Business

Changes to business digitisation brings

Big Problems For Sony Continue, Now EULA
This weekend, there’s been lots of furious chat on blogs and Slashdot about the EULA that comes with SonyBMG’s audio CDs.
An EULA? What’s that? I hear you cry. An End User Licensing Agreement (EULA) is something that has been shipping with software packages for a very long time – the cold-hearted view of them is they impose restrictions on the purchaser while absolving its producers from any liability.
To have an agreement shipping with an _audio CD_ in itself is pretty strange. The EULA may well be related to the software that is shipped on the protected CDs, not the music – but this is now unimportant as the generally held view is that it is for the music.
It certainly has got the goal of a few – but it’s the terms of this 3,000 word EULA that has most up in arms. Some of the highlights/lowlights of it are
- If you move out of the country, you have to delete all your music. The EULA specifically forbids “export” outside the country where you reside.
- If you file for bankruptcy, you have to delete all the music on your computer. Seriously.
- You can’t keep your music on any computers at work. The EULA only gives you the right to put copies on a “personal home computer system owned by you.”
The full list is detailed on the EFF site.
All of this builds up on the now huge story of SonyBMG’s choice of software on some of their US released audio CDs. Called XCP, originally designed to ‘assert’ SonyBMG’s rights over their music CD’s, it installs itself on any computer where the audio CD is played. The user of the disk isn’t asked if this is OK, or even told that the software is installing itself. The software then hides itself using something called “rootkit.”
The really big problem for SonyBMG is that virus writers are now using this rootkit exploit to deliverer their viruses.
Many have reacted to RootKit by saying that they feel it is ‘safer’ for them to download their music from unlicensed file sharing services, as they aren’t exposing themselves to unauthorised pieces of software installing on their machines.
SonyBMG have said they will stop selling music CD’s using XCP, but the damage to the Sony name has been done.
It’s all going wrong
A while back Sony, the parent company, had a revelation – that they needed to look outside their Sony Silo and start of embrace open formats. We saw MP3 being supported on their music players, where they’d always insisted on using their propriety content protections scheme ATRAC3. I even saw DivX supported on their DVD players, where DivX had previous been thought of as the content pirates tool.
Sony had (I stress had) started to claw back against Apple and the other companies that they’d been losing out to. As of now, it looks like they’ve slipped even further behind. For goodness sakes, they’ve even got groups of people suggesting Boycott Sony and 3488 have, so far, signed an anti-Sony petition.
Sadly for Sony, it doesn’t end there
In digging through SonyBMG’s code, Finn Matti Nikki has located references to LAME, an open source, MP3 encoder library, within the code used by SonyBMG’s version of the XCP software.
As Matti says, “I’d say this indicates that the executable has been compiled against static LAME library, which happens to be LGPL. I don’t have any further evidence about this, other than lots of data from libmp3lame being included and easy to find.” Let us translate – the LGPL (Lesser General Public License) provides certain freedoms and restrictions in the use of the software covered by it.
These include needing to make the source code to the open-source libraries available and the source code and executable code of their programs.
Without abiding by these rules, they are breaking the licensing terms of the content. Carrying out the exact act they the music companies are loudly decrying in their customer.
Where now for Sony?
SonyBMG have managed to completely undo the small, patient steps that Sony, the hardware business, has been taking to gathering favour with the equipment buying public.
The idea of Sony owning content and hardware businesses always appears to be a great idea – they’d win all around. The reality is turning out to be very different.
There is a tension between the content business, who want to restrict movement of content, and the hardware business that wants to set the purchaser free. Whether a comfortable balance between these can ever be struck is unclear.
What is clear is that it appears that this CD story is nearly out of control for Sony. Someone at the most senior level at Sony needs to grab hold of this and do something radical. Our suggestion for a surefire, credibiliy-straightening maneuver? Reject DRM.
LGLP
SonyBMG on XCP
Wikipedia on LAME
LAME
Slashdot – Sony’s EULA Worse Than Its Rootkit?
14 November, 2005
Digital Music Conspiracies : Teenage Tech Roundup
Oooh, Conspiracies Abound
We’ve recently covered the Motorola ROKR iTunes music phone, and then again more recently, followed reports of its shortcomings. Now, The Apple Blog has a conspiracy theory on the device: It was deliberately sabotaged.
Apple makes a lot of money out of its iPod sales, with reports of profit margin of as much as 50% on the iPod Nano according to AppleInsider and its one of the company’s principal sources of income. Think about what would happen if people started buying phones as iPod replacements. That’s right, Apple would lose out.
I can well imagine Apple mastermind and CEO Steve Jobs would have seen this from far off, and had thought long and hard about whether or not to allow Motorola to produce an iTunes-compatible mobile phone. I’m sure that Motorola pays Apple some amount of money for the iTunes compatibility, and I’m also sure that Steve Jobs wanted the cash.
How would you introduce a phone that mirrored the iPod’s functionality without canabalizing iPod sales? That’s right, limit its functionality. Maybe this explains the 100-song limit on the Motorola iTunes phone. And before you say “but it’s not got enough memory for more”, it has: It’s possible to put enough memory in it to store around 500 tracks at least, but the software won’t allow any more.
It is possible that Apple want to actually make people think of MP3-playing mobiles as a pile of rubbish, meaning that they will instead buy iPods. Of course, there is no hard evidence that supports this theory, but there are a lot of things that point in this direction.
Whether or not this move on Apple’s part (Apple designed the software) would be wise one or not remains to be seen, and whether the 100-song restriction will still be in place in the upcoming RAZR V3i iTunes phone is also something only time and/or NDA breaches will tell.
The relevance that this idea has to me as a teenager is that as someone who always loses stuff, I would love to just carry one piece of kit around. I want one device that plays music, receives my email, makes phone calls and surfs the web. Apple theoretically attempting to block this digital utopia is something that annoys me.
More conspiracy…
I thought I’d stick with the conspiracy theme. While this rumour is not true, it does highlight what is theoretically possible in an Internet where corporations are increasingly battling their customers. I refer, of course, to media piracy.
The rumour contains the following:
Apple and Microsoft have teamed up in an unusual and, until now, secret partnership. The two firms have developed unique anti-file sharing DRM (Digital Rights Management) technologies they say represent cast-iron guarantees of copyright protection. The technologies “ Apple’s Fair Play earbuds and Microsoft’s PowerHit“ are slated for beta release in time for the Christmas rush, say sources.
From December 1, all iTunes downloads will carry a new kind of Fair Play DRM, a direct negative feedback ‘watermark’ recognized by Fair Play earbuds and, ultimately, by other audio devices from manufacturers who sign up for the code, which was created under a joint SunnComm and Macrovision venture.
When an iPod (or other) user wearing the new audio devices plays an iTunes track not sanctioned by Organized Music (EMI Group, Vivendi Uiversal, Warner Music), Fair Play feedback ‘instructs’ the buds to emit a piercing, high-pitched scream in stereo at 250 decibels.
Sounds pretty nasty doesn’t it! My view is that as long as you never had any intention of going out and buying the music track, having a copy doesn’t deprive anyone of anything. It’s like saying that taking a picture of a painting in a gallery is the equivalent of taking it off the wall and running out with it.
The conclusion? While not true, this could very easily become a reality. Maybe not with Apple and Microsoft working together, because that would just be absurd, but extremely restrictive DRM that punishes the user for misbehaving isn’t such a huge step away, and it seems like the current DRM schemes are training consumers to accept more restrictive varieties.
The reason I am against this, is that as much as technology has changed things for the better, my generation has come to take it for granted. If something is invented when you are under the age of 10, you generally do. The problem with this, is that the next generation will come to take DRM for granted, and we will be the “fogeys” saying “In my day, we were allowed to share music we bought with our friends”>
11 November, 2005
Vodafone Licenses Intertrust DRM
Intertrust must have though that all of the xmases came at once on the day Vodafone confirmed their licensing deal. It’s not every day that the World’s largest mobile operator signs a deal like that with you.
The Open Mobile Alliance (OMA) specified DRM (Digital Rights Management)contains what they refer to as, the essential patents – the minimum required to run the very basics of the content/rights protection.
The Vodafone deal goes well beyond these basics and licenses all of the technologies and patent that Intertrust have available.
When we asked which of the Intertrust pieces of technology they were planning to use, Vodafone became unusually very shy, explaining that they didn’t have definitive plans as to which parts would and wouldn’t be used.
Both Vodafone and Intertrust declined to reveal the value of the transaction, but given the need for separate deals with the handset companies, it may be here that Intertrust make most of their money. This will not be optional if the handset manufacturers want to be on the Vodafone service and offer content.
The length of the deal has been loosely described as ‘Long-term licensing’, but Vodafone didn’t reveal how long this was by the time we went to press.
Intertrust
Vodafone
10 November, 2005
RFID’s Are Go: Ofcom Extends UK Frequency Range
Ofcom, the UK uber-regulator, has today announced that they have removed the licensing restrictions on the frequency that radio frequency identification(RFID) tags use.
The currently spectrum available is limited to the range 869.4 to 869.65 MHz. The new position will make the range much wider, stretching between 865-868 MHz range.
The extension isn’t a great surprise as, for a number of years, there has been great excitement in industry as to the possible uses of RFID. The much used example is to improve the efficiency of handling goods in a warehouse, where items within a crate are wirelessly read, and their number deducted from the known stock list automatically as they leave the warehouse.
Many have voiced concerns about the privacy problems of information being remotely read about a person, using RFID, without their knowledge, or complicity. Their oft cited, but basically harmless example is of each item of clothing that a person is wearing being read as they walk into a shop.
Ofcom say that when coming to their decision, they considered two main issues. The first, the potential of interference from RFID devices, concluding that current legislation of output levels covered this. Secondarily, the economic costs and benefits. We quote
Ofcom conducted an impact assessment which found that the potential net benefits to businesses (through better inventory management and improved security) and consumers (if savings were reflected in lower prices) would be £100 – £200 million over 10 years
Benefits are clear for business, as efficiency is improved, by removing employees from the equation. Those to the consumers are less clear, as we can see Ofcom effectively acknowledge in their bracketed ‘if savings were reflected in lower prices’. Given what we know about the pursuit of profit, we see this as a very large If.
Perhaps the revealing section in Ofcom’s announcement is that they “seek to deregulate in order to increase the amount of licence-exempt spectrum used by businesses to bring new technologies and services to the market.” (Our stress).
It could be argued that Ofcom are losing site of their statutory dutiesunder the Communications Act 2003 – to look after the interests of the public. Specifically, quoting from the Ofcom site (again our stress).
3(1) It shall be the principal duty of Ofcom, in carrying out their functions;
(a) to further the interests of citizens in relation to communications matters; and
(b) to further the interests of consumers in relevant markets, where appropriate by promoting competition”
The above is listed on the ‘about section’ on Ofcom’s site .
Ofcom’s full statement (PDF)
Wikipedia RFID
9 November, 2005
Amazon UK Straightens Out Tesco Via The ASA
The commercial rivalry between two UK online retailers has spilt over into the world of advertising, or more precisely the heady world of UK advertising adjudication, run by the Advertising Standards Authority.
Amazon.co.uk complained directly to the ASA that Tesco has sent out an email for DVDs and CDs, that attempted to seduce purchasers as follows, “Did you know our chart CDs and DVDs are cheaper than Amazon.co.uk and Play.com?* Visit Tesco Jersey and see for yourself … *Refers to Tesco Jersey, Amazon.co.uk and Play.com delivered prices”.
This put Amazon.co.uk’s nose right out of joint on two counts. Firstly some of the chart DVDs from Amazon Jersey were available from less money than Tesco Jersey, secondarily they felt it mislead readers as Amazon order over £19 included delivery.
The ASA batted the first complaint aside, but felt the second held water despite Tesco putting up the follow argument. Their long winded thinking can be cut down to … As no single CD or DVD was priced over £19 (thank goodness – our addition), to qualify for the Amazon free delivery, it entailed ordering more than one item.
Well, yes, true. We follow that. The ASA also did, but found it irrelevant.
How did Tesco aim to put this right? First by stating that they didn’t think the ad was misleading, then with a swift call to their internal legal department by the looks of it. They fine tuned their terms and conditions of the price comparison on their Website.
We’ll save you from all of the details, but to us the pertinent part of it was “Comparison excludes multiple purchase or free delivery offers.”
But this jiggery pokery didn’t get them off the hook and the ASA found against them.
What terrible fate awaits Tesco? The ASA told Tesco to make clear in future that the claim referred to single item purchases and excluded their competitor’s multiple purchase discounts. We bet the collective boots of Tesco shook.
It’s a funny old world isn’t it?
Well what can we draw from this? It shows that the online market is sufficiently tough – and potentially profitable – that Amazon is employing people that read through their competitors emails looking for the smallest detail that they can try and call them on.
We have no doubt that Tesco would do the same to any other company that it felt threatened by.
Given the outcome, we suspect that neither Amazon with be cracking the champagne in celebration, nor Tesco will be drowning their sorrows.
The world continues to turn and the happy came of capitalism continues to fight another day.
Amazon
Tesco
8 November, 2005
Grokster U-turns And Closes Service
Grokster, the online music sharing service, much legally embattled, has decided to shut the service and pay $50 million to settle claims against it.
Visitors to their site will now see the following message
The United States Supreme Court unanimously confirmed that using this service to trade copyrighted material is illegal.
Copying copyrighted motion picture and music files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners.
There are legal services for downloading music and movies.
This service is not one of them.
Quite a turn around from their previous stance and not exactly expected.
AP is reporting that the settlement
permanently bans Grokster from participating, directly or indirectly, in the theft of copyrighted files and requires the company to stop giving away its software.
You would think that this would pretty much be the end of them, but no.
There is a plan to launch a service that they say will be a “safe and legal service” under the name Grokster 3G.
As you would expect with such a massive turn around, the record industry is pretty happy. Mitch Bainwol, Chairman and CEO of the Recording Industry Association of America (RIAA) explained their position, “As the Court articulated in no uncertain terms, there is a right way and a wrong way to conduct a business. This settlement makes clear that businesses are well aware when they are operating on the wrong side of that line.”
The fallout from this sudden turn-around by Grokster is far from clear. They were originally one of the strongest proponents of the right to run a P2P service without restricting the content that is exchanged on it.
Certainly, it will put significantly more pressure on StreamCast Networks Inc., which distributes Morpheus, and Sharman Networks Ltd., which distributes Kazaa, who were co-defendants of the original court case.
What is not certain is if Grokster will be able to pull any of their current users over to their new Grokster 3G service – effectively ‘doing a Napster’. We suspect that it’s highly likely that many of the current Grokster’s will feel betrayed by their change around.
Grokster
8 November, 2005
Free Speech In Advertising?
Background – Make Poverty History had its last TV advertising campaign, widely know as the finger-click advert, removed from the UK’s TVs by Ofcom, citing political advertising.
Tamsin Allen (pictured below) has a thought-provoking piece on page six of today’s MediaGuardian (Sadly we can’t link to it as they are a subscription-only service, but it’s on page six of the printed version).
Partially arguing against the UK ban on advertising by organisations that attempt to “influence public opinion on a matter of controversy”, she says her group will challenge the ban. Allen is right in some respects when she says:
Oil companies can spend thousands on vanity advertising to convince us that the environment is safe under their stewardship but Greenpeace is not allowed to contest that view in the same media.
My reaction:
Tamsin Allen also misses the point in certain ways. Allen’s same logic of unfairness also applies to political party messages, but she discards them into some lower class of speech than (oddly) animal rights. That is wrong. If a group of interested persons – whether organised as a political party or not – want to get a certain message across to the UK populace and that message is otherwise legal, it should be permitted. Picking and choosing the nature of the permitted topic (animal rights, environmental issues, etc.) seems as arbitrary as the current system.
I don’t mean to be flippant about Allen’s cause, but do we really want the aborted ‘My Mate’s a Primate’ ad campaign to be the poster-child for this issue?
The whole ‘we don’t want to end up like the US’ tone he starts off with is just silly. So much of misguided thinking on British media policy is a reaction to some perceived deficit in the US system. Straw man thinking.
If you want a reasoned view of the US system, just click on the Becker-Posnerblog – they covered this precise issue yesterday. Becker notes,for example, that the $4 billion spent in the 2004 US campaign is quite small compared to the $200 billion annually spent by commercial advertisers.
There’s a convergence point here somewhere. Oh, it’s with the Conservatives. And the Labour Party. And even the Respect Coalition! So, like so many other debates we are witnessing, the regulatory scheme developed in 2003 is already out-of-date in many respects.
Russ Taylor writes for OfcomWatch.
7 November, 2005
Botnet Man Charged In California
The alleged ‘commander’ of a 400,000 strong botnet has been arrested in the US, in the first US case brought.
The 20 year old, Jeanson James Ancheta, of Downey, California received a knock on the door from FBI agents on Thursday. He was subsequently charged with spreading a Trojan horse program, “rxbot,”, and in the process building a network of around 400,000 infected computers.
The FBI say he used IRC (Internet Relay Chat) to command this network to do his bidding.
He looks like he’s in pretty big trouble as he’s been charged with 17 counts, including conspiracy, transmission of code to a protected computer, to a government computer, and multiple counts of fraud and money laundering.
The cheeky young scamp even advertised his botnet to be available from such pleasantries as spam and DoS (denial of service) attacks.
His fiendish plans didn’t stop there, they think he also received $60k from what is being referred to as an “unnamed advertising service company” and in return he popped their advertising gunk on the infected machines under his control.
We hope that if this is proved to be true, not only are the advertising company going to be chased down, but the advertisers are too.
Among the computers infected were some from the Weapons Division of the US Naval Air Warfare Center, and machines belonging to the US Department of Defense’s Defense Information Systems Agency, according to a statement from Debra Wong Yang, US Attorney for the Central District of California.
You have to question how a computer at somewhere that sounds quite that serious has the opportunity to get infected
As ever, all of this is alleged and we await the outcome of the court case to find out if he actually did carry it out.
Botnet’s explained
4 November, 2005
Homehoice Appoint CSFB To Fund National UK Expansion
This morning, Homechoice, the currently London-focused DSL-based VOD announced that they had appointed CSFB (Credit Suisse First Boston, as was) to raise new capital for their expansion around the UK.
Starting 2006, Homechoice plan to expand the number of homes they cover from the current 2.4m homes to over 10m. Homechoice state that this footprint is approaching the same size as that of the combined UK cable companies, which they’re close with, as ntl + Telewest actually have just over 12.6m.
New subscriber figures have also been announced by Homechoice, revealing 34,000, more than double the 15,000 previously disclosed and widely quoted this week when rurmours of Sky being interested buying them were circulating.
Roger Lynch pointed out, “We’re now the fastest growing pay TV service relative to our footprint ,” which, while it’s encouraging, would be expected given they started at such a small number of subscribers.
Their newly-announced ARPU (Average Revenue Per User) figures are impressive at £430, being considerably higher than Sky’s £384 (announced in 3 August 2005), but lower than Telewest’s £538 and ntl’s £477 (reported to ofcom, Q2 2005).
Comment
We find it slightly confusing that Homechoice is headlining this news release with their national expansion, which has been a long-stated aim for them and is therefore not news, and not CSFB’s appointment. They’re also putting out a whole lot of figures saying how well they’re doing. We’re not clear if this down to them wanting to make the most of the resent press interested the Sky rurmours have brought or a way of trying to cover that they’re need more money, or just genuine excitement of working the CSFB.
On the financing of the next stage of the roll-out, Lynch explained, “We’ve also reached the stage in our corporate development when we believe it’s right to raise capital from new investors. Hence our decision to appoint CSFB.
This could be read as saying that the current majority backer, Digital Explosion, which is owned by Chris Larsons, a Microsoft co-founder, doesn’t look like it’s prepared to fund the next stage. When we asked Homechoice, their spokesperson said Digital Explosion “Remained committed,” one further probing they wouldn’t be drawn on how much more money, if any they were prepared to invest.
We really hope that Homechoice is successful, we’ve always have been, and continue to be supporters of theirs – for their vision, their progress and their sheer bloody-minded determination to keep going.
Homechoice
3 November, 2005
MacExpo UK Review (1/2) – Expo or Shop?
MacExpo has moved to Olympia from the Islington Design Centre and that’s probably the most exciting bit of the show.
Though the new Apple Powerbooks and G5’s were there, a lot of stands were just selling Mac and iPod add-ons, MacExpo is turning into a computer fair. Being generous, it could be the economic conditions that are forcing it in that direction.
The new G5’s are nice, based on the PCI Express architecture with the ability to put some very high-end NVidia graphics to real work. They now support two CPU’s each with dual cores (i.e. 4 cores) though each core only operates up to 2.5GHz rather than the older two CPU systems that operate up to 2.7GHz (but then, in theory, you’re getting 10GHz compared to a max previously of 3.4GHz – real world tests show more like a 67% speed increase). The new NVidia graphics cards are all capable of driving dual displays – so that’s two 30″ Cinema displays … but you’ll need a new desk.
The new 15″ and 17″ Powerbooks have updated displays and all have better batteries offering longer life.
The new iMacs were there too and they are still the sexiest systems on the market.
Slim Devices (makers of the Squeezebox) showed off their 3rd generation systems, rather than long and thin they’re now more squat (i.e. not so wide but taller) with big bright displays which can now display pseudo VU meters, they’ll cost £179 ($320, E265) for the wired version and £229 ($406, E338) for the wireless one. The SLIM Server software is available for Windows, MacOS and Linux/UN*X. They also use a digital output as well as analogue connections for connecting to your HiFi system
Postworx were showing off their balls (and selling them). They are designed for laptop users and attach to the base to increase airflow, keeping the it cool. They also raise the back, and to our initial surprise make it much more comfortable to type. They come in several versions and colours to match your mood or laptop. They either attach by a small velcro-like disk which you stick to the base, or a slightly larger plastic mount onto which the half-ball twists on to and attaches.
Read the second part of the review.
Slim Devices
Post Worx
3 November, 2005