News written by Rich Fiscus (December, 2007)

Christmas day showed signs of being big for both Microsoft and Apple judging from the number of visitors to the websites for each company's moble media players. According to industry analysts at Hitwise, traffic to Microsoft's Zune website was up nearly 400% over Christamas Eve, while iTunes from Apple got six times as many hits as the Zune site, also up more than 300% from a day earlier.

Besides getting the lion's share of traffic among online music stores, iTunes als made it to number 9 on Hitwise's list of most visited etailers on Christmas day. They received a reported 0.068% of all online retail visits.

"Although the Nintendo Wii was the most-talked-about product during the holiday season, MP3 players were also very popular as Christmas gifts," Heather Dougherty, director of research at Hitwise, said in a prepared statement. "This year the Zune has captured interest from music listeners with a new line of redesigned players and discounted older models, while the popularity of iPods continued to drive traffic to the Apple Store and iTunes Web site."

In a continuation of the all too familiar trend of the last few years, the CD industry saw more huge declines in sales during 2007. In addition to the expected sales drop during the rest of the year, Christmas sales were an abysmal 20% lower than last year during the weeks leading up to Christmas. Sales for the entire year were down 15.3%.

In addition to other factors, including reduced shelf space for CDs in many stores, the drop is being attributed to poor weather and a lack of hit albums during the Christmas buying season. "It just makes things worse in one of those already bad holiday selling seasons," says Rob Perkins, president of Marietta, Ga., chain Value Music.

"Unless we get some innovation put into physical music," Value Music's Perkins says, "we will see a continuing of this bad sales trend." Music executives are already forecasting another drop in sales next year, which could be aggravated by retailers continuing reclaim valuable shelf space by reducing the amount devoted to CDs.

Source: Reuters

Although this year's box office receipts will set a new revenue record for the movie industry in the U.S. it's not necessarily a sign that the market is improving. It turns out that the 4% increase over last year's revenue happens to be the same as the average ticket price increase. In other words the same number of people paid more money to fill the same number of seats.

According to some, this years decline in home video sales was due in part to a lack of blockbusters as new releases. Despite a large number of theatrical blockbusters this year, a large number have been sequels, which typically don't perform as well in the home video market. Add in consumer uncertainty about the format war between HD DVD and Blu-ray and you have a recipe for continued decline in revenue for Hollywood.

Brandon Gray, president of online movie publication Box Office Mojo, says that there's reason for concern since only one of the many sequels released this year exceeded previous installments at thei box office. He also mentioned that this year's revenue was from fewer movies, each playing on more screens than was typical in years past.

Despite the U.S. Government Accountability Office (GAO) criticizing the federal government, and especially the FCC, for lack of preparation for the digital transition coming in just over a year, the Consumer Electronics Association (CEA) says more than 50% of American households have at least one digital TV (DTV).

The GAO report criticized the FCC for lacking any sort of benchmarks to measure their progress in preparing Americans for the day when their analog TVs will no longer be able to receive Over The Air (OTA) TV broadcasts without a converter box of some kind. Cable and satellite customers are already prepared, with cable companies being required to support analog TVs past the February 17, 2009 cutover and satellite services already using digital streams that require special receivers.

The real concern among many in Washington isn't so much the general public as a particular segment of the population who are mostly spectators in the digital video revolution. By and large older Americans haven't seen a need to buy digital TVs just for the technology, and unless they're educated about either purchasing a new DTV or getting a voucher for a converter there's likely to be repurcussions on Capitol Hill as legislators get complaints from angry constituents.

According to the results of a survey conducted in late October of year asking Americans where they get their entertainment, internet based and mobile content is becoming increasingly popular. The study indicates that not only are 36% of U.S. consumers using Cell phones for entertainment, an even larger number are actually creating content with them. Nearly 40% indicated that they watch TV shows online.

"I think for advertisers one of the conclusions is you don't make decisions to advertise either on television or the Internet when you want to hit all the demographics, but rather you need to have a multiplatform strategy," said Ken August, vice chairman and national sector leader for Deloitte & Touche's media and entertainment practice, which commissioned the study. "It shouldn't be an either or proposition."

That appears to be what American broadcasters are doing. The last year has seen in increase in the amount of TV programming available directly from network sites, as well as services like Joost and the NBC Universal / News Corp. owned Hulu. These services offer not just recent programming but also older series for online viewing. At the same time they continue to release more titles on DVD.

Consumers who have purchased Windows Home Server (WHS), the Microsoft OEM network storage solution released earlier this year, are having a number of problems. Although some issues are simply due to programs not supporting the use of network shares, there's apparently also an issue with files being corrupted.

"A few people in the Community Forums have reported data corruption when saving files [on WHS] from applications including Windows Vista Photo Gallery, Windows Live Photo Gallery, Microsoft Office OneNote 2007, Microsoft Office OneNote 2003 and SyncToy 2.0 Beta," the WHS team wrote in a blog post. "Additionally some applications, like Microsoft Money and Microsoft Outlook, do not support storing files on shared folders."

This seems to highlight the concerns that led Microsoft to make WHS exclusively and OEM product. For the general public much of what a computer does is already something of a mystery. It becomes even more complicated when you add networking, and especially network-based storage into the mix. However, with the proliferation of large multimedia files, and the need for ever-increasing storage levels it's not surprising that many people would turn to such a solution.

Twentieth Century Fox and Apple announced a deal that will add movie rentals to the iTunes online store. Currently Walt Disney, Paramount, MGM, and Lionsgate, although new releases are only available from Disney. Fox will be the first company to offer rentals through iTunes.

Although the internet has long been touted as a replacement for DVDs, or at least an additional revenue stream, so far no service, including iTunes, has emerged that makes enough money for Hollywood to consider it an unqualified success. Earlier this year NBC Universal severed their relationship with iTunes over just that issue.

Some on Wall Street are apparently seeing the deal as a threat to more conventional DVD rental operations like Blockbuster and Netflix, causing shares of both companies to decline by more than 4%. But not everyone is convinced that this puts iTunes into competition with those services.

According to Wedbush Morgan analyst Michael Pachter its an attempt to expand the market to include more consumers. "I don't think that will cannibalize rental for the purpose of viewing at home," Pachter said. "I think that the primary purpose of renting movies is to consume the entertainment in the home. The primary purpose of downloading anything from iTunes stores is to consume on the go."

As part of our continuing efforts to keep up with changing technology Afterdawn has a new HDTV Buyers Guide available in our Guides section. Along with our recent guide on Getting Started With HDTV it should serve as a good starting point for making your first HDTV purchase.

You can find these, and other guides on a variety of topics in our Guides Section:

https://www.afterdawn.com/guides/

Michael Nathanson, analyst for Bernstein Research, is predicting the demise of the DVD as the dominant vehicle for consumer video. His prediction comes as DVD sales are down more than 4% for the year according to data from Nielsen VideoScan. Nathanson believes retailers will soon start reducing shelf space dedicated to DVDs as a vacuum is created which will need to be filled by the winner of the HD DVD / Blu-ray format war.

In addition he's not predicting a particularly rosy future for the victor between the two HD formats. He doesn't expect a rush to replace a lot of titles consumers already own on DVD, noting that “few standard def titles will be worthy of replacement.”

Perhaps a more pressing problem for the movie industry is consumers' increasing preference for watching movies through Video on Demand (VoD) services. Besides more traditional cable VoD services, a number of companies are offering movie downloads, some in hi-def, either for purchase or rental. Services like Vudu and Amazon Unbox can be used with set-top boxes. Unbox is particularly appealling for some TiVo owners who can use it with their existing hardware. In addition, Xbox Live has had some success with video offerings. Netflix and Blockbuster have both gotten into the online video business as well, with Netflix offering Streaming video as a standard feature of their rental plans and Blockbuster buying download service Movie Link earlier this year.

If you've been thinking about getting your first HDTV but haven't been able to decipher the wide array of technology and marketing terms well enough to decide what to look at you should take a look at our new guide Title Getting Started With HDTV.

From LCD to plasma, and Progressive to interlaced it gives you a tour through the technology, highlighting what you need to know.

You can find the new guide, along with others on a variety of topics in our Guides section.

If you want to evaluate different models of HDTV don't forget about our Hardware section, where you can find and add descriptions and reviews of flat panel TVs.

Yet another HDTV manufacturer is putting additional focus on LCD flat panel displays. Following the announcement last week by Matsushita, whose Panasonic brand is one of the leaders in plasma technology, announcing plans for high end LCD production, Sony is shifting their strategy. Instead of a move from plasma to LCD, it's a rear projection to flat panel.

Until fairly recently the market for very large, but lower priced HDTVs was dominated by rear projection models. Prior to its demise at the hands of DLP, plasma, and now LCD, having a large screen meant projecting an image either from the front or back. The curvature of CRT tubes translated to Limited screen sizes in direct view models. Eventually with CRT on its way out for HDTVs it was replaced by DLP (a projection-only technology) and LCD, which at the time was very expensive in anything but projection models.

In recent months flat panel LCD HDTVs have dominated first discount, then high end LCD sales and every major TV manufacturer is focusing on the technology with increased production and many new or retooled factories.

According to a report released last month by the Academy of Motion Picture Arts and Sciences, best known as the group behind the Oscars, the movie industry is getting ready to face a crisis in movie archiving. Ironically the problems are being caused not by aging celluloid (film) but rather the move to digital filmmaking.

For consumers digital video has been a blessing. It puts at our disposal capable of creating projects comparable to some Hollywood productions, and best of all it does so in a form that's cheaper than ever. Unless the technology is constantly evolving and you need to archive hundreds of hours of video every year and keep them for decades (or even centuries) which is exactly what all the major studios typically do.

With actual film the process is relatively simple. Given good environmental conditions it can last in relatively good condition for well over 100 years. With the interest in preserving copies of films for future re-re-re-releases on the latest and greatest consumer formats this has long been standard practice. Unfortunately with digital media it's not that simple. While it costs an estimated $1,059 to store a film master for a year, the cost increases more than ten-fold to $12,514 for a digital master.

The country of Antigua came out of World Trade Organization (WTO) arbitration with victory against the U.S. on the issue of gambling revenue. The country, whose economy has shifted from being largely tourism based to having a thriving online gambling industry, was looking for $3.44 billion in compensation for U.S. violations of a WTO treaty. Instead they were awarded $21 million.

Perhaps most importantly to U.S. officials, Antigua received WTO sanction to ignore other treaty provisions regarding intellectual property. Based on the decision they could decide to keep royalty payments to U.S. owned businesses for themselves in order to make up for being denied entry into the biggest online gambling market in the world.

"The United States is pleased that the figure arrived at by the arbitrator is over 100 times lower than Antigua's claim," said Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab. He also cautioned that if Antigua were to actually take advantage of the IP related portion of the decision it "would establish a harmful precedent for a WTO Member to affirmatively authorize what would otherwise be considered acts of piracy, counterfeiting or other forms of IPR infringement."

Yet another group of industry analysts is predicting that next year will almost certainly see a single dominant HD disc format emerge next year. Unlike recent speculation from Screen Digest, however, the report from Understanding and Solutions includes predicting which side it will be. In their analysts' estimation Blu-ray will emerge as the victor in 2008.

“Blu-ray and HD DVD player prices have been falling since the summer, culminating in Toshiba’s loss-leading sub-$100 HD DVD player, available in the U.S. last month for a Limited time,” said Jeremy Wills, an Understanding and Solutions consultant. “Price reductions in the U.S. have continued into December, with Blu-ray players dropping below $300 for the first time and HD DVD players below $200.”

“Crucially,” added Wills, “Blu-ray benefits from stronger Hollywood studio support and represents a greater proportion of high-definition disc production volumes and disc sales. To date, Paramount’s move to sole support of HD DVD has failed to turn the market, despite the HD DVD exclusivity of key titles Transformers and Shrek the Third. Blu-ray still represented more than 70% of high-definition video sales in the U.S. during the week Transformers was released on HD DVD.”

As sales trends over the Christmas shopping period are being charted an interesting trend is starting to come into focus. While the overall figures have continued to favor Blu-ray over HD DVD in terms of Title sales, higher player sales due to superior prices is finally starting to pay off for HD DVD supporters. Blockbusters such as 'The Bourne Ultimatum' and 'Harry Potter and the Order of the Pheonix' on HD DVD are reversing a long running trend by outselling their Blu-ray equivalents.

As each side in this format war has spent the year positioning themselves to deliver a knockout blow and claim the title of Successor to DVD for themselves, every comparison between the two has been followed by a loud (and usually at least partly justified) declaration from the other that the numbers are biased and misleading. Among common complaints are counting game consoles as Blu-ray standalones and free (as in Buy one, Get one) titles as sales.

As part of new CEO Jim Keyes' bid to bring the cost of its Total Access program under control, Blockbuster has increased the price for two tiers of the service and stopped offering the highest tier entirely. Total Access is the name of the program that combines online movie rentals with in-store returns. With prices comparable to mail-only plans offered by online rental leader Netflix, Total Access was a success in terms of public response, but has so far has failed to be anywhere near profitable.

At the same time prices on two rental plans introduced in June are being cut $1. Instead of returning movies to brick and mortar locations to exchange for in-store rentals, the new plans allow subscribers to rent a movie for $1.99 for in-store returns.

Just a few months ago Blockbuster appeared to be headed either to the top of the online DVD rental busines or to bankruptcy court, or perhaps both. Their aggressive marketing of Total Access had lured away enough Netflix customers for that company to see their first quarterly loss of customers ever. However, with Netflix aggresively pushing their Streaming video and Blockbuster quickly losing money Keyes decided it was time for the company to pay more attention to their brick and mortar business, which leads the U.S.

Neuros, a company that specializes in digital recording devices that place no limitations on use of content, is hoping to start a movement to help consumers identify technology, like theirs, that doesn't include any DRM and adheres to open standards. The company has already trademarked the Unlocked Media brand, and is hoping to find a third party to administer it, eventually allowing any product with meets the program's guidelines to include the new logo.

DRM free music has arguably been the biggest news in online sales this year, with every major label either actively engaged in selling DRM-free music, or doing market research to determine its feasibility. At the same time, though, other industries, most notably film and television, are still resisting removal of DRM for downloaded media. Almost weekly there seems to be a new initiative, PR event, industry announcement, or legislation introduced in Congress that would place additional restrictions on the public's dwindling access to their own fair use rights.

According to Neuros CEO Joe Born, "Big Media is waging a strong campaign to convince our legislators to pair down our digital rights and outlaw many technologies to create Unlocked Media. We need a shorthand to rally citizens and fight back”

Media analysts at SNL Kagan have released the results of a study called 'Video-On-Demand: A Strategic and Economic Analysis' in which they look at the growth and future of various on-demand technologies, and concludes that revenue will top $6 billion within another five years.

Technologies covered in the study include Video on Demand (VoD) and Pay-Per-View (PPV). Revenue per user for these and similar services from cable and satellite television providers, in addition to telcos and other computer/internet based sources. "We're starting to see factors align that can enable operators to translate the rise in on-demand traffic into more significant sales," said SNL Kagan senior analyst Ian Olgeirson in a statement.

Olgeirson also noted that this increase will necessarily be accompanied by new initiatives in advertising, which is what supports most on-demand video right now.

"Digital video is not only a competitive necessity for cable operators, but it also provides the foundation for future revenue growth," reads the report. It estimates that by 2011, the combined installed base of digital set-top boxes will be over 110 million.

Source: Ars Technica

Matsushita and Hitachi are in negotiations that may reshape the flat panel HDTV market in the near future. Although Matsushita, whose Panasonc brand may be the most recognized in the plasma HDTV market, is looking to take over a joint venture between the two companies and Toshiba that's currently a money loser for Hitachi.

Up until now Panasonic has been committed to plasma technology, especially for 50" and bigger HDTV displays. Unfortunately with the sudden rise in popularity of LCD technology starting before last Christmas, combined with major advancements in LCD technology, plasma is no longer the undisputed champion of large flat panels. While Panasonic has continued to improve plasma technology, it's becoming clear that high end LCDs aren't going anywhere. If they want to be a leader in the high end HDTV market they'll need to put a lot more effort and money into LCD R&D and production.

"This is a move that Matsushita had to make," said Tetsuro Miyachi, fund manager at Franklin Templeton Investments Japan. "It needed to decide whether it would become a niche player in 50-inch-plus TVs or pursue the mass market, and if it was going to do that it had to get bigger in LCDs," he said.

Maybe there are bigger differences betwen PC and Mac users than it would seem on the surface. Market research company The NPD Group is reporting that Mac users seem more likely to pay for music than their PC using counterparts.

“There’s still a cultural divide between Apple consumers and the rest of the computing world, and that’s especially apparent when it comes to the way they interact with music,” according to Russ Crupnick, vice president and entertainment industry analyst, The NPD Group. “Mac users are not only more active in digital music, they are also more likely to buy CDs, which helps debunk the myth that digital music consumers stop buying music in CD format.”

If these numbers aren't simply a fluke, the remainder of NPD Group's analysis would appear to be good news for the music business. It indicates that Apple's share of the personal computing market is on the rise, and suggests that as more consumers buy iPods and Macs, Apple's sales model will convert them to paying customers from pirates.

“While the market for digital music is growing, it’s growing slower than many would like it to -- CD sales are still declining and digital music has not replaced those lost sales,” Crupnick said. “The more consumers become comfortable paying for digital music, the more chance they will evangelize to others. And at this point in the game, it’s the growing base of Apple consumers that are the industry’s low-hanging fruit when it comes to converting from physical to digital music.”

According to a report from Digital Entertainment Group Europe (DEGE), more DVDs will be sold during this year's Christmas shopping season than during last year's holiday sales period. In fact, according to DEGE the numbers aren't even close, with 68% of U.K. residents questioned buying one or more DVDs last year, compared to 78% this year.

DEGE, which represents a number of European movie studios, is expecting over 90% of this year's DVD sales going to the standard definition variety, although they're optimistic about the future of next-generation HD DVD and Blu-ray formats as well. The report suggests that most U.K. consumers who haven't already are planning to upgrade to HDTV and either HD DVD or Blu-ray within the next year.

Meanwhile other analysts are painting a less rosy picture of holiday sales this year. Just last week NPD Group released their own report, showing that both revenue and the number of people buying DVDs have dropped since last year. guess is that it’s really the moderate and light DVD consumers that are falling off on buying,” said Russ Crupnick, VP and senior entertainment analyst at NPD. “The average DVD household now has about 80 DVDs. For some people, it has got to be really exciting content for them to buy, as they already have these large collections.”

Last week Swarmcast released a set of tools designed to make Streaming Flash video a smoother experience for the viewer. The new software, Autobahn HD for Flash, takes advantage of P2P technology to distribute a single stream from multiple sources, and at varying quality levels.

Autobahn works by starting each stream from multiple locations. A client computer running Swarmcast's own Flash player can download small pieces from each source simultaneously, which are then re-assembled into a video stream for viewing. If the same video is available in a variety of quality levels, the player is designed to automatically switch to the highest quality available at the current connection speed. The idea is to ensure that when the connection fluctuates the video isn't interrupted.

"We're focused on working to turn the Internet ... into a truly viable alternative to cable and satellite TV," says Swarmcast chief executive officer Justin Chapweske.

Although it uses P2P networks for distribution, that doesn't mean content will be stored on customers' personal computers. All streams would still originate from servers run by Swarmcast or another company licensing the technology. For a Limited time they're offering hosting on their servers free in the hope of attracting clients.

The DVD Copy Control Association (DVD-CCA) filed a brief with the California Court of Appeal hoping to overturn a lower court's decision that Kaleidescape isn't violating the CSS license by selling home servers that store DVDs on a hard drive.

Kaleidescape's case is unique because it's the first instance of the DVD-CCA going after one of its licensees' products. At issue is whether the technical specifications delivered to Kaleidescape after they entered into the license agreement and paid the requisite fee are an enforcable part of the licensing contract. The DVD-CCA considers the technical document, which apparently requires the original DVD to be present for playback, is part of the license agreed to and puts Kaleidescape in violation.

Although eventual implementation of managed copy, meaning a DRM controlled system to copy content to a computer or mobile device, is in the works for both HD DVD and Blu-ray, there are no plans to allow basic disc copying for any of the major video formats. In addition to appealing the California court decision in favor of Kaleidescape, DVD-CCA members have drafted two different amendments to the license that would eliminate the question of the technical document by adopting requirements that the original DVD must be present at the time of playback.

Analysts at U.K. based Screen Digest are now predicting that either HD DVD or Blu-ray will win the hi-def format war next year, although they're not guessing which one. This is a switch from their position over the last few months which has been in agreement with others in the industry that neither format would dominate for at least another 2-4 years.

The Christmas shopping season has already seen supporters of both formats declaring imminent victory, and rumors that Warner Brothers plans to announce that they're backing one or the other (depending on who you heard the rumor from) at CES next January.

"It would only take one major player to shift allegiances to push the tipping point one way or another," said analyst Richard Cooper.

Their report was more certain when it comes to gaming consoles where they predict Sony's PS3 will see big sales growth and become serious competition for Xbox 360 from Microsoft and the Nintendo Wii.

The report, titles 'Global Media Markets: The Battlegrounds of 2008' also forecasts a good year for 3-D digital cinema. Analysts see as many as 1,300 digital 3-D theater screens internationally, as well as more releases for them.

Intel has introduced a new solid state drive, the Z-P140, which they plan to market as part of their Menlow mobile platform. A press release describes the drive as "smaller than a penny and weighing less than a drop of water." It will initially be available in 2GB and 4GB capacities, with a maximum capacity for the line of 16GB. It uses a Parallel ATA (PATA) interface.

As mobile devices from media players to smartphones become more common there's a growing market for smaller, lighter, more durable storage that consumes less power. Solid state drives accomplish all these things by using memory technology to eliminate motors and other moving parts.

"Our mission is to provide world-class non-volatile SSD and caching solutions that are designed, optimized and validated to enhance Intel Architecture-based computing platforms," said Pete Hazen, director of marketing for Intel's NAND Products Group. "Our customers are finding the Intel Z-P140 PATA SSD to be the right size, fit and performance for their pocketable designs. This is Intel's latest offering as we continue to expand our product line of reliable, feature-rich and high-performing SSDs."

Blockbuster employees are putting in extra hours at the company's Dallas headquarters. What's unusual is that instead of overtime pay they're spending their lunch hours trying to get packages out to United Service Organization (USO) centers, where they'll be distributed to U.S. servicemen.

Although Blockbuster has a long standing policy of sending movies and games to U.S. military personnel, this year seems to be busier than most. Blockbuster employee Larcine Bland said "This is the first year we've had a packing party. We've been shipping them out all week. In an effort to ensure we get them there as close to the holidays as we can, we've asked for volunteers to help us." She added, "We had a great response from employees that wanted to come and help."

Each shipment includes an assortment of genres: comedies and dramas, new releases including 'Pirates of the Caribbean: At World’s End' and 'The Bourne Ultimatum', as well as holiday classics like 'It's a Wonderful Life'.

Source: Video Business

According to research firm Understanding & Solutions online video revenue is expected to increase to more than 500% over the next four years.

The study indicates a number of factors that are holding back the online video market, including pricing and technology. “The market is currently underperforming for a variety of reasons,” said Mai Hoang, an Understanding & Solutions analyst. “Online video services and Title availability are Limited, pricing strategies are embryonic and the technology infrastructure has yet to catch up. However, momentum is building, and by 2011, online video in the U.S. will represent 8% of total home entertainment revenue, with Western Europe close behind at 7%.”

The report goes on to talk about two successful services, iTunes and Xbox Live, and attempts to dissect why they've done as well as they have. In the case of iTunes they attribute it, as do most analysts, to the success of the iPod. Xbox Live's success, on the other hand, they point to its approach of essentially connecting a computer to the television.

Later this week Toshiba will start selling the first laptop to feature a HD DVD rewritable drive. It will only be available in Japan.

Rather than being outfitted as a video workstation, the newest addition to Toshiba's Qosimo line is designed for people who want to watch hi-def video on a computer. In addition to the recordable HD DVD drive it features two HDTV receivers and a 17" screen with a Resolution of 1,920x1,200, as well as 4 Harmon-Kardon speakers.

The computer also supports a new recordable format for recording to HD DVD called HD Rec. HD Rec is currently only supported by Toshiba's RD-A301 DVR, also only available in Japan. The DVR can also burn recorded content to standard DVD+/-R media, which could then be played on the new laptop.

No plans have been announced to sell the laptop outside Japan, although previous Qosimo laptops have become available overseas after a Japanese launch.

The Government Accountability Office (GAO) of the U.S. Federal government has issued another report critical of the lack of planning so far among various agencies in preparation for the transition from analog to digital TV broadcasting in February of 2009.

According to the report "Despite public-private sector interaction designed to help facilitate the transition, we found that no comprehensive plan exists for the DTV transition. Among other things, a comprehensive plan can detail milestones and key goals, which provide meaningful guidance for assigning and coordinating responsibilities and deadlines and measuring progress."

The report goes on to state that when presented with the report's conclusions the Chairman stated "FCC does not have a formal plan in place that is publicly available, but that the various orders contained in FCC dockets amount to a plan." He also indicated that he didn't feel the GAO report gave his agency enough credit for the things they've already done. Of course, as the document points out, a plan is important not just for accomplishing goals, but also evaluating their completion, something that can't be done if there are no goals set to begin with.

A new precedent has been set in France that may have a chilling effect on viral video sites like YouTube. The High Court of the First Instance of Paris found Google liable for copyright infringement after Zadig Productions, a Parisian film company, took them to court over content posted on Google Video.

The decision is notable not because Google was found responsible, but rather for the court's reasoning. According to the high court, when a service like Google's receives a notice from a copyright holder they're obligated not just to remove it, but to ensure it doesn't get uploaded again. "The crux of the decision is that once hosting providers have been notified of illegal content, they are obliged to make sure that it does not reappear on their site," says French lawyer Brad Spitz, in a blog post on the decision.

According to court documents, Zadig notified Google about the illegally posted video last April, and although it was quickly removed it re-appeared just as quickly, forcing Zadig to repeatedly complain to Google in order to have it repeatedly removed. "The court said that Google had not proven that it implemented all measures necessary to prevent people from re-posting," Spitz told The Register. "It's a bit harsh on hosting providers."

At the UBS Securities Media & Entertainment conference Jeff Zucker, CEO of NBC Universal (NBCU), announced that his company's joint online video venture in partnership with News Corp. should be going live sometime after the beginning of next year. Currently the service, called Hulu, is in private beta testing with an estimated 60,000 users.

In August NBCU announced they were removing their videos from iTunes, which finally occured earlier this month when their agreement with the online store ran out. In October they launched the invitation-only private Hulu beta. In the interim they also shut down their official YouTube Channel.

Zucker says the reason for the split with iTunes was a simple economic decision. He called iTunes a fantastic service, but said he felt it unreasonable on Apple's part to refuse requests to have input on pricing. “There is no place that I can think of where the retailer also gets to set the wholesale price,” Zucker said. "All we asked for is the opportunity to set a variable price structure, even with just one program. Apple was not willing to do that.”

“One of the biggest things I struggle with is to make sure we’re not replacing dollars with pennies,” Zucker said.

Depending on who you ask in Hollywood the future of home video is either bright and clear or murky and uncertain. As 2007 comes to a close studio executives and industry analysts don't even seem to agree on the outlook for the remainder of the year. Questions have haunted the entertainment industry for much of the year, including lower DVD revenues, striking writers, and the format war between Blu-ray and HD DVD, with no obvious answers on the horizon heading into 2008.

To say this year has been dissapointing for the major studios would be an understatement. Consumer spending on DVDs is down from last year, and so far hi-def formats like HD DVD and Blu-ray haven't gererated enough business to close the gap. In part this is blamed on a larger than usual number of sequels among top DVD releases, but studio executives know they can no longer take market growth for granted. Add in the growing potential for drastically lower TV box set revenue from missed episodes do the Writers Guild of America (WGA) strike, and a still-contentious battle for dominance between the two next-gen DVD formats and you can understand why there's concern.

CinemaNow is embarking on a campaign to dethrone Apple as the king of media downloads, starting with a promotion from Samsung to provide $10 in download credit with the purchase of their new P2 Portable Media Player.

CinemaNow CEO Curt Marvis indicated that more such promotions would be coming in the next year with their partners, such as Windows Media Center vendor Hewlett-Packard and moblile media player manufacturer Archos. The company's strategy is unique, and at the same time proven in the relatively young download business. Like the relationship between Apple's iPod and their iTunes online store, CinemaNow has made sure that each device is manufactured with support specifically built in for their service. The big difference is that instead of concentrating on a single player, they're working to get support in as wide an array of devices as they can.

“The content is uniquely customized through each device. That same way iTunes works with iPod, we’re working to make CinemaNow to work with their hardware,” Marvis said.

CinemaNow has already worked with Hewlett-Packard to provide a download service tailored to their Windows Media Center PCs.

After taking a great deal of heat from Mac and Linux users over the Windows-only iPlayer, the BBC has introduced a Flash based player. Unlike the iPlayer software, this new client is intended to stream video for playback rather than download it to the viewer's hard drive.

When the public iPlayer beta was opened earlier this year there was an outcry from a relatively small but vocal group of dissatisfied BBC viewers who complained about the Windows-centric approach the entire program appeared to be taking, while being funded partly by their license fees. After BBC management appeared to confirm their fears in October with a statement that support for other platforms would be contingent on the cost, but were quickly overruled by the BBC Trust, who said they approved the entire program with the understanding that all platforms would be supported.

The new Streaming player isn't restricted to non-Windows PCs either. If media reports of dissatisfaction with the iPlayer are accurate there will likely be many people already using it who are tempted to try this new alternative.

The U.S. Department of Justice (DOJ) is apparently not very happy with proposed legislation in the House of Representatives intended to stiffen penalties for copyright violations and put an increased emphasis on enforcement of both criminal and civil intellectual property (IP) laws. While they're not complaining about the new punishments for copyright violation, according to Sigal Mandelker, deputy assistant attorney general, there's no need to add a separate IP enforcement office, as the bill currently before the House Judiciary Committee would do.

"We have a current structure … that works quite effectively," said Mandelker, adding that removing IP enforcement operations from the DOJ's criminal division "will disrupt important relationships within the criminal division and will make intradepartmental IP coordination more difficult." She also pointed out that the DOJ has already implemented more than 30 recommendations from a report they submitted, but "there was never any recommendation to create an entirely new division for IP."

Ironically, the DOJ's biggest concern about the legislation may be the biggest selling point for the entertainment industry. Mandelker expressed concern about the creation of a new IP related position that would be located in the White House. "We are always going to be concerned when you have somebody at the White House who may be in the position of directing our enforcement or what cases we do or don't do," she said. "That would be contrary to the long-standing tradition of the department making independent decisions regarding law enforcement."

Microsoft has decided to drop it's 'PlaysForSure' logo program, replacing it with 'Certified For Windows Vista'. PlaysForSure was used to denote music services supporting Microsoft's DRM to simplify matching mobile players with that used on music from online stores.

Despite the goal of simplifying DRM implementation, in reality the PlaysForSure logo didn't even guarantee compatibility between player and music since not all vendors supported both the subscription and per song applications. It wasn't helped any by the Zune team's decision not to support it with either version of Microsoft's own music platform.

Making things even more confusing, even though neither the DRM or the Zune has changed, both will now carry the same logo for Vista certification. Michael Gartenberg, analyst for JupiterResearch, said "The licensing arm is only interested in spreading adoption of Microsoft technology; hence the decision to link music downloads to Windows Vista, which will eventually replace XP in the market. The Zune unit, on the other hand, wants to keep its technology closed. It goes to show how Microsoft is not always in lockstep with itself."

Perhaps the most interesting development this year in online music has been the emergence of SpiralFrog. If you live in Canada or the U.S. SpiralFrog offers ad-supported music downloads from a large (and growing) number of major label artists. I recently spoke with the company's Vice President of Marketing and PR about where they are now and where they're going. If you've been thinking about trying SpiralFrog out and would like some help making up your mind, or even if you're just curious to see how well it works, read our detailed review just added to the Guides section. In addition to a typical product review I've added my impressions of the company and where they're going.

Read the review here: SpiralFrog: A Free Music Service and the Company Behind It

Mark Wattles, founder and former CEO of Hollywood Entertainment (parent company of Hollywood Video), is hoping to force Movie Gallery to at least give him a chance to buy his former company back. Movie Gallery, which is working on an reorganizing after filing for bankruptcy, purchased Hollywood Entertainment more than two years ago for more than $1 billion.

Despite selling the chain, Wattles retained 20 Hollywood Video locations, paying Movie Gallery $900,000 in royalties annually to keep using the name. Until recently Wattles was trying to force Movie Gallery to buy the stores from him as stipulated in the contract he signed with the company. While Wattles has completely dropped the issue of selling the stores, Movie Gallery is now trying to cut all ties to him without buying the stores.

Based on court papers filed December 11 Wattles, and a group of potential investors, has another idea. The papers indicate Wattles “is a potential investor in connection with a possible competing reorganization plan.” It's possible, if not likely, that such a plan would involve putting Wattles in the driver seat as CEO of the company. That might explain why Movie Gallery would want to get as far clear of him as possible.

Paramount is going to be experimenting with Internet-based film distribution when they debut the new hour long movie 'Jackass 2.5' free with advertising on Blockbuster's recently purchased Movielink service.

Thomas Lesinski, prexy of Paramount Digital Media, said the third "Jackass" movie was never considered as anything but a straight-to-Web project. "We've developed a distribution model that's never been done before," he explained. "Our goal is to prove that there is an audience to watch content online."

Besides being a landmark for Paramount (or any major Hollywood studio), it's a chance for Blockbuster to show off what they can do with Movielink. Immediately after it was announced that Blockbuster was buying the service there was a lot of speculation that they wanted to use it to keep their Total Access subscription service competitive with rival Netflix's Watch Instantly Streaming service. Since that time Blockbuster has very publicly changed their strategy to focus more on the brick and mortar market they already dominate. This has lead to some question about their plans for Movielink.

Last week Western Digital came under fire from a number of technology news sites for their Anywhere Access software, which is designed to allow users of the company's backup and Web sharing storage device, the My Book World Edition, to share files over the internet. The problem for many users is that it won't share most common multimedia formats.

The issue was first brought to light last week when a post on BoingBoing called the company's decision to control sharing of such files "the most extreme example I've seen yet of tech companies crippling data devices in order to please Hollywood." Despite the rhetoric, the author makes an excellent point when he asks "who needs a 1 Terabyte network-connected hard drive that is prohibited from serving most media files?"

According to reports the answer to this question from Western Digital boils down to claims of ignorance about what users might want to do with the device, and concerns about protecting copyright holders' rights. As the bad PR from this move mounted last week, Western Digital went on the offiensive - sort of, with Director of Marketing Brian Miller talking to some tech writers hoping to put a positive face on the situation.

Nielsen, a company famous for their TV and Web ratings, and Digimarc Corporation announced a new entry into the online video recognition market, touted by supporters as the solution to the rampant uploading of video without the copyright holder's permission.

A press release said the service, called Nielsen Digital Media Manager, will be released next spring. It notes "Nielsen already uses digital watermarking to Encode 95% of national television programming for its television ratings service, and the new service will focus initially on the online distribution of television content in the U.S. The companies expect these new solutions to be available in MID 2008."

It goes on to say the company intends to expand the service to add Watermarks to consumer content, which can then be used later to make identification easier if someone attempts to upload a copy of the video to viral video sites like YouTube, social networking portals like MySpace, or even P2P networks.

For a Limited time DivX Inc. Is giving away their DivX Pro bundle which includes the official DivX converter and DivX Pro Codec. These products add multi-processor (SMP) support for faster encoding and decoding with dual CPU or dual core CPU machines. The bundle normally costs $19.99.

When you install the software you'll be prompted for an email address to send your serial number to. Until your serial arrives you can use the 15 day trial versions of each product. Mine arrived nearly immediately.

Nobody seems to know how long this promotion will last so get yours now from the DivX download page. Instructions for downloading, installing, and requesting/entering your serial number can also be found there.

A bill introduced in the Judiciary Committee of the U.S. House of Representatives with bipartisan support would expand the scope of Intellectual Property (IP) enforcement by Federal officials through the creation of a new division of the Department of Justice for the job.

According to the announcement from House Judiciary Committee chairman John Conyers the bill would create an office called 'The Office of the United States Intellectual Property Enforcement Representative in the Executive Office of the President' (the law enforcement center of the Federal Government) responsible for enforcing IP law both domestically and internationally. On the domestic front, it even mandates that the new IP Enforcement division be responsible for prosecuting civil cases on behalf of intellectual property owners, many of which are multi-billion dollar corporations.

The bill also increases both criminal and civil penalties for IP infringement, as well as adding forfeiture of computer equipment used for such infringement by the IP Enforcement office.

Bloggers across the internet have attacked the bill as draconian, many seeing a direct relationship to comments made earlier this year by NBC Universal Chief Executive Jeff Zucker that the creation of such an agency is critical to the well being of the country's economy.

An audit performed by the Office of Inspector General, U.S. Postal Service (USPS) has concluded that there are problems with the envelopes used by online rental giant Netflix to deliver and return discs. The problem apparently occurs on the envelopes' return trip, after the consumer has ripped it open to remove the disc and then resealed it to return their movie. This leads to problems processing these envelopes by machine, and the need to hand sort 70% of these returns.

A Netflix spokesman said “The mailer is in compliance with the U.S.P.S. currently,” The report from the Inspector General's office confirms that following current Postal Service guidelines, Netflix had been told their envelopes could be processed by the machines, and recommends that those guidelines should be changed to reflect the problems the additional expenses incurred handling the envelopes.

The report recommends a $0.17 surcharge for each envelope unless the design is changed to make it more compatible with their sorting machines. This would reduce the company's operating income by 67%. Citibank analysts Tony Wible and Mark Mahaney downgraded Netflix’s stock Tuesday.

SpiralFrog, a web service that offers free (ad supported) music from major labels has announced that they now have 1 million songs available for download. The service launched in September with nearly 800,000 songs and has been adding music steadily ever since.

“We are constantly adding new content and features to the site,” said Joe Mohen, founder and chairman of SpiralFrog. “Music fans want to be able to update and expand their music library on a continual basis and with our ever-expanding library and popular site features such as ‘Buzz of the Day’ and ‘New Releases,’ we’re making it easier than ever to discover and catalog new music.”

SpiralFrog, which is available to internet users in both the U.S. and Canada, provides downloadable songs from many major label artists, allowing you to either play them on a PC with Windows Media Player 10 or 11 and copy them to up to 2 devices supporting Microsoft's PlaysForSure DRM technology.

In addition to music, SpiralFrog also features 3,500 videos, some of which must be streamed live from their site, while others may be downloaded like the songs.

The results of a survey by Broadbandchoices.co.uk are in not surprisingly a majority of respondents, some 61%, rated "downloading DVD quality films in five minutes" as the feature they're most interested in having available through their broadband internet connection.

Despite an interest in lightning fast movie downloads, consumers surveyed aren't necessarily prepared to pay a premium for the capability. Nearly the same number indicated that either they wouldn't pay more for it or they weren't sure if they would. Interestingly, watching videos was actually rated as the least popular current online activiy.

"From our results it does appear a little contradictory that respondents rated 'watching TV' or downloading films as being the least amount of time spent on the internet in a week and yet when asked which future service would be of most interest rated them as the most popular," said Michael Phillips, product director at BroadbandChoices.co.uk.

"It could be that current services are not at a high enough standard to warrant utilising video services. If speeds were improved, consumers are more likely to use broadband to watch TV and/or download films," said Phillips.

Entertainment industry analysts at Screen Media Digest and Adams Media Research aren't buying into claims by Blu-ray supporters that they're on the verge of victory in the format war with HD DVD. In fact they say nothing has changed, and both formats will almost certainly continue to compete for at least a few more years.

“Both formats will be established and co-exist for the foreseeable future,” said Helen Davis Jayalath, senior analyst at Screen Digest. “By 2012, U.S. high-def software will be evenly split between the two formats, where Blu-ray represents 55% of the market and HD DVD represents 45%. But high-def formats won’t boost volume sales [for home entertainment] to the degree that DVD did [over VHS]. Backwards compatibility and Upscaling reduces consumers’ desire to replace existing DVDs.”

Interestingly, it isn't competition between the two formats that appears to be doing the most damage to either. At the High Def 2.0 conference sponsored by Home Media magazine, analysts from the two companies argued that the biggest factor opposing the success of either format at this time is the continued popularity of DVDs. Although Title sales have been dropping in recent months it's not necessarily a sign that consumers aren't still happy with the technology. Despite major improvements to video and audio quality that are readily visible on most HDTVs, the urgency of the switch from VHS to DVD simply isn't there.

As Blu-ray sales seem to be dominating the still struggling next-gen format war between HD DVD and Blu-ray, Paramount and Universal are thrilled with the reaction to HD DVD's web enabled content.

According to DreamWorks/Paramount numbers, 80,000 unique visitors have used their HD DVD players to connect to the disc's website, and 30% of those have returned to take advantage of additional content release after their initial visit. Meanwhile Universal saisy viewers of their HD DVD titles 'Heroes', 'Knocked Up', and 'Evan Almighty' have visited the respective sites for each disc.

“We’ve only scratched the surface in offering Web-connected experiences to fans of hit movies and TV shows, so it was great to see so many connecting online for these titles,” said Ken Graffeo, executive VP of HD DVD strategic marketing for Universal Studios Home Entertainment and co-president of the HD DVD Promotional Group. “As more titles from the HD DVD studios include access to downloads, trailers and community pages, the owner of any HD DVD player can take advantage of these Web-connected experiences,” he said.

On Monday a federal judge in the U.S. threw out an antitrust suit against a group of major music labels by Lime Group LLC, owners of the Limewire P2P service.

After the case was filed the record labels filed a motion to have it dismissed, which the judge granted, saying that the file sharing company had failed to "allege an adverse effect on competition market-wide." In other words they hadn't shown any damages that could be legally attributed to the labels.

Other claims for damages under state laws were also dismissed, but without prejudice. Dismissal without prejudice essentially amounts to a no-decision that would allow these claims to be filed again.

Lime Group claimed that recording industry officials had conspired with each other to shut Limewire out of the legal download business. Their lawyers claimed that label representatives refusal to make a deal that would have established a legally licensed download service, and also that they engaged in hacking of the Limewire network.

The judge rejected the claim of conspiracy, noting that executives' decisions appeared to be independent of each other, and amounted to legitimate business dealings. While he didn't actually rule on whether the alleged (attempted) hacking actually occured, or whether the labels were responsible, he did rule that those things wouldn't be anti-competitive.

In a move that comes as a surprise to virtually no one, NBC Universal (NBC U) won't be selling TV shows on iTunes since their contract with Apple expired last weekend.

Problems between Apple and NBC U flared up over iTunes' pricing policies. NBC U executives felt their revenue of $15 million from iTunes sales last year would have been higher if they were given the ability to set different prices for more popular content. Apple's policy is to sell all TV episodes for $1.99, while NBC wanted to sell episodes of some shows for as much as $2.99.

"We had 40% of the market share on the video side of iTunes, we were most popular," NBC Universal CEO Jeff Zucker said at a keynote address Monday at the UBS Global Media Conference in New York. "It wasn't the game changer for us that it was for Apple. We would like to be part of it. But nowhere does the reseller set the wholesale price. We wanted price flexibility and greater protection against piracy. Over time, we hope to work all that out."

NBC content has also been pulled from YouTube in order to promote NBC's new venture with News Corp., Hulu. Hulu provides both full TV episodes and clips from various shows, and even offers a few movies. Hulu's content is free, but it's currently in closed beta testing.

News Corp. is close to finishing negotiations with Apple to make their movies available on iTunes next year according to an analyst who watches Apple closely.

This would make News Corp., owner of 20th Century Fox and various broadcasting operations including the Fox broadcast network, only the second major content owner to sell new release theatrical movies through Apple's online store. Currently Disney is the only major studio making new relases available on iTunes, which almost doesn't count since Apple CEO Steve Jobs is on the studio's board of directors, in addition to being a major shareholder.

While studios aren't exactly lining up to make their movies available through iTunes, that doesn't mean they're not looking at how consumers already prefer their video. Earlier this year 20th Century Fox included a special version of the new release 'Live Free or Die Hard' along with the standard DVD version so that consumers can copy it to a portable player. Warner Bros. made a similar move with the DVD release of the latest installment of the Harry Potter franchise, offering a portable media player friendly version which can be downloaded for free.

According to a report from Quixel Research, sales of 720p front projectors increased by 43% in the third quarter of this year compared to the second quarter.

The report, titled 'Quixel Research's Home Theater and Entertainment Front Projector Market Review,' indicates that the increase is a result of "great value" 720p models currently available.

"The residential front-projection market is very segmented," stated Tamaryn Pratt, Quixel's principal. "For all the buzz about 1080p in the projection industry, as well as the entire display industry, 720p at the right price is perfect for many consumers' needs. We saw the 720p category blossom in the third quarter — all the top sellers were 720p and they were all priced below $1,300. Many even included a screen."

While total shipments for the total (home entertainment) projector category wree up 3% from the second quarter of this year, revuenue dropped a massive 19% from the third quarter of last year due to competition in all consumer hi-def display categories.

Source: This Week In Consumer Electronics

Starz Entertainment, parent company of the Starz and Encore cable channels is partnering with gadget retailer Brookstone to promote the Starz owned Vongo online movie service with purchases of at least $100.

The promotion, which will be going on through March 24 of next year, offers Brookstone customers a free 30 day trial of Vongo, including access to more than 1,000 video titles. Brookstone will also be promoting a new theatrical release from another venture owned by Starz, Overture Films. The promotion for Mad Money will give advanced screening passes to a Limited number of visitors to the mall-based chain's stores.

“Vongo is a terrific match for Brookstone’s tech savvy customers, and we are pleased to leverage the upcoming Overture Films release Mad Money as part of the overall campaign,” said Joe Cantwell, VP of advanced services at Starz. “As the only subscription-based download service for mainstream new release Hollywood films, Vongo is in a unique position to work with innovative companies such as Brookstone.”

Brookstone CEO Lou Mancini added, “The co-marketing agreement with Starz for the Vongo movie download service will give customers yet another compelling reason to visit Brookstone.com during the holidays and into the New Year. Also the Mad Money tie-in and giveaway is another fun way to reward our retail store customers.”

Nokia is publicizing a a report combining their own consumer research with a study conducted for them by market analysts at The Future Laboratory, and released a report with their conclusions about the future of multimedia content. Not surprisingly Nokia's conclusions indicate that consumers are heading in a direction that would dovetail nicely with the company's current direction.

The Future Laboratory's portion of the study included interviews with what Nokia calls "trend-setting consumers" from 17 countries about their views of the next few years and how they expect media to be created and consumed. For their part, Nokia got feedback from 9,000 customers around the world who own mobile devices, including some manufactured by other companies.

According to Mark Selby, Vice President of Multimedia for Nokia, the study indicates that in a few years most content will be created by users for circulation on a variety of mobile devices. He said "From our research we predict that up to a quarter of the entertainment being consumed in five years will be what we call 'Circular'. The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups - a form of collaborative social media."

According to the Blu-ray Association, as of the end of Black Friday (November 24th) the total number of Blu-ray playrs sold reach 2.7 million.

As with most announcements of this kind from either camp in the next-gen video format war, there's an aspect to the Blu-ray numbers that will be loudly and vehemently disputed by their opponents in the HD DVD camp. Like the figures released in the past these include each PS3 as a standalone Blu-ray player. While there are certainly some people buying PS3 consoles for their Blu-ray playback and others who have taken advantage of it despite buying the unit only for gaming, but what percentage of the PS3 owners fall into either category is anyone's guess.

Despite that, it does appear that if there was a winner between Blu-ray and HD DVD on Black Friday it was probably Blu-ray. Despite significantly lower prices for players, HD DVD movies were outsold nearly 3:1 by Blu-ray on the day after Thanksgiving.

Source: Video Business

Smarting from his failure to push through tighter controls on cable television providers, on Wednesday FCC Chairman Kevin Martin proposed a new rule that would cap the percentage of viewers a single cable company in the U.S. would be allowed to serve.

Martin has been the subject of much public criticism from cable companies, who argue that his tougher regulatory stance is out of step with the overall message coming from the President's office. Specifically, his latest proposal, which would limit any cable company to only serving 30% of TV viewers in any given area, appears to be aimed squarely at Comcast. If the proposal were to be passed Comcast would effectively be prevented from expanding further in many areas.

Earlier in the week Martin attempted to get commissioners to ratify another proposal that would have given the agency stricter regulatory control of U.S. cable television operators. That proposal was intended to enact provisions in a 1984 law that gives the FCC the responsibility to enact such controls when cable television is available to at least 70% of all U.S. households have the service available to them and at least 70% of those are actual cable subscribers. It was eventually withdrawn after objections by both cable industry representatives and FCC commissioners over the accuracy of a study Martin used to show market penetration.

Best Buy has made some changes to in-store operations in an attempt to address customer suggestions gathered in a company sponsored survey. Over 90% of respondents indicated that the company's return policy and having phone calls answered by a real person. Another 89% rated in-store customer service as important, and 70% indicated that the quality of the company's website is a high priority.

In order to address those concerns Best Buy has made numerous changes for this holiday shopping season, including extending their return policy for purchases made before Christmas, cross-training store employees to provide general customer assistance on the sales floor, operators for each store who are trained in customer service and able to pull up inventory information. In November the company launched BestBuy.com/espanol, a Spanish language version of their Website. In addition to providing a bilingual experience on their site, it's also intended to connect Spanish speaking visitors with customer service representatives who can assist with everything from using the website to finding items in stores.

Other additions include what the company describes as “complete gift solutions,” which include in-store tools to help consumers identify accessories that go with purchased items (such as a memory card for a digital camera).

According to a nre report from comScore the number of streaming video viewers continues to grow, but in the last 6 months that growth has been slowing down.

This isn't exactly a surprising development given that the number reach nearly a full 75% in September. While that's less than a 1% increase from the month before, at nearly 3/4 of the potential audience for streaming video, and possibly starting to converge with the number of internet users with broadband internet available to them to stream across. The percentage increase is also somewhat misleading, as it indicates that 136 million streaming video viewers.

As usual Google, led by YouTube, led all other video providers, serving up video clips to nearly 71.6 million unique viewers, or more than 28% of the total.

Perhaps more importantly at this point, the average amount of time viewers spend watching online videos was up three hours. This is up from 2.5 hours in May. In total over 9 billion clips were streamed in September.

Source: MediaWeek

On Thursday the European Parliament passed the Audiovisual Directive, which addresses issues of regulating video transmissions in a way that's consistent throughout the European Union.

Besides standardizing laws across national borders, the "Audiovisual Media Services Without Frontiers Directive" is intended to establish a unified set of rules that will apply whether video is being transmitted as a traditional over the air (OTA) signal, an IPTV stream across the internet, or anything in between the two extremes.

Several advertising issues are covered by the directive, which mandates that it must be clear when product placement is taking place, but as with the previous rules product placement in children's programming is completely off limits. Hourly advertising limits remain unchanged at 12 minutes, but daily limts are now gone.

One item that wasn't changed is the method to determine what copyright laws in the case of broadcasts from one country to another. In this case the laws in the country the broadcast originates in would apply. This provision may be particularly important as webcasting becomes more popular.

Source: The Register

TiVo scored a victory last week when the U.S. Patent and Trademark Office issued a ruling that the company's "time warp" patent is valid. This is the basic issue being argued in a case that's been in court since 2004, when TiVo sued satellite television provider and satellite receiver manufacturer EchoStar. TiVo won the initial courtroom battle, a decision EchoStar has been appealing ever since.

The patent is a crucial piece of TiVo's business model. While TiVo has been losing market share to cable and satellite providers' DVRs, they've continued to be profitable, partly because of the "time warp" patent, which covers devices that can pause, rewind, and fast forward live TV. With the rapid increase in DVR usage over the last couple of years this has been instrumental in TiVo surviving their slip from DVR dominance.

The patent office's judgement isn't the last word on the subject though. And even TiVo fans might not be well served if it's upheld. In fact many people feel this patent is a good example of what's wrong with the U.S. patent system today. Many products developed in the past may have been greatly hindered by patents this broad. For example, how would a patent for a carriage that can propel itself with horses have affected the development of the automobile? Likewise, a patent for a mechanical clock (box that displays the time) would be equivalent to a digital watch (also a box that displays the time) under modern patent law application.

Perhaps the biggest divide between what customers want and what music labels provide in the way of downloaded music is in the area of file format. While most labels have eschewed the MP3 format for DRM reasons, if you ask the average consumer what format they'd like to buy that would probably be it. Thanks to a promotion between Pepsi and Amazon.com it looks like consumers may finally get what they want.

The promotion will allow Pepsi drinkers to redeem 5 bottle caps for a free MP3 from Amazon's music store. Pepsi is planning to distribute 5 billion bottles with the caps, meaning up to 1 billion songs could potentially be purchased this way. That could mean big money for any label in the MP3 business, which currently doesn't include either Warner Music Group (WMG) or Sony BMG Music Entertainment.

Both EMI and Universal Music Group (UMG) have been selling MP3s for some months now. EMI was the first major label to embrace them when they made the decision to drop DRM from downloadable music. UMG has been experimenting with removing DRM from their catalog as well, leading to their music being featured both at Amazon.com, and rival Wal-mart.com, both of whom sell only MP3 formatted music. Even Disney owned Hollywood Records is testing DRM free downloads from the two sites.

Last month the Oregon Attorney General announced that he would help the University of Oregon fight a standard RIAA subpoena that would require them to find and release the identities of 17 students to the RIAA. Now he's going on the offensive, calling RIAA investegatory practices in question and issuing some subpeonas of his own for the trade group's investegators.

According to a motion filed by the Attorney General's office, there are many questions surrounding RIAA tactics, some of which the AG feels may be illegal in Oregon. In fact SafeNet, the company the RIAA pays to find infringers, isn't even licensed to operate in Oregon. The AG argues

The motion also states that RIAA lawyers have refused to answer questions by the AG's office regarding whether they had engaged in data mining to find "personal and confidential information." Now the Attorney General would like to know "precisely how invasive Plaintiffs' investigation was." Specifically, it says "Plaintiffs may be spying on students who use the University's computer system and may be accessing much more than IP addresses."

The motion also requests the court to require the RIAA to "Describe with particularity the economic damage, if any, that the RIAA suffered as a result of the unlawful conduct of each Doe Defendant." This is certainly something that many people would like explained. Of course since the RIAA is normally facing individuals without the deep pockets required to pay for a sustained legal battle they're normally not taken to task for their damage claims.

Just as Blockbuster has been making headway competing in the online rental business, rival Netflix has apparently decided to retun the favor and compete in Blockbuster's brick and mortar world.

No they're not opening up a chaing of brick and mortal rental establishments. What they are doing is selling gift cards in stores like Office Depot, Winn-Dixie, and Barnes & Noble College Booksellers. In addition, more stores could be added next year.

Netflix is looking to take advantage of the massive popularity of gift cards as Christmas gifts. This is one place where internet based businesses like Netflix have a decided disadvantage. While a customer can walk into a brick and mortar establishment (including Blockbuster) and walk out with a gift card to give as a present, the internet isn't a particularly good medium for selling them.

According to the National Retail Federation, gift card sales are expected to total over $25 billion this holiday season.

“Introducing gift cards this holiday season is part of our larger strategy to expand retail distribution over time,” said Jessie Teitz, VP of marketing at Netflix. “The end goal is to make it as easy as possible for consumers to give the gift of Netflix or purchase it for themselves.”

If Black Friday and the weekend that followed was any indication, it's going to be a long Christmas season for HD DVD backers. On the first weekend of the Christmas shopping season Blu-ray discs outsold HD DVD by nearly 3:1 according to Nielsen Videoscan

To some this was a surprising development since the prices for Blu-ray players didn't come close to matching HD DVD's sub-$200 sale prices. In fact the cheapest Blu-ray player was $400 at Best Buy, which included a $100 gift card. Meanwhile Sears had the Toshiba HD-A3 (HD DVD player) for just $170.

This would seem like somethig of a validation of Blu-ray backers who have said all along that the key to the format's success will be the quantity of titles released in the format. However, there's nearly a month to go, and lots of consumers have yet to weigh in on the matter, at least with their wallets. And really that's the only opinion that counts.

Source: TGDaily

This year's Black Friday sales on the day after Thanksgiving saw consumers passing on recent DVD releases in favor of bargain priced fare, in some cases below $5 per movie.

The discounts on catalog titles were even more numerous than in past years. At Borders book stores they sold such titles as 300, The Departed and Night At The Museum for half their normal price. In addition box sets of titles like Family Guy, Curb Your Enthusiasm, and House for only $19.99. Other retailers, including Sears, Target, and Kmart had titles like Spider-Man 2 and Batman Begins for only $4.

“We’ve done sales like this in the past, but this selection was the deepest that we’ve done for Black Friday,” said Borders spokeswoman Ann Binkley. “The merchandising team worked with the vendors to be able to offer this deeper selection.”

According to Ian Leshin, a buyer for Newbury Comics, “We created a lot of deep discount opportunities with the help of the studios through rebates and other programs, and we were definitely very aggressive with the sales.” He added that, “it did seem more catalog-driven this year than new release.”