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January 31, 2008

A Little Market Research [2:40 pm]

From this week’s New York Times “Most Wanted” page [local copy]:

A look at the top 10 artists based on sales of album, and the top 10 artists based on downloads of digital track shows a divide. Fans of popuar and country music prefer albums, and fans of hip-hop and R&B download tracks. Only Linkin Park [...] made the list in both categories.

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Surveillance Tech: US-Made [2:27 pm]

And, of course, field-tested here: Keeping an Eye on China’s Security

[W]ith China now becoming wealthier and its citizens more mobile, the government is now embracing the extensive use of street-by-street surveillance technology — and the United States government is becoming less sure that American companies should be playing a central role in the effort.

The Commerce Department is drafting new rules on what security equipment American companies can sell to China. The move comes in response to rapid advances in surveillance technology and the increasing involvement of American companies in the Chinese market as the Olympics approach.

People involved with the process said the Commerce Department was singling out biometric technology — face-recognition software, in particular — which Chinese security agencies could use to identify political and religious dissidents.

[...] American companies heavily promote their equipment as being the most advanced on the market, in part because much of it was developed to fight the threat of terrorist attacks in the United States. Current American regulations allow the export of most surveillance equipment if regulators believe it could be used in a factory or office complex and is not intended exclusively for police work.

In addition to multinationals that export surveillance equipment from the United States, there are other security companies that are incorporated in the United States — and are mainly bankrolled by American hedge funds — but with virtually all of their employees in China.

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Technology: It Taketh and It Giveth [12:29 pm]

HDTV: The Super Bowls guaranteed MVPpdf

IMPROVED televisions hardly seem like harbingers of social change, but this technological evolution very well may alter how some people spend their time and relate to others.

If a football game or movie is exponentially better when viewed at home than in a stadium or theater, are we more likely to withdraw into our own private worlds? If a new generation of viewers grows up watching TV on some high-definition cellphone of the future, will fewer families gather around the big set together?

Though researchers are just beginning to study the effect of HDTV on human behavior, the new technology represents what sociologists call the privatization of leisure: People are less likely to seek entertainment in public social settings.

Whats complicating the outlook for the future, UCLA sociology professor David Halle says, is the Internet.

“While people are watching their HDTV, theyre also text-messaging their friends. This is not privatization in the old sense, but now in context of this tremendous web of relationships.”

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January 30, 2008

Consequences of Opening Cellphone Networks? [5:11 pm]

And I’m sure it will be used as an excuse to inhibit the change: Porn to spice up cell phonespdf

Unlike in Europe, mobile porn has yet to take off in North America as carriers have been afraid of offending political and religious groups and parents concerned about children being exposed to adult content.

That may change this year as phone companies plan to loosen control on their networks to allow a wider variety of gadgets and services, while introducing new tools to shield minors. More advanced phones with better Web browsers like Apple Inc’s iPhone also offer higher quality pictures and video.

Note that there are copyright issues, too, of course:

Popular video-sharing site YouTube.com’s plan to expand to about 100 million advanced cell phones may help the cause, even if it means some ClubJenna content — which includes everything from glamour photographs of scantily clad models to hardcore videos — is seen for free on phones. ClubJenna was sold to Playboy Enterprises Inc in 2006.

“It’s a double-edged sword. On the one hand, it’s giving away content. … On the other hand, it’s expanding the brand,” said [ClubJenna's Jay] Grdina [sic], adding that ClubJenna needs a boost in the U.S. market, where it generates “pretty much zero” mobile revenue compared with “very healthy” revenue in Europe.

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Dahlia Lithwick Calls A Spade A Spade [4:44 pm]

Let’s do away with the legislative fiction of the terrorist alarm clock

It’s true enough that FISA requires a sober update to account for technological changes since it was drafted in 1978, but the PAA wasn’t sober and it wasn’t justified. Now we must also contend with the added insult of the president’s demand for telecom immunity for the companies that allegedly helped him illegally spy on Americans. Hmmm. Don’t punish phone companies for believing our lies almost sounds plausible, so long as the Bush administration remains on the hook for peddling those lies. But that’s not what the White House wants—it wants telecom immunity, plus more government secrecy, plus no oversight. Sens. Feinstein and Feingold, and others, are pushing for amendments that would keep us safe while preventing the Bush administration from slinking away from its surveillance activities.

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January 29, 2008

“Hippies?” [2:48 pm]

If you’re going to try to spin a story, a little more thought into the underlying concepts might be in order. Particularly since, IMHO, the music industry’s current problems have only been revealed by technological developments rather than caused by them [via Machinist]: Silicon Valley’s hippy values ‘killing music industry’pdf

U2’s manager yesterday called on artists to join him in forcing the “hippy” technology and internet executives he blames for the collapse of the music industry to help save it.

Paul McGuinness, who has plotted the rise of the Irish group over 30 years, said technology gurus in Silicon Valley such as Apple’s Steve Jobs and Microsoft’s Bill Gates had profited from rampant online piracy without doing anything to stop it.

“I suggest we shift the focus of moral pressure away from the individual P2P [peer to peer] thief and on to the multibillion dollar industries that benefit from these tiny crimes,” he said.

See also this FT article echoing the currrent IFPI (and AT&T) position: U2 manager urges ISPs to help fight web piracypdf

Also, related: Music executive: business is not so bad, actually (pdf) and Music industry finds the solution to its pirate troubles - give everything away (pdf)

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EU Privacy Preempts Suspicion of Copyright Infringement [2:35 pm]

For now, anyway: EU court: Downloaders can stay privatepdf

Record labels and film studios cannot demand that telecommunications companies hand over the names and addresses of people who are suspected of sharing copyright-protected music and movies online, the EU’s top court ruled Tuesday.

But European Union nations could — if they want — introduce rules to oblige companies to hand over personal data in civil cases, the European Court of Justice said.

The court upheld the Spanish telecom company Telefonica SA’s right to refuse to hand over information that would identify who had used the file-sharing program Kazaa to distribute copyright material owned by members of Promusicae, a Spanish trade group for film and music producers.

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Putting Your Signature on a Gene [7:54 am]

A little IPR gamesmanship (arrogance?) from an acknowledged master: Synthetic Genome: Signed, Sealed, Decoded

Dr. Venter announced last week in the journal Science that his team had become the first to synthesize the complete DNA of a bacterium. He revealed that the genome had five “watermarks,” sequences of genetic code that would spell words using the letters for the amino acids that would be produced by the DNA.

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Litigation, Consumer-Created Content and Advertising [7:49 am]

With echoes into other domains of user-created content: Can a Sandwich Be Slandered?

The dispute over an ad is fairly standard — companies often sue one another over advertising claims — but the video contest raises a novel legal question: Quiznos did not make the insulting submissions, so should it be held liable for user-generated content created at its behest?

If the answer is yes, that could bring a quick death to these popular contests, advertising executives say. Consumer brands like Doritos, Dove, Toyota and Heinz have run promotions of this sort because they generate publicity, usually at a low cost to the advertiser, and sometimes lead to clever spots that work well on television. But the Subway lawsuit, which seeks financial and punitive damages, seems to open a Pandora’s box.

“Let’s just hope that as collateral damage it doesn’t kill the entire genre of competitive advertising,” said Brad Brinegar, chief executive of McKinney, an ad agency in Durham, N.C., that does not work with Subway or Quiznos.

In its lawsuit, Subway contends that the consumer videos — which were posted at a site Quiznos had set up called meatnomeat.com, as well as on iFilm — contained “literally false statements” and depicted Subway in a “disparaging manner.”

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Matchmaking, Updated? [7:43 am]

An uneasy marriage of psychology, sociology and commerce: Online Dating - Compatibility Testing

Once upon a time, finding a mate was considered too important to be entrusted to people under the influence of raging hormones. Their parents, sometimes assisted by astrologers and matchmakers, supervised courtship until customs changed in the West because of what was called the Romeo and Juliet revolution. Grown-ups, leave the kids alone.

But now some social scientists have rediscovered the appeal of adult supervision — provided the adults have doctorates and vast caches of psychometric data. Online matchmaking has become a boom industry as rival scientists test their algorithms for finding love.

[...] As the matchmakers compete for customers — and denigrate each other’s methodology — the battle has intrigued academic researchers who study the mating game. On the one hand, they are skeptical, because the algorithms and the results have not been published for peer review. But they also realize that these online companies give scientists a remarkable opportunity to gather enormous amounts of data and test their theories in the field. EHarmony says more than 19 million people have filled out its questionnaire.

[...] Does this method actually work? In theory, thanks to its millions of customers and their fees (up to $60 a month), eHarmony has the data and resources to conduct cutting-edge research. It has an advisory board of prominent social scientists and a new laboratory with researchers lured from academia like Dr. Gonzaga, who previously worked at a marriage-research lab at U.C.L.A.

So far, except for a presentation at a psychologists’ conference, the company has not produced much scientific evidence that its system works. It has started a longitudinal study comparing eHarmony couples with a control group, and Dr. Buckwalter says it is committed to publishing peer-reviewed research, but not the details of its algorithm. That secrecy may be a smart business move, but it makes eHarmony a target for scientific critics, not to mention its rivals.

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January 28, 2008

Tim Wu On The Tension Between Promotion and Piracy [4:08 pm]

Of course, Microsoft has managed this pretty effectively, but the network effects of software are somewhat different from those of popularity: Please pirate my Sundance film

Film piracy, the conventional wisdom goes, is a threat to the film industry at all levels. Thats certainly the sense at the Sundance Film Festival, where both the festival and distributors invest heavily in anti-piracy measures, including undercover agents who attend screenings to capture illicit videotapers. But it turns out that they may be wasting their money. Sundance films, present and past, simply do not register in the online pirate world—unless they are one of the few that have already made it big like Clerks or Little Miss Sunshine. This proves two things: When it comes to content piracy, obscurity, not security, is the best defense. It also demonstrates that movie pirates are fundamentally parasitic, not predatory.

[...] Not a single 2008 Sundance film is on any major pirate site that I could find. That might be accounted for by anti-piracy measures, but here’s the kicker: There are also almost no 2007 films on leading pirate sites, and none of last year’s Sundance “hits.” The online pirate world and the Sundance world are, as far as I can tell, separate domains.

Why this result? The simplest explanation is that it takes a critical mass of interest—lots of people who want to see a film—before it will get decent pirate distribution. There are a number of reasons for this, but, crucially, every step of the piracy distribution system relies on knowing that the film exists at all. Moreover, to get effective, fast distribution on a peer-to-peer network, you need lots of reliable peers—enough people willing to share the burden of distributing the film online.

In the end, it’s a numbers game. [...]

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Wha-aat? [9:58 am]

So, if I follow this correctly, it is so important to the safety of the nation to make the current temporary bill permanent that the President will veto a 30 day extension — an extension needed, among other reasons, because of the White House’s late delivery of pertinent documentation about the surveillance program? A demonstration of just how shameless this administration is: Veto of Wiretap Measure Is Threatenedpdf

The White House warned Democratic leaders yesterday that President Bush would veto a proposal to extend an expiring surveillance law by 30 days, saying that Congress should quickly approve a Senate bill favored by the Bush administration.

The move is aimed at forcing Congress to renew and expand the Protect America Act — which is due to expire at the end of the day Thursday — and escalates a national security showdown between Democrats and the White House just before the president’s annual State of the Union address.

[...] In his weekly radio address, Bush said “we cannot afford to wait” for a permanent legislation.

“If this law expires, it will become harder to figure out what our enemies are doing to infiltrate our country, harder for us to uncover terrorist plots and harder to prevent attacks on the American people,” Bush said.

But [Harry] Reid said that “current law ensures that no ongoing collection activity will be cut off on February 1.”

For more background, see this entry: Something Else From This Week’s New Yorker

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Sweden Caves To MPAA/IFPI Pressure [9:28 am]

Sweden to charge Pirate Bay in copyright casepdf

Sweden plans this week to charge the people running Pirate Bay, one of the world’s most visited Web sites, with being accessories in breaking copyright law.

[...] Public prosecutor Hakan Roswall said last week he will charge the Swedish site’s organizers with accessory and conspiracy to break copyright law, which could lead to fines or up to two years in prison.

The charges will be filed in a district court on January 31.

[...] No copyright material is stored on Pirate Bay’s servers and no swapping of files actually takes place there. Rather, Pirate Bay locates file sharers on the Internet and acts as a directory of so-called torrent files.

Later: Sweden charges Pirate Bay with copyright offences [pdf] (31 Jan 2008) — also Sweden Accuses 4 of Copyright Offenses

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Coping With The Rush To Computer Voting (updated) [9:07 am]

A paper jam roils California votepdf

In a series of controversial decisions last year, California Secretary of State Debra Bowen decertified the vast majority of electronic voting machines in the state, arguing that they were vulnerable to tampering and have defects that could corrupt vote counts.

As a result of her order, about a third of California counties are scrambling to prepare for the Feb. 5 presidential primary, printing millions of paper ballots, acquiring new optical scanners and pressing into service optical scanners normally used to count absentee ballots.

[...] The counties believed the machines provided a bulwark against a disputed election, like the one that hit Florida’s punch-card system in 2000. In their view, that election demonstrated an accuracy problem, not a security problem. Nonetheless, the electronic machines are under a cloud.

Bowen enlisted a team of eminent computer scientists from top laboratories and universities. They were able to hack into every type of voting machine. “People just don’t trust them,” Bowen said about the electronic machines. “You only have one chance to get an election right.”

Part II: Electronic voting is facing a recallpdf

Congress thought it was fixing the system in 2002 when it passed HAVA, laying the groundwork to eliminate punch-card systems, create new standards for certifying electronic voting machines and provide access to the disabled.

It created the Election Assistance Commission, a panel of two Republicans and two Democrats, to administer the new law.

But the $3 billion was handed out to states before the agency was formed, before new standards were created and before the commission could certify independent labs that would put a federal stamp of approval on the new equipment. As a result, the states purchased the machines based on the marketing of the four major electronic voting machine companies.

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“Fantasy” Lands, For Marketers [9:04 am]

Disney draws an interesting line here, in that it doesn’t accept advertising — but it certainly is gaining incredible market research for its own products: Disney adds fantasy landspdf

Walt Disney Co. is no stranger to fantasy worlds, transporting audiences — whether to a cottage in the woods with a young princess in “Snow White and the Seven Dwarfs” or to the Great Barrier Reef aboard the Finding Nemo Submarine Voyage ride at Disneyland.

Now, Disney is spinning its tales in the newest mass medium — online virtual worlds, where children adopt cartoonish avatars and play games.

Disney and other entertainment companies are rushing to capitalize on the latest Internet phenomenon: the rise of virtual worlds for kids. Online haunts for grown-ups, such as Second Life, grab the attention of corporate marketers. But digital playgrounds for the juice-box set — such as Disney’s Club Penguin and Ganz Inc.’s Webkinz — are drawing bigger crowds.

[...] Disney says it opted for subscriptions to defray the costs of monitoring and providing a safe environment for kids to play online. It chose not to permit advertising. Webkinz drew criticism from a parent group last month for displaying ads for the “Alvin and the Chipmunks” film and encouraging young users to buy chipmunk costumes and food for their virtual pets.

For Disney, a virtual world such as “Pirates” pays dividends beyond the potential subscription revenue. It keeps fans of the movie franchise interacting with the characters and primed for the next chapter in the “Pirates” epic, be it a film, a game or merchandise.

[...] “The media companies are starting to realize that virtual worlds represent a very easy, very controllable, very compelling and very sticky media channel,” said Stephen Prentice, analyst for technology research firm Gartner Inc.

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Refining the Business Model - 3 [8:59 am]

Major record companies weigh deal with online servicepdf

Major record companies may be considering deals with Qtrax to allow music lovers to listen to any tune, anytime, free of charge.

Qtrax says that the four big labels — Universal Music Group, owned by Vivendi; Sony-BMG Music Entertainment; Warner Music Group; and EMI Group — have agreed to license their digital catalogs to the service, which aims to exploit online music bandits for commercial purposes.

Executives at Universal, Warner and EMI say they haven’t signed deals with Qtrax, though a Universal spokesman says the label is “really close” to coming to terms. Officals with Sony haven’t returned phone calls.

A Qtrax spokesman insists the deals have been made.

Later (1/29/2008): Qtrax jumped gun on online deal, labels saypdf

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In Search of the Elusive Digital Book Platform [8:32 am]

A Kindle reviewer wants us to believe the time has come — I’m not so sure, although I don’t agree with Steve Job’s take, either: Freed From the Page, but a Book Nonetheless

Building a portable electronic reader was the easy part; matching the visual quality of ink on paper took longer. But display technology has advanced to the point where the digital page is easy on the eyes, too. At last, an e-reader performs well when placed in page-to-page competition with paper.

As a result, the digitization of personal book collections is certain to have its day soon.

Music shows the way. The digitization of personal music collections began, however, only after the right combination of software and hardware — iTunes Music Store and the iPod — arrived. And as Apple did for music lovers, some company will devise an irresistible combination of software and hardware for book buyers. That company may be Amazon.

[...] [W]hen Mr. Jobs was asked two weeks ago at the Macworld Expo what he thought of the Kindle, he heaped scorn on the book industry. “It doesn’t matter how good or bad the product is; the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year.”

[...] The book world has always had an invisible asset that makes up for what it lacks in outsize revenue and profits: the passionate attachment that its authors, editors and most frequent customers have to books themselves. Indeed, in this respect, avid book readers resemble avid Mac users.

So, why will digital books take off, then?

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The Gawker-Scientology Fight Hits the Times [8:26 am]

Scientology Writes; Gawker Rises

At Scientology’s request, YouTube and other sites took down the copyrighted video, but Gawker refused, instead posting and mocking the reproachful letter sent by a Los Angeles lawyer representing the church.

As for whether Gawker will be hauled into court, Karin Pouw, a spokeswoman for the Scientologists, issued a statement that further action had not been “contemplated, let alone decided.” Equating the lawyer’s letter with a threat of a lawsuit amounts to “unsubstantiated rumors” by “those wishing to create further controversy and media attention,” she wrote.

Diane Zimmerman, an intellectual property professor at the New York University School of Law, said Gawker appeared to be within the copyright law’s “fair use” provision, which permits excerpting copyrighted material for news gathering or criticism.

See earlier Gawker Taking on Scientology

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Refining the Business Model - 2 [8:11 am]

Direct-to-DVD Releases Shed Their Loser Label

Once a dumping ground for movies considered virtually unwatchable, the direct-to-DVD pipeline is becoming increasingly important to mainstream film franchises.

Hollywood’s new direct-to-DVD strategy rests on calculating a sequel’s chances at the multiplex. Three big-screen “American Pie” movies rained money on Universal, selling more than $750 million of tickets worldwide, according to Box Office Mojo. But Universal had a decision to make when it came to approving a fourth installment for a theatrical release. The third film, “American Wedding,” cost $55 million plus tens of millions more to market — far more than its predecessor. Yet its ticket sales were 28 percent lower.

In previous years, the studio would have either pulled the plug on the series or continued to serve up sequels in theaters to increasingly smaller audiences. Opting for diminished returns was typically the industry’s course — why leave money on the table? — which is how wince-inducing films like “Police Academy 6: City Under Siege” ended up at the multiplex.

But studios have realized that the power of the DVD market gives them another option. They drop everything but the franchise concepts and the titles, and hire cheaper acting talent. Add a marketing campaign of decent weight to increase the size of the audience that remains and — presto — more profit, pound for pound, than some big action flicks. Oh, and get rid of that pejorative-sounding direct-to-DVD term. Call it DVD Premiere.

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Refining the Business Model [8:03 am]

I’m not sure where Bray gets his technical information (CDs are WAV, rather than PCM, data?), but the issue of sound quality as new formats are introduced is one that is as old as the audiophile community: More music dealers offering downloads with sound quality that rivals a CD’spdf

Internet music retailers offer millions of tunes, in every genre from opera to hip-hop to Palestinian folk songs. But it’s still hard to find online music that sounds good on a $10,000 stereo system.

Online music sellers like Apple Inc. and Amazon.com use digital compression technologies to shrink the sizes of music files, making them easier to store and download. But compression also hollows out the music, eliminating many of the sonic subtleties cherished by hardcore audiophiles. That’s why many finicky music lovers won’t sully their ears with today’s downloadable tunes and are clamoring for something better.

[...] A handful of online music dealers, including Magnatune, MusicGiants Inc., and AIX Media Group Inc., are responding with audio downloads that match, and in some cases exceed, the quality of standard CDs.

“If you’re going to ask people to move from CDs to downloads, I think you have to have something that’s just as compelling,” said Magnatune’s founder, John Buckman.

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