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MGM v. Grokster

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March 14, 2005
Volume 8, Issue 4

Trymedia Now Used by All Top CGPs

DCIA Member Trymedia Systems, secure digital distribution services provider and operator of the world's largest distribution network for downloadable games, has further bolstered its digital distribution network by establishing new partnerships with top casual game publishers (CGPs) and developers Big Fish Games, FreshGames, iWin, PlayFirst, Selecsoft, and Toy Box Games.

Already a pioneer and established leader in core game distribution, Trymedia has extended its leadership position with the recent signing of these companies. Trymedia's ActiveMARK technology is now used by all top-ten CGPs.

"As a top destination game site targeting mature players, the fastest growing segment of the Internet, Big Fish Games benefits tremendously from Trymedia's technology platform, allowing us to reap the full value from our online games," said Paul Thelen, Founder & CEO of Big Fish Games. "Trymedia's network also helps us tap into the millions of consumers that play casual games and create new channels of distribution."

Industry analysts and experts agree that the downloadable games market will continue its breakneck growth in the next few years driven largely by casual games. In response, developers are focusing on creating casual games with more innovative content, while leveraging the technology and distribution experience of leaders like Trymedia to grow their revenue and prevent piracy. According to International Data Corp., the total revenue of downloaded games is projected to reach $1 billion by 2008.

"Trymedia has aggressively expanded its casual game offerings in recent years, bringing the strength of our leadership in core games to this explosive market segment," said Alex Torrubia, Co-Founder, President & CEO of Trymedia. "Today, we are the leading technology and service provider for downloadable games across all genres."

Trymedia's ActiveMARK technology enables publishers and portals to maximize the value and reach of their PC games. Each time consumers copy and share an ActiveMARK-enabled game, it automatically reverts to trial mode, allowing subsequent users to play the game for a limited amount of time before purchase. ActiveMARK also allows consumers to easily backup, play on multiple computers, and securely share their games.

More than 200 million licensed games have been downloaded using ActiveMARK technology.

Inaugural Gift Presentation

DCIA Members INTENT MediaWorks and Sovereign Artists teamed last week to deliver their historic and symbolic inaugural gift honoring President George W. Bush of the new "Petra Hayden & Bill Frisell" album distributed via peer-to-peer (P2P) file-sharing technologies.

INTENT Founder & CEO Les Ottolenghi made the trip personally to give this presentation, which included promo CDs and marketing materials contributed by Sovereign Artists, at the E-Government and Information Technology Department, Executive Office of the President, on Monday.

"INTENT has made it simple for any music label to distribute tracks for sale and for free downloading by means of multiple P2P platforms," said Chip Schutzman, Internet Marketing Strategist, Sovereign Artists. "Labels such as Sovereign can now realize the advantages of the P2P marketplace and effectively capitalize on those opportunities to benefit our artist roster."

Featuring the vocal harmonies of singer-songwriter-violinist Petra Haden – the daughter of jazz legend Charlie Haden – and the guitar-playing of Bill Frisell, the album contains twelve tracks. The artists and composers on the album include Elliot Smith, Foo Fighters, Coldplay, George Gershwin, Tom Waits, Stevie Wonder, Henry Mancini, as well as original songs from the duo.

The last track on the CD, "Throughout," an original song by Bill Frisell, is available free on P2P, with all other tracks available for purchase at $0.89 each. While the total retail value of the gift may be only $9.79, it truly represents a turning point in the licensing of mainstream music content for P2P distribution.

This also marks the first major release to use INTENT's Palladium platform, which allows the end-user experience to be identical whether the track is downloaded from a hosted Web site such as All About Jazz or Off the Peer, or by means of a P2P software program such as BearShare, eDonkey, Grokster, Kazaa, LimeWire, or TrustyFiles.

"Our mission is to positively impact the bottom line for artists, labels, and consumers by using P2P and other interactive digital technologies," said INTENT's Les Ottolenghi.

Sovereign Artists and INTENT MediaWorks have demonstrated that collaboration is becoming the standard for new artists' releases and that the P2P is a great way for artists to get their music out to the masses.

Report from CEO Marty Lafferty

We salute the Center for Technology and Democracy (CDT) on its tenth anniversary. Just over a decade ago, technology and public interest leaders joined with CDT President Jerry Berman in pursuing the grand vision that has become CDT's mission.

In his words, "Put simply, with apologies to Tocqueville: Self-interest rightly understood should lead all parties to work for an open, decentralized Internet that supports democratic values."

Today the Center is widely recognized for its capabilities in developing pragmatic solutions that enhance free expression, privacy, open access, and democracy for the rapidly evolving communications technologies of the digital age.

CDT's philosophy of "principled pragmatism" has led to free speech making the Internet a true technology of freedom; user empowerment becoming a touchstone for both policy development and technology design; privacy protection evolving into a combination of self-regulation, government policy, and technology; and Internet-related legislative proposals being focused on bad behaviors while avoiding curtailment of innovation.

The Center is valued for its effectiveness as well as its vision. According to a June 2004 Syracuse University report, CDT leads all public interest organizations in testifying before Congress on communication and information policy issues.

CDT combines the roles of convener, advocate, and think tank in building consensus among all parties interested in the future of digital media. To promote civil liberties and an open, decentralized Internet, the Center develops policies through a dialogue with diverse industry and public interest stakeholders.

At last week's Washington, DC gala, attended by several hundred supporters coming together to honor CDT, Senator Pat Leahy (D-VT), Congressman Bob Goodlatte (R-VA), and FTC Chairman Deborah Platt Majoras each praised Jerry Berman and the talented CDT team and their accomplishments, and said they look forward to continuing to work with the Center in the years ahead.

Congressman Goodlatte noted, "The secret of Berman's success is that he listens to people. He effectively represents consumers' concerns about privacy and civil liberties, but he also makes a real effort to understand the problems that the high-tech industry, law enforcement, and others are confronting."

This event also marked the introduction of a fellowship, established by DLA Piper Rudnick Gray Cary, to honor Ron Plesser's work in e-commerce and the privacy field and his commitment to the public interest.

Jerry Berman said of Ron Plesser, "He educated all of us not only about the threats to privacy in the computer age, but also about the social value of new technologies in our lives."

The Ron Plesser Fellowship will have an initial commitment of five years, and will be awarded to a first-year lawyer to work at the Center. Tax deductible contributions may be made through the CDT.

The Center's current priorities include protecting Internet free speech, building consumer trust, strengthening privacy rights, opposing government mandates that would jeopardize privacy or impede innovation, protecting intellectual property without impairing innovative technologies, and advancing Internet access globally.

We have had the privilege of participating in a working group led by CDT's Ari Schwartz focusing on anti-spyware issues, and have been greatly impressed with the quality of CDT leadership and the depth of skills that it attracts from relevant disciplines to fulfill its mission.

The CDT has earned the respect and admiration of interested parties with varied backgrounds and positions on numerous issues, and all of us in the emerging distributed computing industry continue to benefit from its valuable work.

Opus Software Solutions & SVC Financial

Opus Software Solutions announced the partnership on Friday of its Electra Card Services (ECS) unit with DCIA Member SVC Financial Services to set up and process mobile-enabled card-based payment transactions.

ECS, a 100 per cent subsidiary of Opus Software Solutions, which was recently formed to offer "pay-per-use" software services, will be the delivery platform for SVC Financial Services in India.

SVC Financial will leverage the ECS processing platform based in India in a "pay-per-use" application service provider (ASP) mode. Transactions originating from different parts of the globe will travel to the ECS platform for authorization in India.

"With this partnership, ECS is heralding a new era in outsourcing. This is the first time that `core transaction processing' will be outsourced from the US to an Indian card processor," said ECS Chairman Ramesh Mengawade.

SXSW's Torrent of Free Tunes

Excerpted from Wired Report by Katie Dean

Music fans don't have to be in Austin, TX to hear hundreds of new songs from the South by Southwest (SXSW) music festival.

This year, the festival is making it even easier to listen by providing a huge BitTorrent file (2.6 GB) of more than 750 songs. The songs can be downloaded for free using the BitTorrent peer-to-peer (P2P) file-sharing application.

For added convenience, the music is integrated with a new application called SXSW4Pod from CitizenPod.

Instead of carrying around the schedule of SXSW bands and venues as a dog-eared brochure, festival-goers can download the lineup electronically and transfer it to an iPod.

At the festival, which starts this week, fans can search for shows by time, venue, genre, or band name, and then listen to a full-quality MP3 of the band.

The SXSW website is also providing a smaller BitTorrent file (345 MB) of 30-second song clips.

"We wouldn't have been able to do this without using BitTorrent, because this is such a huge file and it would have taxed our bandwidth resources beyond our capabilities," said David Rose, webmaster of the SXSW site.

Jorge Navarro, front man for the Cuban Cowboys, a Cuban surf rock band, said combining all the MP3s into one BitTorrent download for iPods "is basically like an extension of the conference itself. You can put the conference in your pocket."

Be sure to visit DCIA Member Indie911 at SXSW.

Digital Hollywood Announces DRM Track

This year's Digital Hollywood Spring will feature an extraordinary Day-Long Digital Right Management (DRM) Track and VIP Dinners co-sponsored by Philips Electronics, Greenberg Traurig LLP, and Entriq at its spring event March 30th-April 1st at Loews Santa Monica Beach Hotel in Los Angeles, CA. The DCIA is contributing multiple speakers and will be hosting a special networking event for registered DHS delegates. Details will be forthcoming in next week's DCINFO.

Digital Hollywood's Victor Harwood proclaimed, "Our focus on DRM is a continuation of our effort to provide an atmosphere for content companies, technology organizations, consumer electronics manufacturers, legal parties, and legislative voices to come together."

DCIA Member speakers include Steve Masur of MasurLaw; Tom Meredith of P2P Cash; Les Ottolenghi of INTENT MediaWorks; Mitchell Reichgut of Jun Group; and Chip Venters of Digital Containers.

With over 2,000 attendees expected, entertainment transformation and convergence will again be in full swing at the conference. Digital Hollywood is your passport to the future of the entertainment, technology, media, and advertising industries. Click here to see the full agenda.

Coming Events of Interest

  • IP and Creativity Conference – Connect with leaders who are shaping today's intellectual property issues. Policy makers, CE manufacturers, media, think tanks, academics and Hollywood executives convene March 16th in Washington, DC at this Consumer Electronics Association (CEA) sponsored event.

    This jam-packed conference includes top industry, academic and media luminaries, including Arlen Communications' Gary Arlen; RIAA's Mitch Bainwol; Congressman Rick Boucher (D-VA); Senator Norm Coleman (R-MN); CDT's Alan Davidson; MPAA's Dan Glickman; LA Times' Jon Healey; CED's Charles Kolb; Washington Post's Jonathan Krim; CH Potomac's David Leibowitz; EFF's Fred von Lohmann; DCIA Member INTENT MediaWorks' Les Ottolenghi; CEA's Gary Shapiro; Public Knowledge's Gigi Sohn; and UNC's Professor Koleman Strumpf.

  • Winter Music Conference – In its 20th anniversary year, WMC is regarded as the singular networking event in the dance music industry, attracting professionals from over 60 countries. WMC will be held March 22nd-26th at the Wyndham Miami Beach Resort in Miami, FL. With its high concentration of top international artists, DJs, and industry professionals, WMC permeates the international press. Every aspect of the industry is represented including the top technological innovators, artists, DJs, producers, radio and video programmers, retailers, distributors, and audio manufacturers.

    DCIA CEO Marty Lafferty will speak at WMC on copyrights in the digital age. “Your Fair Share: Digital Copyrights” panel topics include P2P, copy protection technology, licensing preferences, fair usage, and international copyright issues.

  • Future of Digital Music Forum – "What's after iTunes?" is the theme for The 2nd Annual DallasBlue Future of Digital Music Forum being held on Thursday March 24th, from 5:30 PM to 9:00 PM at Swan Court in Richardson, TX.

    Five years ago the question was "What's after Napster?" Today iTunes is the poster child for Hollywood in a far more complicated environment. Overall music sales are flat. Broadband, the digital home, and wireless are increasingly pervasive. P2P continues to thrive despite an adverse environment. Online music services are popping up like weeds.

    An expert panel spans the technology and entertainment sectors. Presentations and moderated discussions examine the convergence of music, consumer marketing, and technology. Sponsored by DCIA Member RazorPop.

  • Supreme Court Oral Arguments – The US Supreme Court will hear arguments March 29th on whether companies that provide peer-to-peer (P2P) software violate copyright laws if their users commit copyright infringement. The Court's date for oral arguments in the case, MGM v. Grokster, coincides with an expected decision in a similar high-profile case in Australia, which involves Kazaa.

  • Digital Hollywood Spring – An extraordinary group of over 300 speakers will be featured during the 16th Annual Digital Hollywood Spring at Loews Santa Monica Beach Hotel in Los Angeles, CA March 30th-April 1st. Digital Hollywood is the leading gathering of entertainment, media and technology executives.

    Tracks and panels with special relevance to the DCIA include subjects ranging from DRM & Piracy: Digital Rights Management in Film, Music and Technology; to P2P Super Distribution: Evolution of the Content Distribution Revolution.

    Speakers (with DCIA Member links) include BayTSP's Mark Ishikawa; CEA's Michael Petricone; CH Potomac's David Leibowitz; Digimarc's Reed Stager; Digital Containers' Chip Venters; EMI's Ted Cohen; Envisioneering Group's Rick Doherty; FOX's Ron Wheeler; INTENT MediaWorks' Les Ottolenghi; Jun Group's Mitchell Reichgut; MasurLaw's Steve Masur; Microsoft's Derek Broes and Andy Moss; P2P Cash's Tom Meredith; Overpeer's Marc Morgenstern; SPE's Mitch Singer; ThinkAndLink's Gerd Leonhard; and UMG's David Ring.

  • Justice Talking – On April 5th NPR's debate format show taped in front of a live audience at the National Constitution Center in Philadelphia, PA will be discussing digital copyright, the MGM V. Grokster case, P2P, music sampling and more.

  • Copyright and Internet Intermediaries – The management of intellectual property in the online environment poses significant opportunities as well as challenges, and raises high stakes as the value of online transactions, both authorized and unauthorized, increases.

    Internet intermediaries, which may include Internet service providers (ISPs), file-sharing software distributors, auction sites, and portals that enable these transactions, are at the center of global debate involving complex policy, legal and business issues.

    The World Intellectual Property Organization (WIPO) is sponsoring a seminar to help obtain a better understanding of these issues on April 18th at its headquarters in Geneva, Switzerland.

    The seminar is designed to provide a forum for discussion among international experts and business leaders, academics, government delegates and policy makers.

  • CONNECTIONS Digital Home Conference – This executive marketing conference, to be held May 11th-13th at the Hyatt Regency near the San Francisco Airport in Burlingame, CA combines Parks Associates' market and consumer expertise with insights from key industry strategists to provide a comprehensive analysis of current and future "Digital Living" technologies.

    DCIA Members Digital Containers' CEO Chip Venters and Trymedia Systems' SVP Gabe Zichermann will be featured speakers.

    Parks Associates' research shows that roughly one-third of all US households now have broadband access and nearly 20 million have a home network. The combination of these solutions is changing the paradigm for access to mainstream music, movies, television programs, and games. Currently one-third of all Internet households listen to online radio stations each month, and a comparable number download music files. Likewise, 10% of all Internet households access on-demand video content each month.

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