Business

Changes to business digitisation brings

Dead Granny sued by RIAA – A Serious Own Goal
If they weren’t already unpopular enough with a large part of the online music file sharers, the Recording Industry Association of America (RIAA) has managed to score a spectacular PR own goal by suing a dead woman for swapping music files.
The Associated Press reported that investigators at the RIAA identified Gertrude Walton as a prolific sharer known as “smittenedkitten” and set about bringing this evil distributor of music to justice.
A federal lawsuit was duly filed, with the RIAA claiming that Mrs Walton had shared more than 700 songs through P2P networks.
But there was a slight problem: the defendant was a computer-illiterate 83-year-old grandmother who has never owned a computer.
And there was an even bigger problem: she had died the month before the lawsuit was filed.
After being notified of the upcoming legal action, the dead woman’s daughter, Robin Chianumba, faxed a copy of her mother’s death certificate to RIAA adding, “I am pretty sure she is not going to leave Greenwood Memorial Park (where she is buried) to attend the hearing”.
This king size cock-up does nothing to RIAA’s bully boy reputation. In 2003 the association successfully sued a twelve year-old girl for copyright infringement after her hard drive was found to be harbouring an MP3 file of her favourite TV show. Her working class parents were forced to shell out two thousand dollars in a settlement.
RIAA
Boycott RIAA
8 February, 2005
Microsoft and Macrovision Join Forces
In a move sure to annoy and frustrate pirates and possibiliy home users, Microsoft has struck a deal with copy-protection specialists Macrovision to make it harder for consumers to swap video content.
The technology aims to stop people making copies of TV shows and movies using analog connections between devices (e.g. linking a set-top box to a television).
Up till now, the big studios and content providers have been more concerned about preventing high quality, digital to digital copies, but now they’re getting in a sweat about users recording the output of a DVD player onto a computer hard drive.
Unlike most digital copy protection schemes, Macrovision doesn’t scramble the signal, but it blasts out a pulse of electronic energy along with the video as it is played. Devices such as DVD recorders will recognise this signal and refuse to record the content.
The new deal also enables Microsoft’s Windows Media software to detect this signal in incoming analog video streams. Future versions of the software may allow content to be stored for just 90 minutes or up to a week.
Upcoming versions of Microsoft’s Media Center Edition operating systems will allow users to make a temporary copy that can be stored for one day and then rendered unusable after that time.
By hammering down digital rights management, the idea is that the entertainment industry can to take advantage of emerging revenue channels without remaining confident that their rights are protected.
How your average consumer, keen to make a copy of the Antiques Roadshow at home, might respond to all this technology is another matter. One option they might take is to replace their Windows machine with another type that doesn’t place this restriction on them.
Macrovision
Microsoft
2 February, 2005
HP Blur Photos with Camera Privacy Patent
HP is making an interesting move in the digital camera market. The company’s latest technical wizardry is a system in which digital cameras could be equipped with circuits that could be remotely triggered to blur the face of those who don’t want to have their photo taken.
This story originally came around in November last year after HP had been granted the patent. We didn’t cover it then, so are pleased that our friends at News.com have brought it up again.
The design for paparazzi-proof cameras is covered under US patent application 20040202382, which was filed in April 2003 and published in October 2004, and describes a system in which an image captured by a camera could be automatically modified based on commands sent by a remote device.
It covers technology that would have to be incorporated both into digital cameras and the ‘image inhibitor modules’. Cameras would be equipped with facial recognition software sophisticated enough to single out faces for the blur treatment. The repercussions for this technology are outstanding, allowing anyone who doesn’t want their photo taken at a particular time to trigger a ‘clicker’ (image inhibitor module) to ensure that any cameras or camera-equipped gadgets in range produced only a fuzzy outline of their face. This story takes us back to the classic science fiction TV show, Thunderbirds, when Thunderbird 1 was fitted with a camera detector to stop their advanced technology being copied. At the time such an idea seemed impossible, strange how science fiction becomes science fact.
With the prevalence of digital recording devices, one of which is cameras, people will either have to become used to having their actions and utterances captured, employ impractical draconian measures such as banning them, or throw technology at it.
At Digital Lifestyles we’re keen on audio recordings and have been wondering for some time if, by identifying vocal patterns, people could opt out of being recorded.
The move comes following the proliferation of digital imaging capabilities with growing concerns about privacy, especially as the number of subjects who would prefer not to be photographed has increased thanks to mobile phones with built-in digital cameras and video functionality. However, when we spoke to HP they told us they had no current plans to commercialise the technology, which would require widespread adoption by camera makers and possibly government mandates to be practical. For now, the company is keeping the patent as part of its IP portfolio.
HP
HP focuses on paparazzi-proof cameras – News.com
Badge keeps paparazzi out of the picture – The Times, November 2005
28 January, 2005
eContentplus €149m Digital Content Fund Get EU OK
The European Parliament has voted in favour of a new programme to promote the European digital content market, setting it a budget of €149m (~$194m, ~£103m) for the next three years.
The eContentplus programme aims to tackle the fragmentation of the European digital content market by supporting the development of multi-lingual content for innovative, online services.
“The internet offers a unique opportunity for content companies to outgrow their so far mostly national markets”, said Viviane Reding, the Commissioner responsible for Information Society and Media.
“The eContentplus programme will facilitate the production and distribution of online European content, thus stimulating innovation and creativity. At the same time it will help to preserve and share Europe’s cultural and linguistic identities and give them a more prominent place on the Internet,” Reding added.
The European Parliament voted in favour of the programme with only one amendment, which sets the budget of the programme at €149m for the period 2005-2008. Reding said the new budget was a substantial increase in comparison to the previous programme.
The eContentplus programme will concentrate on the parts of the digital content market where there is clear fragmentation in Europe, and where market forces have not been enough to drive growth.
It targets three areas – spatial or geographical data, educational material and cultural content.
In the case of geographical data such as post codes, planning and land registration details, fragmentation occurs because different member states collect and store data in different ways.
If the programme can reduce this fragmentation, it can open the way for new EU-wide information services using this data in areas such as transportation, navigation, emergency response and environmental management.
The eContentplus programme is part of a set of measures to boost innovation and creativity in the converging content market, including the MEDIAplus programme, and the modernisation of the Television Without Frontiers Directive, due later this year.
eContentplus
28 January, 2005
Tim Berners-Lee Wins Greatest Briton Award
It’s gradually becoming more common knowledge that the inventor of the Web, and what many people think of as The Internet, is an Englishman.
Tim Berners-Lee worked up the idea when working at CERN in 1989 and has now received another award, the first Greatest Briton awards.
Following the world changing invention, Berners-Lee consciously took the decision to give the idea away and not patent it, sharing it for the good of society.
To many this highlights the difference between the US and the UK, and possibility the US and the rest of the world. The idea of inventing, then freely sharing the idea, rather to only release the idea when they have figured out how to commercially exploit it. They view Berners-Lee generosity in stark contrast to events since the Web’s invention, with the rise of software patents. The opposing view is that those in the UK really don’t have the first idea about how to make a business from a good idea.
As one of the awards panelist, David Starkey said, “He chose not to commercially exploit his invention. He gave it away almost wilfully. If he had fully exploited it, he would make Bill Gates look like a pauper today.”
Tim now holds the 3Com Founders chair at the Laboratory for Computer Science and Artificial Intelligence Lab (CSAIL)at the Massachusetts Institute of Technology (MIT). He is the overall Director of the W3C (World Wide Web Consortium), an open forum of companies and organizations with the mission to lead the Web to its full potential.
Tim Berners Lee
28 January, 2005
Real Networks Results, Sales Up but No Profit
RealNetworks is enjoying record sales that have helped the Seattle-based Internet company to trim its fourth-quarter loss. The announcement comes amidst its ongoing cost of litigation against rival Microsoft, with whom it’s suing in a billion-dollar case for unfairly promoting its own media software.
The company reported a net loss of $1.0 million, or 1 cent per share, for the fourth quarter, compared with a loss of $5.3 million, or 3 cents per share, a year earlier. According to RealNetworks’ CEO Rob Glaser, the company’s improved sales have resulted in an increase in ad-supported revenues ($19.1 million of revenue in 2004, up from $8.2 million in 2003), mainly due to a better Google relationship. Its Comcast relationship (on the music side) is going very well, and Video/SuperPass now has lower content acquisition costs.
The company has also discontinued CNN and Nascar video offerings to focus on more profitable products, and noticed a secular trend going on – the move to digital music – in which it will participate in the overall category growth, along with Apple. RealNetworks is also no longer counting on university subscribers.
RealNetworks has been aiming to reach profitability, excluding litigation costs, by the end of 2004, and said it expects to be profitable on the same basis throughout 2005. For 2005, RealNetworks expects revenue to grow 16 to 20 per cent over 2004 with revenue of $266.7 million. Other Q4 highlights include music revenue grew 172 per cent to $21.6 million from $7.9 million in the year-ago quarter, revenues from games sales and subscriptions grew 156 percent to $10.1 million from $3.9 million in the year-ago quarter, although video and consumer software and other revenue was down slightly to $29.1 million compared to $29.3 million in the year-ago quarter.
Paying subscribers to Rhapsody music and premium radio services increased to over 700,000 from over 625,000 at the end of Q3 of 2004, and ad-supported Web services garnered $19.1 million of revenue in 2004, up from $8.2 million in 2003. What’s also helped the company is that Internet video streaming was up 80 per cent in 2004, with 14.2 billion video streams being counted worldwide over the year, according to a new report by AccuStream iMedia Research. The number of video streams last year was up by 80 per cent compared to 2003.
Real Networks
27 January, 2005
Midem Mobile Music Forum Report
Few topics are as hot as mobile music right now, with the Midem Mobile Music Forum the place to be on the subject. Panelists touched upon several important areas, with all attempting to understand the future direction of explosive medium. Once again, Digital Music News was on the ground to capture the chatter.
Just who is buying all of those ringtones and downloads through their phones? A knee-jerk reaction seems to always point to the younger buyer, though many close to the space are seeing activity from the older buyer. During one of the mobile music panels, Martin Peronnet (Content Director, Mobile/i-mode division of French operator Bouygues Telecom) declared that 15% of his customers are in the 35 -40 age bracket. That is a total of one million customers, with many among the most active subscribers. Others revealed similar data, with Universal Mobile Chairman Cédric Ponsot announcing the launch of a series of oldies realtones, based on major hits from the 60s. Clearly, ringtones aren`t just for kids.
With the mobile music space expanding, where do things go from here? Many were convinced that 2005 will be the breakout year for the space, with new services like full song downloads on the horizon. But many attendees urged their peers to remain focused on ringtones, the most lucrative aspect so far. Meanwhile, projections were bandied about, with event chairman Ralph Simon forecasting a $11.2 billion space by 2008 .
But more money can sometimes bring more problems, with operators, publishers, and labels swimming in disagreement. Vodafone Global Marketing Director Guy Laurence gave a clear warning to the music industry when he declated that “the music industry needs to sort out the mess between publishers and labels and figure out who owns what during the next quarter. It is the consumers that matter. The bickering has to stop.” In another panel, Chrysalis Group Chief Executive Richard Huntingford expressed his concern about Vodafone exerting too much control. “What do they know about music?” he asked, calling for the music producers to unite their efforts. Orange Marketing Handset Services & Solutions Director Pascal Thomas called for mutual collaboration, reminding attendees that the CD has been around for 20 years with almost no innovation, while the mobile business is rapidly deploying new products.
Mobile Music Forum
26 January, 2005
EU Software Patent Causes Controversy
Plans to introduce European-wide laws on computer software patents have caused controversy because of the impact they could have on the cost and availability of commercial and open-source software. Microsoft chairman Bill Gates put the case rather more strongly, describing opponents of the legislation as ‘modern-day sort of communists’ who want to damage industrial innovation.
The software Patentability of Computer-Implemented Inventions aims to clarify existing European laws on patenting software, but could create legal hurdles for IT departments wanting to develop their own software. In the worst-case scenario, the patents could force smaller suppliers and open-source specialists out of business, restricting competition and the choice of software available to users.
To be patented, software has to have a ‘technical application’. This basically means that a company that develops software to control a DVD recorder can patent it, as controlling a DVD recorder is a technical application. However, a company that develops software to automate an accounting system would not be granted a patent. This is because accounting systems are regarded as a business process rather than a technical application. The whole process is governed by European Patent Convention, an international treaty which has so far been implemented in slightly different ways in each country.
The bill has sparked a debate on whether the EU should follow the US model of granting patents to Internet business methods, such as online bookseller Amazon’s ‘one-click shopping,’ or instead restrict patents for computer software. Poland, a large EU member whose backing is crucial for the adoption of the proposed rules, told Reuters last week that it was not ready to back the legislation amid fears it could open the door to the patenting of pure computer software.
The major benefits of the bill is that it would provide European companies with protection for their ideas and encourage innovation, create a level playing-field for patents across all European countries, and clarify existing patent laws, rather than introducing major changes. However, small suppliers will not have enough financial muscle to obtain and enforce patents, thereby reducing choice for IT departments. It could also restrict the availability and functions of open source software, and IT departments may have to conduct patent searches to make sure they are not infringing rights. The saga continues, with adoption of the bill now scheduled for next week.
25 January, 2005
TiVo effect, TV still doesn’t know what to do
In a long line of articles where TV execs try to ponder how to stop losing sleep and preserve their once comfortable lives, Meg James in the LA Times covers the impact of PVR’s, in particular TiVo, and how the TV industry is still trying to adjust to its impact.
It’s warming to see that there are still articles coming out, with quotes from TiVo users such as, “Once you’ve used one, you can’t imagine life without TiVo,” as Charlie Flint of Marina del Rey, California did. It’s somewhat reassuring that the impact is still as great for new users as it was when TiVo was first introduced.
One thing that doesn’t get mentioned in connection with this, and this is something that TV people should have sympathy with, is that ad breaks, do exactly that, break up the programme. Interrupting its flow.
This has been more than amply proven in the UK where The Simpsons have moved from commercial-free BBC2 to the advertiser-supported Channel 4.
Previously used to watching the show from beginning to end, without interruption. When watching the show, on TiVo of course, the story is interrupted by having to skip through the adverts.
Interestingly the exact opposite of the programmes sponsor desired intention is achieved. I have now come to resent the Pizza chain, as they are associated with interrupting my viewing pleasure.
One of the reasons that articles like this continue to make press is that estimated figures coming out of research houses and banks make worrying reading for the TV, and therefore the entertainment world.
By 2010, half the US households with TV sets are expected also to have digital recorders, according to a recent Smith Barney report. The tipping point could come as early as 2007, the report said, when the television industry may lose as much as $7.6 billion — or about 10% of its annual ad revenue — as advertisers seek other ways of reaching consumers.
A number of alternatives are suggested including pay-per-play, product placement in shows.
In one, viewers would pay $1 to see an episode of a show On Demand, “much as music fans do when they download a song from Apple Computer Inc.’s iTunes music store,” appearing to forget that the iTunes users don’t pay another $1 when they listen to the song the following week, as would be that case with a VOD show.
It’s gratifying that Meg James ends the article with a wise quote from her interviewee, one that the TV industry should be listening to, “I’m now trying stuff that I never would have watched before. I’ll give it a shot and set the TiVo, then watch the show later … when nothing else is on,” TiVo-user Flint said. “I’m watching probably 50% more TV than I used to.
LA Times – Looking for New Ways to Make Viewers Pay
TiVo
21 January, 2005
Michael Powell, FCC Chair to Go
The Wall Street Journal is reporting that US Federal Communications Commission (FCC) Chairman, Michael Powell, will be leaving his position today.
The rumours of his departure have been circulating for a long time, but what is unexpected is that he is resigning the day after George Bush’s inauguration.
Powell has had his detractors and his supporters. He’s acted as a liberaliser – opening up the VoIP market, and, in some peoples eyes, a restrictor – last year he authorised fines in excess of $7.7 million for indecent programming.
He will, for us, for ever be remembered for calling a TiVo “God’s machine“.
Overall we think he’s been an enthusiastic supporter of technology advances. We hope his replacement will show a similar enthusiasm.
WSJ – FCC Chairman Powell Plans to Step Down (reg. req.)
Seattle Post-Intelligencer – Officials: FCC Chairman Powell to resign
21 January, 2005