Los Angeles is using technology to discourage Net piracy of films or music, but it’s holding off on playing campus snoop, a school official said Monday at the Digital Hollywood conference here.

As previously reported, UCLA has implemented a technology system to give notice and warnings to students who have been fingered by Hollywood studios or record labels as perpetrators of digital copyright theft.

An implementation of the Automated Copyright Notice System, or ACNS–an open-source notification software–the system lets UCLA instantly send notices of copyright infringement to students by e-mail and restrict their network access until they have removed the offending file.

Meanwhile, other universities and content providers are increasingly embracing technology from Audible Magic and others to attach digital fingerprints to copyrighted works and keep tabs on students’ file-swapping–technology backed by the Recording Industry Association of America and the Motion Picture Association of America.

My Government At Work

House votes to target P2P pirates

The most controversial section of the bill punishes Internet users who offer “for distribution to the public” $1,000 or more in copyrighted materials with prison terms of up to three years and fines of up to $250,000. If it became law, prosecutors would not have to prove that $1,000 in copyrighted materials were actually downloaded; they would need to show only that those files had been publicly accessible in a shared folder.

An existing law called the No Electronic Theft Act already permits federal prosecutors to bring criminal charges against individual copyright infringers, though no such prosecutions have taken place so far. About the closest the government has come to that politically charged possibility is the announcement last month that a specific file-swapping group called the Underground Network is being investigated.

Also, Wired News’ File Traders Could Do Hard Time

Copyright bills are likely to loom large in the waning weeks of Congress. The Senate this week is expected to consider a measure that would make it easier to sue peer-to-peer networks. The bill has drawn spirited opposition from the technology industry.

A Big Picture Look

Coco points to SSRN-P2P and the Future of Private Copying, which clearly reflects an effort to update the Lessig take on modalities of control as applied to the P2P problem, as these abstract excerpts show (I haven’t yet read the whole thing, so see the CoCo comments)

Using a holistic approach, this Article takes on the ambitious task of bringing together existing scholarship while offering some thoughts on the future of private copying. This Article does not seek to offer any new theory or model, which could become obsolete quickly, or even immediately, as digital and P2P technologies advance. Rather, the Article provides guidelines as to how policymakers can craft the “ultimate solution” to the unauthorized copying problem.

[…] Using a holistic approach, this Article takes on the ambitious task of bringing together existing scholarship while offering some thoughts on the future of private copying. This Article does not seek to offer any new theory or model, which could become obsolete quickly, or even immediately, as digital and P2P technologies advance. Rather, the Article provides guidelines as to how policymakers can craft the “ultimate solution” to the unauthorized copying problem.

OT: Daniel Ellsberg Seeks A Contemporary

A provocative op-ed piece worth reading: Truths Worth Telling

Leakers are often accused of being partisan, and undoubtedly many of them are. But the measure of their patriotism should be the accuracy and the importance of the information they reveal. It would be a great public service to reveal a true picture of the administration’s plans for Iraq – especially before this week’s debate on foreign policy between Mr. Bush and Senator John Kerry.

The military’s real estimates of the projected costs – in manpower, money and casualties – of various long-term plans for Iraq should be made public, in addition to the more immediate costs in American and Iraqi lives of the planned offensive against resistant cities in Iraq that appears scheduled for November. If military or intelligence experts within the government predict disastrous political consequences in Iraq from such urban attacks, these judgments should not remain secret.

A Persistent Format

Or a measure of the unpopularity of DRM-encumbered downloads? Compact Disc Rocks On

The compact disc has at least another five years as the most popular music format before online downloads chip away at its dominance, a new study said on Tuesday.

Technology consultancy Jupiter Research said in its annual report that in 2009 European music fans will buy 836 million euros ($1 billion) worth of music in the form of digital downloads and subscriptions to internet radio services.

At that level, digital music revenues will account for roughly 8 percent of Europe’s estimated 10.2 billion euro music market. The study does not take into account the surprisingly successful market for mobile-phone ring tones.

The piracy-battered music industry is desperate to see industry-backed download services become a hit with consumers to derail the popularity of free file-sharing networks such as Kazaa and eDonkey.

But trying to predict growth in the nascent digital music sector has proved extremely difficult.

Trade Regs and Speech

Treasury Being Sued for Curbs on Editing

Treasury Department regulations against editing manuscripts from Cuba, Iran and other countries under American economic sanctions violate the First Amendment of the Constitution and should be overturned, a group of American publishers said in a federal lawsuit filed yesterday.

[…] The regulations, meant to keep Americans from trading with enemies, require anyone who publishes material from a country under trade sanctions to obtain a license before substantively altering the manuscript. The publishers say that keeps them from performing typical editing functions like reordering sentences and paragraphs, correcting grammar and adding illustrations or photographs.

The regulations do not forbid publication of existing works from those countries. They allow publishers to print and distribute materials that come to them in camera-ready form, that is, ready to be published without alteration. But they also restrict marketing materials, which the publishers say essentially prohibits publication.

The publishers argue that the regulations do not allow enough room for them to prepare material from foreign authors for the United States market and create a “chilling effect” on them. “For all practical purposes,” the suit states, “that means American publishers simply cannot publish their books.”

The Push Is On

From Reuters via FindLaw: U.S. Senate to Weigh Bill Targeting Web Song Swaps (also NYTimes)

After weeks of negotiations, the U.S. Senate could take action this week on a bill that would make it easier to sue “peer-to-peer” networks like Kazaa and LimeWire that allow users to copy music and movies over the Internet.

[…] Only a few short weeks remain in the legislative session but Shapiro and opponents worry that the measure’s powerful backers, who include Senate Majority Leader Bill Frist and Minority Leader Tom Daschle, could slip it into one of the giant spending bills that Congress must approve before it adjourns.

The Senate Judiciary Committee could take up the bill on Thursday, a committee spokeswoman said.

[…] “The stakes here are chilling what drives America’s economy, which is technical innovation, both in the marketplace of products and the marketplace of ideas,” said Adam Eisgrau, executive director of P2P United, a trade group for several peer-to-peer networks.

From Wired News: New Induce Act Alarms Foes

But critics say the new language fails — again — to address the concerns of technology and consumer groups that believe the bill, if passed, would have a devastating effect on innovation and consumers’ right to use technology how they please.

“Any technology that allows dissemination is still completely threatened by this bill,” said Jason Schultz, an attorney with the Electronic Frontier Foundation. “Even if you have nothing in your business model that has anything to do with infringement, you can still be held liable for all of your users who do infringe.”

[…] “If I release and distribute a product that can be used to infringe, I’m at least going to face a jury trial,” said Andrew Greenberg, a vice chairman of the IEEE-USA’s intellectual-property committee, who testified on the original draft of the bill before the Senate Judiciary Committee in July.

Thus, the proposed law could deter companies from investing in new products that may make them liable for billions of dollars — even if they never intended the product to be used to infringe copyright.

In addition, the bill would nullify the so-called Betamax decision, which sparked 20 years of innovation in technology. This legislation introduces a new kind of infringement — inducement — which Betamax does not protect, Schultz said.

The Independent On Music eTailing Economics

Record labels still on top despite online revolution, with commentary by Mark Mulligan of Jupiter Research

But figures from the US show that Apple Computer, the dominant legal download business in Europe and the US, retains just 4 cents from each 99-cent (55p) track sale while “mechanical copyright” holders – generally the record labels, who own copyright in the song’s recording – take 62 cents or more. Music publishers take the rest – about 8 cents.

With the sites, the copyright owners have doubled their share of royalties, even though the marginal cost of manufacturing has fallen to almost zero.

The revelation will embarrass industry executives, who meet this week in Manchester for their annual In The City music conference.

Mulligan’s take is a little different:

The split discussed in the story actually misses out a few key costs such as payments etc and is also a bit too heavily skewed towards labels. But it is in the right ball park and the principle remains the same: label costs are a massive slice of digital music prices. The article claims it will send many stores out of business. At Jupiter we take a slightly different tact: that stores with alternative revenue streams are the ones who will survive, using digital music as a loss leader.

Two Postings from Digital Music News’ Blog

Some musings on music business models:

  • The Convergence Of Music And Fashion Due To Technology

    Again it is technology, this time the internet, that will drive an even deeper convergence between music and fashion. If websites such as CD Baby for independent music and iTunes for the major labels and established artists become the new music stores, why can’t cutting edge fashion labels whose websites also reach a worldwide audience, and whose customers crave new music, as well as new fashion, produce and create their own music and sell directly to their customers? Well this has already happened!

    Diesel, the Italian based retail clothing chain and fashion label, is a brand that is a fashion brand actively engaging in the music business in an original and significant manner. Diesel has launched its own a music label, Diesel-U-Music.

  • Can You Make it Without a Label Deal?: The Gospel Truth

    The choices perhaps are easy for the gospel industry – radio is small, church is big, and booking agents are well paid. Hence, the singers have a network to accomodate live performances and sales at the back of the concert hall as the prime way to promote and survive in a professional career. Who needs Universal and Clear Channel?

    The upshot of this discussion? Provided that SOMEBODY performs the intermediary roles of promotion and distribution, an artist can survive very well without a major label. Of course, it is the responsibility of the interested community of artists, fans, and potential entrepeneurs to put the structure together. Jam bands have learned and taught some lessons. But a wider strata of intermediaries still must emerge.