Month: November 2004

BT And Blueprint Jointly Develop Innovative Music Distribution Service

In yet another move in the legitimate digital music market, BT and Blueprint have jointly developed a new service based on Blueprint’s Open Royalty Gateway (ORG) and Song Centre software that allows copyright holders to take more control of their material.

The new service for hosting, managing and distributing music and related content online, promises to accelerate the growth of the market by addressing key problems hampering the development of online music businesses, such as time to market, copyright protection, capital expenditure in IT and networking technologies, control of rights and the margin structure of the present models.

BT brings to the table IT, networking and data storage knowledge, while Blueprint offers experience in media management software and music industry relationships. Blueprint will provide the software framework and industry interface, with BT utilising its digital content hosting platform and international network to deliver a global reach.

The solution enables rights holders – artists, writers, publishers and record companies – to host their songs, videos, ringtones and other digital media files while having a direct commercial relationships with retailers. Content can be delivered directly to any number of media-enabled devices, including PCs, digital audio players and mobile phones. Of course, online-only distribution also dramatically reduces the time it takes to get digital files to market, but the system has to be successful in managing rights and digital licences, reporting royalties and sales to rights holders, and offering a wide variety of digital media to consumers using variable pricing structures.

An interesting feature of ORG is that it allows rights holders to actively manage their content, including setting business rules for pricing and location, electronic contract creation, sales tracking and royalty reporting. In addition to handling ‘major label’ music content, ORG allows independent labels and artists, many of whom control their own rights, to encode, package and upload their content to the service and then manage contracts. Blueprint will also work with retailers, letting them mix and match content to create their own offers and campaigns through a service called Song Centre.

On the other hand, the service could, however, let artists or smaller labels bypass the majors and sell their music directly to retailers or consumers. Referral and reward programmes, using viral recommendation, also means that consumers can earn back the cost of the music they purchase, by rewarding them with a commission each time one of their friends buys recommended content.
The service has already been used by EMI for Robbie Williams’ recent No.1 hit single ‘Radio’ with Australia and New Zealand’s leading music retailers, Sanity and Sounds. Audio, video, visual and mobile content was bundled together for sale, and linked into a competition utilising Blueprint’s referral and reward technology to drive additional opportunities to win prizes. The service is now powering the global Robbie Williams ‘Greatest Hits’ digital download store.

Blueprint
BT

Thomson: ContentGuard and Verisign deals

Paris-based Thomson have been busy. They’ve done two deals that will have an impact.They have become a strategic investor in ContentGuard, a closely-held developer of Digital Rights Management (DRM) intellectual property. With this investment, Thomson enters into a partnership with current investors Microsoft and Time Warner Inc.

Digital Rights Management describes a wide range of technologies that have been developed to allow movies, music and other digital content to be accessed by consumers over the Internet while protecting that content from unauthorised copying and counterfeiting – a technology championed by Microsoft and its Windows Media Player software.

Thomson has agreed to purchase an aggregate 33 per cent voting stake in ContentGuard from Microsoft, Time Warner and Xerox, subject to customary closing conditions and regulatory approvals. The announcement follows Time Warner’s April 2004 purchase of most of Xerox’s stake in ContentGuard.

The three companies (Microsoft, Time Warner and Thomson) are using the announcement to promote the development of inter-operable DRM systems, accelerate the deployment of consumer devices that support Digital Rights Management, and encourage content owners to launch new distribution channels.

The move is also interesting because Thomson is a long-standing technology and services provider to content owners and network operators, thus bringing a unique perspective that should complement the interests of ContentGuard and its co-investors. Thomson also has a lot of experience in IP licensing, which should further help to support ContentGuard’s licensing activities and accelerate and broaden the acceptance of DRM and ContentGuard’s intellectual property.

“The development of Web services and new content distribution systems requires a complete ecosystem of participants. Thomson’s investment alongside Time Warner and Microsoft shows that media, software, devices and services companies are committed to developing the infrastructure for Web services to flourish”, said Bill Gates, chairman and chief software architect, Microsoft. “This partnership will help propel the licensing of DRM intellectual property. With the participation of Thomson, a recognised leader in IP licensing, we add a European headquartered partner that will make this important technology more accessible in other parts of the ecosystem, particularly services and devices.”

“Today’s announcement marks yet another important step in our work on DRM, and expands our collaboration with key partners on this strategic initiative,” said Ron Grant, senior vice president at Time Warner. “We look forward to working with Thomson, Microsoft and others on offering consumers exciting new digital media products and services while simultaneously protecting content.”

In another move, Thomson and VeriSign have joined forces to create an authentication and authorisation service for movies, music and games delivered over digital networks. The new service, which will likely debut next summer, will be used to process secure transactions and for other back-office functions. It is geared at the subscriber digital entertainment market over broadband networks, which is a fast growing industry.

VeriSign’s Internet transaction authentication and network infrastructure technologies will be used, while Thomson will capitalise on its experience in content security, management and distribution. Both companies also plan to develop proprietary technologies to authenticate and authorise digital content and to build an interface for home networking devices such as video recorders, mobile devices and computers. These features could help protect movies and other content from piracy.

Thomson
ContentGuard
VeriSign

Universal Music Group Creates Digital-Only Music Label

Another month, another digital music announcement. This time, however, a record label is actually thinking long term. Universal Music Group (UMG) are embracing online technology as part of its business model, rather than wasting its time, money and efforts suing a handful of consumers for downloading copyrighted material.

Universal, which like other record companies, has heavily relied on profits from sales of CDs, will this week promote eight relatively unknown acts on a digital-only label (UMe Digital) through online services including Apple Computer’s iTunes, RealNetworks’ Rhapsody and Microsoft’s MSN Music. Online promotion is an alternative marketing option that’s nowhere near as expensive as traditional forms, but has the potential to be highly effective.

It’s great news that Universal is taking these innovative steps, as it finally shows that music labels will have to adapt to online sales and marketing in order to survive, especially as sales of CDs have fallen over the last four years, record stores are moving from high streets, and more shelf space is being given to DVDs and video games.

The move is also great news for bands because they can get relatively large exposure without having to spend a fortune on recording, making a video and then going on the road to ‘develop’. However, bands do not receive an advance or even the cost of producing an album. Having said that, they do retain full ownership of their master recordings and licence them to Universal for a limited time.

Universal is paying the musicians around 25 per cent royalty on the retail price of the downloads, and if online sales of an artist’s music reach a certain point, say around 5000 copies of a particular song, the company has an option to pick up distribution of the CD to record stores.

It’s now only a matter of time before digital-only independent labels start promoting bands online by creating a low-risk way to market them without producing a physical album or underwriting a tour or music videos. For consumers, gone are the days of paying £15 for a CD – a digital world means more choice and better value.

Warner Music Group is developing a unit similar to Universal’s, initially to sign artists and finance recordings for online sales, with the potential for later CD releases.

Universal Music Group
Warner Music Group

JFK Reloaded Described as ‘Despicable’

JFK ReloadedOn the eve of the 41st anniversary of John F Kennedy’s murder, a dramatic new ‘docu-game’ brought the tragic assassination by Lee Harvey Oswald to life for a whole new generation. However, a spokesman for the president’s brother, Senator Edward Kennedy, called the game ‘despicable’, but has not commented on whether the family was taking any action to stop the game’s release.

JFKReloaded ($9.99, ~€7.70, ~£5.40), recreates the last few moments of the President’s life and challenges participants to help disprove any conspiracy theory by recreating the three shots that Lee Harvey Oswald made from the infamous sixth floor of the Dallas book depository.

The game promises to accurately recreate the surroundings and events of 22nd November 1963 in downtown Dallas, using information from the Warren Commission report, and has taken a ten-man team seven months to research and six months to program. The reconstruction enables players to examine the challenges that faced Oswald.

‘This new form of interactive entertainment brings history to life and will stimulate a younger generation of players to take an interest in this fascinating episode of American history,’ commented Kirk Ewing, managing director of Traffic and the creator of JFKReloaded. ‘We’ve created the game in the belief that Oswald was the only person that fired the shots on that day, although this recreation proves how immensely difficult his task was.’

Regardless of the continued passion in the US surrounding the death of one of America’s greatest heroes, Traffic is determined to promote the title respectfully whilst encouraging as many people to play the game as possible. The company has also offered an incentive of up to $100,000 (~€77,000 ~£54,000) for the first person to most accurately recreate the three shots made by Lee Harvey Oswald. A cash reward of this size is the first of its type for a game.

“We genuinely believe that if we get enough people playing the game we’ll be able to disprove once and for all any notion that someone else was involved in the assassination. The computer ballistics model says it’s possible, but players will discover just how hard it is to place those three bullets in exactly the same way that Oswald did.” The site goes live at midnight on the 22nd November 2004 and will run for 3 months.

It’s more than likely that this game will raise the issue in the press of video games containing violence, as was last seen with ‘Manhunt’. Last time the press got the wrong end of the stick and blamed a killer’s obsession with the violent computer game ‘Manhunt’ for the death of a schoolboy, although it actually turned out that the game was present in the victim’s home, not the killer’s. Some are wondering if the release of JFK game around the anniversary of the incident was a calculated move by the development company, Traffic, after watching the sales of Manhunt go through the roof during the last press frenzy.

FCC Approves First Software-Defined Radio (SDR)

The US Federal Communications Commission (FCC) has announced its approval of the first software-defined radio (SDR) device allowed in the United States. The new equipment will allow users to share limited airspace, increase flexibility, and reduce interference concerns. In a move that may prove to be a radio technology revolution, the industry is now beset with pioneering work to find more creative and efficient use of airwaves in order to offer benefits to consumers.

Software-defined radio, sometimes shortened to software radio (SR), refers to wireless communication in which the transmitter modulation is generated or defined by a computer, and the receiver uses a computer to recover the signal intelligence. To select the desired modulation type, the proper programs must be run by microcomputers that control the transmitter and receiver.

However, the most significant asset of SDR is versatility. For instance, wireless systems employ protocols that vary from one service to another – even in the same type of service – whereas a single SDR set with an all-inclusive software repertoire can be used in any mode, anywhere in the world. Software defined radios can change the frequency range, modulation type or output power of a radio device without making changes to hardware components. This programmable capacity permits radios to be highly adaptable to changing needs, protocols and environments.

The ultimate goal of SDR is to provide a single radio transceiver capable of playing the roles of the cordless telephone, mobile phone, wireless fax, wireless e-mail system, pager, wireless videoconferencing unit, wireless Web browser, Global Positioning System (GPS) unit, and other functions, operable from any location.

The FCC’s approval gives the go-ahead to Vanu, a software development company, for a cellular base station transmitter. Vanu’s Radio GSM Base Station, which is based on a HP ProLiant server running Linux coupled with ADC Telecommunications’ Digivance radio subsystem, can support multiple cellular technologies and frequencies at the same time and can be modified in the future without any hardware changes. The technology has the potential to lower costs and provide new flexibility in wireless networks, thereby changing the entire cost structure over time. The first users will be military and public safety officials.

FCC

Philips’ Tiny Chip Provides FM Radio In Mobile Devices

Royal Philips Electronics has showcased a series of chips that will add FM and AM tuner functionality to mobile phones, CD/MP3 players, PDAs, and other handset devices. The chips are not only the world’s smallest, but will also allow handset manufacturers to create ‘true’ multimedia devices that are capable of playing audio, video, games, and radio.

According to Philips, FM radio is one of the key features users are looking for as mobile phones are evolving into connected consumer devices. With listening figures as high as 20 hours per week, according to the company, Philips is hoping that consumers will appreciate the addition of easy-to-use FM radio on their mobile phones. This, of course, is very likely, as for most people it will probably mean one less item to carry in their pockets. Today, only some 15 per cent of mobile phones sold worldwide have FM radio, although the market is set to continue to grow towards 50 per cent, asserts Philips.

Each new chip has its own peculiarities. For example, the TEA5767 requires low power whilst the TEA5777 supports the AM range. The smallest in the series, the TEA5761, is made using WL-CSP (Wafer Level – Chip Scale Packaging) and is a wafer of silicon crystal plates. As the I/O connections were redesigned and some of them removed, TEA5761-based solutions require considerably less PCB space. Some of TEA5764 are also shipped in WL-CSP package, but they primarily stand out with RDS (Radio Data System) support (provides various information like station name, current track, news, ads, and so on). RDS also helps to simplify tuning by ensuring that the radio always tunes to the strongest signal available. The technology also offers benefits for telecom operators by increasing average revenue per user (APRU).

‘Mobile phones are becoming the ultimate portable device and consumers are placing great value on the multimedia features that differentiate their phone from others in the market. Already established as a proven technology with a large user base all over the world, FM radio is a valuable addition to any handset,’ said Peter Baumgartner, senior vice president of Philips Semiconductors’ Communications business. ‘As the leader in this market for FM radio on mobile devices, Philips enables everyone to enjoy radio entertainment, everywhere and anytime they want.’

Philips’ FM TEA5761 is available now, while the FM+RDS TEA5764 and the AM/FM TEA5777 will be available in January 2005.

Royal Philips Electronics

VCR Sales in UK Halted by Dixons

The largest electronics retailer in the UK, Dixons, has announced that it’s to stop selling Video cassette recorders. They say as sales of DVD Players are so strong, they outsell VCR’s 40:1, that there is no demand for VCR’s anymore. Dixons sales peak for VHS (Video Home System) was in 1993.

All of this is, of course, great for Dixons in the build up to xmas – they’re splashed across all of the papers and other media today, supplementing their already considerable media advertising spend.

You would probably have thought that we’d be jumping with joy at this knockout move for an old, and let’s face it, pretty unwieldy format. Well quite a lot of time has passed since we at the Digital Lifestyles offices originally discarded our own VHS machines, and that gives us a chance to reflect on this news, rather than react.

In that 18-24 months the entertainment industry (read TV and film in this case) has had time to plan it’s future and their approach to visual media in the digital future has become firmer.

Today’s news must make those media companies very pleased. It effectively starts the countdown to the end of access to the large collections of video content people have built up over the last 26 years on VHS, both self-recorded TV programming and pre-recorded.

It also closes one of those pesky ‘analog holes’ that often get mentioned by the media companies, in debates over the future of digitisation of media.

Dixons? They’ll also have the opportunity to sell all of their punters a whole range of new equipment when high-density disc formats (blu-ray, etc) arrive. Of course there’s a bigger profit margin in a £150 DVD recorder that a £40 VCR.

We also assume this will start to open the market for high-end VHS players as people come to realise some of their old content isn’t yet available on new formats. Will there be VHS buffs, like there are analogue HiFi buffs?

European Broadband Pricing Drops 23% in 2004

A new report, the European Broadband Pricing Report, researched by Quantum Web and distributed by BroadGroup, shows European broadband pricing (of speeds between 0.5Mbps and 2Mbps) dropping since January 2004 by around 23%. The numbers of supplier and packages available have increased considerably over this period with 0.5Mbps tariffs availability increasing 75%.

455 tariffs offered by 109 operators over 36 European countries were examined over the first three quarters of this year (2004).

At the higher speeds, 4Mbps and 8Mbps the price reductions have been less dramatic. Clearly at this premium-end of the market there is little competition and in their words “[leaves] more room for price elasticity for content providers.”

It’s interesting to note that non-DSL products make up 20% of the European market.
BroadGroup European Broadband Pricing Q3 2004 Graph
We find it surprising that, given the intense competition at the 0.5Mbps level, pricing hasn’t come down more than at 1 and 2Mbps levels. We wonder if this is due to the majority of connections being provided by wholesalers to markets, such as BT Wholesale in the UK. Without competition at this level, these wholesalers (normally the incumbent telco) don’t have much impetus to lower their prices dramatically, just gradually, to keep their telecoms regulator from getting angry.

When we asked the BroadGroup about pricing across the surveyed countries they said there was a considerable difference. Generally, the previous Eastern European counties have lower pricing, as do many of the Scandinavian countries. To us this points towards major fibre optic network runs equalling lower prices, as most of the former Eastern Europe frog leapt mainland Europe by replacing their antiquated phone system with fibre. Scandinavia is well known for their wisdom in laying copious amount of fibre. We suggest that those trying to make their countries competitive both in terms of the obvious – IT, and the less obvious – digital entertainment networks, pay attention.

BroadGroup – Broadband Pricing in Europe Q3 2004

Microsoft TV Attracts Older People To The Web

Microsoft is hoping its Web-based TV service will attract ageing users to surf the Internet, read e-mail and view digital photos – all without a computer. In what initially seems like a shot in the foot, Microsoft’s research indicates that the untapped market potential for older users is in excess of 40 million – a sizable figure even for the king of software.

As well as the older generation, Microsoft is also targeting first-time Web users, particularly in developing economies where the Internet is out of many people’s reach because of the cost of a PC. The major benefit of being able to view photos and read e-mail on your TV is that most people already own a TV, thus eliminating the prohibitive cost of a PC, as well as the hassle of installing and learning how to use it. Sitting in front of a TV is also usually a heck of a lot more comfortable than a computer.

“Our average user is 57 years old,” said Andy Sheldon, senior director of product marketing for MSN TV. “These people are getting to the age where they don’t want to deal with complicated ways of connecting to the Web.”

The service comes via a MSN TV 2 unit set-top box, bringing e-mail and the Internet to the TV. It includes a wireless keyboard and remote control and costs $199, in addition to a subscription fee, which costs around $22 per month. MSN TV 2 also includes a 56Kbit/s phone modem, as well as an Ethernet jack for connecting to an existing network or broadband connection. Of course, there’s also e-mail and instant messaging accounts and access to 200 radio stations and video clips. Viewers can also browse Web pages or even digital photos stored on memory cards.

MSN TV 2 is probably ideal for those who have yet to take their first step onto the Internet, but anyone interested in a home networking device can get more for their money
.

Skype and Logitech Sign Global Marketing Deal

Logitech, supplier of personal peripherals, and Skype, the Global Internet Telephony Company, announced an agreement to work together on marketing and promotional initiatives.

As part of the agreement, Logitech will bundle up to 120 minutes worth of free vouchers for SkypeOut – the pre-pay service that allows Skype users to call traditional phone numbers – with Logitech USB Headsets sold in Europe, the United States and Canada. The free SkypeOut trial will enable customers of Logitech USB Headsets to experience clear voice communications from their PC to people using a telephone or mobile phone, around the world. In addition, they will be able to use the Skype service to talk to other Skype users on PCs around the world, free of charge. The two companies will also promote the other’s products on their respective Web sites.

The packaging of qualifying Logitech audio products will indicate that the products are “Skype Certified”. In the future, Logitech and Skype may extend the geographical reach of their co-marketing initiatives, and evaluate possible cooperation in product development.

Skype is revolutionizing the world of telecommunications by allowing its 15 million users to make superior-quality voice calls via their PC over the Internet to other Skype users for free, or to any landline or mobile phone worldwide at local rates.

“Logitech’s PC headsets, which offer comfort, convenience and superior audio, are the perfect complement to Skype’s Internet telephony services,” said Bob Wick, senior vice president of Logitech’s Audio and Interactive Entertainment business units. “This marketing agreement will help both Logitech and Skype expose our mutual customers to the value of high-quality voice communications over the Internet.” “Logitech has a strong retail presence in the US, Europe and Asia,” said Niklas Zennström, Skype CEO and co-founder. “We admire Logitech’s focus on quality, innovation and style and are pleased to execute this agreement.”

Skype
LogiTech