Business

Changes to business digitisation brings

  • Acclaim Faces Nasdaq Delisting

    Acclaim are facing Nasdaq delisting as the market value of the company no longer meets the minimum criteria for inclusion on the technology stock market.

    The company has until August 18 to remedy this or will no longer feature on Nasdaq. Shares fell 25% last week when the company reported their Q4 results for the financial year ending March 31 2004. Indeed, the debts that the company are facing mean that they could well be filing for bankruptcy before the end of the year.

    Acclaim’s recent titles have not sold particularly well this year, and the outlook for Christmas is looking even bleaker – their forthcoming racing game juiced will be up against Sony’s Gran Tourismo 2 and EA’s Need for Speed Underground 2.

    Acclaim

  • RIAA Wins Over ISPs

    Judge Denny Chin of Manhattan has ruled that Cablevision and other ISPs must hand over details of file swappers to the RIAA to assist in their pursuit through the courts.

    This contradicts a previous decision by the Washington DC appeals court, and only applies in New York, New Jersey and Connecticut. Specifically, it states that Cablevision has to provide personal details of a subscriber even before the RIAA has decided to sue him or her. The decision has surprised many in the industry.

    It was the previous Washington decision that forced RIAA to prosecute downloaders as John Does, with decidedly mixed results – the RIAA only found out targets’ identities when it got to court.

    It is staggering that a commercial body now has the power to extract personal information about members of the public from another company. Although the recent ruling does contain a provision that the RIAA must have a firm case against a user before demanding personal information – though of course, “a firm case” is always open to interpretation.

    RIAA

    Cablevision

  • The IBC Digital Lifestyles Interviews – Simon Perry – Part II

    Second part of on an interview with Simon Perry on the Digital Lifestyles conference theme day at IBC The first section is also available.

      
    SP: If you think back to things like a normal non-video editing suite. The ways that you can drop in videos and get it to expand the time line drop isn’t something, it’s not – you have to learn to do it that way. It is not a natural way that people will work or think.

    FL: It is not stopping Dixons from selling dozens of video cameras per branch per day.

    SP: Yes. Well I think it is going into people’s cupboards. I think it is sitting in the chest of drawers in the lounge and it is being brought out at Christmas and the equivalent of boring people with photo slide shows well that is happening again now. There is a resurgence of that, but, it is content that is just sitting there that isn’t being fiddled about.

     Now we know the processing power of computers is huge now. No problem whatsoever in manipulating video. It takes a long time to actually learn to use the tools, but, it also takes a long time to understand the language of video and how to get a cohesive piece of video together – to present something.

     Before you asked me for some examples – Talking Lives – BBC

     It is BBC funded and it has grown out of a project in Cardiff and it is in Hull as well and it’s really what they call digital story telling and that sort of shows the difficulties involved with it. Because everyone who goes along to create a digital live story goes on training, I think it is five or six days worth of training, where they might turn up with no idea of what they want to talk. Some people have got a very clear idea, lots of people do not have idea and they will be tutored by media professionals, for want of a better phrase, who teach them how to tell a story, pull the pertinent parts of the story out and drop the other parts out and they create a two / three minutes piece about something in their lives and it’s some of the most emotional content I have ever seen on a TV screen. It is so personal.

     Some of the pieces have been about people’s difficulties but some things have been about people’s relationships or people’s joyful events that have happened to them and it draws that something out. The results are a real contrast to the way TV media is at the moment – sanitised – you don’t have the true emotion of someone expressing their own story. That’s a fantastic example.

    FL: We have a convergence industry and people will quite happily go out and spend £1500.00 on a video camera but will not then take the tiny extra step of actually learning how to produce the content with it. The only evidence that I see of these billions of pounds that are being spent on convergence media appliances – well actually the standard of clips on You’ve Been Framed is just as bad as it has always been.

    SP: I disagree that it’s a small extra step. There is the significant barrier that video editing isn’t simple. It is currently very easy to go out and shoot a piece of video and, as you say, spend £1500 on a Camcorder or even significantly less than that these days. You wander round and you point it at someone and you get them to talk. The results of which can be either well framed or not and there is a certain at traction in both, but, it is the barrier of making the editing process simple that I don’t feel has been conquered.

     There were moves with some video cameras of trying to do the editing on camera and this is something that is now being re-visiting with the DVD Camcorders, DVD-recording Camcorders where you can do editing on the machine. But, you know what it is like editing video. That is not the right interface. You have this tiny little screen that’s got touch screen on it and you are trying to drop pieces of video and do that kind of stuff. Not idea, but worth exploring.

    FL: So the alternative – for people to actually produce a DVD at home – I think that’s currently beyond their reach if they can’t edit AB track video, they won’t be able to alter a DVD.

    SP: I think there is a huge market for it. As we have discussed, all of this stuff’s been shot. There’s hours of it sitting in people’s cupboards. Surely they are going to get to the point where just say let’s make something of this. Maybe it is the point of retirement and that is the space where producing edited home videos are going to be cut together and home videos are going to be massive?

     Well there are a lot of people now retiring and they have got Camcorders and they shoot their kids or grand-kids and are editing things together. That could be an interesting trend.

    FL: What for you is the most exciting form of convergence? Is it in mobile phones? Is it in enabling people to do things? Is it in what it means for broadcasting?

    SP: I really think the user-generated content is an exciting area.

    FL: Do you generate much digital content yourself?

    SP: Photos, yes, I have given up on video because I don’t have the time to edit it as does take a lot of time to do it properly. I have 12/13/14 thousand images, not all of them brilliant images and this is something I want to pick up when you were saying about photographers. I think that in digital photography we are going through a remarkable time at the moment. I have heard two sides of this argument. My personal feeling was that there are images being created today which are as good as the professional photographer can take because people have a freedom in taking images with digital cameras. In effect, many people early on when they get their digital cameras take as many images as they can to get the value out of their digital cameras because, they’re having to buy films and, therefore, feel they have got to make up the cost of buying an expensive camera: The difficulty is – and this is a thing of education over a period of time – is that not everyone has a strong eye and so won’t necessarily have an understanding of what is a strong image and what isn’t. So I think probably there are far more amazing images being taken today. Whether we will ever see them, whether they will sit on a crashed hard disc or backup CD/DVD’s somewhere and never get dragged off is another matter.

     The opposing argument is on the side of professional Press photographers. Where they’ve been taking a series of photos and deleting all their images that they don’t want, that they don’t think are relevant. So those moments that were previously caught in time, such as Clinton and Monica Lewinsky, frozen for a camera, will disappear because professional images are huge, 15 MB, and they understand that sorting through 14 thousand images is a total nightmare so they immediately pare down as they shoot.

    FL: This means that each of us generates a mass of data throughout our lives, much of which we are not even interested in, which will probably be deleted when we die or whatever.

     Do you think that there will little archives around individual people in the future and that’s really where it lies?

    SP: Yes, and I think blogs are the first step towards that.  A person’s blog or URL is their zero index. Their reference point.

    FL: But who is going to curate that?

    SP: The individual.

    FL: When they’re gone it all gets washed away.

    SP: To a lot of people, them living beyond the time that they are around is quite important. So I guess for those people they will spend quite a lot of time preening and displaying what they want to display to the world after they’ve gone.

     I think it is tremendously exciting to think that you could have access to any piece of music, video or TV show or film. A huge potential to stimulate. What is disappointing about the way it appears to be going at the moment is that you won’t be able to use that content yourself to generate further content yourself. That’s the way that most of the media is going, with the notable exceptions like the BBC, with their Creative Archive project they are opening the doors for a new form of creativity.

     I have thought of another one of those user-generated content pieces – One Minute movies.

    FL: One Minute Movies – BBC.

    SP: Yes, when people – and this is something that we thought was going to be exciting on TV was the idea of very short form content for mobile devices and creating a piece of content within one minute is an incredible challenge. It is very difficult to get everything across that you want to say within one minute.

     There is also the side of what is going on with the mash up video as well.

    FL: This is just sampling. It is not creating new kinds of content.

    SP: No. That is true. It is sampling but it is just using more complex tools to do the sampling.

     We were talking about open source and an open source platform is an interesting idea. One of the real expenses of creating video content for Broadband distribution to a number of platforms or any platform is that there is tremendous cost involved in versioning different sizes and different resolutions as well as colour depths as well as the programming side of making the content interactive. It becomes very expensive.

     So the idea of having a defined European or UK platform where small groups of content producers can get together and create content that they know will go to a platform is quite exciting.

     We’ve talked about user generated content. The upshot of this in another exciting area. Very small production companies, micro production companies, creating content. The equipment is cheaply available, so the means of production of video content are within the hands of people who have the skills to do it now. There are lot of people involved with TV whose dream has always been to make a TV show. These tools for creating TV are now within the hands of people. They don’t have to go cap in hand to production companies and say “Please let me make this”, they can just go off and do it. That becomes more and more attainable. This raises one of the big unanswered questions, that we touched on at IBC last year – how will people find the content when there will be so much of it around? When you have got websites full of 1,000 videos;  people’s blogs with say ten movies on them; two of which may be interesting looking over say 1,000 blogs. How do people get navigated or navigate themselves to the point of finding that content and seeing it as – getting to see the tool. When you have got thousands of movies and hundreds of thousands of music pieces – finding access to those is very difficult.

     You find interesting stuff and you become the trusted guide to content and certainly that is undeniably a great way of finding content. The disadvantage with that is you may chose the people who are guiding you to content because you like them and they think in the same way as you, but, that is just one person’s view of the world. So you would have to be quite conscious about thinking well I am going to start picking people that have got a completely opposite view to me but I still – there is a core something that I like there but the rest is completely bizarre. Otherwise you start getting bizarrely – because the frustration of having so much content available to you – your consumption becomes more and more narrow.

    FL: This is something that was a fear for a while really. If people could customise a newspaper to things that they were interested in it would mean that their interest areas would then become so narrow they would never find out about things which would otherwise appeal to them.

    SP: There are bits of software around that create highlights of content for you.

    FL: You need that random seed though.

    SP: Perhaps in the future we’ll take our net and scrape the bottom of the media ocean and just see what comes up. You say – give me random – and you sit down there for an hour or however long and you just go through it marking how much you like it with thumbs up and thumbs down on your controller.

    FL: Like TiVo I suppose.

    SP: With the recommendation from other people who have bought other content you are looking at you get back to that thing of possibly restricting the type of content you are going to see. But, if you just said – using Google as an example – give me results from the last 1000 searches that Google has had literally the last 1000 around the world. Just display all those video pieces me end to end and I will decide to either have the software sitting between which does a quick summary of the video content that has been searched and retrieved. That is of absolutely no interest to me whatsoever. You just basically have gradations of whether is it interesting or not. You can obviously then use that to then gather other information but you still get back to that point of having your view constricted.

    FL: That brings me on to horrible topic metadata. Where is metadata in all of this?

    SP: Metadata is everywhere.

    FL: It should be everywhere but it is not. That is the last thing on people’s minds. They make their content.

    SP:  It is a big problem. It has got to be in the production process but that is not what a production budget is to pay for and that is the problem. Hopefully it will get resolved after a number of years – as people understand just how important it is – they will find the budgets to put it into the production budget. At the moment I don’t think it is going to be archived any other way.

     Before we reach that point there is anciliarary way of doing it. Post-broadcast metadata. Individuals creating their own metadata around a broadcast TV programme. I think it’s another fascinating area. If we look at what has happened with radio three website recently where they are putting markers in for each radio show that is created. There is now a place on the web that has a constant URL for it. I don’t know how far they are going to open it up but potentially any content that anyone thinks is relevant could be tied to that URL, either through them creating their own blog entries and then tracking back using a trackback mechanism back to the BBC site or; whether it is all just held within the BBC site and in such a way that anyone can gain access to it.

     When people are able to, through out a broadcast, drop metadata in whether they are able to put markers in a time line to say – OK the point that this was mentioned here, here is some additional information. Stuff that in the early days of interactive Broadband video people were doing – putting in text or photos or additional video clips that can then drilled down in to becomes very interesting.

     That is anther thing that is great about convergence.

     


    Simon is chairing ‘The missing piece – Getting paid for content’ session between 11:30 and 13:00 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here

  • CinemaNow Secures More Financing From Cisco, Lions Gate and Menlo

    CinemaNow, the video on demand company has just secured a further US$11 million in financing for its projects. The investment is expected to fund the company’s expansion into the European and Asian markets, as well as acquiring new content and developing CinemaNow’s technology. CinemaNow have developed the PatchBay content on demand distribution system, and their website is based on it.

    This new round of funding was led by Menlo Ventures, with additional investment from Cisco Systems (who provide hardware to CinemaNow) and Lions Gate (who provide content).

    CinemaNow was established in 1999, and now has a library of 5,000 titles for downloading and streaming over the internet. Content is available on a pay-per-view, subscription and download to own basis. CinemaNow features content from 20th Century Fox, Disney, MGM and Warner Bros, amongst others.

    They are currently second place in the market behind MovieLink, and has recently announced that it has been breaking even.

    CinemaNow

  • Survey: US Digital Music Sales Will Reach US$1.7 billion in 2009

    A new survey from Jupiter Research indicates that the digital music market will grow rapidly from about US$270 million (€221 million) in 2004 to US$1.7 billion (€1.4 billion) in 2009. At that point, digital downloads will account for 12% of consumer music spending.

    These new sales are expected to end the four years of declining sales, but won’t bring the industry back to its 1999 level of activities. Nor are downloads expected to start cannibalising CD sales any time soon.

    Subscription services are expected to become more popular than downloads in the long run – on this, JupiterResearch VP and Senior Analyst David Card says: “The so-called celestial jukebox is in sight. But for now, it will appeal to music aficionados. The U.S. music industry must manage digital music as one of a series of incremental revenue streams, one that is in the same scale as licensing.”

    US sales of digital music players are expected to grow by more than 50% per year for the next few years. Interestingly, the survey showed that 77% of consumers who would buy a player did not feel they needed more than 1000 songs on a player at any one time, irrespective of the size of their music collection.

    Jupiter Research

  • Mudda: Peter Gabriel and Brian Eno’s New Venture

    Peter Gabriel and Brian Eno have got together to create mudda.org – the Magnificent Union of Digital Downloading Artists. An idealistic venture, the organisation’s goal is to allow artists to distribute their music directly without having to negotiate terms exclusively with labels.

    Mudda is not anti-label – it intends to share power and rights between artists and their labels.

    As Gabriel states on the Mudda site, “The relationship of artist to the business has most often been one of contract and servitude. We believe the way forward must be a partnership in which the artist can take a much bigger role in how their creations are sold, but also have the chance to stand at the front of the queue when payments are made instead of the traditional position of being paid long after everyone else.”

    Advantages to musicians also include being able to release work to their own schedule, instant sales figures and bulk negotiations with online stores – restrictions that many find difficult when dealing with a record company.

    Another interesting benefit is that artists will be able to release compositions of whatever length they choose – rather than being restricted to the properties of the distribution medium.

    Do you know why a CD is 74 minutes long? Because when the engineers were setting the specifications, they decided that the most popular music CD would be Beethoven’s 5th, and that’s just under 74 minutes.

    Pop songs are 4 minutes long because that’s how much music you can store on a 7” single rotating at 45 rpm.

    When albums became popular, artists could then experiment with compositions that were 25 minutes long, or one side of a vinyl record. And when CD appeared, Brian Eno brought out Thursday Afternoon, one of the first pieces of music composed specifically for CD and taking advantage of the format’s extended time – Thursday Afternoon has no breaks and takes 1 hour and 56 seconds to complete.

    Eno has composed some very long compositions that rely on loops of sound coming into, and going out of synch. Some of these pieces take days to complete, and I look forward to the day when I can legally download and play one at home.

    The internet may be about to change music again, in a way that few people could have predicted – as it no longer has to written in 4, 25 or 74 minute chunks.

    Mudda

  • The IBC Digital Lifestyles Interviews – Simon Perry – Part I

    This is the first in a series of eight articles with some of the people involved with the Digital Lifestyles conference day at IBC2004.

    We interviewed Simon Perry, the executive producer of the Digital Lifestyles theme day, in a two-part feature that covers on the makeup of the day and question him convergence and other aspects of the media. He publishes Digital Lifestyles magazine.



    Fraser Lovatt: Tell me about the four discussion sessions at IBC this year.  What are they about and who’s speaking at them?

    Simon Perry: When the Digital Lifestyles day was introduced at IBC last year, my aim was to set the scene – to signal the change in the content industry. This year builds on that, by highlighting four specific areas that merit closer attention by the creative, business and technology people.

    The day will inform the delegates on the new types of content possible, how to get paid for it, where you can deliver it and the business models around it.

    The first session is titled ‘New platforms, new content’.

    It is set in the context that, with new content delivery methods comes new forms of content. It’s chaired by Ashley Highfield, director of New Media & Technology at the BBC, and will create a discussion between some of the most experienced and forward-thinking Games, Film and TV people. In each of their fields they are bringing together different strands of content, creating something that couldn’t have existed previously, such as content that migrates between platforms, creating united content.

    The second session is about getting paid for content. Up to now, the industry has been focused on protecting the content that they have, which is understandable and technology companies have been more than happy to assist them.

    I feel this is a distraction. The really key part is how the consuming public are going to pay for content that they think is worth paying for, whether they receive it to their mobile phone, their TV, via broadband to their PC’s or through an adaptor on to their TV. The methods of payment are as diverse as the delivery methods.

    The panel brings together the knowledge and experience of people who are successfully receiving payments from the public for text and video content; others offering payment systems that take small amounts, less that a pound/dollar, online and others that use mobile phones to make payments.

    Tim Jones, the CEO of  Simpay will be on the panel. Simpay was brought to life by the four major mobile phone networks in the UK. The first stage of their service offers the phone-carrying public to pay for phone delivered content – catching up with the currently favoured premium-rate SMS charging. The next stage is – and this is where it becomes a more interesting example – allowing you pay for any types of content, as well as physical goods from shops, using your phone. It is something that has been theorised for a long time and Simpay appear to be pulling it together now. Tim’s background is particularly interesting. He co-invented Mondex, which as we all know, was the first form of public e-cash in the UK.

    The third session is chaired by Ken Rutkowski of Ken Radio, and is about informing the content creators about the increasing range of platforms that are available to them for distributing their content. Within the industry there are different stages of knowledge, expectation and experience of what digital lifestyles will mean to the creators of the content, as well as the public. In this third session they will explore what roles different media play on different platforms and the effect it is going to have on the type of content people produce. Ken’s enthusiasm will lift the best out of the panellist.

    The forth session is future business models chaired by media journalist, Kate Bulkley. It will explore the models that will run aside 30-second spot ads; mobile delivery; gaining benefit from efficient delivery to different platforms; generating new revenue from TV. There’s a lot of innovation in this area.

    What does convergence mean to you? What’s your internal definition of it?

    It’s an interesting word. It’s been around for a long time – and increasingly, over the last six/nine months it has become to mean anything that any marketeer wants it to mean. The original definition saw all devices being morphed in to one device. It’s clear that there won’t be convergence to that extent. It’s becoming less defined. The more it enters everyones vocabulary, the wider the definition becomes. Perversely it’s definition is diverging.
     
    The convergence that Digital Lifestyles magazine focuses on, is how the influx of technology into the creation, transfer and reception of media content is changing the industry. Where media and technology touch, is what’s of interest to us, and the impact it will have.

    There is an argument that media has always been a technological activity. From first workings and marking things on cave walls to the development of perspective, to the first film studios to television. It has always been technology-led.

    That is probably true. Well it’s not probably true – it is true. The definition of what is technology is a sliding window, isn’t it? Pens, paper and the printing press were all once thought of as advanced technology, and then they slowly shifted to become the norm. I would argue that the window moves more quickly these days.

    But media always seems to be at the forefront of technology – many technological breakthroughs are media related and have been throughout the history of mankind.

    Technology has certainly had an influence – I don’t know whether media has always been pushing technology, or whether it has always been using the latest technology. It certainly has previously utilised it, and the people who have utilised the technology are the ones that have had the upper hand. Look back to Murdoch in the use of technology in the production of newspapers, originally pioneered by the Eddie Shah with Today.

    I think people get business advantage by using technology and media. I don’t think necessarily the mainstream media are quick in adopting technologies and making the most of them, and that’s frustrating. However, this gives a space for the people who are outside the mainstream media, micro-production companies if you will, to use the technologies to create and deliver their content to an audience on an economic basis.

    Do you think the public thave an active participation in convergence? Do they see the convergence as something they are getting involved in or do they see it as something that has happened around them? Five years ago they were going out and buying DVD players and now they are buying PVRs – Do you think they are seeing it as progress or just something new to buy?

    Let’s use digital music, because that’s quite a good example. One of the articles on Digital Lifestyles today covered the Virgin Music Player, a little thing you just hang on your waist.  People will obviously notice that they don’t have to carry around a bulky CD player or a mini disc player or a cassette player, but as to whether they realise that the changes are wider reaching than that – I doubt it. It will feel like another small step.

    These days people are now conscious of change. They have come to expect things to change. They are becoming numbed to the “Oh my god” reaction, when they come into contact with a new use of technology.

    The people in the industry see it as significant, because they see the long-term impact.
     
    One of the ironies I perceive with convergence is that the media itself, those pieces of entertainment like music, film and to some extent e-books, are becoming fragmented through platform and DRM issues. Do you think that we will be happy buying three versions of the same thing in the near future because the DRM or file formats are incompatible, or do you think that this will be resolved gracefully?

    Incompatibility is a fear of mine and yes, in the short term, it is likely. It’ll happen because of the number of incompatible content protection systems that are around. I think the industry, whether it be the providers of content protection or the media companies, which are using the content protection systems that don’t allow interchange between devices are going to do themselves a disservice and, if it continues, will frankly end up irritating the customer.

    I have asked the question to quite a number of people in the media business and technology business – I have never really had a good answer from them either. How do you sell the public something that’s less good, through it’s restrictions, than the thing that is being replaced? Something that ends up flexible, even though the form it is held in allows greater flexibility? So, short term I think it probably will be a problem. I hope that it won’t be a problem beyond the short term.

    It can be argued that a lot of the fragmentation that we are seeing in media in file formats and devices is down to proprietary systems that are involved in the creation of media, and in its protection and distribution so we have DRM, we have CDs which can’t be played on PCs.   These are all proprietary.  Do you think there is a place for open standards in a convergent media culture?

    I think the reason this hasn’t happened so far is that the prize is so enormous. The prize for being the provider of content protection is to be one of the largest businesses in the world. Much commercial material will only reside in the rights holders-approved DRM formats; ones that they feel protect their interest. That’s not to say that there won’t be a huge market for other content in another format, and that could be an open format.

    Do you think that one company will be allowed to hold the keys for content protection?

    Who is going to stop them? Are you talking about Government restrictions?

    Some view it as a monopoly.

    Certainly from the discussions I have had with content creators of the large studios, there is an unease with a number of companies holding all of the keys. There have been many suggestions as to the way that could be got around. One I found interesting was Fraunhoffer’s Light Weight DRM (LWDRM), but it still relies on a central repository that decides whether you are entitled to this music or that you have paid to have access to it.

    The Fraunhoffer response to that question is to say, well we place that with a third party – so you split up the business of running the content protection system away from the business of holding the keys to the access to that content. Their suggestion was that it be done by institutions like the German post office. Different nations have got different relationships with their governments. So that’s something that might work in a country such as Germany, but not others.

    There are two arguments – on the open source side there are many people, the Electronic Frontier Foundation (EFF) for example, who argue that there should be no content protection and people will pay for their content, relying on the good nature of man.
     
    Rightly or wrongly, that is not how the mainstream media industry sees it. But if you look at companies like Warp Records, they sell their music in MP3 format. They have taken a more open file format, which can be exchanged quickly between different formats and difference devices. The consumer in me sees this as completely reasonable. I buy something and then I am able to put it on whichever device I want.

    I did some research for the European Commission on a unified media platform called N2MC and it became clear from speaking to a wide range of people, along the whole creation-to-distribution change, that the idea of an open source content protection system didn’t currently work for them.

    Because it could be easily reversed engineered?

    It was seen as a weakness in the chain. One part of a content protection system must remain proprietary.

    This interview is continued and concluded here.


    Simon is chairing ‘The missing piece – Getting paid for content’ session between 11:30 and 13:00 at the IBC conference on Sunday, 12th September in Amsterdam. Register for IBC here

  • Survey: US Console and Game Sales Down 2.5%

    A survey from NPD indicates that US console hardware and software sales fell 2.5% during the first half of 2004. Price cuts from Sony and Microsoft saw a drop in the market’s value, but the number of units sold was up by 1%.

    The console market in the US was worth US$3.4 billion (€2.78 billion) during the first six months of 2004, compared to US$3.5 billion (€2.86 billion) for the same period last year.

    All of the consoles available have been on sale for at least two years now, so penetration is high – this caused a 17% drop in hardware sales. Portable software (that’ll be Game Boy cartridges then) fell 12%. However, internet accessories like the PS2’s broadband adaptor rose 120% and “speciality controllers” rose 184%. Looks like everybody decided to go out and buy a Wavebird.

    “The reduced price points for Microsoft’s Xbox and Sony’s PlayStation 2 helped to stabilize industry sales during the first half of the year,” said Richard Ow, s senior video games analyst at NPD. “While the first quarter of 2004 was showing double-digit losses in console hardware unit sales, with the help of lower price points for the Xbox and PS2 during the second quarter of 2004, the industry actually saw double-digit increases in unit sales for the entire second quarter of the year.”

    NPD

  • iMesh Pays Out, Changes Business Model

    iMesh.com have just paid out US$4.1 million (€3.34 million) in compensation to the US music industry to settle a lawsuit on their P2P software. The iMesh client software was accused of helping internet users to download music illegally, and so record companies pursued them for US$150,000 (€122,400) per song plus legal fees.

    iMesh are now operating under Bridgemar Services and have promised to introduce a new, non-infringing, service. No details are forthcoming on what the service might be, though. Their website simply states: “Don’t worry — we are not going anywhere. We have been doing this for a very long time and are very good at what we do. So, we anticipate no gaps in service while we transition to the new model. The new model will launch later this year.”

    The company is upbeat about settling the case, however: “iMesh views this as a historic opportunity. We agreed to settle in order to ensure our ability to provide you with more content and better technology than any of our competitors. Under the New iMesh model, which will launch later this year, you will be able to find and share the content you want without fear of being sued.”

    There’s the issue: there’s nothing to prevent the RIAA now suing the music sharers and downloaders who used the iMesh service.

    Whether iMesh will be successful in relaunching itself as a legitimate P2P service, much like Napster’s moderately successful reinvention, remains to be seen.

    iMesh

  • European Commission Gives the Nod to Sony BMG

    The European Commission has granted regulatory approval to the creation of Sony BMG, a joint venture bringing together the music divisions of the two companies.

    The Commission did warn, however, that it would be keeping a close eye on the industry as it becomes more concentrated within a small number of companies, and would “very carefully scrutinise any further major concentration in the industry.”

    The venture is a 50/50 project and covers the discovery and development of artists, plus the recording and marketing of music. It doesn’t cover music publishing, manufacturing or distribution.

    The Commission was initially concerned about the venture as it reduced the number of music majors to four – but was satisfied that Sony BMG would not be larger than some one of the companies in the market at the moment. The top spot is still held by Universal.

    Sony Music UK