Digital-Lifestyles

Business

Changes to business digitisation brings

  • RIAA Files 750 New File-trading Lawsuits in the US & CD sales up 10%

    The Recording Industry Association of America (RIAA), on behalf of the major record companies, has just issued a new round of copyright infringement lawsuits against 750 illegal file sharers using peer-to-peer (P2P) software. Including 25 users on 13 different university campuses, who used their university servers to perform the dreaded deed. This brings the total number of lawsuits filed by the RIAA against alleged file sharers since September 2003 to over 6,200.

    The file sharers that were sued were using (P2P) services such as eDonkey, Kazaa, LimeWire and Grokster, although maybe Grokster miscreants will receive universal absolution if the deal between Grokster and Sony BMG to make file sharing respectable goes ahead. In keeping with practice used in previous cases, the RIAA suits have been filed against ‘John Doe’ defendants – a method used to sue defendants whose names are not known. They will instead be identified by their numeric Internet Protocol (IP) address. Names can only be obtained by music company lawyers’ issuing subpoenas to Internet access providers.

    In addition to the 750 ‘John Doe’ litigations, 213 separate lawsuits were filed against named defendants who were already identified through the litigation process but then declined or ignored an RIAA offer to settle the case before it proceeded any further.

    This is despite the fact, that legitimate downloading services seem to be doing rather nicely, with the RIAA’s recently released mid-year figures showing that 58 million single tracks were downloaded or burned from a licensed service for the first half of 2004.

    Furthermore, the figures also show that full-length CD shipments to retail outlets increased by 10.2 percent this year, compared to the amount of shipments over the same time period in 2003 – the first time in five years that the first half of the year has experienced such an increase.

    People are still flocking to the record store to buy their music, as overall, CDs and all other audio and video music products shipped to retailers increased by 8.5 percent in the first six months of 2004 compared to the same period in 2003.

    It’s a funny thing that while all this litigation is going on, that the RIAA has just given out the first-ever Gold and Platinum awards for digital downloads, albeit for legally sold ones.

    RIAA
    Subpoena Defense site

  • Report: Euro Music Download Market $5.7 Billion by 2009

    A new report by research and analysis firm Generator, predicts that the digital song download market in Europe will reach $5.7 billion (€4.5 billion) by 2009. If this figure pans out, it will mean that the download market will account for about 40% of the total recorded music market.

    The report also predicts that the mobile channel will figure largely in this market growth, up to $777 million (€610 million), 13.5% of the total by 2009 – and that’s not including huge ringtone market. But Europe first needs to change its usage-based mobile data tariffs and adopt flat-rate 3G tariffs like DoCoMo in Japan to encourage the successful use of the mobile channel, says the report’s author, Andrew Sheehy.

    Operators will also need to develop their WAP portal strategies, so consumers can directly access existing Internet music resources, such as artist Web sites and digital music stores.

    The Generator report, ‘Digital Music Meets Mobile Music’, differs considerably from last months Jupiter Research report, ‘European Digital Music: Identifying Opportunity’, which predicts that digital music revenue will reach €836 million, or 8% of the total market, by 2009. With a difference of 32% between Generator and Jupiter, one perhaps slightly conservative and one perhaps slightly ambitious, it might be safest to pitch the predicted figure somewhere between the two.

    Only one year into the legal digital music industry, but in real terms more than a few years in, it has permeated the world of commercial music consumption far quicker than happened with the CD.

    While both Generator and Jupiter agree that sales of downloaded digital music in Europe will continue to grow steadily for the forseeable future, Jupiter says the trend but will not replace the CD anytime soon, while Generator says it will be largely replaced within ten years.

    Don’t throw anything away yet!

  • Micropayments to be $60Bn by 2015 in Says Gartner

    Gartner and many in the micropayment world, want companies to engage Zen-like, in a shift of consciousness regarding how their products and services are sold.

    For those who don’t keep an eye on such things, a micro purchase is something you buy online for less than $5 by subscription, on-the-spot, invoiced or prepaid. “Apple’s iTunes music store was originally conceived as a driver for iPod sales, but it has become a shining example of how small electronic purchases can actually become a major revenue-driver for an entire company,” said Jackie Fenn, vice president and fellow at Gartner.

    Gartner puts the acceleration down to three intersecting trends – the rise of networks making it easier for PC-based buyers and sellers to locate each other, the low cost of transactions handled electronically, and lastly, the increased usage and sophistication of automatic location identification for targeted content and services.

    “Online marketplaces that gain critical mass, such as eBay and Craigslist, already provide an infrastructure to link buyers and sellers cost effectively” said Ms. Fenn at the Symposium. “In the same way that eBay makes it economical for a person in Boston to locate and buy a $10 teapot from another state or country, the emerging mobile delivery and payment infrastructure will provide a framework for buyers and sellers to connect for new types of micro services.”

    It behoves organisations then to identify if they can leverage mobile and micro payment processes to economically deliver or consume services delivered in much smaller units.  And the infrastructure for doing this – micro payment systems, mobile connectivity, m-commerce on wireless networks, authentication, and more-granular products and services are becoming more and more firmly entrenched in the world of electronic business.

    Zillions of people making tiny purchases would seem to be more significant from a global economics perspective, than millions of people making very large purchases. Micro commerce may be augmenting the revolution of the small spending masses, quietly sitting in front of their PCs in living rooms all over the world.

    Gartner

  • Court Orders New Protections for People Targeted by RIAA

    A district court in Pennsylvania has forced the Recording Industry Association of America (RIAA) to rethink the privacy and due process rights of people it has accused of copyright infringement. The impasse arose after the music industry filed a flood of lawsuits against anonymous individuals who they claimed were sharing copyrighted music, but because the industry did not know the identities of the file sharers, it served subpoenas to the individuals’ ISPs seeking their names. The court held that before the ISPs turn over these names, they must first send notices to each file sharer advising them of their rights.

    The judge ruled that the RIAA cannot sue alleged file sharers simultaneously, since they had grouped 203 of them, called “John Doe” because their identities are not yet known – into one lawsuit last month. The RIAA must now identify alleged file swappers by their Internet Protocol addresses.

    On Friday a subpoena was authorised in the case of John Doe No. 1, but the RIAA will have to make separate requests to seek the identity of each of the remaining 202 alleged file sharers, and must pay court fees of $150 for each lawsuit filed.

    “Piracy, both online and on the street, continues to hit the music community hard, and thousands have lost their jobs because of it”, said Mitch Bainwol, Chairman and CEO of the RIAA in a recent press statement. The RIAA and its partners in the music community have continued a variety of public education efforts. These include joining with the FBI to unveil a new anti-piracy warning and seal; expanding the acclaimed “I Download…Legally” media campaign; and working with the university community to develop new programs to educate students about intellectual property laws, discourage illegal peer-to-peer use, and offer legitimate online music alternatives.

    Notwithstanding, the RIAA, for the first time ever, included digital downloads in its semi-annual shipment report. For the first half of 2004, there were 58 million single tracks downloaded or burned from licensed online music services.

    www.riaa.com
    www.eff.com

  • Preminet: Nokia’s Mobile Content Move

    Courtesy of Nokia, mobile content distribution and transaction will reside in a one-stop-shop, making life easier for mobile networks and perhaps more interesting for the owners of some 350 million Java-enabled handsets (at last count.)

    Preminet is a hosted open service model that streamlines all the steps involved in delivering content for smart phones through a single channel.

    As a result of an agreement announced yesterday between Nokia and Starcut, a Finland-based mobile media publisher, content from Universal Studios and Warner Music Group Content will be made available to operators and consumers through the one-stop content shop.  Preminet and Starcut will provide operators with pre-certified content such as life-style and sports, ringtones, graphics, games and video that they can brand and offer over the Web, or via Java or Symbian OS enabled mobile phones.

    Here’s how it works.  Preminet sources premium Java and Symbian OS software from leading developers and content aggregators worldwide to give operators a master catalogue of certified applications, games and other mobile content. A chain supply experts dream system – the sequence includes the Preminet Master Catalogue, Preminet Service Delivery Platform and Preminet Purchasing Client, an innovative software application that make it easy for end-users to trial run mobile applications, content and services before buying. Operators can integrate Preminet content into their own download delivery systems or have Nokia provide a complete hosted solution.

    Until now, each operator was responsible for maintaining hundreds of relationships with individual Java and Symbian OS developers as well as sourcing and testing each application before bringing them to the end-user. Now they have a single channel – the Preminet Master Catalogue containing a whole range of Java and Symbian OS software as well as a framework for delivering billing and distributing revenues.

    In February, Nokia took one of its first steps towards Preminet when it joined with Sun Microsystems, Motorola, Siemens and Sony Ericsson Mobile Communications to create the Java Verified Process for testing and certifying Java 2 Micro Edition (J2ME) applications for wireless handheld devices.

    Preminet is not a new concept though, coming after the Brew development platform for mobile devices from Qualcomm.  Preminet has been launched worldwide and Nokia expects a complete commercial deployment by the end of November.

    Time will tell as to how the mobile and content industries will react to Nokia taking this role on, and taking a percentage for each transaction in the process.

    Preminet
    Starcut

  • Lexmark lose DMCA-case

    Lexmark can no longer use the Digital Millennium Copyright Act (DMCA), enacted by Congress in 1998, to stop its competitors from creating and selling cartridges that interoperate with its printers.

    A federal court has ruled that a small North Carolina company, Static Control Components (SCC) can continue selling their Smartek chip that allows any printer cartridge to work with Lexmark printers.  Or to put it another way, Lexmark, the No. 2 maker of printers in the United States, have learned the hard way that you can’t commandeer the Digital Millennium Copyright Act (DMCA) in conjunction with copyright law to create monopolies of manufactured goods for your company.

    The decision lifts an injunction imposed by a lower court on the sale of Static Control Components (SCC) chips that allow any printer cartridge to work with Lexmark printers. Now, any company that wishes to compete with Lexmark in after-market cartridge sales can do so by using SCC chips in its products.

    Congress originally intended the DMCA to prevent mass copyright infringement on the Internet.  But some companies have been scrutinising the small print and using legal loopholes to gain control over after-market competition. Lexmark, for example, programmed its printers to require a digital “handshake” with cartridges, so that only Lexmark cartridges could be used.  But when SCC started selling chips that allowed other companies to refill used cartridges and make them interoperable with Lexmark printers, Lexmark claimed they were engaging in unlawful reverse engineering and sued under the DMCA.

    Under section 1201 of the DMCA, it is generally unlawful to circumvent technology that restricts access to a copyrighted work or sell a device that can do so. But Congress also included exemptions in the DMCA explicitly permitting activities such as interoperability, which permits reverse engineering, “for the purpose of enabling interoperability of an independently created computer program with other programs”. 

    Unfortunatley for Lexmark, they were unable to convince the judge that SCC was in breach of section 1202, while SCC were able to convince him that they were not in breach.

    The now-normal model of very cheap printers and costly ink cartridges may be coming to an end.

    SCC Smartek
    Lexmark

  • In-Game Ads in the Ascendance

    With the effectiveness of TV advertising on the wane other avenues are being pursued. Chrysler Group are doing it, McDonalds are doing it – advertising on game consoles instead of the screen.

    The fantasy world of video games is rapidly becoming prime advertising space.  According to Nielsen Media Research, TV viewership among men aged 18 to 34 declined by about 12 percent last year, while they spent 20 percent more time playing video games.  So, if you want to successfully target a niche market pick the console rather than the screen.

    Chrysler Group has already cottoned on to this trend and they are availing of some simple measurement science to see how they can do it better. Nielsen Entertainment and Activision Games have launched a test to measure how consumers react to ads in video games. The test uses audio encoders to identify when and for how long players are exposed to product placements within the game, and to do this they will use the exposure of Chrysler Group’s Jeep in the newly released ‘Tony Hawk’s Underground 2’.

    Nielsen also conducted pre- and post-test surveys with 500 male gamers aged 13-to-34 in their research.  Two-thirds of respondents actually believed real-world products and advertising in the games made them more realistic. The more highly integrated the brand was in the game the more it was remembered, with 40% even admitting that they would be more inclined to buy the advertised product.

    Four years ago the Chrysler Group did not even have a budget for video game advertising but now it represents 10% of that budget, with Chrysler, Jeep and Dodge vehicles featuring in more than a dozen games.  Conversely, their spending on TV and print ads has dropped.  Chrysler first experimented with this medium a few years ago in the  “Tony Hawk’s Pro Skater 2” game where players had to do rail stunts over a Jeep to get points, or go through game levels festooned with Jeep billboards. In  “Tony Hawk’s Underground 2” they have gone a step further – players who want game upgrades will have to go to Jeep’s Web site to download them.

    Activision and The Chrysler Group have also just announced the Chrysler brand will feature in the upcoming simulation game, The Movies.

    Nielson

  • Napster Take PayPal Payment

    As an appetiser, Napster introduced pre-pay cards at Dixons’ stores across the UK earlier this month, in an effort to attract customers who don’t have a credit card. As the music business is fretting most about  teenagers downloading music, it would appear to make perfect sense to give them a payment method that allows them to pay for the music.  Now, the Los Angeles-based digital music provider has announced that customers in the United States, the United Kingdom and Canada can now pay for tunes using PayPal, using it to purchase monthly subscriptions or individual tracks and albums.  PayPal, owned by eBay is one of the largest payment handling companies on the Internet.

    Napster obviously wants its payment options to be as convenient and accessible as its music download options. If you don’t already have a PayPal account, Napster will set one up for as part of its registration process, while existing customers can select the new payment option when they enter billing information.

    The ultimate benefit of PayPal, which already has nearly 57 million customer accounts around the world, lies in its flexibility. It acts like a virtual wallet, allowing users to pay for products online with multiple funding options including a bank account, a credit card or an existing PayPal account. Other payment options on Napster, such as credit and debit cards as well as prepaid cards, will continue to be available.

    Unless you have been living in a parallel universe, you will know that Napster popularised free music swapping over the Internet, primarily using the MP3 format, before turning into a legal music service. Now the popularity of legal downloading services like Napster and Apple Computer’s iTunes has resulted in a resurgence of interest in online transactions that use micropayments. 

    iTunes still only accept the credit card, but no doubt they will now feel under pressure to offer an alternative payment method also, and are probably already talking to an online payment handling company as I write.

    Napster
    PayPal
    Apple iTunes

  • QUICPay Using RFID in Tokyo Taxi Payment Trial

    News reaches us that a Japanese credit card company, JCB International, is starting a two-month trial in November of a contactless payment system using mobile phones.  It’s called QUICPay and the guinea pigs will be taxi drivers in one of the world’s busiest cities, Tokyo. The exercise makes sense in Japan where it has been found that people use cell phones more than they use credit cards, and the Kanachu Hire taxi company will make contactless payment history.

    QUICPay will be tested with NTT DoCoMo mobile wallet service handsets that are embedded with Sony’s FeliCa IC chip.  When the phone is presented within ten centimetres of the QUICPAY RFID (Radio Frequency ID) reader, it will determine the balance stored on the customer’s chip, automatically deduct the fare and reset the chip’s balance.  The QUICPay (“Quick and Useful IC Payment”) amount will then be billed to their existing credit card just like any other card purchase.

    QUICPay can skip the authorisation process because it can instantly determine the balance that is available on the chip. The great thing about this system is its immediacy.  How often have the seconds turned to minutes and the minutes multiplied while you waited for the shop assistant to move heaven and earth to finalise your card transaction? In contrast to this a QUICPay offline payment transaction can be done in seconds and what’s more, no signature is required. 

    While this trial is using only phones, it will be possible to embed the chip in a credit or other plastic cards in the future. If the experiment is successful JCB hopes to introduce the technology to convenience stores by 2006.

    As far as we’re aware, there is no ‘keep the change’ option on QUICPay, so if the system becomes universal and moves us ever closer to a cashless society we’d better find another way of tipping.
     
    Other mobile phone-based payment systems such as SimPay are being actively pursued. What isn’t clear is what transaction fees the handler will remove. Given it is all electronic, one would hope they would be negligible.

    JCB International

  • Targeted adverts for P2P

    AlmondNet, Inc. and Intent MediaWorks will separate the appropriate from the irrelevant to exclusively bring you only the good ads.

    Should your browsing habits make you fair game for any advertiser or should you only be subjected to ‘relevant, targeted interactive ads’?  The latter option is obviously a lot more preferable, and if done in the right way, it shouldn’t be too much of a nuisance.

    Two technology companies in New York and Atlanta are trying to achieve the latter option and have consequently signed a deal whereby advertisers can target specific ads to P2P users.

    During the download process users are served ads via the INTENT MediaWorks client, using AlmondNet’s technology, which is cookie based and they say doesn’t collect personally identifiable information, adverts should be targeted.

    The two companies involved are AlmondNet, Inc., a New York-based advertising technology company that offers web publishers targeted ads based on audience attributes, and Intent MediaWorks, an Atlanta-based company that provides a technology platform for secure distribution of content via legal peer-to-peer networks. They have signed a co-operation agreement whereby Intent MediaWorks will use AlmondNet’s patent-pending behavioural targeting technology to target ads to P2P users who use their secure distribution platform.

    Intent MediaWorks already has technology that allows recording artists and music companies to distribute their digital content securely via major P2P systems like Kazaa, Gnutella, and Bit Torrent. INTENT say they already has 600 artists on its books for music distribution.

    Ads come in good, bad and ugly flavours, not to mention irrelevant and downright inappropriate. As usual it is the 18-34 year old that is being targeted in this space, and while one has to be slightly suspicious about users being targeted based on their online behavior and interests, since no ad campaign is altruistic, at least they are being spared the irrelevant and inappropriate.

    We’re not certain that anyone who is downloading via a P2P network will be looking at their screens while the files are coming down, it’s normally a fire-and-fire operation. If this is widely-so, we’re not sure who is going to pay to advertise?

    INTENT MediaWorks,LLC
    AlmondNet, Inc