The city of Los Angeles has sued Take-Two Interactive Software Inc. over the hidden sex minigames in Grand Theft Auto: San Andreas. When a mod for the game known as "Hot Coffee" was released on the Internet to unlock these hidden games, it sparked outrage, especially from the Entertainment Software Ratings Board (ESRB). The game was given a new rating of "AO" which stands for "Adult Only". Since most retailers don't sell games with AO ratings, the company had to modify and release a new version of the game without the extra code.
Los Angeles City Attorney Rockard Delgadillo, accused the game publisher of failing to disclose the pornographic content included in the game. He said the company then further deceived consumers by blaming it all on hackers, which it accused of modifying the code to include the minigames. It turned out that the minigames were already present in the game, and all the Hot Coffee mod did was unlock them.
The lawsuit demands that Take-Two and Rockstar Games, the subsidiary behind "Grand Theft Auto," one of the best-selling in video game franchises history, stop marketing the games to children, pay fines and return $10 million in profits. Shares of Take-Two plunged 18.4 percent to $13.90 on the Nasdaq in late morning trade, after earlier hitting an almost three-year low of $13.68.
On January 10th, Paris District court ruled against the use of Digital Rights Management (DRM) mechanisms on Warner Music's Testify CD from Phil Collins. Warner Music will have to pay €59.50 in remedies for the plaintiff's damages, and a punitive fine of €5000. The court banned the "use Digital Rights Management systems on the Phil Collins' Testify CD as long as they block users from copying on any media of their choice". The decision was praised by consumer groups.
On group in particular was the famous French Consumer Association UFC-Que Choisir, which has been very active in the fight against digital rights management. While DRM's main priority is to stop music tracks from being shared on the Internet, it also causes problems for consumers. These restrictions often get in the way of users transferring music onto portable devices of their choice.
DRM would be best kept off audio CDs, as the main source of pirated music files on the Internet is semi-professional groups. If an anticipated album leaks online, within a few days it would be so widespread, it would be impossible to stop unauthorised distribution. So does DRM on CDs really have any positive effect for the music industry, or consumers?
RealNetworks is continuing to expand its online music services with the introduction of RealCommunity, a new service that allows unsigned bands and artists to setup their own profile pages and upload and sell their own music tracks. These tracks can then be rated by visitors to the community, which will judge which members make it onto the top ranked chart that will be highlighted on RealMusic, RealNetworks' recently launched online music service.
Tracks will also be available to buy via SMS message, as a ringtone sent straight to a mobile phone or a song downloaded straight to a computer. Artists will be selected from the bunch and promoted on the RealGuide homepage giving featured artists an opportunity to be in the spotlight. It certainly does sound like a useful service and if used correctly, could help an artist get some recognition.
"Joining the RealCommunity will give artists instant exposure and access to an entertainment-centric audience," commented Piers Heaton-Armstrong, Marketing Director at RealNetworks. "Our RealMusic and RealGuide sites are extremely popular with music lovers, so RealCommunity artists have a great opportunity to get noticed, build their profiles, and sell their music."
The Motion Picture Association of America (MPAA) has amusingly been accused of piracy for making an unauthorised copy of a documentary that was submitted for a rating. The documentary, "This Film Is Not Yet Rated", explores how the MPAA rating system works, and questions some issues such as whether there are stricter standards for rating explicit depictions of sex than for gruesome violence and whether independent films are rated more harshly than studio films. The MPAA admitted to making the copy of the movie, which was viewed by the MPAA President Dan Glickman.
Although while the trade organisation has in fact admitted to copying the movie without the filmmaker's permission, it denies that it broke copyright laws and accuses movie director Kirby Dick of exploiting the situation as a publicity stunt. Dick said he was "very upset and troubled" to discover that the MPAA had copied the film from a digital version he submitted for a rating. His lawyer, Michael Donaldson, has demanded that all copies of the film be returned and an explanation of how this unauthorised copy was approved.
The BBC has questioned some of the Music Industry's biggest players using the most frequent queries from users of the BBC News website. The questions were answered by John Kennedy, chairman of the International Federation of the Phonographic Industry (IFPI), Peter Jamieson, executive chairman of the British Phonographic Industry (BPI), Steve Knott, managing director of HMV UK & Ireland and Brad Duea, president of Napster.
The BBC summarized the 8 most common questions as follows...
Will download prices come down?
Should iPod users be punished?
Why buy on the net?
Downloads aren't flexible
What's the point of DRM?
Will downloads last?
How can teenagers be persuaded?
Have you ever stolen music?
I'll add in the real questions from consumers that the BBC put to them, an answer and a link to the rest of the answers. I have chosen questions 1, 2, 5 and 8 to provide you with a sample.
Question 1:Will the price of tracks or albums be reduced with the more cost-effective digital distribution method? You don't have to manufacture the CD, package it, send it to the distributor/wholesaler, and finally the shops.
Rowan Smith, Exmouth
Overall consumer spending on DVDs fell in 2005 despite the amount of discs sold being higher than it ever was. According to the report in the trade journal Screen Digest, average European DVD consumer prices fell by more than 11% in 2005 to just under €15. Price reductions put spending down by 1.7% even though more than 732 million discs were sold during the year. Paul Callaghan, Screen Digest analyst, said VHS tapes were likely to die out completely in Europe by 2008, leaving more room for DVD sales growth, although it would be slower than before.
The report, entitled European Video - Market Assessment and Forecast to 2009, found that 60% of Western European homes owned a DVD player or a DVD recorder but in Central and Eastern Europe, there is room for growth as just 12% of TV households have a DVD player. Overall, spending on DVD rentals are thought to have reached about €2.2bn. The report covered 22 countries in detail.
The report suggest that, despite growth in other parts of the continent, the majority of spending on DVDs occurred in the more affluent countries in Western Europe. Three quarters of DVD consumer spending took place in UK, France, Germany, Italy and Spain, the continent's five largest video markets.
According to the International Federation of the Phonographic Industry (IFPI), global music sales fell again in 2005 despite a huge rise in online music download sales. Chairman of the IFPI, John Kennedy said that global music sales fell by 2% after remaining flat in 2004 amid a four year slide. According to a separate report by the IFPI, there was a threefold increase in digital music revenue, while illegal file-sharing volumes changed little.
The look now has to go beyond piracy for the obvious possible goods and services that are taking a bite out of music sales. "Piracy in all its forms has been the major factor in this reversal but not the only factor." EMI chairman Eric Nicoli said. He cited increasing competition from other categories of consumer goods. "Twenty years ago there were no mobile phones, no DVDs, no computer games to speak of." he said.
"In categories that did exist, like magazines, cosmetics and designer clothes, we've seen a massive explosion of choice and accessibility to consumers. So no surprise, then, that music sales have come under pressure." he added. To attempt to increase revenues, some record labels have been pressuring Apple to allow variable pricing on tracks offered by the iTunes music store. Apple so far has insisted that a blanket price per track is the best way to go and is unwiling to change its stance.
Eric Nicoli, the chairman of the EMI group, has said that digital music will make up for the loss of music sales and become a quarter of the music industry's sales by 2010. He also commented about the poor success and promise shown by music subscription services and mobile music downloads. "Our belief is that the [total] market will be bigger in 2010 than it is today - and potentially much bigger," Nicoli said in an interview with Reuters.
"We've seen a tripling [of download sales] in the last year and we've hardly gotten started," he said. "The day is surely within our sights when digital growth outstrips physical decline and we can all compete for share of a growing pie." So far, most music services are failing to provide real competition to Apple's iTunes music service, which has been surprising to the labels, especially when they are offering subscription services.
"We thought subscriptions would be huge - they haven't been," Nicoli said. Mobile music downloads are also not proving to be popular enough yet. "We're at year zero - if that - with mobile," he said. He commented that allowing consumers to download individual tracks from albums (or the "unbundling" of music) is vital to the success of digital music. "The pessimists will say that's a problem, but our research suggest that the net effect of unbundling is a positive," he said.
iMesh, a well known P2P software company, has signed a deal with MusicNet to provide it with songs as it attempts to create a legal download service. MusicNet is also behind many of the catalogues offered by other legal services including AOL and Yahoo. iMesh will offer tracks as one-off downloads and will also offer a subscription service. Customers will be allowed to share their music but when you try to download a protected track, you are prompted with an opportunity to purchase it.
Anyone using the subscription service can download as much music as they like just like before, only now the music will be more limited and record labels will get paid for it. iMesh will also connect users to the Gnutella P2P network so they can download what the company calls "unclaimed" works and promotional content. The P2P client will most likely come with some sort of scanner to ensure that the content being downloaded is not represented in MusicNet's catalogue.
MusicNet claims to have "the largest available music library in the industry today". iMesh hopes to merge this long list of tracks with more content that the Gnutella and iMesh networks can provide. "In addition to the licensed tracks from MusicNet... the P2P community has access to over 15 million tracks at any given time culled from the Gnutella and iMesh networks," the company said.
A company called TVMyPod is raising legal questions by selling video iPods to its customers that are pre-loaded with TV shows or movies that the customer wants. The company can fill your iPod with content that is available to buy on DVD. After it has copied the content to the iPod, it sends it along with the original DVD to the customer. TVMyPod co-founder Vijay Raghavan said most people haven't got the time or technology to convert their movies and TV shows to put them on their iPods.
The vast majority of retail DVDs contain copy protection and under the Digital Millennium Copyright Act (DMCA) it is illegal to circumvent these protections. However, Raghavan insists that the company's methods to not use any decryption. He also commented that moving content to the device is a one way transfer and since the customer gets both the original and the copy, it is legal under the fair use provisions of the U.S. Copyright Act.
"It's kind of an obsolete law since Congress was not taking into consideration portability," Raghavan said. "These players are exploding on the market, but the legality of it can sometimes be in a gray area." TVMyPod isn't actually charging for its services yet, so all customers have to pay is the cost of the iPod and the price of the DVD as it appears on Amazon. The company does plan to introduce set prices however, and also is looking into a subscriptions service to keep content up to date. Customers will also soon be able to send in their own iPods they bought elsewhere.
Digital Playground, a US adult film maker known as an innovator in bringing porn to personal computers, has thrown its support behind the Sony-developed Blu-ray Disc format. "We feel that of the two formats, it's the one that's more future-proofed," Digital Playground's president and founder, who identifies himself as Joone, said. Blu-Ray is competing with Toshiba's HD DVD format, and so far seems to be gathering the majority of support, particularly from Hollywood studios.
Even though Digital Playground has picked a next generation format to run with, it has not yet managed to find a company willing to mass produce its content in the new format. Joone says this is because companies that replicated DVDs are hesitant to embrace the porn industry and are committed in putting mainstream Hollywood's movies onto the new discs. However, the Blu-ray group is happy for the new endorsement as it shows the format's wide appeal.
"It shows that Blu-ray is appealing to film genres of many types," said Andy Parsons, a spokesman for Blu-ray and a senior vice president at Pioneer Electronics. The format war will kick off properly this year with the launch of both formats and new players within the next few months. Both sides also have a planned offering of high definition movies for 2006.
According to research by Nielsen NetRatings, the popularity of the iPod is helping to drive much more traffic to Apple's iTunes site. The firm found that traffic to the iTunes site had grown by a massive 241% in 2005. Between December 2004 and 2005 the numbers of people going to the site regularly grew from 6.1 million to 20.7 million. The firm said the figures show that more than 14% of the net's population is using the iTunes service.
"Consumers have clearly indicated that they are eager to control their own music libraries, one song at a time," said Jon Gibs, director of media analytics at Nielsen NetRatings. The iPod music player has been the most successful MP3 player to date with over 14 million iPods sold over the holiday quarter. Taking that number and the fact that you can only get legal songs for iPods from iTunes into account, the huge increase in traffic is not exactly surprising.
However, the research didn't just focus on things we already know. It found that 12 to 17 year olds made up a disproportionately large group of iTunes users. They were more than twice as likely to visit the music store than any other population group. It also found that iTunes users were 2.2 times more likely to own a Volkswagen than other Internet users, and that Audi and Subaru cars were popular amongst the users as well.
Imation, a well known manufacturer of blank media products and other data storage products, has agreed to purchase its competitor Memorex in a $330 million deal. Also, depending on future financial performance, additional payments of $5 million to $45 million may be paid. The acquisition would complete in the second quarter, and Memorex should be fully integrated with Imation by the end of the year, according to both of the companies.
The combined company would maintain Memorex's Cerritos, California headquarters. "Added to our technology expertise, strong B2B brand, global footprint, broad product portfolio and industry experience, we are creating a new global powerhouse in the data storage industry," said Imation chairman and CEO Bruce Henderson.
Earlier this month, Imation also announced it has begun its scale-up of manufacturing for HD DVD and Blu-Ray optical recordable media in preparation for product introduction in early 2006.
South Korean electronics giant Samsung has announced that it has completed its development of Blu-ray Disc drives. The announcement paves the way for the release of players for the Sony-developed next generation format. The company did not give any price information however, and didn't give any release date, just that they would appear later in 2006. In statements to the press, Samsung highlighted the improvements that both HD DVD and Blu-Ray disc have made over the DVD format.
Samsung is a member of the Blu-ray Disc Association but has indicated in the past that it might work on dual-players for both formats. The company is set to sell the first Blu-ray disc standalone player, the BD-P1000, in April. It comes with a price tag of $1,000 so many consumers might want to wait and get a PS3 for about half that price if industry guessing turns out to be correct.
Speaking in an interview with News.com earlier this week, Nintendo's executive vice president of sales and Marketing Reggie Fils-Aime said the Revolution console will go on sale later this year for less than $300. He also took the opportunity to criticise the company's rivals for the high prices consumers have to pay for their new consoles. As an example, he said a consumer would need to spend $700 to properly experience what the Xbox 360 console has to offer.
The PS3 is also rumored to go on sale for about $500. "We resolve at Nintendo to remain within reach for the vast majority of our consumers," Fils-Aime said. The news of the Revolution's cheaper price tag sent Nintendo's shares up 6.4% in Japan to 16,090 yen on Friday. Fils-Aime believes that the cheaper price will attract new gamers that are scared off by the other consoles' prices.
He also said that the Revolution's game line-up will attract gamers that are constantly forgotten about such as women or people aged over 35. Developing games for the console will apparently be far cheaper than for the Xbox 360 or PS3, which are rumored to require intensive labor and are expensive to develop for. No details were given by Fils-Aime about the games that will be available for launch, just that the company will show some titles at E3.
The chairman of the International Federation of the Phonographic Industry (IFPI), John Kennedy, has said that legal advances and key victories worldwide in the recording industry's fight against illegal file sharing were helping to contain the problem. He made his comments at the MIDEM music trade fair in Cannes. He called on Internet service providers to begin blocking Internet access to persistent illegal file sharers and condemned the French proposals to legalise online sharing of copyrighted music and movies.
Kennedy said that judgments by four courts in Australia, Korea and the United States represented "a real sea change world-wide" that would help the digital music business to grow. "We believe we are containing the problem," he said. He said that the 20,000 lawsuits against individuals in 17 separate countries "are changing consumers' attitudes". Legal downloads of single music tracks more than doubled in 2005 to 240 million.
As for the French proposals, Kennedy said he was optimistic that the French wouldn't go through with it. He said the move would kill the French music Industry. "I can't believe that at the end of the day, the French government will want this," he said. According to EMI Europe chief executive officer Jean-Francois Cecillon, just 20 million of the 1 billion tracks downloaded in France in 2005 were legally bought.
Eric Nicoli, the chairman of the EMI Group PLC, has condemned French moves to legalise the sharing of copyrighted music on the Internet through the introduction of a so-called "global license". "If France continues down this road it could jeopardise the promising growth we’re now seeing in the legitimate online market," he said. EMI is the worlds No. 3 major record company. Nicolo has urged a rethink by the French government, fearing the damage a global license could do to the developing music download market.
The French government is expected to publish new proposed amendments to its copyright bill soon. Last month, deputies voted to introduce a global license that would mean any Internet user willing to pay a few extra euros on top of their subscription charges could freely copy music online. This extra fee would be distributed amongst artists and copyright holders.
While consumer groups have welcomed the vote, music labels and retail chains have lined up to condemn it. "France has always respected copyright and supported creative industries, so it seems an aberration that the government has taken a first step towards a global licence," Nicoli said, in a keynote speech at Midem, a global music industry gathering in Cannes. "I urge the French government to reconsider and reverse these proposals. Protection of copyright is of utmost importance in any business relationship within the digital arena."
After the Consumer Electronics Show, many believed that the launch of the PlayStation 3 console from Sony would suffer similar shortages and other problems experienced by Microsoft during the launch of the Xbox 360 console. An analyst at Pacific Crest Securities estimated earlier this week that about 1 million PS3 consoles would be available for a November launch. However, that figure is nothing in comparison to the amount of consoles that Pioneer executive Andy Parson thinks will be available.
While speaking with The Digital Bits, Parsons discussed the Blu-Ray format and how the PS3 would mark the success of the format. He then gave his comments on the upcoming PS3 launch. "The PS3 is launching right at the forefront of Blu-ray disc," Parsons said. "If Sony ships the kind of numbers we expect them to this year, that will provide a very rapid growth of players out there hungry for titles. We've been hearing between 4 (million) and 7 million (PS3s) could ship."
Microsoft experienced shortages during the Xbox 360 launch in the US and Europe. The company originally aimed to ship 3 million units within the first 90 days but later adjusted its figures to 4.5 million to 5.5 million by June. Despite Sony's previous aim for a Spring 2006 launch, industry analysts believe the console wont reach North America until later this year, with a possible mid-year launch in Japan.
The results of a four-year study conducted in the UK have indicated that no matter how frequently you make calls with a mobile phone, your risk of developing brain tumors remains the same. The results were published Friday in the British Medical Journal. It focused on the incidence of glioma in phone users. Glioma is the most common form of brain tumor. The study was conducted by the Leeds, Nottingham and Manchester Universities in conjunction with London's Institute of Cancer Research.
966 people aged between 18 and 69 with glioma brain tumors were interviewed along with 1,716 randomly selected healthy individuals. The interviews took place between 1 December 2000 and 29 February 2004. Researchers asked questions about how frequently the phone users made calls, the average duration of the calls and even the make and model of the phone itself.
The results contradicted earlier studies including one Swedish study that showed mobile users in rural areas had an increased risk of tumors because base-stations are further apart, forcing the phone to operate at higher power. The UK study found no evidence to support this link. However, other past studies also pointed to increased risk on the side of the brain closest to where users hold their phones.
The UK's National Consumer Council (NCC) has called for new laws to protect the rights of consumers to properly use purchased digital content. In a submission to a parliamentary inquiry into technologies that limit what people can do with CDs, DVDs and downloaded media, the group said that anti-piracy efforts were eroding established rights to digital media. The NCC fears a self-regulated industry will fail adequately protect consumers' rights.
The group said that honest consumers were constantly clashing with digital content protections that were put on their products by major record labels or movie studios. Many consumers complained about not being able to easily move digital copies between devices, like the thousands of iPod owners who couldn't store music on their iPods because of DRM. The NCC said such digital locks are "constraining the legitimate consumer use of digital content."
It said that rights established by consumer protection and data protection laws were being undermined. "Consumers face security risks to their equipment, limitations on their use of products, poor information when purchasing products and unfair contract terms," said Jill Johnstone, the NCC's director of policy. As an example, the group pointed out the recent XCP and MediaMax discoveries that turned into an on-going public relations nightmare for Sony BMG.
Apple has made some changes to its iTunes software to address privacy concerns raised by bloggers over the included MiniStore feature. The MiniStore feature sends the data about a selected track to the iTunes music store just to help make recommendations, but bloggers discovered that it also sends unique identifiers for a computer and iTunes account. They criticised Apple for not being more open about the data that was being collected or what was being done with it.
The revised iTunes will now warn users about the data being collected and let's them easily disable the recommendation feature. Apple issued a statement describing the changes made and ensuring iTunes users that nothing has been done with the collected data. The feature also sent back data on songs not bought from iTunes and made recommendations on similar tracks available in the store.
Softvault, a Washington based Intellectual Property company, has sued Microsoft and many other tech firms including Yahoo for alleged patent infringement. The main patent in question is "US patent 6,249,868". It covers security components for a computer which can enable or disable systems by use of a remote server. Softvault also claims that the companies it has targeted are infringing another one of its patents, US patent 6,594,765.
The main action is against Microsoft. It was filed in the Eastern District Court of Texas. Softvault alleges that products with the feature include Windows Server 2003, Windows XP, Microsoft Office XP, Access 2002, Excel 2002, Vision 2002, Visual Studio Net, Office 2000 SR-1, Project 2000 SR-1, PowerPoint and other products. Softvault also alleges Microsoft infringes US patent 6,594,765.
Another case against Yahoo, Napster, Creative Labs, Dell, Gateway, Iriver, Samsung, Toshiba, Digital Networks, Palm, Audiovox, Sandisk and Thomson relates to the same patents but is slightly different. Softvault alleges that Microsoft distributes the Windows MediaDRM software, which breaches its patent, and the other tech firms use the same DRM so they also infringe the patents.
For years the streets of San Salvador have been full of street vendors selling bootleg copies of CDs and DVDs for very low prices. Now, new tougher copyright laws have come into place since 1st January this year which include a mandatory jail sentence for selling pirated software movies or music. The new copyright laws were part of El Salvador's implementation of CAFTA. CAFTA provisions on intellectual property increased penalties for piracy.
Salvador Canjura described on his blog how the average price of a pirated DVD went down from $3 to just $1 in the last week of 2005. The interesting thing about these cheaper counterfeit goods, is they contain political messages from the street pirates urging their customers to vote against the political parties who voted for the new copyright laws.
Additionally, many of the vendors took to the streets demonstrating against the laws. They are demanding that their government "take steps to address the destruction of their livelihoods." The street protests included blocking traffic and burning tires. You can see some pictures of the protests here.
In an interview with Betanews, Toshiba expert and HD DVD representative Mark Knox, gave some details about the HD DVD optical disc drive technology and also downplayed advantages held by Blu-ray while highlighted some problems with the Sony-developed format. One of the first things he highlighted was Blu-ray's numerical aperture, which is rumored to be the cause of production problems for Blu-Ray. The aperture setting on standard DVD is 0.6, with the setting for HD DVD a slightly smaller 0.65.
The additional capacity is then provided by the blue laser technology. On the other hand, Blu-ray has adopted a 0.85 aperture. This means the divots on the optical layer are smaller and more prone to errors. It also requires a thinner disc and smaller layer spacing, making the disc even more vulnerable. At first, Blu-ray discs were designed with an external cartridge to protect the disc, but now the group is utilizing a protective coating which has not yet been finalized.
Knox also explained why he believed the higher storage capacity advantage held by Blu-ray wasn't a very big issue, at least for movies. He said through the use of better codec technology, an extra 20GB is not needed. The Blu-ray group also revealed to Betanews that most movie discs will not go over the 25GB mark. Knox then went on to point out the manufacturing issues with Blu-ray disc. HD DVD's requirements are similar to those of DVD, eliminating manufacturing problems, whereas there will be little room for error in the Blu-ray manufacturing process, as well as the reading of discs by Blu-ray players, he said.
In Brooklyn and Queens, pirate broadcasters are rebroadcasting Howard Stern shows on conventional FM radio frequencies. Stern's show originally broadcasts on satellite radio. What makes this interesting is Stern was chased off public airwaves by the FCC because of the content of his shows, so will this bring the FCC to the pirates' doors? A complaint is needed at first to begin an investigation and obvious candidates are Sirius or Stern himself.
The FCC regulates the airwaves. It was created to apportion and license spots on the radio dial, making sure signals didn't bleed over. Of course, nowadays licenses are worth a fortune, from $20 million to $100 million for a good signal. The small holes remaining on the dial can be filled by pirates with broadcasting hardware that can cost only a few hundred dollars.
Some of these "pirates" see themselves as freedom fighters and prefer to be called "free broadcasters". They often offer programming that is ignored by conventional broadcasters for several reasons. For example, there are pirate stations dedicated to just heavy metal because the commercial radio broadcasters decide such music isn't in the interest of their advertisers.
New York Attorney General Eliot Spitzer recently launched an investigation into price fixing in online music sales but now he is also being requested to investigate how record labels charge music subscription services, such as those offered by Napster and Real. Sources inside the music industry say that each agreement made between a major record label and a service includes a "most favored nation" clause. MFNs basically mean that a service would have to increase payments to a label if another label strikes a better deal.
So for example, if Label A was receiving 10c per a song streamed to a customer, then Label B signs a deal for 12c per song, Label A automatically will now also get 12c per song. It is a common practice in retail for example, where a company would come to an MFN agreement with a wholesaler. However the existing music subscription services frown upon MFNs being involved in their business.
"Seller-side MFNs are inherently price-increasing and anticompetitive," says Jonathan Potter, executive director of the Digital Media Association. Among the members of the Digital Media Association are Apple, MSM, AOL, Yahoo, Napster, MTV, MusicNet Inc. and RealNetworks. MFNs cause a collusion on pricing and force subscription services to pay additional costs, which might made up by charging consumers more for the service.
Attempting to merge fashion with the latest in tech gadgets, jeans giant Levi's has introduced iPod-compatible jeans. The RedWire DLX jeans are not due out until Autumn this year though. It has a joystick remote control built into the watch pocket allowing owners to navigate through their iPod's contents and change the volume without having the take the device out of their pockets. A separate pocket will hold the iPod and also conceal the bulge from it.
It also features a built in retractable headphone unit to prevent tangled wires. The company also said a red conductive ribbon will keep wearers connected while allowing them to remove the iPod from their pockets to view the screen. "The Levi's RedWire DLX jean is the latest extension of the Levi's brand leadership position, by merging fashion and technology that provides consumers with the most innovative way to enhance their portable digital music lifestyle."Robert Hanson, Levi's US brand president, said in a statement.
More than 100 countries sell the ultra-popular brand jeans. This is an example of why the iPod enjoys so much success; it is not just a device to play music in some people's minds, it is a fashion accessory. This does not make iPods the "best" players by any means, but it keeps them on top as the most popular.
Apple Computer Inc. can rest assured that its iPod music player will dominate the market for some time yet, but why is it that these very expensive, small (or tiny in Nano's case) devices are so popular? Is it because they reign over everything else in audio or video quality? Not really. Most of the success just comes from very good timing on Apple's part. Take iTunes for example; the recording industry was complaining about file sharing piracy when it offered no alternative. Apple was smart to get there and offer that vital legal alternative.
The iPod, which made its debut in 2001, isn't really just a digital music player either. It has become a fashion accessory also. The advertisements for iPods also have a great effect on consumers, especially when you consider they feature the most popular music at the time and some of the world's biggest stars such as Eminem. That alone is enough to draw the attention from millions of kids all over the world who then continue to add iPods to their wish list for Christmas or birthdays etc. And boy, they sure did that in 2005.
During the holiday quarter, more than 14 million iPods were sold. That figure could have even been much higher as many interested consumers couldn't find stores with any left. "Absolutely there were times when we would find ourselves out of stock," says Lori DeCou, spokesperson at Best Buy Canada Ltd. Indigo reported iPods sold out as fast as they came in. Since the iPod is so popular, some consumers have even begun to incorrectly refer to all MP3 players as iPods, regardless of the real make.
A new feature in Apple's iTunes music software was widely criticised because it collects data on the tracks users select in order to make recommendations on other music tracks to purchase. The MiniStore feature sends the data about a selected track to the iTunes music store just to help make recommendations, but bloggers discovered that it also sends unique identifiers for a computer and iTunes account. Users said Apple had to be more open about data being collected.
The company was quick to respond however to tell concerned users that it doesn't store the collected data. Additionally, Apple does mention in the licence agreement for iTunes that it contacts the Gracenote music database to work out which album is being played via the program. Still though, privacy advocates complained that Apple had not done enough to warn people about the information that was being collected, nor what was being done with the collected data.
"Apple should be clear about its information gathering practices," wrote blogger Marc Garrett, who wrote a journal entry about MiniStore and the data it passes back to Apple shortly after the update. The feature doesn't just collect data on music you bought from iTunes in your playlist either. In the past, Microsoft and RealNetworks have gotten into trouble for similar snooping. However, in those cases, neither disclosed their actions.
After announcing at the Consumer Electronics Show that the company will offer an external HD DVD drive for the Xbox 360 console, Microsoft has now indicated that if Blu-Ray is the favored format for consumers, it may also offer an external Blu-ray drive. Microsoft still remains completely in support of HD DVD however. Peter Moore, head of Microsoft's Interactive Entertainment Business division was quoted by Japanese web site ITMedia as saying the Blu-ray drive is a possibility.
Sony's next generation console, PlayStation 3 (PS3) is expected to be released later this year, and will include a Blu-ray drive. Due to the popularity of PlayStation, this will effectively put a Blu-ray player in many homes very quickly. The next generation format war is getting increasingly close to the console war, a fact that upset Warner Home Video president, Warren Lieberfarb, who slammed Sony Corp. for its tactics promoting Blu-ray.
A Blu-ray add-on for the Xbox 360 would be neat though for owners who have no intention to buy a PS3, as it would probably be much cheaper than buying a Blu-ray player. That being said, it would depend on when exactly Microsoft would decide to release one.
Apple Computer Inc. has launched legal action to have patents held by Burst.com declared invalid. Burst approached Apple in 2004 in an attempt to agree licenses for the use of its technology. The company's legal team informed Apple that it is infringing its patents, and that it would launch action. Of course, Apple denies that it is infringing the patents. The company sued Burst in the US District Court in San Francisco requesting declaratory relief to determine the patents invalid.
Burst has warned that it will respond to the litigation brought by Apple with a counterclaim for patent infringement shortly. Burst settled its patent and antitrust suit against Microsoft last year, which saw Microsoft taking a licence to Burst's patents and paying $60 million. "Burst remains committed to the enforcement of its intellectual property and looks forward to successfully resolving this litigation through a licence covering Apple’s QuickTime, iPod and iTunes products, including Apple’s iTunes Music Store," the company said.
Two more men who were nabbed as part of Operation Copycat, which targeted warez group members have pleaded guilty, bringing the total to 10 of 14. Paul Aleman, 25, of Menafee, and New Jersey resident Philip Kang, 22, entered guilty pleas in a federal courtroom in San Jose today. Operation Copycat was part of a much larger, now infamous International piracy crackdown dubbed Operation Site Down that targeted some of the best known warez groups on the Internet.
Federal prosecutors say that warez groups are responsible for most of the pirated material that can be found online. They said when a group makes a "release", it spreads to top-level servers in a matter of minutes, and then continues to filter down through P2P networks and BitTorrent sites where they will can be downloaded by anyone with a decent Internet connection. To further demonstrate the scale of the worldwide operation, federal prosecutors showed some directory lists they had obtained.
They included more than 750 movies such as Star Wars: Episode III- Revenge of the Sith, Batman Begins and Bewitched which were uploaded by groups within hours of theatrical release. The list also included 1,250 computer games and over 180 major software titles. Operation Site Down had a dramatic effect on the entire worldwide network, but you don't have to look very far to see that the scale of releases is still huge.
To make investing in next generation disc formats more comforting for consumers, the sale of a device capable of playing both would be ideal. However according to many executives and analysts, intellectual property issues, legal agreements and simple pride will keep such a consumer-friendly option at bay for a long time. "Until everyone agrees to check their egos at the door and help the consumer, there is nothing we can do about a universal product," said Peter Weedfald, a senior vice president of marketing at Samsung North America.
The battle between HD DVD and Blu-Ray Disc continues to heat up after the announcements from both camps at the Consumer Electronics Show. Both revealed very similar upcoming movie releases and the first players for the discs. Each side is confident that they have the best format with consumers interests in mind. Microsoft also announced plans to release a HD DVD add-on for the Xbox 360 console so owners could enjoy high definition movies with the console.
In the week between Christmas day and New Years Day, music downloaders purchased over 20 million tracks, smashing the previous record of 9.5 million which was set just the week before. Of course, the obvious explanation for the boost in downloads is the number of people who received MP3 players or download vouchers as gifts. The figure of downloads was more than three times the amount over the same period in 2004. However, while the numbers are growing at a huge rate, they still haven't caught up with P2P.
BigChampagne, a P2P monitoring company estimates that music tracks downloaded from P2P still beat those downloaded from legitimate sources at a ratio of at least three to one. The company believes that up to 250 million tracks can be downloaded in any week on file sharing networks. P2P services would have also seen a massive amount of new users after Christmas looking to get tracks for their new MP3 players.
For the first time ever, MP3 player sales have surpassed those of personal CD players according to NPD. "We have definitely moved from MP3 players being a computer-oriented product to a consumer-directed product," said Stephen Baker of NPD.
The European Union plans to add a 14% import duty onto imported LCD monitors. This action will lead to a huge hike in prices. It applies to any screen over 19" in size and applies to monitors that are not produced in the EU, which is the majority of monitors imported. Philips, for example, manufactures most of its LCD monitors in the Far East. Dutch trade organisation ICT Office believes the tariff will cost its members millions.
The Netherlands last year became the first EU state to impose a 14% tax on DVI screens as a result of an EU directive signed in 2004. The Dutch State Secretary of Finance then decided that LCD screens classified solely as a computer monitor would have to be taxed also. ICT Office says that the EU tariff conflicts with the Information Technology Agreement (ITA). It states that levies would not be encouraged through future trade agreements.
During the Consumer Electronics Show in Las Vegas, Google made an announcement that it will soon launch a service called Google Video Store that will feature prime-time TV shows from CBS, basketball matches from NBA, music videos from Sony BMG and more.
Move puts Google in direct competition with Apple, who launched its expansion of iTunes to include videos back in October, 2005. Apple's main partner has been ABC, whose shows like Lost and Desperate Housewives, have proved that an on-demand TV show service (even though its main output device is iPod) can be a commercial success.
Content from CBS will contain titles like CSI, Survivor and Amazing Race. NBA will offer current season's games 24 hours after they finish and will also offer some "outstanding performances from the past" via Google's service.
However, Google might have made one big mistake with its service, as it stated that prices of shows are determined by each content provider individually and that there's no minimum or maximum limit for pricing. Many analysts have agreed that part of Apple's success has been fixed pricing, where each song, album and TV show cost the same (videos cost $1.99 via iTunes) and knowing how the content industry works like, it sounds very likely that at first, the pricing will be low, but once people get used to the idea of buying TV shows, the prices for most popular shows will skyrocket.
The iPod NanoMP3 player from Apple Computer Inc. is one of the most popular digital audio players of all time because of its small size, design and decent storage capacity. The 2GB and 4GB models have earned Apple massive profits, selling out easily. Even reported problems and lawsuits surrounding the player's unique ability to gather scratches did little to reduce its popularity amongst consumers. Samsung and SanDisk are just two of Apple's long list of rivals, and both companies want to compete with the Nano - meet the Samsung YP-Z5 and the Sandisk Sansa e200.
Samsung YP-Z5
The new Samsung TP-Z5 does not look much like a Nano at first glance, but it comes in small silver and black models, 2GB and 4GB available, just like the Nano. It is also around the same size as the Nano. It has two main advantages over the Nano; firstly it has a 1.8in colour LCD screen in portrait orientation (compared to the Nano's 1.5in landscape display) and it has a 38 hour battery life (compared to the Nano's 14 hour battery life).
Samsung Electronics Co. Ltd. has unveiled the first Blu-ray Disc player that will be available in April. The price tag is quite high at $1,000. The BD-P1000 was unveiled at the International Consumer Electronics Show. The device will play video content from BD discs at 720p or 1080i which the player will output to HDTV using High Definition Multimedia Interface (HDMI). Toshiba also unveiled the first two HD DVD players that will be released in March, for up to half the price.
"Samsung's Blu-Ray player will be the first available to consumers, and we will continue to innovate with our introduction of a Blu-ray recorder later this year," said President Geesung Choi of Samsung Electronics' Digital Media Business. "With today's announcement and those to come, Samsung is demonstrating its leadership in driving the next generation optical format."
In a move following the company's 2005 decision to cease producing iPods, Hewlett-Packard has now stopped distributing Apple's iTunes software with its PCs. Instead the company will now distribute Real Network's Rhapsody software. HP had been distributing iTunes with new PCs since 2004. The deal had been announced at the Consumer Electronics Show in Los Vegas. Now that HP is distributing Rhapsody instead of iTunes, customers will also receive a 30 free trial to Real's music subscription service.
iPods sold by HP accounted for about 5% of all iPod sales. The popularity of the iPod has lead to massive profits for Apple, but not a lot was gained for HP. The original deal with Apple was secured by the former HP chief executive, Carly Fiorina, who was ousted from the company in February 2005. It wasn't until July that HP ended the iPod deal with Apple under new chief Mark Hurd.
Backers of the Toshiba-developed HD DVD format have promised consumers 200 movies releases in 2006, with about 50 by May. Paramount Pictures, Universal Studios, HBO Video, New Line Entertainment and Warner Home Video gave details of the movie releases at CES. Harry Potter 4, Million Dollar Baby, Sahara and Sky Captain and the World of Tomorrow were among the list of new movies to be released on the HD DVD format. Some classics such as Full Metal Jacket and Blazing Saddles were also named.
Nancy O'Dell, host of Access Hollywood, said that the five studios represent over half of the movies ever made. Europe's Studio Canal and the Weinstein Co., responsible for hits such as Shakespeare in Love, also will come out with movies in the HD DVD format, according to the HD DVD Promotion Group. "HD DVD is now playing," said Yoshiihide Fujii, CEO of the Digital Media Network Co. of Toshiba. "HD DVD delivers a quantum leap in how consumers view video."
Infinity-mods posted a very short note on the site's homepage on 2 January claiming the have received Xbox 360 modchips for testing, and to expect sales within 2 weeks. Today, the site revealed more on the Modchip. The name of the chip is I.C.E. Here are the details that were given on the site today...
Jan. 5th, 2006 - Due to massive emails regarding the xbox 360 chip, we will provide you some more details. Price is retail $70, Wires are 20-30, Install time is approx 25 minutes, able to direct boot backups, dumped ios, or full rips. Name is I.C.E. Chip
Of course, most Xbox 360 owners are skeptical about the claim since the launch of the console was only weeks ago. Information alone is useless to convince people, we will need to see it to believe it. It will be a major blow to Microsoft though if it is true, since the company has touted tougher security on the console.
Toshiba America Consumer Products, L.L.C. ("Toshiba") has unveiled the details of its line-up of HD DVD players for the U.S. market. The two players, HD-XA1 and HD-A1 will cost $799 and $499 respectively and will be available in March 2006. Toshiba has originally priced players at $1,000 before the launch was delayed. The company said both players will take full advantage of the capabilities of the HD DVD format. Of course, both players will connect to TV sets using HDMI.
"As a leader in home entertainment and a pioneer in DVD technology, we are very excited to introduce our first HD DVD players for U.S. consumers," said Jodi Sally, Vice President of Marketing, Toshiba America Consumer Products Digital A/V Group. "With the support of some of the hottest films, we can confidently say that Toshiba's HD DVD players will come to market with important industry backing in time to meet the HDTV transition."
Both players have backward compatibility so owners can still enjoy their DVD and CD collections. DVDs can also be upconverted to output resolution of 720p or 1080i which is useful if you own a good HDTV. They support the video compression standards of MPEG-4AVC and VC-1, as well as MPEG2, both models will utilize a new video decoder chip developed by Broadcom.
After much speculation around the subject, Microsoft has revealed that it plans to release an external HD DVD drive for the Xbox 360 later this year. Microsoft Corp. Chairman and Chief Software Architect Bill Gates revealed the plan during his keynote speech at CES. He didn't give any details about the price of the add-on or any more details on when it will be available. Microsoft's decision to use the existing DVD format for games has been frowned upon by many, considering the PS3 console will use Blu-ray Disc technology.
Whether games will ever be released for the Xbox 360 on HD DVD discs is anybody's guess but it is unlikely. It is intended to be a solution for consumers to watch HD-DVD movies with. Of course, with Blu-Ray Disc holding most of Hollywood studio support under its belt, you have to question whether there will be much reason for Xbox 360 owners to purchase this add-on, if it is only really intended for video. There will be plenty of HD DVD movies available soon, but with the format war ongoing, such an add-on could become less useful if it goes bad for HD DVD.
The Walt Disney Company has announced that it plans to make more content available on Apple's iTunes store from networks including ESPN and ABC Sports, ABC Entertainment and Touchstone Television, ABC Family, ABC News, Buena Vista Television, Disney Channel, and SOAPnet. In addition, content produced by Walt Disney Feature Animation will be available. The most interest in the new shows will probably lean towards sports as the network will offer condensed versions of all four BCS Bowl Games, Tostitos Fiesta Bowl and Nokia Sugar Bowl, the Orange Bowl and the Rose Bowl.
ESPN will also add some Original Entertainment programs, such as "Night School", which is a new show that will premiere on iTunes. It is a forthcoming reality show that will feature Texas Tech basketball coach Bobby Knight. "Wildfire", "Kim Possible" and "The Proud Family" are other shows that will also be offered by Disney. This is another major boost for Apple as it fights to get as much control over TV downloads as it can in these early stages.
Plans for a new multi-agency approach to tackling traders who sell counterfeit goods are being drawn up in the UK following a series of four raids, dubbed Operation Dawn. The raids took place in the run up to Christmas at North London's Wembley Market. Between 50 and 70 people including police officers marked more than 30 traders for possible prosecution and seized counterfeit goods that would have been valued at £1.5 million at retail.
"My understanding is that Operation Dawn is likely to be the blueprint for similar operations from the Patent Office... for dealing with this sort of trader or organised crime." said Giles Speed, the Brent and Harrow trading standards officer. A spokesman for Britain's Department of Trade & Industry said the multi-agency approach would be co-ordinated by the Patent Office and the National Criminal & Intelligence Service.
Apparently some legitimate traders and local businesses, including Blockbuster, supported the raids. Agencies included in Operation Dawn included the British Phonographic Industry (BPI), the Anti-Counterfeiting Group, Job Centre Plus and the Inland Revenue. However, no piracy-related arrests were actually made. In fact, the two arrests made were a man on suspicion of outstaying his immigration visa and another man for not producing identification. The raids were instead a deterrent for traders.
Nintendo Co. Ltd has announced that sales of the Nintendo DS hand-held gaming device have reached 10 million worldwide. As you would expect, the majority of the devices sold were in Japan, with Japanese gamers picking up over 5 million since its launch in December 2004. That makes it the fastest selling video game machine in Japan to date according to the company. In the United States, Nintendo sold over 4 million of the devices since launch.
Games such as Nintendogs and Super Mario 64 DS have been most popular amongst DS owners. "It is on the upswing of its life cycle,"Perrin Kaplan, Nintendo of America's vice president of marketing, told Reuters. After its launch in the U.S. in November 2004, Nintendo ended the year having sold 1.4 million units there. Nintendo also said that the new Wi-Fi Connection wireless gaming service has had over 550,000 unique visitors globally.
The company's Game Boy Advance SP sold 4.6 million units in North America in 2005, compared to 7.6 million in the previous year. Both the Nintendo DS and Sony's PlayStation Portable (PSP) helped lift the U.S. video game industry in the past year. U.S. video game hardware and software sales were $7.6 billion through November 2005.
New political party has been set up in Sweden that plans to participate to country's upcoming general elections. The party is called Piratpartiet as in Pirate party and it aims to remove copyright laws from Sweden.
Party plans to remove all immaterial rights, including copyrights and patents and also plans to stop Sweden's participation in international copyright organizations, including WIPO and WTO and to make it illegal to put any restrictions on distribution of digital content (in form of DRM, copy protections, etc). Party also states that it plans to uphold and push even further the strict privacy laws currently in place in Sweden and to make it illegal to track or monitor citizens' communications online and offline.
People behind the party have made it very clear that their idea is not a joke. To register an official party in Sweden, party needs to get 1,500 signatures to support its cause. Organization already managed to gather over 4,000 signatures in first 24 hours and now is in process of validating the signatures. Once validated, it aims to register itself as an official party and to participate in next general elections with their rather interesting agenda.
Now that 2005 has come to an end, major music labels can assess their sales over the past 12 months. To the annoyance of the Recording Industry Association of America (RIAA), music CD sales in the U.S. dropped by about 3.5% according to Nielsen Soundscan. CD sales had risen by 2.3% in 2004 and the music companies were quick to applaud their anti-piracy efforts and gave those efforts full credibility for the rise in CD sales. However, now faced with a 3.5% drop, the same companies are blaming piracy all over again.
However, looking back over the past year, the collective anti-piracy efforts of both the music and movie industries on the Internet reached a whole new level of toughness. Specifically, the entertainment industry has the U.S. Supreme Court Grokster ruling under it's belt, which then led to many P2P services disappearing or changing completely. Now add on the 7,000+ lawsuits from the RIAA against P2P users and the Australian Kazaa case; it was a good year for anti-piracy efforts (from the music industry's usual point of view).
As all other news outlets do the same, we do it as well; its once again time to take a look at the events that happened in the world of digital media during the last year. As a summary, in terms of digital video, it was a year of empty promises and nothing else. In terms of digital entertainment as a whole, it was a year of major hardware releases.
First year of "next generation" console wars
Year 2005 was the year that launched a new era of gaming console wars. The war is being fought on two fronts -- Sony took a shot at Nintendo's dominance in handheld gaming consoles by releasing the PlayStation Portable in the U.S. in March and few months later in Europe. Hackers were also busy trying to find exploits in PSP's firmware in order to run homebrew software and pirated games on the device. Several security holes were found in various PSP's firmware versions that allowed to do that, but Sony also seemed to be very cautious about the loopholes and released several firmware updates to the device, typically bundled with latest games that forced users to upgrade their firmware in order to play the games.
The city of Los Angeles has sued Take-Two Interactive Software Inc. over the hidden sex minigames in Grand Theft Auto: San Andreas. When a mod for the game known as "Hot Coffee" was released on the Internet to unlock these hidden games, it sparked outrage, especially from the Entertainment Software Ratings Board (ESRB). The game was given a new rating of "AO" which stands for "Adult Only". Since most retailers don't sell games with AO ratings, the company had to modify and release a new version of the game without the extra code.
On January 10th, Paris District court ruled against the use of 
RealNetworks is continuing to expand its online music services with the introduction of RealCommunity, a new service that allows unsigned bands and artists to setup their own profile pages and upload and sell their own music tracks. These tracks can then be rated by visitors to the community, which will judge which members make it onto the top ranked chart that will be highlighted on RealMusic, RealNetworks' recently launched online music service.
