News written by Rich Fiscus (January, 2008)

U2 manager Paul McGuinness recently made a big impression at the MIDEM music industry convention in Cannes by calling out everyone from ISPs to customers. Sounding much like he was reading talking points for international recording industry trade organization IFPI, he said ISPs "have for too long had a free ride on music."

Despite chiding the industry for not "catering to people who want to hear music through big speakers rather than ear buds" and a "lack of foresight and poor planning" he says that ISPs are the real problem because he feels they only have broadband internet customers because of illegal music downloads. He said "It is time for ISPs to be real partners. The safe harbours of the 1990s are no longer appropriate, and if ISPs do not cooperate voluntarily there will need to be legislation to require them to cooperate."

Perhaps this is where the real disconnect between the music business and the rest of the world happens. As one Verizon executive pointed out recently, if ISPs become responsible for copyright enforcement what else should they be expected to be responsible for? And what of privacy - at what point is an internet-bound communication considered private?

During a recent Internet policy conference, Verizon Executive Vice President Tom Tauke spoke about his company's position on filtering customers' traffic for copyright violations. "From a business perspective, we really don't want to assume the role of being police on the Internet," said Tauke, adding "We are leery of using these technologies on our networks."

Recently AT&T generated a great deal of contreversy by announcing that they're working to develop technology to find copyrighted works, hoping to curry favor with content owners. Due to the Safe Harbor clause in the DMCA, as long as ISPs take action when informed of infringing content on their networks they're already safe from sharing liability for it, although many in the recording industry have characterized the ISPs as part of the problem, and said they should be required to police their networks for copyright infringement.

Although he did mention concerns about customer privacy, it appears Verizon is equally worried about what other responsibilities they might be asked to take on. After all there are a number of illegal activities that certainly involve at least a small number of Verizon customers. From child pornography to illegal online gambling to fraud, the possible activities other industries, not to mention government agencies, would like to have Verizon and other ISPs keep track of seem nearly endless.

As music labels sit by and watch their decades old business model crumble before their eyes, yet another artist is attempting to make the leap past CD technology. Neil Young has apparently decided to skip a traditional CD release for the first in a series of releases which are intended to form a retrospective of his career from the 1960s through the present day.

"I know it's in technical production now, but it's only coming out on Blu-ray and DVD," he said during an interview at the Sundance Film Festival, adding "There won't be CDs. Technology has caught up to what the concept was in the first place [and] how we're able to actually present it."

Reportedly, Young's issue with a CD release has nothing to do with complaints about lower CD sales or P2P downloads. Rather it's due to the audio CD's single format - audio - versus the multimedia aspects of DVD and Blu-ray formats, combining music with both video and still images, as well as allowing far more interaction with the listener.

Nelvana, a Canadian company that produces such cartoons as the Fairly OddParents and Rolie Polie Olie has inked a deal with ReelTime Rentals, Inc. to add episodes of selected shows to the ReelTime.com subscription Streaming video service. Nelvana titles including 'Jacob Two-Two,' 'Rupert,' 'My Dad The Rock Star,' and 'Flying Rhino Junior High.'

According to Doug Murphy, Nelvana's President, the company is trying to find new ways to sell directly to customers online. They've been selling content through their own online store, TreehouseDirect, since 2006.

ReelTime.com offers streaming Video On Demand (VOD) using a subscription model. Subscribers pay varying amounts, depending on whether they pay for one, three, or six months at a time. Subscribers may watch most content at no additional cost, with additional titles available for viewing for an additional rental fee.

Redbox, the number one DVD rental kiosk operator, is expanding their operation into a pair of supermarket chains in the Midwest. Hy-Vee stores in Iowa, Illinois, Missouri, Nebraska, Minnesota, and Kansas, as well as Buehler locations in Ohio have all gotten the kiosks this year.

Last year a massive shift from traditional brick and mortar video rental operations to kiosks seems to have begun. With McDonald's, owner of a substantial stake in Redbox, making them a common sight outside their fast food restaraunts and Blockbuster shifting from a focus on their Total Access "Netflix killer" to a plan that includes putting branded kiosks in a number of retailers' establishments, taking advantage of their established name.

Less than a month into 2008, Redbox has added more than 400 kiosks around the country, apparently continuing the meteoric rise they experienced last year.

After the dissapointment of being outsold by Blu-ray players more than 10:1 a week earlier, HD DVD standalone player sales rebounded for the week ending January 19, 2008 to comprise around 1/3 of all Next-Gen DVD players sold.

Ross Rubin, analyst for the NPD Group attributes both Blu-ray's recent advantage and HD DVD's apparent resurgence to price rather than any consumer mandate. “Both camps face really strong competition from standard DVD up-converting models, which inexpensively render [consumers’] massive DVD libraries well on their TVs,” said Rubin, adding “We’ve seen a consistent trend of the market responding to changes in price and promotion by both camps. So you’ll see a significant shift [in sales one way or the other] in response to the end of a promotion or the beginning of a new promotion.”

Toshiba, however, is putting a more positive face on the development. Toshiba marketing VP Jodi Sally argues that the previous week's figures were the result of a gap betwen promotions, with one ending on Janury 5, and the next beginning on the 13th. “All of our promotions had ended at that time,” he said . “But if you look at our unit sales at key retailers for the first week of our price moves, Toshiba sales are twice the rate of our average weekly sales during 2007.”

The European Court of Justice, the EU's top legal authority, sent a clear message to content owners that their exclusive right to distribute copyrighted works doesn't trump personal privacy rights of ISP customers.

The decision came in a case where Promusicae, a non-profit organization representing music producers and publishers, was suing to force Spanish telecommunications company Telefonica to turn over names and addresses of people allegedly violating copyright laws by sharing music on the Kazaa P2P network. Telefonica officials had refused to identify their customers, citing Spanish law which they say only allows them to share customers' personal data for public safety or national security purposes.

The court's decision basically came down to the question of one individual's rights versus another's. While the court acknowledged the importance of enforcing intellectual property law, they were emphatic that enforcement efforts may not "affect the requirements of the protection of personal data."

"The directives on the protection of personal data also allow the member states to provide for exceptions to the obligation to guarantee the confidentiality of traffic data," the court added.

In case there was any question of Toshiba's commitment to HD DVD technology, it should be put to rest now with the announcement that the company has bought a 30 second ad during the Super Bowl for nearly $3 million.

Toshiba's recent marketing push, including not only the Super Bowl ad, but also reduced HD DVD player prices and a very public order for HD DVD recordable media from Ritek, don't appear to have convinced the public that HD DVD is still a viable product. After seeing Blu-ray's sales edge since Warner Brothers' announcement earlier this month, whatever analysts were still on the fence have also gotten both feet squarely on the side of Blu-ray.

"Gartner believes that Toshiba's price-cutting may prolong HD DVD's life a little, but the Limited line-up of film titles will inflict fatal damage on the format. Gartner expects that, by the end of 2008, Blu-ray will be the winning format in the consumer market, and the war will be over," wrote analyst Hiroyuki Shimizu in Gartner's Semiconductor DQ Monday Report.

Amid all the hype at the MIDEM music trade show in France around Qtrax's announcement of the free music service that wasn't, a more important story is emerging with the presentation by Jean Berbinau, general secretary of French regulatory body Autorité de Régulation des Mesures Techniques (Regulatory Authority for Technical Measures).

He officially introduced legislation requiring ISPs to monitor their networks for copyright infringement and institute a policy that would disconnect offenders after their third offense, saying "We have to do something, but it is only transitional, only to give time to the industry to adapt and maybe to encourage a new business model."

The idea for the controversial law was first discussed last November by French President Nicolas Sarkozy. It also mirrors the primary goal stated in the annual report on digital music by international music trade organization IFPI.

A recent announcement from Apple regarding iPhone sales stirred up contreversy due to much lower numbers being activated for use with AT&T's wireless network. With a discrepency of nearly 1.5 million phones it's easy to see why people would be interested in the reason. According to analysts at Bernstein Reasearch, nearly a third of the phones are in AT&T's hands waiting to be sold. That leaves around 1 million, which are believed to be unlocked to work on networks other than AT&T.

Although neither Apple nor AT&T have had any comment on the analysts' estimates, it's clearly not something either company is happy with. As the only official network for iPhones in the U.S., AT&T splits fees collected for them with Apple. Every phone on a different provider's network is lost revenue for both companies.

"Besides the financial implications, we believe the prevalence of unlocked iPhones presents a significant strategic dilemma to Apple," Bernstein Research analyst Toni Sacconaghi wrote.

Several hours after their announced launch, and even a few hours after an Afterdawn member posted a link to the much anticipated client software, Qtrax now officially has a download link on their website. But before you rush to out to download it and start looking for free music you should know that there isn't any yet. In fact right now, the Qtrax client basically amounts to a music player with ads.

And there isn't any schedule for when they'll be coming either. Despite claims that they're on the verge of getting contracts signed with each of the four major record labels, the company isn't talking about when they expect those to be in place. Actually they've had contracts with more than one of the labels already, but at least one has expired, and another was made in the context of the original plans for the service, which would have limited the number of times free songs could be played, and added a premium tier of service for unlimited playback.

It's two hours after the official Qtrax launch time and there's still no sign of a client for download. Since the story of the new P2P based, ad-supported online music service became hot news over the weekend, their website turned into a popular destination. At one point it even featured a message suggesting that visitors come back in 24 hours as the site was unavailable due to high traffic. That was later replaced with a promise for a download to be available at midnight Eastern Standard Time (EST). It's now just past 2AM EST and still no sign of the download. And apparently not quite the same story we, and many other outlets, publicized yesterday.

Although Qtrax is promising downloads from all four major labels - Universal Music Group (UMG), Sony BMG Music, Warner Music Group (WMG), and EMI Group - according to executives from three of the four companies no agreements for their content exists. No one from Sony BMG has commented so far. WMG spokesman Will Tanous told the Silicon Alley Insider that “Warner Music Group has not authorized the use of our content on Qtrax’s recently announced service."

This week Swedish officials plan to charge the individuals responsible for running Pirate Bay, a large torrent Tracker originally operated in that country, as accessories and conspirators in breaking copyright law. Since a 2006 raid by Swedish police the servers have been moved to locations reportedly not even known to those in Sweden who are apparently going to be charged in the case.

Public prosecutor Hakan Roswall told Reuters "It's not merely a search engine. It's an active part of an action that aims at, and also leads to, making copyright protected material available." He added "It's a classic example of accessory -- to act as intermediary between people who commit crimes, whether it's in the physical or the virtual world."

"It's idiotic. There is no legal ground (for the charges)," Pirate Bay spokesman Peter Sunde told Reuters.

Prosecuter Roswell isn't fooling himself about the impact convictions in the case would have. He said it could take more than convictions in Sweden to stop Pirate Bay. "Because the infrastructure is scattered among several places around the world... no separate country will be able to stop the site."

A new free music download service is getting ready to launch. A P2P-based service called Qtrax is supposed to be going live today, offering 100% ad-supported music downloads, and apparently a selection of over 25 million songs. A Mac OS X beta is supposed to be coming in March. Although at least one website is reporting that the service was to go live at 12 AM today, there doesn't appear to be a download link available as of two hours later.

Last year marked the launch of SpiralFrog, the first free music to work closely with the major record labels, which occured several months after the firing of original CEO Robin Kent. Undeterred, Kent started an advertising firm with fellow SpiralFrog veteran Lance Ford. That company, called Rebel Digital is now responsible for selling the ads necessary to fund Qtrax.

The similarities to SpiralFrog don't end there either. Like that service, Qtrax will be paying royalties based on how often each downloaded song is played. Also like SpiralFrog, that begs the question of how such a service can manage to exist in the long term, with recurring expenses for a single download, regardles of how much ad revenue that download might include.

According to the IFPI's annual report on the music industry, released today, it was innovative labels, rather than frustrated consumers or knowledgable online store management who came up with the DRM-free music model that's taking over online music sales. It's an apparent bid to rewrite history, in which they were actually dragged kicking and screaming into the DRM-free marketplace. In fact, last year's report describe DRM as "the enabler of flexible music offerings."

The IFPI is also pulling no punches in their campaign to turn ISPs into their proxies in the fight against internet piracy. opens with a section titled "Making ISP Responsibility A Reality." Interestingly, however, the report also features another section highlighting the mobile music market in Japan, in which that coiuntry is characterized as "setting a fascinating example to the rest of the world."

Although Japan apparently doesn't have any laws to prosecuted virus authors under, that's not stopping officials in that country from going after a 24 year old graduate student suspected of spreading a virus through infected animation files. Ironically it's the same innocuous looking files used to spread the virus that are at the heart of the government's case - for copyright infringement.

It marks the first case of anyone being arrested in Japan over a virus, and seems to have been a reaction to complaints from animation production houses whose copyrights were being violated. Although it's encouraging to see copyright law used for something clearly in the public's fundamental interest, such as bringing a virus author to justice, it's hard not be struck by the irony of the situation.

While distributing malicious code that could potentially have financial ramifications for hundreds, thousands, or even millions of people, the illegal use of cartoon characters, which is unlikely to affect anyone financially, seems to be a high legal priority.

In a new deal with the BBC, MySpace will be adding a number of the broadcaster's show's to thier MySpace Video site. In addition to watching them on the YouTube clone, the clips will also be available to MySpace members to embed in their personal pages. In return, the BBC will receive a cut of ad revenues. It's the first deal MySpace has made with a major television network.

"With the global nature of the deal, this is a great opportunity to put the best shows from the BBC in front of new audiences," Simon Danker, director of digital media for BBC Worldwide, said in a statement.

Jeff Berman, MySpace's executive vice president for marketing and content, said the deal "reflects a fast-approaching Internet future defined by co-operation between corporations."

Sony Computer Entertainment America (SCEA) will be selling programming licensed from MTV on UMD for the PlayStation Portable (PSP). The MTV programming includes episodes of 'Beavis and Butthead', 'Jackass', 'Wildboyz', 'Viva La Bam', and 'Aeon Flux'. Titles will sell for $14.99.

“This collaboration with MTV is a key first step in meeting the needs of our consumers who are utilizing PSP as a video player more than ever and are thirsting for more content, particularly short-form videos,” said Phil Rosenberg, senior VP of sales and business development at SCEA. "MTV’s programming is hugely popular, and SCEA can utilize our internal resources to appropriately manage the publishing and distribution of these hit shows on UMD. This demonstrates our commitment to supporting the UMD video format by delivering what consumers want to watch at the right price. SCEA will continue to license movie, TV and other video content.”

Yahoo is reportedly working on a plan to launch a MP3 download service some time this year. The company is apparently engaged in preliminary talks with the major music labels, but still hasn't decided if their service will offer music for free, or as ad-supported downloads.

According to Yahoo spokeswoman Carrie Davis the company has added discussion of DRM free downloads to their regular dialog with the labels. They already have an ongoing relationship, in part due to their existing free and subscription based Streaming music services. Last year they indicated they were planning to move away from their commercial offerings in favor of expanded ad-support.

Yahoo also entered into a deal last year that allows Sony properties to be used by users to create content for various Yahoo services and portals. In exchange, Sony shares in the ad revenue generated.

According to Video Business, Sony Pictures Home Entertainment has entered into an agreement with Hewlett-Packard (HP) to provide DVDs using their Manufacturing On Demand (MOD) technology. Like the technology being developed to allow DVDs to be sold through kiosks, MOD allows a DVD to be prepared only after a consumer orders it. Unlike that technology, however, the disc is actually a stamped, making it more or less identical to a mass produced studio release. In a kiosk the disc is burned using special software and hardware capable of including DVD-Video's standard CSS encryption.

Although there are several small studios which already have deals with HP for MOD manufacturing, but Sony is the first major player to get involved. A company representative indicated that this may create the opportunity to sell titles that aren't expected to sell well enough to warrant a general release, but which may be economically viable through MOD.

One of the FCC's most contreversial decisions last year was a rule banning contracts for cable providers to exclusively service entire buildings or complexes, with no choice given to the tenants. "I believe that people in apartment buildings deserve to have the same choices as people in the suburbs," Martin said at the time. "The commission found that people who live in apartment buildings often have no choice of companies when it comes to their video service provider. This is because building owners often strike exclusive deals." He also pointed out that between 1995 and 2005, a period during which cable rates nearly doubled, other communications services such as long distance calling actually fell.

Now the National Multi Housing Council and National Apartment Association who represent the owners of many of these buildings are challenging the ruling in the U.S. District Court of Appeals' District of Columbia division. The complaint alleges that the ruling exceeds FCC authority and is "arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence."

The E.U.'s CULT committee, responsible for on helping shape EU policy on issues related to culture and education, has decided not to include amendments drafted by the international recording industry trade association IFPI in the final draft on their report on Cultural Industries. The report is intended for adoption by the European Parliament as EU policy.

As we reported last December, the IFPI was lobbying to have language inserted that would require ISPs to monitor subscriber traffic for copyright violation and actively Block websites the organization deems not in compliance with legal licensing practices. These sites primarily operate out of countries like Russia, where the international recording industry has less sway than the owners of such sites as AllOfMP3.com.

Another amendment which didn't make the cut would have extended copyright terms, purportedly with the intention of extending the period of time during which song writers could profit from their works. Critics have pointed out that only the most successful songs continue to generated enough revenue for the author to receive a benefit worth codifying in law, but record labels who can continue to distribute and license these works would see far more financial gain from such a change.

Unlike the actual consumer side of the U.S. digital TV (DTV) transition, for which the FCC has taken a relatively hands-off approach, the auctioning off some of the radio frequencies being abandoned by analog TV transimissions, which officially begins on Thursday, has received a lot of personal attention from FCC Chairman Kevin Martin.

Martin's primary interest in the auction seems to be largely based on what he sees as an opportunity for one or more companies to build wireless data networks that could compete with incumbent cable and DSL broadband internet providers. "It's because of the unique characteristics of the spectrum, it's going to have the most significant impact on consumers we've seen in a while," Martin told the Associated Press.

The characteristics Martin is referring to are primarily related to the frequencies available. Although many wireless data networks have been built around higher transmission frequencies, those being auctioned off now, currently in use for UHF channels 52 through 69 are less prone to loss when encountering solid objects. In other words they're better at going through buildings and other obstacles without becoming too weak to be useful.

On Tuesday Microsoft reached and agreement with South Korean firms Daum Communications Corp. and Celrun to establish IPTV service in that country. Daum will be supplying content for viewing on Celrun's set-top boxes from Microsoft's MediaRoom IPTV solution. Microsoft will also be responsible for marketing beyond South Korean's borders.

Daum spokeswoman Park Hyun-Jung told AFP "The deal is part of our preparations to launch the IPTV service following the recent passage of a related bill in parliament." She added "We aim to start the VOD service in the second quarter of this year when the joint venture is formally launched."

According to Park Daum is predicting 16 million South Korean IPTV viewers by 2011.

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A comparison of Netflix and Movie Gallery is a study in opposites. In the last year Netflix managed to withstand a challenge for online rental supremacy from Blockbuster and come out the undisputed leader, with Blockbuster apparently giving up on previous online ambitions to concentrate on brick and mortar operations where their primary competition, Movie Gallery, was declaring bankruptcy and closing stores.

The trends for both Movie Gallery and Netflix appear to be continuing in the same direction for the fourth quarter of last year. Netflix today announced a revenue increase of 9% from the same period in 2006. Meanwhile Movie Gallery has filed a motion asking the U.S. Bankruptcy Court in Richmond, VA to approve an expenditure of around $1 million dollars for employee compensation related to closing more stores.

It's no secret that one of the most influential products in the last few years is the TiVo DVR, which has been the inspiration for an entire industry of products, mostly designed around particular cable and satellite television services. At one time, DirecTV even had a model that combined the TiVo interface and underlying operating system with DirecTV receivers, although they've since discontinued those units in favor of their own proprietary DVR technology.

Now U.S. cable television provider, Comcast, has officially introduced a DVR upgrade that takes a somewhat different approach and adds TiVo functionality to their own DVR platform. In addition to offering Comcast the opportunity to offer the TiVo interface without replacing existing DVR hardware in customer's living rooms, it may also prove to other cable providers that a partnership with TiVo can improve already popular DVR offerings.

The biggest difference between the Comcast and DirecTV TiVo offerings is the ability of cable operators to exercise the same amount of control over the DVRs as they do now. While the DirecTiVo had several key features, including USB support to easily add a wireless network adapter, disabled by default, the relatively open nature of TiVo's Linux based architecture, made if fairly easy to enable them using resources freely available on the internet.

Despite increased sales and an increased profit margin over the year before, Apple's stock ended the day down more than 3% on Tuesday after the company reported both earnings for the last three months of 2007, which is actually Apple's first quarter of fiscal 2008, and a sales forecast for this quarter.

Yankee Group analyst Carl Howe attribute's Apple's excellent performance during last year's Christmas shopping season as the result of months of preparation and product positioning. "Basically, they had all their ducks in a row well before the holiday shopping season started," he said. "That's really the key to success during a holiday season. It sounds simple, but a lot of companies screw it up. People knew what the products were, where to buy them, and then they went out a bought them."

Interestingly, last quarter's record revenue was fueled by sales of more expensive products, like the 16GB iPod Touch. If that trend continues actual revenues may prove to be be closer to what Wall Street analysts were expecting prior to Apple's Tuesday announcement.

As part of an initiative to come up with a common standard for connecting portable digital audio and video devices to everything from home stereos to car entertainment systems, the Consumer Electronics Association's Mobile Electronics Committee is preparing to conduct a study of combining High-Definition Multimedia Interface (HDMI) signals with Portable Digital Media Interface (PDMI) connectors.

Rather than requiring several different types of connections for different brands of portable media players, this would allow home and automotive entertainment systems to add an interface for practically all such devices at a relatively low cost. Currently most solutions available to consumers, like FM broadcast, add multiple generations of loss to music that's generally been subjected to lossy MP3 or AAC Compression already.

The MPAA is now backing away from statistics they began using in 2005 as a bullet point in their legal assault on college campuses. The study which generated the statistics claimed that 44% of their domestic losses due to piracy came from college students. However, the group has now admitted that due to "human error" the real number, which is more like 15%, was exaggerated.

According to Mark Luker who is vice president of Educause, a sort of professional association for entire campus IT departments, the real figure is lower still since the study only accounts for the approximately 20% of students who reside on campus. He estimates the correct figure to be closer to 3%.

"The 44 percent figure was used to show that if college campuses could somehow solve this problem on this campus, then it would make a tremendous difference in the business of the motion picture industry," Luker said. The new figures prove "any solution on campus will have only a small impact on the industry itself."

A Dutch company called Polymer Vision hopes to make a big splash this year with the introduction of their new Readius, a 3G mobile phone with a 5 inch display that folds into the device when not in use. The technology that makes this possible is called the Rollable Screen, which involves a display that can literally be rolled up to fit into the device.

In addition to being a phone, the Readius will also be an e-book reader, using the same E-Ink material for its display as the Amazon Kindle, a reader introduced last year by Amazon.com which has no phone functionality. E-ink is primarily notable for appearing very similar to paper, including it's reflective properties. For this reason it makes a superior display for reading from. It's also capable of retaining an image without requiring any electricity, resulting in devices that are more energy efficient than those using conventional LCD displays.

"You get the large display of e-reading, the super battery life of e-reading, and the high-end connectivity ... and the form factor and weight of a mobile phone," said Karl McGoldrick, chief executive of the company, in which electronics giant Phillips has a 25% stake.

The Canadian government has recently been considering changes to their copyright law, laregely in response to complaints from content owners and the U.S. government regarding the country's lack of DMCA-style legislation to make bypassing Digital Rights Management (DRM) measures illegal. However, at least one government official is worried about the implications of legal protections for DRM.

Last Friday Jennifer Stoddart, the Privacy Commissioner of Canada, sent a letter to Minister of Industry Jim Prentice and Minister of Canadian Heritage Josée Verner expressing concern over the use of DRM to violate consumers' privacy. She pointed to Sony's now infamous rootkit fiasco in 2005, when a number of that company's CD releases included a program that automatically installed itself when inserted in a computer running Windows without asking, or even notifying the user.

As Time Warner's Home Box Office (HBO) premium cable service begins trials of an online Video On Demand (VOD) offering targetted specifically at cable internet customers, another branch of the company, Time Warner Cable, is finalizing a plan to experiment with monthly download limits for broadband internet subscribers.

In other words, while the company's right hand is offering consumers extras available only through the internet connection they're already paying for, the left hand is threatening to charge them more if they use the service too regularly.

Meanwhile Time Warner Cable is trying to downplay the apparent schism between the two Warner Brothers divisions, telling The Hollywood Reporter "Time Warner Cable is confident our subscribers will enjoy content like HBO on Broadband no matter what the pricing is." No doubt there are more than a few customers who would disagree with that opinion, and probably more than a few Time Warner executives trying to figure out how to "clarify" the statement so it doesn't look quite as much like a major corporation calling their customers mindless sheep.

If the results of a recent study by the Association of Public Television Stations is to be believed there are tougher times ahead for television broadcasters in the U.S. According to the study only about 5% of the 21 million people who currently count on Over The Air (OTA) broadcasts for television viewing plan to either subscribe to a satellite or Cable Television service or purchase one of the converter boxes that will soon be available for converting digital TV (DTV) to a format an old fashioned analog TV can handle.

Broadcasters already losing revenue because of the increased use of DVRs, reducing advertising dollars from sponsors who don't want to pay to have their commercials skipped. The possibility of losing 10 million viewers outright can't be an appealing thought.

Of the remaining respondents, only 12% indicated plans to subscribe to a pay service to prepare for the February 2009 digital transition, while 43% said they plan to buy a converter and continue to watch OTA TV. "This data indicates that free, over-the-air television may be set for a big comeback," APTS president and CEO John Lawson said. "Many people see broadcasting as a dinosaur technology, but we broadcasters have the opportunity to reposition it as 'wireless TV' and reach new audiences."

Last Thursday BBC Future Media and Technology Group Controller Erik Huggers announced the hring of Joost CTO Dirk-Willem van Gulik as the division's Chief Technical Architect. van Gulik will be taking over the position in February. He will be succeeded at Joost by former Comcast and Cisco executive Matt Zelesko.

Just a few months ago Joost was in the enviable position of having "legitimate" online video from television networks, as well as a lot of buzz surrounding their beta, which promised free "broadcast quality" online television viewing. Since then, however, it seems to have quickly faded into obscurity, overshadowed by direct offerings from network websites, new services like the joint venture from NBC Universal (NBCU) and News Corp. called Hulu, and more recently Apple TV.

As Joost attempts to re-energize their service with a new CTO and plans for a second base of technical operations in the U.S. it seems fair to ask what kind of future the company has. Last July they boasted of having "1 million viewers," although this most likely equates to the number of people who have downloaded their player, rather than those actually using the service on even a semi-regular basis.

In a move over a year in the making, HBO has announced that it will begin trials of its online video service, dubbed HBO On Broadband. The service will be tested in two different Wisconsin markets - Green Bay and Milwaukee - and be available only to those who subscribe to both HBO and broadband internet from the same cable television provider.

The offering has been planned since at least 2006, but has been slow getting out of the gate because of the HBO's concerns about harming their relationship with cable providers, who would no doubt not be happy to have HBO essentially bypassing them to service customers. For now there will be no additional cost, beyond what consumers are already paying for HBO, to access the content.

"It encourages customers to take our bundle and keep it," says Peter Stern, executive VP at Time Warner Cable, which says 365,000 Wisconsin customers will have access to the new service.

Much like other online Video On Demand services from television networks and stations, HBO On Broadband will allow customers to download current content to their computer and keep it for a limited amount of time for playback. Variety is reporting the amount of time a show may be kept as a few weeks.

With Warner Brothers jumping on board the Blu-ray bandwagon, studios and consumer electronics manufacturers aren't the only ones starting to think about the end to the so-called war between the two supposed "next-gen" optical movie formats. Retailers, who have consistently said they don't expect to see a serious market as long as both formats are around, are starting to in anticipation of a Blu-ray victory.

Mark Higgins of Trans World Entertainment, which operates more than 800 F.Y.E. stores in the U.S., told Video Business “We are waiting to hear more about what [HD DVD] hardware manufacturers decide to do, but I think one thing we can all agree on as retailers, is that consumer confusion is leading to a delay in buying a format."

He added “They don’t want to buy into another BetaMax. As retailers, we need to simplify things for the consumers as much as we can with merchandising one format. We don’t want to be biased, but that is clearly the direction that high-def production looks to be going.”

At this year's Consumer Electronics Show in Las Vegas NBC Universal (NBCU) experimented with making their TV shows available from kiosks setup by Mediaport Entertainment. Mediaport was hoping to make a deal to add NBC shows as an option for their kiosks, which already offer music that can either be burned to CD or downloaded directly to mobile devices compatible with Microsoft's PlaysForSure DRM.

According to NBC, CES visitors downloaded nearly 10,000 shows to complimentary memory sticks. The shows featured DRM customized by NBCU to allow it to be played for up to 14 days.

“NBC Universal needed us to create a simple to use, quick-to-download, system that would give the consumers the ability to enjoy the NBCU content while maintaining the intended DRM of the programming," said John Butler, president of Mediaport. “That’s exactly what Mediaport delivered.”

With the Directors Guild of America apparently ready to sign a new contract that deals with many of the same issues members of the Writers Guild of America (WGA) have been striking over for over two months, it looks likely that a settlement with the writers may be reached within the next month and a potential Screen Actors Guild (SAG) strike this summer averted completely. Even assuming that studios are able to come to agreeable terms with the WGA, it will be interesting to see whether the strike has had a lasting impact on the home entertainment industry.

While the business of making movies and TV shows has nearly been shut down by the WGA strike, consumer demand for entertainment in the living room hasn't waned. It has had to adapt to the reality of television with no writers though. According to a recent study from media analysts at Interpret, both DVDs and video games have become more popular as replacements for television are sought. The study found that around 1/3 of respondents have changed their viewing habits since the strike began in November.

More than 40% of those polled reported more time spent watching movies on DVD, and 23% saying they're getting their TV the same way, the outlook for studios to get back to business as usual seems good. But another group, the 26% who said they're spending more time playing video games, may be something of a concern.

Chieftan Capital, owner of around 2% of Comcast, this week sent a letter to the cable giant requesting that current CEO Brian Roberts be replaced, and the company's shareholder voting rules be changed to wrest control away from the Roberts family. Despite owning a mere 1% of the company, these voting rules give them nearly complete control over management decisions.

The letter characterized Comcast's management team over the last several years as a complete failure, and laid the blame squarely on the shoulders of the Roberts family, saying "Protected by super-voting stock, management has been free to ignore shareholders entirely"

"Returns on invested capital have been anemic, high-priced acquisitions have proven a waste of capital, capex has ballooned and free cash flow has consistently disappointed. While management has boosted Comcast's operating cash flow by ten-fold in the past decade (mostly through acquisitions), it has created zero return for shareholders," Chieftain wrote in its letter that was signed by managing directors Glenn Greenberg, John Shapiro and Thomas Stern.

With the initial buzz over Apple's movie rental operation giving way to speculation about its success or failure, some have cited it as the real next-gen movie format, while others have pointed out some important problems with the current state of online video distribution, warning that big improvements are needed.

While it's probably fair to say there are good points on both sides, the short history of digital distribution shows that a Video On Demand model (rental) should be more successful than selling movies. With the limitations imposed by DRM, and lack of portability from set-top box to DVD, very few people are interested in buying downloaded movies. They offer tighter restrictions for a similar price, and without the extras found on the typical DVD.

Rentals, on the other hand, are quite competitive because long term viewing concerns don't apply. The conveniencence of renting a movie without leaving your living room can easily outweigh the comfort with more familiar technology like DVD. In fact, when coupled with a well designed set-top box, VOD from the internet doesn't have to feel any more foreign than similar offerings from pay TV providers.

Today Chinese officials issued what amounts to an international cry for help to help in their crack down on internet piracy. "To evade punishment, pirates often locate their servers in other countries or regions, posing very big difficulties for police efforts to carry out (a) crackdown," said Gao Feng, a senior public security ministry official. "Copyright infringements, by their very nature, are international crimes. To effectively curb such activities, (we) need enhanced international cooperation on law enforcement," he said.

"It's difficult to block these websites completely ... as it's hard to arrest a person responsible if he lives in a foreign country," Liu Bin, a Beijing-based analyst with technology consultancy firm BDA China, told AFP.

However, there's good reason to believe that Chinese officials' actual motives have less to do with piracy than controlling the country's population. The plea for international cooperation comes on the heels of a government announcement that by year's end only state agencies will be authorized to provide audio or video on the Web.

Despite RIAA lawyers' brilliant legal argument that they shouldn't be required to pay the victim of a lawsuit they brought without evidence because they were still pretty sure she was pirating music has come to its logical consclusion. Today an appeals court upheld both the decision to force the RIAA to pay Tanya Andersen's legal bills and another dismissing her counterclaims against the organization without prejudice.

Although not as sensational, the status of her claims of RIAA harassment could have a longer lasting impact on the future of such litigation. After the RIAA's suit against her was dropped with prejudice, meaning they may not sue her over the same incident, Andersen decided to continue her claims against the RIAA in a separate suit that she hopes will qualify for class action status. By affirming the decision to drop her original counterclaims without prejudice, they may be included in future lawsuits, such as the one she has pending against the RIAA right now.

At the beginning of this year Veoh, a web service that offers free streaming video aggregated from other sites, began distributing video from Hulu. Hulu is a service owned by NBC Universal (NBCU)and News Corp. intended to give TV networks and studios a direct outlet to reach viewers with free video offerings. It's currently in private beta testing.

Veoh made headlines shortly after their launch last year when they filed a lawsuit against Universal Music Group (UMG) after allegedly being threatened with legal action by the music giant. Although some question the legality of Veoh's service, as a company spokeswoman told PC Magazine, "we retain the video ads that the content owners have sold so they can continue to monetize their content."

She also stated "We haven't heard anything from Hulu, so I can't comment on their reaction, but we do think that we can be a valuable source of distribution for their high-quality content."

In a pair of interviews published on CNet last week, Trent Reznor and Saul Williams talked extensively about their joint experiment to distribute Williams' latest album online, with consumers given the option to download for free in MP3 format or pay $5 for CD quality audio. 2 weeks ago Reznor revealed that just more than 18% of those downloading the songs chose to pay for the higher quality format.

While Reznor and Williams' experiment was overshadowed by Radiohead's online giveaway last year, and again by CES last week, their story is arguably a more accurate barometer of how the average artist might expect to fare in a market where payment for downloaded music is voluntary. Besides the pair's openness about the number of downloaders who chose to pay, unlike the Radiohead release it wasn't an album that had a large, built-in listener base to generate near-automatic sales.

As we reported on Monday, in addition to removing limits on the use of their Watch Instantly Streaming video service, Netflix has also "upgraded" their system to require Windows Media Player 11 on subscribers' computers. This unfortunately leaves people with Windows XP Media Center Edition computers with a version from 2004 or earlier out in the cold as WMP 11 can't normally be installed on this operating system.

Being a Windows MCE user myself, I don't have any interest in paying a minimum of $150 essentially for an update to the Media Center application, which is the component that Microsoft hasn't updated for MCE 2004. This left me with two options, either stop streaming video from Netflix or find an alternative to a new version of Windows.

As it turns out there is an alternative, and although it's not free, you shouldn't have to buy any new hardware, including the remote control. A product called SageTV provides all the functionality of Media Center, and in fact appears to have many more features than were available in the older Windows XP MCE versions. By using it, or another Media Center alternative like BeyondTV, you can also safely install Windows Media Player 11 using a new guide.

As if they didn't have enough problems competing (or refusing to compete) with Netflix, now it appears that the official announcement from Apple that they'll be offering movies for rental from iTunes has stockholders worried. After the official announcement from Apple today, Blockbuster shares dropped more than 15% to $2.69.

According to the Associated Press, Blockbuster spokeswoman Karen Raskopf responded to questions about Apple's plans by saying "We view Apple's announcement as a great way to create consumer awareness, and we believe we are positioned to capitalize on that increased awareness."

Blockbuster rival and leader in online DVD rentals, Netflix, was also affected by Apple's news. Although their stock price lost $0.72, it only amounted to a 3.2% decrease. Earlier in the week Netflix announced that all subscribers will now be able to take advantage of unlimited Streaming through their Watch Instantly service. Previously Netflix customers were only allowed a limited number of hours per month, depending on the rental plan they had.

According to a Erica Ogg of CNet, Digeo, the DVR manufacturer owned in part by Microsoft co-founder Paul Allen, announced a change in direction today. The company is scaling back plans announced last year to introduce an entire range of DVR and home automation products. Instead the company is cancelling what was would have been their flagship product lines, the Moxi Home Cinema Edition DMR and Multi Room DMR and laying off nearly half their workforce. Among those looking for a new job will be CEO Mike Fidler.

Fidler's successor, former COO Greg Gudorf, said "As we assessed our situation, it became clear that the best action for Digeo was to focus our work on the next-generation product for the retail market," adding "Building the software and hardware for this category is a complex endeavor, with dynamic technical standards, regulatory issues, and content considerations. Previously, we were spreading our energies across too many platforms."

As they're being investigated for alleged violations of the FCC's 2005 Internet Policy Statement, Comcast appears to be sticking to the same company line that company representatives have used for months, namely that they're not blockingany applications.

According to a statement sent to Ars Technica by Comcast Executive Vice President David L. Cohen "Comcast does not, has not, and will not block any websites or online applications, including peer-to-peer services." He also indicated that the company hopes to "bring more transparency for consumers regarding broadband network management."

However, most people familiar with the situation are taking any Comcast statement with a grain of salt right now. For one thing, despite their rhetoric, Comcast has refused to say exactly what form the "network management" that apparently manages to stop much BitTorrent traffic actually takes. Even FCC Chairman Kevin Martin expressed doubt over Comcast's claims, noting in an appearance last week at the Consumer Electronics Show, "When they have reasonable network practices, they should disclose those and make those public."

In reality, what Comcast is being accused of isn't exactly "blocking" applications. Rather, the claims are that they're delaying packets used for particular applications, most notably BitTorrent, for a period of time that will cause them to time out waiting to be delivered. In other words transfers will be stopped because Comcast's network engineers delay them. Although this may not technically amount to "blocking" an application, in effect that's exactly what's happening.

Despite shutting down its first attempt at a video download service in December, after less than a year of operation, Wal-Mart already appears to be working on a replacement. Unlike the previous attempt, which relied on services provided by Hewlett-Packard (HP) to deliver the video, this time the world's largest retailer looks to be striking out on their own.

No doubt the decision by Wal-Mart executives to set up their own delivery system was at least influenced by the fate of the earlier venture. The reason for making such an early exit the first time around was HP's decision to get out of the business entirely, leaving Wal-Mart without a distribution channel. HP's official statement on the matter said “the market for paid video downloads has not performed as expected, and the broader internet video space continues to remain highly dynamic and uncertain.”

That uncertainty apparently isn't as worrisome to Wal-Mart. According to Multichannel News, Microsoft representatives took advantage of last week's Consumer Electronics Show (CES) to research the technology required to provide movie downloads that can be burned onto DVD.

Last Wednesday, at a House of Commons hearing regarding procurement, Liberal Democrat John Pugh was critical of the BBC's Director General over the decision to support Windows and Internet Explorer exclusively in the initial release of the iPlayer. The iPlayer is intended to allow U.K. residents the ability to download recent programs to view for a limited time. They also offer a Streaming player that uses Flash technology, making it compatible with other operating systems and browsers.

Thompson defended the iPlayer program saying "All the feedback we've had is that consumers are enormously enjoying using iPlayer. About a million people in this country have tried it already."

But Pugh apparently wasn't satisfied with what he heard. He followed up his questioning with a scathing letter to Thompson that has been published by The Register, including the following passage.

The more fundamental issue is its failure to apply open standards and be sufficiently interoperable to work fully (stream and download) on more than one platform. The BBC is funded by licence players not all of whom have or choose to use a computer running Windows XP or Vista. By guaranteeing full functionality to the products of one software vendor it is as a public body handing a commercial advantage to that company - effectively illegal state aid! The aspiration to eventually (you said within two years) remove this advantage - does not rebut this charge. A promise of amendment is never sufficient excuse for past sins or indeed much of an explanation. Read more...

Last Monday Netflix made some changes to their Streaming video service, known as Watch Instantly. Although there was no big announcement, they began requiring Windows Media Player 11 (WMP 11) for access to the service. While this may seem like a minor change to most people using the service, if you're running Windows Media Center Edition 2002, 2003, or 2004 it means your operating system is no longer supported.

So far Netflix hasn't responded to a press inquiry I submitted nearly a week ago. I called customer service today on the chance that they might be able to tell me something. Although the representative I spoke with was friendly, courteous, and professional, this was the first she'd heard about the issue.

And really it's not an issue with Netflix as much as with Windows Media Player. WMP 11 works fine on a standard Windows XP installation, and even on Media Center Editions from 2005 on. But if you bought into the Microsoft HTPC technology before it reached its fourth generation you're out of luck unless you want to use a hack that will cause the Media Center application to stop working.

MusicGiants, whose online music store already offers audio downloads in much higher quality than the typical web retailer has made a deal with Paramount Pictures Digital Entertainment to deliver HD video. The video oriented service, not surprisingly called VideoGiants, can deliver HD movies either one at a time by download or as entire collections on a hard drive that would be installed into a home theater server.

“Over the past several years, high-end audio consumers have come to rely on MusicGiants as the source for all of their favorite music, and we are now pleased to announce that we are going to do the same thing for films and TV shows through our VideoGiants service,” said MusicGiants CEO Scott Bahneman. “Our company is uniquely positioned to sell the highest quality content onto premium connected homes because the MG MediaStore software is being built into so many home theater devices.”

He was referring to the fact that VideoGiants isn't intended purely for PC playback, but rather can (and will) be supported by a number of home theater media servers, including such brands as Creston, Imerge, Niveus, Russound, ReQuest, Xperinet, Cutting Edge and Inteset.

Despite the apparent coup for Blu-ray in convincing Warner Bros. to join their side shortly before this year's CES conference, Seagate Technology CEO Bill Watkins is confident it won't have any impact on the on-going format war for HD dominance. That's not because he believes HD DVD will take the crown, but rather because he's convinced that the real winner will be electronic distribution rather than physical discs.

"People are saying Blu-ray won the war but who cares? The war is over physical distribution versus electrical distribution, and Blu-ray and HD lost that," he said during a breakfast meeting at the Consumer Electronics Show here this week. "In this, flash memory and hard drives are on the same side. The war is over and the physical guys lost."

In addition to talk of devices for storing video from different sources, which of course is a job for either flash memory or hard drives, he also mentioned that electronic distribution also creates the need for backups of all the data to be broadcast.

As the Writers Guild of America (WGA) strike continues to affect Hollywood productions, and even their annual awards season, it's now the directors' turn to work on a new deal with studios. Starting on Saturday the Director's Guild of America (DGA) will start talks with the studios, under guidelines that were agreed to in recent talks.

Until recently the directors were waiting for developments in the WGA negotiations. The chief point of contention between the writers and studios is royalty rates for digital distribution after broadcast, particularly for Streaming or download online. While studio representatives characterize online video as a money losing, or at best break even venture, some on the writers' side point out that this is contrary to claims made in lawsuits against viral video services like YouTube. As the strike has drug on with little communication between the two sides the directors have apparently lost patience.

The DGA negotiations include discussions of the same issues, and although there has never been a prolonged directors strike in Hollywood, the WGA cautions against assuming the same will hold true this time around.

Last year, after being purchased by equity firm Terra Firma, EMI started looking at exactly what the trade organizations they help fund with membership fees were doing to earn their money. We reported in November of last year that the answer was apparently "not enough," and the company was considering backing out of the RIAA because they didn't feel that they were getting their money's worth. Based on a recent article in Variety, things are a little more complicated than that.

While many people, both in the U.S. and internationally, are familiar with the RIAA, most notably for being behind the American campaign of lawsuits against P2P file sharers who offer copyrighted songs for download. But once you leave the U.S. the RIAA has relatively little pull, and not much standing as a lobbying organization. For this reason the four major labels also belong to a number of other trade groups, most notably the International Federation of the Phonographic Industry (IFPI).

Rather than simply backing out of the RIAA (and other industry groups) as sources had indicated last year, it appears the company is actually doing something significantly more calculated. According to Variety, EMI sent a letter to IFPI officials stating their intention to end their association with the organization unless they bring their own interests and goals into alignment with EMI's.

On Tuesday, at an event overshadowed by the annual Consumer Electronics Show in nearby Nevada, Blockbuster CEO Jim Keyes spoke about the company's plans for the coming year. Not surprisingly, those plans are primarily a continuation of the company's direction since Keyes took over last year.

Although lacking the glamour and media attention of CES, the Citigroup 2008 Global Entertainment, Media and Telecommunications Conference in Phoenix was attended by media analysts, many of whom were in attendance for Keyes' presentation, where he laid out Blockbuster's plan to reshape themselves into “an entertainment convenience store.”

“If we can improve that core [DVD rental] business we believe it can generate incremental cash flow that can then be used to invest in the future, for digitial downloads, for technology, perhaps for kiosks,” he said.

Last year Blockbuster began testing kiosks in a number of locations, and is reportedly considering the possibility of both on-demand DVD burning and downloading video to flash memory as an intermediary format used to transport it to a home computer or portable music player. Eventually they may even be able to load media files directly on the consumer's iPod (or other player hardware).

Although the cell processor is most famous for powering the PS3 game console, one of Sony's partner in the chip's development is now showing off what it can do in other electronic devices. At the Consumer Electronics Show (CES) Toshiba showed off a new HDTV that takes advantage of the cell processor's advanced video processing capabilities.

Although the video processing circuitry in a HDTV is something most consumers know nothing about, and usually don't even consider when making a purchase, it's often the difference between a picture that looks good and one that's merely really big. From scaling between different resolutions to deinterlacing, the video processor is what makes it possible to support the wide variety of video standards in use today in a single TV.

The cell processor signals a quantum leap over the processors used in current generation HDTVs. At CES Toshiba demonstrated some of the chip's capabilities, including decoding multiple TV signals in real time. Although the 48 simultaneous video streams were in standard definition, Toshiba says it could do the same thing with up to six HD signals.

Source: PC World

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In an interview from CES with Don Reisinger, the CEO of LionsGate said his company's decision to back Blu-ray over HD DVD was a simple matter of its improved anti-piracy measures. But when pressed later he admitted that the best anti-piracy measure is selling a product people want to buy.

While it's refreshing to see a studio head owning up to the importance of Blu-ray's additional copy protection in their selection, Steve Beeks comments highlight the contradictions inherent in replacing good business decisions with technology. DRM might give warm, fuzzy feelings to studio heads, but spending all their time worrying about it hasn't won them any new customers.

And that's what's really missing from the whole Blu-ray / HD DVD Battle - some customers to fight over. With all the news from both camps over the last year you would think there are huge sales at stake, but so far both together have managed to Capture less than 4% of the total home video market. So far they're biggest accomplishment was finally overtaking VHS sales last year.

In a new twist on recent stories about the transition from analog to digital broadcast TV in the U.S., Best Buy CEO Brad Anderson is expressing concern over the challenges of getting converter boxes in the hands of consumers before the last analog signals are turned off in a little over a year.

Speaking to an industry audience at the Consumer Electronics Show (CES), he said "I think it's one of the biggest risks our industry has." He added "The number of converter boxes that is going to be required could put tremendous pressure on us to solve all those problems."

Part of the prolem, according to the Government Accountability Office (GAO) in Washington is that there are no real goals set by the FCC, and therefore no way to know how far the country has to go. FCC chairman Kevin Martin recently defended himself, saying "the various orders contained in FCC dockets amount to a plan."

If the FCC does indeed have a plan, retailers apparently aren't convinced it will work. "The clock's ticking and this is coming very quickly," Anderson said. Best Buy is planning to have the converter boxes available for purchase by April.

If you're a U.S. resident you can apply for up to 2 vouchers, which will be good for $40 off the price of a DTV converter from stores like Best Buy, by visiting a special government website or calling 1-888-388-2009.

Regardless of how Sony and the rest of the Blu-ray camp think Warner Brothers' decision to get on board means, according to retailers they haven't won anything yet.

"I don't think we're in a position to go out and declare a winner," said Steve Eastman, Target Corp'svice president of consumer electronics, in an interview. He added that he doesn't believe the majority of consumers are willing to choose either side as long as both exist.

Gary Severson, senior vice president in charge of electronics for Wal-Mart Stores Inc. agrees, saying "If we were able to have one united message and say: 'Here's high definition TV, here's a high definition DVD, here's the medium to play on it,' it's a much cleaner story to customers that the industry can push, that every retailer can push and the customer goes, 'OK I get it.'"

Due to a lack of physical shelves with Limited space to stock the competing formats, online retailers aren't necessarily as concerned as their brick and mortar counterparts. "We don't have to choose," said Paul Ryder, vice president of the electronics store for online retailer Amazon.com. "I don't have to say I don't have enough room on my shelf."

According to Brad Stone of the New York Times, if a panel discussion at CES regarding piracy is any indication AT&T is working on developing network filtering technology that could be used to identify copyrighted content being uploaded or downloaded by subscribers to their internet service.

“What we are already doing to address piracy hasn’t been working. There’s no secret there,” said James Cicconi, senior vice president, external & legal affairs for AT&T. He added, “We recognize we are not there yet but there are a lot of promising technologies. But we are having an open discussion with a number of content companies, including NBC Universal, to try to explore various technologies that are out there.”

NBC Universal (NBCU) Chief Counsel Rick Cotton, who made headlines last year when he decried the effects of piracy on popcorn farmers after claiming piracy isn't getting its share of government attention compared to crimes like robbery and burglary, was also on the panel.

“The volume of peer-to-peer traffic online, dominated by copyrighted materials, is overwhelming. That clearly should not be an acceptable, continuing status,” he said. “The question is how we collectively collaborate to address this.”

The EU has ended their investigation of Apple over iTunes pricing in the UK after the company agreed to charge standard prices across all EU countries. At the same time, Apple is also planning to reconsider whether they should continue to sell downloads from any label that doesn't agree to reduce wholesale prices to match what they're already paying in other EU countries.

A statement Wednesday from the European Commision, the body responsible for handling the investigation, said that it “welcomes Apple's announcement to equalize prices for downloads of songs from its iTunes online store in Europe within the next six months. This puts an end to the different treatment of U.K. consumers who currently have to pay higher prices for downloads.”

Commisioners also didn't feel that Apple was forced into their pricing scheme by contracts with the labels. They released a statement saying “The commission’s antitrust proceedings have also clarified that it is not agreements between Apple and the major record companies that determine how the iTunes store is organized in Europe. Consequently, the commission does not intend to take further action in this case.”

Apparently Radiohead's marketing strategy of giving their latest CD, 'In Rainbows' away first in MP3 format, with fans having the option to pay if they wanted to, didn't have quite the effect on sales that many have predicted. The album was number 1 on the U.S POP charts during its first week of release.

In November internet commerce analysts at ComScore announced that according to a sampling of consumers running their tracking software on their computers the band only made $6 per album with more than 60% of downloaders declining to pay anything. A subsequent statement from Radiohead called the ComScore numbers "wholly inaccurate," noting that no one outside their organization had access to the actual numbers.

Many are asking whether the band would have made more money by renewing their contract with former label EMI and releasing the album in the traditional way, with downloads sold through online stores like iTunes. But is that the right question? The CD market that they lead right now is down nearly 4% from last year. Last year's numbers were nothing to brag about either, being down 15% for the year.

According to Allen Delattre, Global Managing Director of management consulting firm Accenture, consumer problems operating new devices costs retailers nearly $14 billion a year in the U.S. alone.

In an interview on Tuesday he said consumers often return the devices believing they don't work correctly even though in many cases it's simply a case of a difficulties figuring out how to operate new gadgets or misunderstand how they work.

While most companies at the Consumer Electronics Show are concentrating on individual products, Delattre is focused on the overal design, manufacture, and packaging process, which he believes nees a major overhaul. "The cost to return on one computer deletes the margin of two others they sell," he said.

The cost comes in the form of labor to test devices and get them back on store shelves for resale and the reduced margins for the returned goods.

Source: Reuters

NBC Universal (NBCU) is using CES to show off kiosks that they hope will eventually be used to distribute video directly to consumers. The kiosks are being provided by Mediaport, who are hoping to make NBC content available through their kiosks.

One of the biggest developments in the home video market last year was the emergence of automated technology for DVD rental. The most conspicous example was the overwhelming success Redbox had with their machines located at McDonald's restaurant locations around the country. Meanwhile provisions were being added to DVD specifications allowing encrypted discs to be burned. This has led to a number of companies working on plans to implement kiosks for on-demand DVD burning.

In addition to transferring video to simple flash drives, which is the focus of the CES presence, the Mediaport kiosks can be configured to burn DVDs or even load video directly to mobile media players.

“We have 500 [music kiosks] globally, and tomorrow we can enable the retailers to also handle video without any major equipment upgrade,” said Mediaport president and owner John Butler. “We are introducing the concept at CES. We can do the same things with TV and movies that are being done with music.”

Apparently hoping to benefit from the visibility of Comcast CEO Brian Roberts, who gave Tuesday's keynote address at CES, FCC chairman Kevin Martin spoke with reporters about complaints filed with his agency in regard to the cable giant's "network management" practices.

Last year Comcast came under fire for "delaying" some network traffic, causing a small number of applications, including software using the BitTorrent P2P file sharing protocol, to have connection problems. When asked repeatedly about the issue at the time, Comcast representatives would say only that they don't block any applications on their network.

Comcast's defense for their actions has been that they are allowed to perform "reasonable traffic management." under current FCC regulations. For many this is at the heart of the case against Comcast, because they feel there's malicious intent toward file sharers that's clearly indicated by the methods being employed. Although they don't technically block BitTorrent connections, or those of any other application, their practice of delaying the delivery of certain traffic results in disrupting some customers' connections.

Members of the U.K. Parliament spent much of today discussing a document outlining some changes to copyright law. While many of the items discussed involved codifying existing caselaw into written law, perhaps the most interesting issue discussed was that of consumers making copies of legally purchased media, such as CDs.

Today's consultation, which included the presentation of a paper by Parliamentary Undersecretary for Intellectual Property And Quality Lord Triesman, was foreshadowed a few months ago when Parliament took up the issue of copyright term extensions. At that time there were already discussions regarding the changes discussed on Tuesday.

The copying issue, called format shifting in reference to the common practice of encoding CD audio to MP3 format, is one of the most hotly debated topics in the music industry right now. While consumers feel it should be there right to make as many copies of (legally purchased) music as they want, representatives of the recording industry are less enthusiastic about the idea.

Geoff Taylor, CEO of the U.K. equivalent of the RIAA - the BPI, noted the industry's dissapointment that the government is considering additional consumer rights with no additional compensation for copyright holders. Lord Triesman doesn't agree. In his presentation today he specifically mentioned that it doesn't make sense to pay multiple times for the same content simply to listen to it in a different setting.

Yesterday at the Consumer Electronics Show (CES) in Las Vegas executives from Fox, Disney, Paramount, and Warner Bros. participated in a panel discussing the future of online video distribution. Each panel member gave some insight to their respective company's strategy over the next year.

Dan Fawcett, president of Fox Entertainment Group Digital Media, focused on his company's intention to help users promote content from the Hulu web service by "letting people distribute our content virally through the Hulu player.” Hulu is a joint venture between Fox's parent company News Corp. and NBC Universal. The service has been in beta testing since last year and is expected to have an official launch some time in the first quarter.

The new president of Warner Bros. Digital Distribution, Thomas Gewecke, and Disney's Executive Vice President for Digital Media, Albert Chang, stressed the importance of diversification. “One core of our strategy is to make content as available as possible and in as many configurations as possible,” said Gewecke.

According to Chang, “Product development and how we handle our video is going to change very quickly over the next few years.”

On the first day of the 2008 Consumer Electronics Show (CES), EchoStar Holding Corp., owner of both the Dish Network satellite television service and place-shifting hardware manufacturer Slingbox has announced that they'll be offering a converter box to consumers to allow their analog TVs to receive Digital TV (DTV) broadcasts after analog TV signals disappear from the airwaves early next year. Although they're joining other manufacturers who are making converter boxes, their boxes are unique in that they can be paid for using nothing but U.S. government vouchers set to be distributed this year. All other converter boxes available to date cost more than the $40 value of each voucher.

Although EchoStar will be losing money on each box sold Charlie Ergen, the company's Chairman and chief executive, is looking at it more in public relations terms. "Maybe they'll just feel good that you helped them with their problem of TV and they feel good about you and they buy something else from you down the road," Ergen said.

Among other things, EchoStar no doubt hopes to generate customer interest in their more advanced products, which will include an upgraded digital to analog converter with a built in DVR. Although these units won't qualify for the government's voucher program the company should benefit from both the increased visibility and potential public goodwill when it comes to selling them.

On Tuesday a new website from leading U.S. Cable Television provider Comcast will be officially unveiled which they hope will give them the number one internet destination for finding out what's on TV - and what related content is on the internet. The announcement will be part of Comcast CEO Brian Roberts' keynote address to kick off the second day of CES 2008.

The site, called Fancast, is already in beta. "The problem is that people don't know how to get their hands on something," says Amy Banse, president of Comcast Interactive Media. "We thought, let's give consumers a one-stop shop."

In addition to detailed listings for both cable and satellite services across the U.S., Fancast provides access to Streaming video originating with other services like Hulu. However, this feature is apparently somewhat buggy right now. The site's listings even include links to add movies to your Netflix or Blockbuster rental queue, rent from Amazon Unbox or buy from Amazon.com.

At this year's Consumer Electronics Show (CES) Microsoft announced a deal with ABC Television, the Disney Channel, and Metro-Goldwyn-Mayer (MGM) to deliver what the president of Microsoft’s Entertainment & Devices Division describes as “twice as much on demand content” as any cable or satellite operator.

Robbie Bach said that U.S. Xbox Live members will have access to TV past and current shows and movies from the ABC Television Network, ABC Family, ABC News, Disney Channel and Toon Disney. Shows will include Lost, Grey’s Anatomy, Ugly Betty and Desperate Housewives and Disney Channel’s Hannah Montana and High School Musical. MGM will provide movies like Rocky and The Terminator.

Despite not owning a major studio like rival Sony, Microsoft has slowly but steadily grown Xbox Live from an online gaming platform to include a sizeable amount of both standard and high definition video. Although Sony has withheld their content, they also have yet to develop a comparable service for the PS3.

Source: Multichannel News

The biggest question at this year's Consumer Electronics Show (CES), which opened in Las Vegas today, is what Warner's decision to join the Blu-ray camp exclusively means. Based on predictions from industry analysts at the end of 2007 it means Blu-ray will become the dominant format by the end of 2008, but Akiyo Ozaka, president of Toshiba America Consumer Products, isn't so sure, and he said as much at a CES press breifing.

Ozaka said "We have been declared dead before." He also said of the Warner Bros. decision, "We were very disappointed with Warner Brothers' announcement. Sales of HD DVD were very good last year, especially in October to December." However, he didn't have any comments about what the company's next move would be.

Although apparently on the side with the upper hand right now, Sony CEO Howard Stringer wasn't much more talkative. At a press conference yesterday he said “All of us at Sony are feeling Blu. But that is a good feeling. We thank Warner to release only in Blu-ray."

Despite the apparent optimism from studios and the consumer electronics industry, U.S. retailers aren't satisified with the growth of either Blu-ray or HD DVD in 2007. While sales were up from the previous year, title sales accounted for only 3.5% of packaged media sold last year.

According to Todd Zaganiacz, president of the National Entertainment Buying Group, sales still aren't high enough to sell retailers on either format. “I’ve talked to a handful of retailers who still aren’t doing HD. I don’t think anybody will ditch it, but there wasn’t enough of a bump to get anyone off the fence, or devote more space to either format.”

Netflix spokesman Steve Swasey indicated that neither format has dominated rentals either. This would seem to validate those who question whether PS3 sales, which have grown at a significantly higher rate than either HD DVD players or non-PS3 Blu-ray players, should be counted in standalone player comparisons.

One thing retailers are convinced of right now is that there's more money to be made in standard definition DVDs. “DVD still gets top billing,” Zaganiacz said. “A lot of the retailers are doing the same as the consumers, and waiting.”

Despite recent consumer trends that have pushed HDTV manufacturers like Panasonic to all but abandon plasma technology in favor of LCD, Pioneer is determined to stay the course. Today the company announced plans to for a new prototype Plasma display they will be showing off at this week's CES show with improved black and contrast levels.

One criticism of every technology that's followed CRT (used for almost all analog TVs) is in the area of reproducing blacks. Although plasma displays were already capable of more accurate reproduction of blacks than LCDs, even the most expensive models haven't been able to match CRT technology in this regard. Russ Johnson of Pioneer says this new prototype doesn't emit any light at all in black areas, which would mark an improvement over even the most expensive plasma HDTVs being sold now.

"There's so much Noise getting around about all these technologies, we thought it was important to show what (plasma) displays can do today," said Johnston. He also noted that the technology isn't quite ready to be used in an actual product that will be available this year. "It's close, but not that close," he said in an interview.

Despite concerns in the TV industry that the Writers Guild of America (WGA) strike will give networks problems packaging and selling TV series box sets from the current season, at least one home entertainment division has decided the future lies in the past. That division is CBS DVD, and as the name suggests they're part of CBS Corp., owners of the CBS television network. The past consists of TV shows owned by Paramount Home Entertainment, a division of Viacom, which formerly owned CBS as well. In 2008 CBS plans to release 105 to 110 titles, resulting in an increase of at least 13% over last year.

Despite no longer being part of the same corporate giant, CBS DVD and Paramount Home Video are still partners in TV series packaging, with the Viacom division taking responsibility for sales and distribution and both companies providing marketing support. CBS retains creative control over the packages, just as before the split from Viacom more than two years ago.

“The [overall] category does show flattening growth compared to previous years, but that is not a testament to how viable the business is,” said Ken Ross, executive VP and general manager at CBS DVD. “We have lots of titles that we will put out that will do substantial volume.”

With the increase in available Blu-ray and HD DVD titles both formats are seeing increased visibility in stores. Blu-ray with more releases and higher Title sales than HD DVD, is also gaining more shelf space, but both have seen significant increases over the last year.

“It’s really a function of more titles being available,” said Best Buy spokesman Brian Lucas. “We are still supporting both equally and haven’t staked a position on [the format war]. We are definitely giving more space and presence to next-generation titles. Part of that is once you start selling the hardware, you have a responsibility to help people get the most out of it.”

It's also worth mentioning that as DVD sales have declined over the same period, industry analysts have said they expect shelf space for them to drop as well. With the increasing emphasis, both among studios and retailers, on replacing DVDs with so called "next-gen" formats this seems to be an accurate prediction.

On Tuesday the first vouchers for converter boxes that make it possible for owners of analog TVs to watch Digital TV (DTV) became available from the U.S. government. The vouchers are intended for people who watch Over The Air (OTA) broadcasts. There's a limit of two vouchers per household.

The vouchers are good for up to $40 towards the purchase of a converter box, which aren't necessary for anyone watching either cable or satellite television. The boxes are expected to retail for between $50 and $70.

Of the available vouchers, the first 22 million are available both to U.S. residents who only receive OTA broadcasts and those who have cable or satellite service, but also receive OTA broadcasts on at least on analog TV in their household. The other 11.5 million are reserved for households where only OTA broadcasts are being viewed. Households with cable or satellite service are Limited to just a single voucher.

Based on numbers from the Nielsen Company there are 14.3 million households in the U.S. who currently don't subscribe to any pay TV service.

Despite an erroneous article in the Washington Post, the RIAA is not suing anyone for copying CDs to their hard drive. The story, copied by a number of websites, including Afterdawn, stated that the RIAA was suing Jeffrey Howell both for the music he shared on Kazaa and the additional songs he ripped to his computer's hard drive but didn't share on any P2P network.

As it turns out, simply reading the legal documents in the case shows that this is not true. The confusion apparently stems from a misreading, or more likely a partial reading of a document filed by RIAA lawyers at the request of the judge hearing the case. The document, which can be viewed freely online, sets the legal groundwork for the RIAA's case.

It includes language indicating that "Other courts have also concluded that placing files in a “shared folder” available to other users for download constitutes a distribution of the files" and "files in a KaZaA user’s shared folder, including Defendant’s shared folder, are “available to other people” for download."

Officials at the University of Washington are trying to decide whether to cooperate with a RIAA request to deliver prelitigation letters over alleged P2P copyright infringement. They're citing a lack of evidence as to the identity of the individual behind the list of IP addresses provided in the documents supplied by RIAA lawyers. This makes them the second American university to express concern over the evidence presented by the RIAA in P2P file sharing cases.

Earlier in the year the University of Oregon, with backing from Oregon's Attorney General, refused to give RIAA lawyers the names of students using particular IP addresses (assigned by the university) at times when files were allegedly shared illegally. The argument, as in the University of Washington suits, is that without extensive investigation they have no way to know who was using a computer when RIAA investegators downloaded the infringing files referenced in the lawsuits.

"Students often share Internet connections," UW spokesman Bob Roseth said, noting that in dorm rooms and computer labs it's often not possible to determine who's using a particular computer.