StreamCast Suit Update

Morpheus makers file suit against eBay

StreamCast claims in a lawsuit filed Monday in the U.S. Central District Court in Los Angeles that Niklas Zennstrom and Janus Friis, the duo who developed the technology behind companies Kazaa and Skype, of breaking an agreement to give StreamCast the first right to purchase their FastTrack peer-to-peer protocol.

FastTrack was the network on which Morpheus’ file-sharing application once operated and is also the technology foundation of Skype’s voice over Internet Protocol (VoIP) service.

Monday’s filing is an amendment of a suit first filed in January. The complaint now adds eBay to the 21 companies previously named as defendants and requests that the court force Skype, acquired by eBay last October, to halt sales of VoIP products. StreamCast is also asking for more than $4 billion in damages.

EMI Posts Profit Increase

EMI Annual Profit Up 14% [pdf]

After years of suffering from illegal downloads and competition from other forms of entertainment, the music industry is singing a new song: A rebound may finally be near.

On Tuesday, London-based EMI Group became the latest major record company to post significantly higher profit, as well as its first annual sales increase in five years. That follows recent upbeat releases by rivals Universal Music Group and Warner Music Group.

[…] EMI, which reports only annual results, said profit rose 14% to 86.1 million pounds ($162 million) for the year ended March 31. Revenue rose 4% to 2.1 billion pounds ($3.9 billion), thanks to strong-selling albums from Coldplay, Gorillaz and country singer Keith Urban.

[…] EMI was especially buoyed by growth in digital revenue, considered the industry’s future as iPod-like devices proliferate. It soared 135%, to 112.1 million pounds.

“In the next five years, digital downloads will increase sevenfold,” said Larry Haverty, who oversees a media portfolio at Gabelli Asset Management Inc. “Downloads have higher margins than physical CDs, they’re easier to sell and distribute — the industry is going to become more and more profitable.”

[…] As digital downloads increase, the industry has been frustrated with Apple, which sells 80% of digital music in the U.S., for resisting pressure to raise prices. Digital subscription models also have failed to take off, and although ring tones — the song clips that play on cellphones — have brought the industry more than $3 billion in revenue, other cellular products have failed to mirror that success.