September 6, 2004

Another Kind of Media Convergence [6:41 pm]

From Newsweek: MSNBC - I Want a Movie! Now! [pdf] [via Slashdot]

Netflix and Tivo ushered in an age of couch-potato bliss. Netflix lets its customers browse through its huge movie catalog on the Web and rent DVDs through the mail without having to worry about late fees. TiVo lets people digitally record their favorite shows and zoom through the ads. But now couch potatoes are perched on the cusp of true paradise. Soon they won’t even have to stand up to trudge to the mailbox; fat broadband pipes will let them directly download movies over the Net to their television.

Netflix and TiVo want this digital nirvana to arrive as soon as possible, and they are about to join forces to make it happen. Later this month, NEWSWEEK has learned, the companies plan to unveil a simple but significant partnership that could shake up the media world. Subscribers who belong to both services will be able to download their Netflix DVDs over the Internet directly into the TiVo boxes in their homes, instead of receiving them in the mail. Spokespeople at the companies refused to comment on what they called rumor. But an insider who was close to the negotiations says the straightforward partnership is all but a done deal, pending only the approval of the TiVo board this week: “You don’t need a lot of creativity to figure out the details,” the insider said.

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Ahhh, The Advertising Music Biz [3:19 pm]

The sidebar to Products Slide Into More TV Shows, With Help From New Middlemen, This Song Is Brought to You by…, raises some new dimensions to the business of music distribution:

Television is not the only fertile ground for product placement. Record executives, plagued by falling sales and online piracy, are trying to blend brands with music. For instance, Rémy Red, a fruit and cognac mix from Rémy Martin, is sponsoring Angie Stone’s summer concert tour, where she has been performing her song “Rémy Red.”

[...] Certainly, brands have benefited from being included in songs and videos. “Pass the Courvoisier” by Busta Rhymes bolstered sales of the cognac, according to Allied Domecq, but Mr. Rhymes swears the company did not pay him.

The biggest obstacle is MTV. The network has banned explicit product placement in videos, fearing that it would dilute the power of its advertisers. That restriction forces dealmakers to be more imaginative. Mark Humphrey, whose company, Band Ad, links musicians and advertisers, struck a deal between Sheryl Crow and American Express: for Ms. Crow’s song “Soak up the Sun,” American Express licensed the music and created a 30-second commercial with content from the video.

Mr. Humphrey sees a future in branded music videos similar to the plans for TV. [...]

While MTV’s actions might seem peculiar at first blush, it pays to remember that MTV is the progenitor of Lucky magazine and other “all advertising” entertainment channels — and they can’t afford to let anyone else in on their game.

More importantly, if music is going to be all about advertising and promotion anyway, the advertisers paying for product placement are likely to be in favor of cheaper, more rapid distribution — like MP3s on P2P networks……

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OT: My Tax Dollars At Work [1:49 pm]

Nothing like running against an incumbent who sees no limits on strategy: Pentagon to check Kerry war record [pdf]

In a fresh blow to John Kerry’s flagging presidential campaign, the Pentagon has ordered an official investigation into the awards of the Democratic senator’s five Vietnam War decorations.

News of the inquiry came as President George W Bush opened an 11-point lead over his rival - the widest margin since serious campaigning began - according to the first poll released since last week’s Republican convention.

The highly unusual inquiry is to be carried out by the inspector-general’s office of the United States navy, for which Sen Kerry served as a Swift Boat captain for four months in 1968, making two tours of duty.

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Revisiting the Definition of Wiretap [1:34 pm]

Feds try again for wiretapping conviction

The U.S. Department of Justice has asked a full appeals court to review a controversial ruling saying an e-mail provider did not violate federal wiretapping laws by allegedly reading messages meant for customers.

In an unusual twist, civil liberties groups are joining the government’s request to the full 1st Circuit Court of Appeals to revisit a three-judge panel’s decision in June that cleared Bradford Councilman, formerly vice president of online bookseller Interloc, of federal wiretapping charges.

Both legal briefs say that the 2-1 ruling sets an unfortunate precedent that effectively creates an unintentional loophole in Internet wiretapping laws–at least in the New England states that make up the 1st Circuit.

[...] In this case, Councilman provided his customers, typically dealers of rare or used books, with e-mail addresses ending in “@interloc.com.” Councilman allegedly ordered the creation of a simple computer program that surreptitiously saved copies of inbound messages from Amazon.com sent to those specialty book dealers.

The panel’s majority concluded that because the interception happened when the messages were stored on a hard drive–even temporarily–rather than in transit, Councilman did not violate the Wiretap Act. Depending on the number of messages being processed at one time, a mail server may take anywhere from a fraction of a second to more than an hour to deliver e-mail.

Though federal wiretap prohibitions may arguably be “out of step with the technological realities of computer crimes,” the court said, making any changes to such prohibitions was up to Congress. One such bill already has been introduced.

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Two From Larry Lessig [1:08 pm]

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New Rev of IICA/INDUCE [12:59 pm]

IP Newsblog reports that a New Draft of Induce Act is available. There’s a link given to the revision of S 2560, but I can’t find an original source. The original source for the story is this CNet News article: Copyright Office pitches anti-P2P bill

The new version is slightly narrower than the previous one, though many critics are still skeptical. The new language targets anyone who “intentionally induces” file swapping. “Intentionally” is defined as one or more “affirmative, overt acts that are reasonably expected to cause or persuade another person or persons” to violate copyright law.

Will Rodger, director of public policy at the Computer and Communications Industry Association objects to the wide reaching language of the draft. “First it was the Hollings bill, then Induce, now the Copyright Office’s bill. They look different, but they all revolve around the same thing: Giving content (providers) veto power over all new technology,” Rodger said. “Who decided that holders of government-granted monopolies should determine the future of high tech? I don’t remember reading that memo.”

Donna talks about the draft here: What the Fox Proposes for the Henhouse

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Talk About Beating a Dead Horse! [12:48 pm]

Or something. FCC Plans Record Fine For CBS - to what end?

The Federal Communications Commission is set to vote unanimously for a record-setting fine against CBS-owned stations for violating broadcast decency standards with the network’s January breast-baring Super Bowl halftime show, though some commissioners are expected to say the fines are not severe enough, FCC sources said.

The $550,000 indecency fine would be the largest levied against a television broadcaster. The decision could be released as early as next week but may come the week after, said the sources, who would not speak for attribution because the vote has not been made public. The amount represents a $27,500 fine directed at each of the 20 television stations owned by CBS, which in turn is owned by Viacom Inc.

Excluded from the fines are CBS’s more than 200 affiliate stations, which also broadcast the show. That exclusion is one source of disagreement among the five members of the FCC, according to the sources, who are familiar with the commission’s deliberations.

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A Chilling Tale [12:45 pm]

Although the title of the article purports to be about Microsoft’s foray into the music e-tailing business, Microsoft Steps Into The Ring [pdf], it’s really a platform for David Card to push his vision of the future of music sales. It’s that there will be no sales at all — rather, it’s going to be (tethered?) subscriptions!:

Some analysts, however, believe the real money to be made will come from subscription services, which now lag behind the download stores in total sales. The reason has to do with the way people buy and use music.

With download services such as iTunes, users can hear a 30-second sample of a song before they buy it. Once they buy it, it stays on their computer or can be transferred to an MP3 player or burned onto a CD. (Songs purchased from iTunes can be played only on an iPod. Songs bought from MSN Music can be played on any of the nearly 100 MP3 devices for sale.)

The subscription model resembles how people watch cable TV. Services such as Napster, which charges $9.95 a month, give users the right to listen to the entire length of all the songs in the service’s library an unlimited number of times. They typically hook up their computer to speakers or run the songs through their existing stereo systems.

[...] The reason for the coming surge in subscription revenue, said Jupiter analyst David Card, has to do with which music consumers spend the most money.

“Downloads appear to us to be a sampling medium,” Card said. “We think subscription services appeal to the heavy spender.”

As many as half of all Americans spend no money on music, Card said. “They just listen to the radio,” he said.

About 25 percent of Americans spend more than $250 per year on music. Those customers are the audiophiles, customers who are “very eclectic and like to hear new stuff,” he said. Those people are prime customers for the subscription services that let users listen to an entire library of songs all the time, he said.

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The Start of the Internet Café [12:32 pm]

NYTimes, September 2, 2004 — It All Started With a Good Cup of Coffee

Ten years ago last Wednesday, Cafe Cyberia, billed as the world’s first Internet cafe, opened in the West End of London. By most accounts, it drew a sleek crowd and a bit of skepticism.

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Converting the PC into a TV? [12:30 pm]

Or something better? No Need to Dress Up for This Preview; Just Log On to the Home Computer

On Aug. 31, the WB Network and Warner Brothers Television offered for the first time previews of one of its new shows, “Jack & Bobby,” to the several million subscribers of AOL’s high-speed Internet service. And from Sept. 13 and Sept. 20, people with Internet connections will be able to watch a preview of another new show, “The Mountain,” a “larger-than-life saga” about a wealthy family that runs a ski resort. The show, which will premiere on Sept. 22, will be available on Web sites run by the affiliates of the WB Network in 19 cities.

[...] AOL said the preview of “Jack & Bobby” was “off to a good start,” but provided no figures on how many subscribers watched the show. It is also unclear how long viewers watched the shows. If they watched for only a few minutes before clicking off, it might give new meaning to the phrase, “sneak preview.”

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A Look at Craigslist [12:27 pm]

A different business model, and culture…. An Online Pioneer Resists the Lure of Cashing In

Craigslist does not charge for most postings and transactions on the site. It does charge $75 for employers to post job listings on the San Francisco/Bay Area site, and it charges $25 for employers to post listings in New York and Los Angeles.

Revenues of $10 million might seem to make Craigslist highly lucrative, given that the whole enterprise is operated by a paid staff of 14.

But it pales in comparison to what Mr. Newmark and his operation might be worth on the open market, said Larry Brilliant, a doctor, entrepreneur and member of the Silicon Valley digital elite who ran two public companies and helped found The Well, a seminal online community.

Dr. Brilliant, noting that Craigslist has had buyout offers from numerous major Web sites, said that the secret to its popularity was that it did not strive for profit at every turn. The result, he said, is that the site feels welcoming and authentic - attributes missing from dozens of profit-maximizing sites that have floundered or failed.

“It was not started with an exit strategy,” said Howard Rheingold, an author on issues of technology and society and an early member of The Well.

[...] People who know Mr. Newmark said his endeavor was not without other rewards. He enjoys mild celebrity; he is the kind of guy who people like to say they have met, or see at a party and scream to their friends, “Dude, check it out. It’s Craig! From Craigslist.”

[...] Mr. Rheingold said the other key to the success of Craigslist was Mr. Newmark’s fastidious personal commitment to keeping scammers off the site. “Craig is obsessively at the door - like Rick’s American Cafe,” Mr. Rheingold said. Besides, he added, “It’s the ultimate geek thing. Craig gets to answer e-mail all day long.”

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Salon’s Farhad Manjoo on MSN Music [12:19 pm]

As Manjoo says, it’s a “dispiriting” time for everyone: One music store to rule them all

According to analysts who’ve pondered Microsoft’s decisions to go into the music business, here’s the plan as the company sees it: The main aim of the MSN Music shop is to have people purchase songs in Microsoft’s Windows Media format, rather than in the AAC format that Apple sells in its store. The Windows Media format (which is used not only for music but also for movies and TV shows) is only compatible with computers and other electronic devices that run or license Windows. Microsoft wants you to store all your content in Windows Media, in other words, in order to lock you into Windows; when all your music and movies are compatible only with Windows devices, how could you ever possibly think of using Linux or Apple or whatever else may come along?

If you think this plan is sinister, you’re right, it is. But it’s worth noting that in these days of ever-stronger and ever-more-ubiquitous tech-based copy-protection schemes, Microsoft’s plan is not that sinister — it’s not bad enough, that is, to make you feel guilty about using the MSN Store. For one thing, promoting a format in order to lock you into a platform is standard operating procedure for Microsoft. The company’s various application monopolies — the main one being Office — are made possible by the strategic husbanding of “network effects” (i.e., since everyone else you know uses Word, you too must buy Word), and we’re all pretty much used to this tactic by now.

And the truth is that Microsoft is not the only company looking to lock you into a media format. [...]

[...] It’s dispiriting to have to choose one copy-protection scheme over another; ideally, all our music would be sold in an open format like MP3, playable forever however we please. But the recording industry would never allow software companies to do that, and so, in a world of digital rights management, we now have to choose: Apple or Microsoft?

And after using the MSN Music store for just a few minutes, you’ll see that the answer may well be Microsoft. This isn’t because MSN Music is as good as iTunes, or that the third-party portable music players that work with it are as good as the iPod — they’re not. But Microsoft’s system is pretty good. It works well, does most everything you need it to do, and it’ll very likely become much better soon. It is good enough. Good enough, that is, to cause one to wonder whether Steve Job’s revolution will (once again) get hijacked by Bill Gates.

Manjoo does point to the potential silver lining, although Sen. Hatch starts to come into the picture, and it’s not a long-lived element of the MSN Music site:

There is one more drawback to shopping at MSN Music — you can’t listen to your songs on your iPod. [...]

[...] The process that the MSN site outlines here [to enable MSN customers to use their purchases on an iPod] is a widely accepted way of converting proprietary file formats — formats like Microsoft’s Windows Media, or Apple’s AAC — into the open MP3 format. In other words, Microsoft was informing its users of a way to circumvent the copy-protection scheme in its songs just so that the users could have a more flexible user experience — which is certainly very, very nice of them!

Shocked — and pleased — by what I’d seen, I sent the URL to Fred von Lohmann, the Electronic Frontier Foundation’s copyright law expert. Von Lohmann, too, seemed surprised. “That’s just too rich,” he wrote back in an e-mail. “What clearer evidence do you need that DRM on purchased downloads does not help copyright owners — MSN’s own tech support is advising people that it’s trivial to defeat using nothing other than the software already on their PCs. We already know the DRM isn’t helping customers — it makes your downloaded music a brittle investment, subject to the whims of the DRM jailer in your PC. So who does the DRM actually help? After you go to the trouble of actually paying for your downloads, you’re now conscripted into the Apple-Real-MSFT platform wars? They should be paying you!”

I also contacted a Microsoft representative to ask about the curious advice they were giving to users. And that’s when Rob Bennett, the senior director of MSN Entertainment, responded in an e-mail that the whole thing was something of a mistake. “I’m reviewing the language on the preview site now,” he wrote. “We absolutely don’t want to encourage people to circumvent the usage rights for music downloads. It is unfortunate that Apple still disables Windows Media support in the iPod (the firmware they license from PortalPlayer actually supports WMA but they turn it off), restricting their customers’ choice of where they download music. Our approach is very different, encouraging broad choice of many music services and many portable audio devices with the Windows Media format.”

When I later checked the MSN Music help site, the advice Microsoft was giving to its iPod customers had been changed. Now, instead of counseling users on how to have MSN’s songs play on their iPod, the site simply provides an e-mail address for people to complain to Apple. [...]

Later: Derek’s, Donna’s and Fred’s reaction

Later: Letters

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OT: Something To Help You Sleep At Night [12:08 pm]

OSS torpedoed: Royal Navy will run on Windows for Warships

But in July of this year AMS announced, claiming as it did to be ‘encouraging’ open systems development, that Windows 2000 was “the current baseline console” for Type 45 development. AMS supports this with copious documentation on the AMS approach to open systems, which can be summarised as open, so long as it uses Windows. Earlier AMS had announced the deployment of Windows on submarine HMS Torbay, together with plans to retrofit Windows to Vanguard class and other attack submarines.

And in case you’re wondering, the Vanguard class boats carry the UK’s Trident thermo-nuclear intercontinental ballistic missiles. So some people think that’s a heap of responsibility for Windows to carry.

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Backstory - Sony’s Schizophrenia and Apple [12:03 pm]

The industry continues to remark upon Sony’s internal difficulties with the differing objectives of the entertainment and consumer electronics divisions. Here’s another example from The Register: Apple’s Jobs ‘offered iTunes team-up deal to Sony’

Apple CEO Steve Jobs offered his opposite number at Sony, Nobuyuki Idei, the opportunity to offer a version of the iTunes Music Store, Japanese newspaper the Nikkei Sangyo Shimbun has claimed.

According to the report, Jobs suggested such a deal during the Sony Open golf event, held in Hawaii last January. Idei is - surprise, surprise - said to have rejected Jobs’ overtures.

[...] Sony is far too wedded to its MiniDisc medium, its ATRAC music format family and MagicGate DRM technology to switch to Apple’s equivalent, AAC and FairPlay. At that point Sony was gearing up to announce its first hard drive-based Walkman, the NW-HD1, with the hopes of beating Apple at the portable personal music game the Mac maker had already wrested from Sony.

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Disney Delays Moviebeam [11:59 am]

Faultline, via p2pnet, asserts a Disney delay to Moviebeam (see earlier story - Wonder What The Post-HDTV Plans Are For Analog TV Spectrum?

Disney is so petrified of anyone stealing its content that it has also separately developed self destroying DVDs with another technology partner, which will survive only 48 hours once the packaging is removed.

It should instead beat a path to the door of DivX and use its technology for protected internet downloads.

Disney decided to wait until 2005 to sort out what to do with its MovieBeam service that beams 100 movies through the airwaves, straight to a set top.

The entertainment giant wants us to believe that it is thinking about just how to go about partnering before it rolls out a service that it has confidence in and that is an unqualified success.

The delay is at least until late 2005 but may be right into 2006, said the company.

See also the Washington Post’s Disney Eyes Video-On-Demand Partnerships

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CNet On Campus Tech/Digital Lifestyles [11:54 am]

Big tech on campus

The success of school-backed technology initiatives is critical for providers of digital lifestyle equipment and services, which test early-adoption patterns and scramble for mindshare among tech-heavy spenders. But there’s a fine line between giving students access to cutting-edge technology and making them marketing guinea pigs, some critics warn.

[...] iPods aren’t the only technology trend schools are buying into. Several universities subsidize or pay for legal music download services such as Napster, Cdigix, RealNetworks’ Rhapsody and Ruckus Network. Pennsylvania State University got the ball rolling earlier this year, when it launched a pilot program that offered Napster 2.0 to a select number of students for free. Penn State’s offer has since been expanded to all students, and other schools are following suit.

Campus authorities say they are partnering with these companies to stymie illegal downloading over peer-to-peer networks. Universities have been targets of several lawsuits launched by the Recording Industry Association of America.

The RIAA has said that so far, its legal efforts, combined with these partnerships, has helped reduce illegal file sharing on college networks.

At least today’s Boston Globe interviewees had the decency to admit that these instruments are unlikely to have anything to do with reducing “piracy.”

Later: Slashdot’s The Changing Face Of Campus Tech

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Zippy The Pinhead And Copyright [9:59 am]

I love to read Bill Griffith’s Zippy the Pinhead cartoons, even though his message is sometimes a little difficult to track. For example, this May 23, 2001 cartoon encapsulates the conflict that many people bring to the debate. Yet, this February 4, 2003 strip puts him clearly into the Eldred camp.

But today’s strip shows that he’s really having problems reconciling the issue, even in his own work. Of course, maybe he doesn’t see the problem. What do you think? And what might Senator Hatch’s INDUCE Act allies think of this standard practice in the art community, generally?

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Campus Threats [9:42 am]

According to this article, Schools’ bandwidth woes are music to Ruckus’s ears [pdf], schools are looking to Napster et al. because copyright infringement leads to bandwidth losses. Yet, even the vendors can’t explain how they’re even going to help in that regard — unless they are prepared to argue that their product will somehow throttle the bandwidth hogs?

College students, with an endless craving for free music and a near-endless supply of free time, are among the biggest perpetrators of illegal downloads. (Last summer, you may recall, the recording industry subpoenaed several Boston-area schools to get the names of students who had been using illegal file-sharing services like Kazaa.) Their downloading activity can put major strains on a college’s network infrastructure.

But the music services being offered by the likes of Ruckus and Napster can’t really claim that they will put an end to illegal downloading. If a student doesn’t find the latest hit single on the legal service offered by her university, she may still go to an illegal site to get it. Or she may be frustrated at some of the services’ inability to supply a file that can be played on a portable MP3 player, or burned onto a CD.

“We in no way prevent illegal downloading,” Galper admits. “But when students begin to use our product, we think they’ll naturally be using less peer-to-peer services.”

At least my institution isn’t buying the snakeoil - and the article’s author fails to, either:

Jerry Grochow, vice president for information services and technology at MIT, says “we have not yet come to the conclusion” that students require an unlimited, free supply of music paid for by the university. Babson College in Wellesley has had discussions with Ruckus, but is taking a wait-and-see approach.

Some schools will want to show the recording industry that they’re making a good-faith effort to fight piracy, even if they can’t stop it cold, and they will cut deals with one of the four music suppliers.

But I don’t see digital music services becoming a campus must-have as rapidly as has, say, wireless Internet access. You can call me a fogey (and I’m also a music lover), but I’m not sure how hot-and-cold running music contributes something positive to the collegiate social or educational experience.

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