News archive (5 / 2001)

MediaBay has filed a complaint against Napster in the U.S. District Court for the Northern District of California in San Francisco. MediaBay? What the heck is that? Well, it's a company that operates websites that sell American old-time radio shows over the Internet :-)

Ok, obviously they have some interest other-than just cashing from Napster (but not very much other interests anyway, I assume), but one would think that old-time radio shows wouldn't be that popular among Napster users. Anyway, company is charging Napster over copyright infringement and unfair competition.

MediaBay also asks court to force Napster to filter MediaBay's radio clips from Napster's service.

Bertelsmann is set to announce today that it will purchase online music "locker" service MyPlay, sources familiar with the deal have told to Financial Times.

MyPlay operates a locker service similiar to My.MP3.com but it doesn't have licenses from major record labels to speed up the service so users wouldn't have to upload their music physically (unlike MP3.com who got this kind of licenses from major record labels after its court battle with them). Users can upload music they own to company's servers, create playlists and listen streamed music from their locker over the Internet wherever they are.

Yahoo was told to be considering to acquire MyPlay in last year for $200M but deal never happened. Now its reported that Bertlesmann will purchase MyPlay for appx. $30M. MyPlay laid off 41% of its work force in February 2001 in order to cut its losses and to focus more on business-2-business services.

Bertelsmann, German-based media giant who owns BMG, one of the "Big Five" record labels has also acquired stake of Napster and it's very likely that company will try to merge its separate online assets into one huge music service. Bertelsmann also operates online retail sites like CDNow.

Yeah, yeah, old news.. RIAA sued p2p company Aimster in last week's Thursday with almost exactly the same arguments as it sued Napster in 1999.

"Aimster is Napster all over again," Cary Sherman, general counsel for the RIAA, said in a statement. "Beneath the added bells and whistles lies the same service that Napster provides."

And as Aimster supports also other than MP3 files unlike Napster, it's expected to see MPAA to file similiar suit against Aimster later.

Interesting thing is that AOL Time Warner didn't join to RIAA's suit, but filed its own suit against Aimster -- AOL says that Aimster isn't a threat against just music, but content overall and as AOL owns music, video and book companies it felt like filing its own suit.

Scour Exchange used to be the best way to download other-than-MP3 files from the Net, but company faced legal problems from MPAA and was forced to shut down and file Chapter 11 last year.

Later company's assets were sold to CenterSpan Communications who now finally launched a new legal version of Scour Exchange. But just think about it a minute -- companies are transforming P2P applications to legal ones.. If you only have certain amount of media that is allowed, why in hell you should even run P2P network when you can actually just store the content in server and deliver it via web site?

And that's exactly the conclusion CenterSpan has gone to -- new Scour Exchange is just a piece of ActiveX that you need to install to your browser so it can keep track of your downloads. But the actual file browsing, downloading, etc is done through their website.

So, this once nice & cool P2P application is now just a web site that licenses content from EMusic... Pretty boring.

But if you insist checking it out, visit their website:

beta.scour.com

Gracenote has acquired two new patents for delivering synchronized multimedia such as lyrics and album covers to the client software as it's playing a song.

With these latest patents Gracenote has control to both the information (the CDDB Compact Disc infromation database) as well as the services related to that information.

Earlier this month Gracenote sued CD-burning software developer Roxio for deciding to use FreeDB instead of the now commercial CDDB.

I'm rather disappointed with Gracenote/CDDB myself. Imagine the Red Cross turning from a non-profit organization to a company selling your free donations for a profit. Sounds fair, doesn't it? That's exactly what Gracenote is doing - taking thousands of hours worth of voluntary work, and turning it into a business.

RIAA sued Launch Media yesterday on behalf of Sony, BMG, EMI and Universal because they think that Launch's existing licensing deal for its Launchcast streaming service doesn't allow the level of interactivity it currently offers.

Launchcast's users can rate songs they hear from the service and based on the ratings, songs are played more frequently, less frequently or not at all.

And yes, the problem is the level of interactivity -- Launch has all the licenses, all the "blankets", etc from RIAA, but service is just a little bit too intelligent. The missing one from "big five", Warner Music didn't file a suit because it has a separate licensing deal with Launch and that deals allows this level of interactivity.

Launchcast service was taken down and according to Launch they are negotiating with RIAA to find the solution for this issue.

MP3.com has signed a deal with ImageSound to license its web-based technology that will allow companies to subscribe for music "piping".

Term means basically that companies like McDonald's will use the MP3.com's technology to deliver music to their branches. ImageSound's customer base in the UK, where the deal is made to, includes McDonald's, Gap and Burger King.

On Sunday Vivendi Universal announced that it will buy MP3.com for $372 million.

Peer-to-peer technology developer Aimster plans to appeal the arbitration panel's decision ordering it to turn over Aimster.com, A1Mster.com, AimsterTV.com, and AimsterTV.net to AOL. The panel found that the domain names violate AOL's AOL Instant Messenger (AIM) trademark.

Aimster CEO Johnny Deep says that the company must appeal the decision by June 1. Losing the Aimster brand might force the company out of business altogether. According to Deep the name Aimster was derived from her daughter's, Aimee Deep's nickname.

P2P developer Aimster has lost their fight with AOL over their domain name. AOL has claimed that Aimster's name is too similiar to AOL's AIM instant messenger program. And actually there's a good reason for it -- Aimster works with AIM, kinda "piggybacks" with it and allows users to share MP3s and other file formats within their buddylists.

The three-lawyer National Arbitration Forum panel found by a 2-1 margin that domain names registered by Aimster, including Aimster.com and A1mster.com, violate AOL's trademarks and that Aimster has to give the rights to these domains to AOL.

Vivendi Universal (a group that owns hundreds of music/tv/movie/etc companies, including Universal Music Group) has agreed to buy MP3.com and all its assets for $372 million.

The deal gives MP3.com's shares a value of $5 each, giving them nice a premium of almost $2 (MP3.com's shares closed at $3.01 this week). The deal is paid in Vivendi's American Depositary Receipts (papers that are treated like regular shares, but are issued because Vivendi is listed in Paris stock exchange) and in cash (50-50 split).

"MP3.com will be a great asset to Vivendi Universal in meeting our goal of becoming the leading online music service provider," said Jean-Marie Messier, Vivendi's chairman and chief executive officer, in a release.

Vivendi can be categorized only as "giant" -- in all terms. It's the biggest music company in the world and music isn't really it's only business -- the company does just about anything related to multimedia & traditional entertainment.

MP3.com was the miracle child of the Internet -- it was one of those IPO's in 1999 that made us all believe that the Net will make everyone rich (check their stock charts here) The company made its worst decision when they launched the My.MP3.com service that lead to legal trouble with major (and minor) record labels. Actually Universal Music Group (part of Vivendi) was the only company that did not settle out of court with MP3.com, but instead went all the way to the end and received over $50M from MP3.com in damages.

SDMI, a group that tries to agree on terms and technologies of future music copy-protection, failed to agree on standards that should be used in future portable devices and CDs.

Group that has members from record labels, technology companies and consumer groups, has been working two years in order to develop a standard for music copy-protection.

Yesterday's meeting that didn't solve any problems related to technologies and standards, is of course a victory for companies who have developed music copy-protection of their own -- and of course for MP3 fans, who are afraid of secure formats.

Vitaminic, Italian based digital music company, launched Europe's first digital music subscription service this week. Users can download unlimited amount of music at £29,99/6 months or £49,99/12 months.

Service's biggest problem is its lack of content. Vitaminic has deals with minor record labels and with some specific big name artists (including James Brown), but lack of major record label content is obvious.

Okay, I guess there's probably one or two Russian (no offence to anyone in Russia) record labels left that haven't sued MP3.com yet. Ok, this time company who sued MP3.com is The Major Bob Publishing Group that represents mostly country artists like Garth Brooks and LeAnn Rimes.

And the story is of course the same as before -- they sue MP3.com because MP3.com used their albums in My.MP3.com service without permission from the record label and now the label is looking for $150,000 / song.

Napster has posted a sign-up form on their website where users can volunteer to test their next generation, subscription fee based client.

Procedure is simple, you just type your email address in the box and hit submit. Napster doesn't offer their new client yet and we don't know how volunteers will be handled -- are they allowed to test the new client for free for a certain period of time and are they going to invite all the users who have submitted their email addresses to use the test client.

We'll see. If you're interested, visit their website.

Digital-Digest.com has reported that users have been experiencing problems with DivX ;-) playback when they upgraded their Windows 2000 with Microsoft's Service Pack 2.

This seems to happen in all players that are based on default Windows Media Player (most of the players), but as one of the users pointed out in Digital-Digest's forums that by using the Good Old Windows Media Player 6 (filename mplayer2.exe, you should find it from your system) everything should work fine. Problem seems to be with new version on WMP7 that somehow breaks the DivX codec (which is based on a hacked version of Microsoft's MPEG4 codec).

Of course this story might be one of these bad "urban legends" and not worth mentioning, but who knows.

Gracenote has licensed its CDDB CD information database service to car stereo manufacturer Pioneer. Pioneer intends to embed the CDDB in three of their upcoming car stereo systems. When the owner inserts a CD into the player the stereo's embedded software and hardware recognizes the CD and displays the title of the disc, the name of the artist, as well as the names of the songs. If a CD is not found from the local database, the user can use a mobile phone link to retrieve the information from the CDDB server on the Internet.

Sounds great. I'm looking forward to seeing how they embed a gigantic database into a small car stereo in a reliable manner.

Vitaminic, Italian-based rival of MP3.com that operates country-targeted digital music sites in 10 countries, posted its first quarter 2001 results and almost doubled its revenues compared to fourth quarter of 2000 (from 669,000 euros to 1.3M euros).

Company's consolidated gross operating loss was 2.64M euros compared to Q4/2000 loss of 5.9M euros. Company has acquired few additional web sites in this year, including IUMA, one of the oldest music promotion services in the world.

Live365, world's biggest "streaming community" that allows users to create streaming channels for free, has began beta testing for PocketPC-based streaming application that uses existing 2G / 2,5G networks.

Beta test will last two or three months and users can listen any of Live365's over 30,000 radio stations.

JumpTV, Canadian based company, began retransmitting nine international TV channels to Web users -- channels include two American channels (JAG Financial and NASA channel) and channels from countries like Italy and Thailand.

JumpTV claims it will begin retransmitting wide selection of American and Canadian TV channels later this year -- a move that has caused already problems with American TV companies. Company has said it has a required technology available to block users from Canada to view the channels -- a solution it hopes to cool down Canadian authorities.

You should read over earlier article about this issue -- you can find it from here -- to understand this issue better.

MP3.com announced this week that its artists will be able to sell their CDs also in digital only format -- basically this means that users can purchase all tracks from an album and those files are then stored into users My.MP3.com "locker" that user can then use to listen music from anywhere via the Internet.

Prices of these "netCDs" will be set by artists themselves, ranging from $3.99 to $30. Even that MP3.com claims this is something really radical, it's basically just selling music downloads "sideloaded" to a net-only harddrive -- same stuff what many companies have done for a long time now.

One of the best known on-going DMCA cases, the trial that tries to solve if it's legal to distribute DeCSS, got a weird twist this week, when appeals' court three-judge panel requested both sides of the case, website 2600 and MPAA, to answer 11 questions that seek to determine how to apply the First Amendment to computer code.

The judges also asked for arguments on the validity of lower court's decision to determine whether banning an online publication from linking to other sites infringed on the right to free speech.

"I've never seen this happen before," said one of 2600's lawyers, Martin Garbus of the law firm of Frankfurt Garbus Kurnit Klein & Selz. "What's clear is that neither Judge Kaplan's decision nor the briefs nor the oral arguments have given them the answer to the questions they think are the most important."

Mr. Garbus said the detailed questions indicated that the three judges Jon O. Newman, Jose A. Cabrenes and Alvin W. Thompson were preparing to write a definitive opinion on the case, rather than limiting themselves to ruling on lower court's Judge Kaplan's decision. The questions also suggested that the judges were thinking beyond Mr. Corley's (owner of the 2600 website) specific circumstances to how the ruling might apply more generally.

Ok, I know - old news, but I still assume that some of you don't read VirtualDub's news section daily :-)

So, the thing is that VirtualDub's (excellent open-source GPL video processing software) author (Avery Lee) is very angry about company called Vidomi. These guys are using pieces of VirtualDub's code in their propietary software (if you use GPL code, your program has to be GPL as well).

I don't want to write same stuff twice, so I just copy & paste this from Avery Lee:

GraceNote, company that owns CDDB database, has filed a lawsuit against Roxio, Adapatec's spin-off company that develops Easy CD Creator (the most popular CD burning program in the world). Lawsuit is about GraceNote's CD recognition system; Roxio/Adaptec has used the technology in its Easy CD Creator and has paid all the licensing fees as they were supposed to, but now they didn't continue their contract that expired 22nd of April with GraceNote and have plans to use similiar open-source database called FreeDB.org. GraceNote says that FreeDB, and therefor also Roxio, violates its patents and trademarks.

Timing of the lawsuit couldn't be worse -- Roxio is spinning-off from its parent company Adaptec, world leader in SCSI technology, and will begin trading in Nasdaq on Monday. Roxio doesn't want to comment the lawsuit because they haven't received a copy of it yet.

GraceNote's database is used for CD recognition -- users put their audio CDs in their CD-ROM drives, open a program that uses CDDB database and they'll see the CD information, such as artist, album and track names, instead of "Track1", "Track2", etc.. GraceNote's technology is used widely in audio players, encoders, etc. Using GraceNote's database is free for freeware software developers, but not for those who develop commercial programs. GraceNote's client list is impressive, including AOL, RealNetworks and MusicMatch.

Akoo, developer of a system which allows users to use their portable players to transmit the audio to their car stereos, and PenguinRadio, a company which has developed "stand-alone" streaming media receivers and also wireless streaming solutions, are about to combine their products into a "Internet car radio".

Basically how it sounds (for me, can't say for sure) is that they're going to use your GRPS (or similiar speed cell phone system) cell phone to receive the streaming data, plug in a module that changes the stream back to car stereo via regular AM/FM frequencies, so your stereo could easily pick up the signal.

If that's the case, it makes me to wonder why to do this in such a complicated way -- why not to release a car stereo that has cell phone's data features built in it? Anyway, this kind of development is the exact same thinking what we've been predicting for a long time; car stereos and other regular radio receivers will eventually be replaced with always-on (just like GRPS, 3G, etc...) cell phone networks and broadband wired connections.

PenguinRadio has distribution deal with Live365, world's biggest Internet radio provider, that has over 30,000 audio streams.

IFPI, the international recording industry's association -- kinda like global RIAA -- which has members in almost all western countries, including RIAA as a member, has launched a service called Songbird that aims to provide tools for musicians to check what is done with their music.

"Songbird gives music copyright holders a completely new insight into how Napster is using their music and, if they want to, take steps to get it removed," said IFPI Chairman Jay Berman.

The new search tool, developed by Media Enforcer LLC to give smaller players and independents a chance to track their work on Napster, was being publicly offered on the www.iapu.org Internet site from Wednesday, the IFPI said.

(sources: IFPI, Reuters)

Recording industry's cash-cow number two (right after consumers), MP3.com, is in trouble once again. Bunch of artists including Tom Waits, Randy Newman and Heart have sued MP3.com for violating their copyrights in My.MP3.com service. As usual, they're seeking for a maximum penalty of $150,000 per each track distributed over the service.

MP3.com has already lost similiar cases against Universal Music Group and TVT Records, so the case is almost clear even before it has really begun. MP3.com also settled similiar cases with other four major record labels and has spent millions of dollars because of their My.MP3.com service.

Funniest thing in this whole issue is the method how My.MP3.com used to work -- users could listen audio tracks online from albums they have already purchased. Problem was that MP3.com had created a music database so users don't have to encode each and every song they own and send those tracks to MP3.com's servers, but instead use shortcut by using MP3.com's copies of tracks and just authenticate that they have actually the CD -- and creating a music database violated copyrights...

An alliance of seven major technology companies are working on a digital watermarking technology. DVDs with embedded watermarks might hit the market as early as September this year.

The Video Watermarking Group (VMW) is a combined venture of Hitachi, NEC, Pioneer, Sony, Digimarc, Macrovision, and Philips. After months of negotiations the companies have come together to produce a digital watermark for DVDs.

The watermark is intended for use with future DVD recorders and players. The recorder or player will read the watermark and determine whether or not the copy is legitimate, can further copies of the disc be made etc. The watermarking will enhance the existing copyright schemes implemented on DVD (CSS and Macrovision). Watermarking also enables companies to track a DVD that has been copied.

"Watermarking is a discreet method of preventing copyright infringement," says Simon Poulter, a Philips spokesperson. "It’s very clever technology because it can be used for tracking to see where copies have come from when they turn up. This makes it a preventive solution insofar as it will deter people [from copying DVDs]."

The Motion Picture Association of America estimates its member studios annually lose $3.5 billion globally and $250 million domestically in videocassette film revenues to piracy.

MusicMatch announced yesterday that it has finally gained number 1 position in audio "bloatware" competition. MusicMatch Jukebox was the most popular all-in-one/jukebox audio software in March 2001, finally pushing RealNetwork's RealJukebox to number 2 spot.

According to Jupiter Media Metrix SoftUsage Home Reach Report released earlier this week, more than 3.95 million people used MusicMatch Jukebox at home during the month of March, compared to 3.79 million active users of RealJukebox.

RealNetworks
MusicMatch

LOS ANGELES--May 2, 2001--Hollywood Syndicate announced a forum to open the discussion of how to transform an underground phenomenon known as DivX into a new paradigm for media on demand.

Due to the explosive adoption of DivX video technology and the proliferation of quality media available on the Internet, the DivX Summit will discuss the many ways time-shifted, streamed, demanded, and collectable digital video will transform the viewer experience and the market for television, cinema, and home media. The event is set for July 30 and 31 at the Sofitel Hotel in Los Angeles. For more information, visit www.divxsummit.com.

"DivX and VCD are proof that the world of entertainment delivery is changing from push to pull, from distribution to hyper-efficient delivery determined by end-users, not providers. It is further evidence that Marshal McLuhan was right: The medium IS the message," said noted visionary Jim Griffin, chief executive officer of Cherry Lane Digital and a founder of Evolab.

DivX is a new video format that enables video to be squeezed down into a size that can be easily distributed through streaming, downloading, or sharing and can be blown up to full screen for more traditional viewing.

FileFreedom.com has announced the release of the FileFreedom SideKick, a new tool for users of file-sharing networks. The FileFreedom SideKick is a small program that is compatible with all file-sharing programs including Napster, Bearshare, IMesh, AudioGalaxy and others. The program brings features to the file-sharing experience previously reserved for online shopping sites, as well as community functions designed to unite traders regardless of their preferred method of downloading.

The FileFreedom SideKick does not allow users to download files, but works alongside a user's current file-sharing program. SideKick allows users to rate, review and comment on files they have downloaded, as well as read reviews by others that had previously downloaded that file. Users are presented with a suggested file list ("Others that downloaded this file also downloaded.") as well as a list of known filename variations to aid in subsequent searches. Messages can be sent to users in response to their reviews and each user is encouraged to keep a list of "friends" with similar tastes. The FileFreedom SideKick gives users complete access to their information. Users decide who can see their download history, create personal profiles to describe themselves,and send messages to other users using FileFreedom's internal emailing system.

Liquid Audio, a company focused to provide secure solutions for digital media distribution, announced yesterday that its going to lay off 40% of its employees.

Company says its going to shift its focus back to digital rights management and pull its focus away from its retail kiosks and other similiar businesses.