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February 19, 2007
Volume 16, Issue 9

INTENT MediaWorks Signs Violator

Violator Management & Records has inked a deal with DCIA Member INTENT MediaWorks for ad-supported and paid distribution, marketing, and promotion of audio and video content via peer-to-peer (P2P) networks and the Internet.

"The entertainment industry has entered a new era, one that will be marked by bold, visionary moves," said Violator CEO Chris Lighty. "Embracing the digital distribution of music and video is one of the boldest and most exciting steps we can take."

"INTENT’s ground breaking technology provides a direct pipeline into the digital realm for Violator’s content, creating instant opportunities and income streams for our artists and better access to music and musicians for fans."

Through Violator Management, Lighty represents some of the biggest names in rap including 50 Cent, Diddy, Missy Elliott, Busta Rhymes, LL Cool J, and Three 6 Mafia. As part of the deal, Lighty will also join INTENT’s Board of Advisors.

Peer-to-Peer Goes Corporate

Excerpted from Wall Street Journal Report by Bobby White

When General Motors extended its in-house video service to car dealers and sales staff in Latin America in November, it turned to P2P technology.

Companies such as GM, Coca-Cola, and videogame publisher Tulga Games are now using the technology to transmit large chunks of data, like video files or software updates, to employees and customers.

P2P typically offers an inexpensive answer to the galloping demands that distribution of video, software, and Internet telephony are placing on corporate computer networks. Instead of downloading a file from a centralized server, P2P technology arranges direct connections between PCs, thereby creating a network where files are distributed from one PC to another.

DCIA Member VeriSign’s Kontiki and AXT Holdings’ Solid State Networks have begun to recast their P2P services for businesses. The technology is a "phenomenally good solution from a management and cost perspective," says Andrew Schroepfer, an industry analyst with Tier1 Research.

Instead of a costly expansion of its satellite network last year, GM turned to P2P to push videos of marketing messages and sales targets to employees overseas, especially those in regions that have limited Internet capacity. P2P provided a relatively cheap way to sidestep capacity issues, says Len Marsico, a GM communications director.

Under the GM system, the P2P technology sits on GM’s servers and directs GM PCs that have already received the video file to send chunks of it to other PCs on the network. Traditional online video distribution would have required a file to be sent to each employee’s computer, which would significantly increase traffic on a network, given the large size of many video files.

Mr. Marsico says GM now uses the P2P technology daily to "deliver a five-minute broadcast to our plants, offices, and dealers" in Latin America.

Coke also implemented a P2P communication service last year. Until recently, the service was restricted to delivering companywide messages from senior executives, but engineers have since added a "narrowcasting" function to the service. The new feature lets Coke decide on the size of a video audience, allowing it more flexibility to distribute video messages among small business units or for all employees, says Adam Brown, Coke’s director of digital communications.

"We get such tremendous value out of the service," says Mr. Brown. Coke’s P2P service is also provided by VeriSign’s Kontiki.

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyWe are encouraged by the many advances involving deployments of P2P technologies for corporate and consumer communications and entertainment, particularly those involving the transfer of larger files needed for film, video, games, software, and photography.

The pace of industry development is accelerating and moving in a very positive direction. New P2P applications and new P2P business models now appear weekly. But we are concerned that the music sector is falling further and further behind.

The US popular music industry symbolizes our culture of freedom and celebrates our society of open expression. Its output touches our human emotions on every level, expressing our feelings and heightening our memories of life’s most precious moments. It is to be supported, cherished, and rewarded.

Labels, management firms, and publishing companies not only create jobs and generate revenue, they also produce role models and inspire dreams. They represent in many ways the vital spirit that is the heart of America.

The advent of digital distribution, and particularly P2P file-sharing technologies, brought about a revolutionary convergence of content, services, and products – affecting the music industry more than any other area of the economy with an urgent siren call for change.

The first responses predictably were to try to stop software companies from distributing P2P applications and to try to stop consumers from using them. In retrospect, finding a way to integrate advertising into P2P music traffic would have saved millions in litigation costs and generated billions in new revenue. P2P could have instantly become "the new radio" for the twenty-first century.

While the rapid adoption curve by users of P2P technologies happened far more quickly and on a much more massive scale than record labels were prepared for, file sharers did not set out willfully to infringe copyrights. Their private conduct that resulted in unprecedented music distribution on a global scale may not have been anticipated, but that doesn’t mean the optimal response to it should be to try to drastically rein it in.

In the wake of the US Supreme Court MGM v. Grokster decision, most P2P file-sharing firms have now settled their disputes with major labels and publishers and are seeking to implement music-industry-sanctioned business models. From the outset, their primary interest has consistently been to find ways to monetize the steadily growing traffic that their software applications have driven.

The DCIA believes that the best way to do that is through innovative business models that take full advantage of P2P’s technological capabilities, which include interactive advertising, sponsorships, cross-promotions, and branding – not just porting the CD sales model into the digital realm with paid downloads, which to date has proven "wildly unpopular" compared with file sharing.

Fans demand to use new, more efficient, and higher quality digital distribution technologies to discover and listen to music; and it’s up to those fashioning this new distribution channel – both the content rights holders and the technology developers – not only to ensure that artists are properly compensated, but also to see to it that audiences access and enjoy their music in ways that keep pace with technological innovation.

Consumers are increasingly frustrated by the limitations being placed on digital music by major record companies. The fact that leaders of both Microsoft and Apple are now speaking out against unreasonable digital rights management (DRM) implementations reflects the rising tide of resentment against draconian DRM measures that make the average consumer out to be a "bootleg bandit."

These approaches don’t work. As the LA Times recently opined, so far "DRM systems hurt the people who actually pay for music by making the tracks they download harder to use. The record labels should stop trying to use DRM to give people less than what they’re used to getting when they buy songs, and concentrate instead on developing compelling new ways to discover and enjoy music."

We invite the music industry to join with our Members in exploring many more innovative approaches than those that have been attempted to date. It is time to enter an era of real collaboration and together find successful ways to harness P2P technologies for mutual benefit. We stand ready to encourage major label participation with working groups, proof-of-concept testing, market trials, and other supportive efforts. Share wisely, and take care.

P2P Gets Personal

Excerpted from Business 2.0 Report by Eric Schonfeld

Sending Grandma a video of baby’s first steps via e-mail is a bit like taking a horse-and-sleigh over the river and through the woods to her house: tediously slow and prone to freezing.

In the YouTube era, our hard drives are stuffed with bandwidth-hogging home movies, music, and photos that we share with friends and family using technology built to transmit short text messages. Now innovative companies are stepping in with a solution to the broadband bottleneck: personal P2P file sharing.

Companies such as DCIA Member Pando Networks (and others from AllPeers to Zapr) let people trade files one-to-one or among a selected group.

The demand for such services is growing. Every day YouSendIt, for instance, transfers more than 30 terabytes of files among its members - the equivalent of the contents of about 1,000 laptop computers. MediaMax, which is operated by a San Diego, CA company called Streamload, sends 3 million files among its members daily and stores 650 terabytes of their data.

Venture capitalists, meanwhile, are pouring money into personal file-sharing startups. In the past two years, Fabrik has raised $12 million in funding, Pando has scored $11 million, and YouSendIt has pocketed $5 million.

Most of the newer services have little revenue to speak of yet. The exceptions are Streamload, which claims $3 million in revenue for 2005; TransMedia’s Glide, which is on track to bring in at least $3.5 million in subscription fees this year; and YouSendIt, which should hit $1 million. Only TransMedia claims to be profitable.

On the P2P side, it’s all about file transfers. AllPeers’ software is an extension to Firefox that turns the browser into a file-sharing service complete with a buddy list showing who’s online and what they have to trade. AllPeers, based in London and Prague, is backed by the same venture capitalists who invested in Skype.

When you send a file using Pando, the recipient gets a regular e-mail with a small attachment. By opening the attachment, that person connects with every other Pando user who is online and also has that file, along with a central backup server.

As for Singapore-based Zapr, you simply drag files to a list of people you want to share with, and Zapr sends each of them an e-mail with a web link. When they click on the link, they can download the files from your computer as long as you’re online.

Pando CEO Robert Levitan thinks his startup can make money as a low-cost delivery network for high-definition movie trailers and other digital content. Most of these services can also be integrated into MySpace pages, blogs, and RSS feeds. AllPeers wants to let people sell as well as share media.

Verizon Shifts Policy Focus to Broadband

Excerpted from Technology Daily Report by David Hatch

Verizon Communications led the charge last year for deregulatory telecommunications legislation in Congress but has reversed course now that Democrats, who are considered less friendly to the Bell companies than Republicans, control Congress.

"We are not looking for sweeping telecommunications legislation this year," lobbyist Tom Tauke told reporters.

AT&T, BellSouth (which is now part of AT&T), and Verizon lobbied heavily in 2006 for GOP measures that would have eased their entry into the video-programming business and taken other deregulatory steps. Supporters argued that the legislation would have benefited consumers by fostering competition.

Verizon is now focusing on other matters, such as boosting high-speed Internet deployment in rural America. Tauke argued that President Bush’s goal of universal broadband access by 2007 has not been achieved in remote areas and that new initiatives are needed. In particular, Tauke cited an initiative in Kentucky to deploy broadband statewide as a model for elsewhere.

CacheLogic ADF Revolutionizes Media

DCIA Member CacheLogic, a global provider of online media delivery services, has launched its new Asset Delivery Framework (ADF). ADF is aimed at businesses that need online distribution of multi-gigabyte digital assets, including feature-length movies, video games, and large software applications.

ADF is an industry first that uniquely addresses the needs of digital media vendors and their customers. It replaces unpredictable distribution costs and poor end-user experience with guaranteed per-asset delivery pricing and faster corruption-free downloads.

CEO Pat Chapman-Pincher explained the difference between the economics of CacheLogic’s ADF and currently available alternatives as follows. "Until now, online content distribution costs have been calculated simply by ‘reading the meter’ and charging per-gigabyte, regardless of whether or not the ‘package’ is successfully delivered. Our new framework guarantees delivery, and content vendors are charged per object, regardless of file size. This is a huge challenge to the existing economic model for online content distribution."

As digital assets become ever-larger, CacheLogic’s ADF is a timely and radical innovation for both content vendors and end-customers. For content vendors, the framework offers predictable costs and margins that are directly correlated with units sold. By not penalizing vendors for distributing highly popular content, the framework’s per-asset pricing model offers a rational business model.

CacheLogic Chief Technology Officer, Andrew Parker, added, "It’s the industry’s first digital asset delivery solution that has been built from the ground-up for multi-gigabyte object distribution. It includes asset management, reporting, billing, and charge-back functionality. Asset pricing ensures costs are independent of traffic bursts, file size, encoding rates and retransmits and there are no overhead fees or extra charges."

Distribution pricing within the Asset Delivery Framework is rationally tiered. For higher value or limited life digital assets, content vendors can opt for express delivery. Lower per-asset pricing is available for lower priority, less lucrative or less popular material.

ADF allows commercial, marketing, and IT interests to build persuasive business cases for online distribution. It means transparency in real asset delivery costs with simple billing, reporting, and delivery models. For the first time it enables correlation of delivery costs with top line revenue.

P2PTV Joost is Juiced

Excerpted from Tech News World Report by John Martellaro

The television industry is nervously watching a new offering from Sweden’s whiz kids, Niklas Zennström and Janus Friis, called Joost. Joost is a P2P system that runs on a computer just like Skype and Kazaa and delivers what people like about old-fashioned TV.

It could be an even bigger disruptive technology than Skype, according to The Economist.

Joost ignores the two most popular business models used for Internet video. The first, used by iTunes, for example, allows the customer to pay for and download a TV show or movie. The second method is a subscription to a streaming service. This is done by Netflix in its new offering.

Fredrik de Wahl, Joost’s CEO, explains a third model. Neither of the above methods "has much to do with the experience of simply watching TV, which most people enjoy. Unlike the download or streaming approaches," he says, "TV is not about buying today what you want to watch tomorrow, it’s about turning it on and watching."

Joost follows the traditional TV model, as well, with commercials. However, instead of the current 18 minutes per hour (in the US), Joost limits them to 3 minutes.

Joost has channels, just like conventional TV. The difference is that the show starts when the viewer is ready. Viewers can even chat with buddies while they watch the same show.

Joost could change TV forever.

Veoh Puts P2P Behind Online Video

Excerpted from Digital Trends Report by Geoff Duncan

Veoh Networks has launched its Internet-based video syndication service, promising DVD-like quality delivered with the efficiency of P2P networking.

"Veoh’s mission is to bring the next generation of television to people wherever they are – office, living room, or on the go," said Veoh CEO Dmitry Shapiro. "Our P2P technology will allow us to dramatically improve the experience, and we believe our formal release is an important step towards realizing our goal."

For online video fans, Veoh essentially wants to be a virtual cable company, with its Veoh Player positioned as a universal repository for all online video. In addition to providing access to the widest range of DVD-quality online video options (including streaming or downloading content from veoh.com), users can subscribe to episodic programs and download video content from Internet sites like MySpace and YouTube.

Users simply identify video they want to save at any site they visit by using the Veoh browser plug-in, and the content is saved automatically for viewing in their Veoh Player.

Viewers can organize and watch content and manage media for iPods and Windows Media devices. Veoh says it currently offers roughly 100,000 videos across hundreds of channels and 15 categories, including 25 branded channels from the likes of TNT, Paramount Pictures, New Line Cinema, and a TV Guide Channel coming this week.

Community features enable viewers to find new videos via recommendations, keyword searching, and straight-ahead categorical browsing, as well as offering recommendations based on users’ viewing habits and preferences.

Starz Aligns with P2P Start-Up

Excerpted from Multichannel News Report by Todd Spangler

Starz Media will distribute its movies and other video content through the P2P network operated by Azureus, a Palo Alto, CA-based start-up, the companies said Monday.

Starz Media, the programming production and distribution subsidiary of Liberty Media’s Starz, plans to make anime, comedy, science-fiction and horror long-form content available to users of Azureus’ Zudeo service. In addition, Starz series that will be available on Azureus later this year will include "Street Fighter Alpha," "Ghost in the Shell," "Astroboy," "Ninja Scroll," "Masters of Horror," and "Tripping the Rift."

"Through this partnership with Azureus, we hope to reach the millions of genre fans online and build upon the avid audience interested in our video titles and series," Starz Media Senior Vice President of Business Development and Strategy Marc DeBevoise said. "We’re excited about Azureus’ high-resolution format and its potential."

Azureus announced a similar distribution deal with BBC Worldwide in December.

P2PTV Camp Swarms Video

Excerpted from Light Reading Report by Craig Matsumoto

Could P2P save Internet video? Start-up founders from the P2P camp are claiming there’s no other way to present high-definition video to millions of users, while also pointing out that P2P requires less of an infrastructure investment than direct video downloading.

"There’s no other cost-effective way to do it. The amount of money YouTube spends to deliver you short grainy videos is already big," says Dmitry Shapiro, CEO of P2P-based video service, Veoh Networks.

Based on that argument – and the P2P philosophy of wanting to "democratize" things – P2P video services are kicking into gear.

The case for P2P even has a timely edge. Last week, Vincent Dureau, the top TV exec at Google, reportedly told the Cable Congress audience in Amsterdam that the Internet, and even Google itself, can’t scale to handle TV.

Proponents say P2P networks will fare better because of their distributed nature. A P2P setup has users’ computers contributing spare processing and bandwidth to help one another complete downloads. That’s made P2P useful for distributing large files to many people.

"We’re not incurring massive costs by distributing these services for free, because of our infrastructure," says Gilles BianRosa, Azureus CEO and the creator of Zudeo.

P2P Ad Firm Skyrider Unveils Product

Excerpted from ClickZ News Report by Kate Kaye

While many users of open-source file-sharing systems despise the commercialization of those services, Skyrider intends to change that. The firm is launching a new video ad product, something President & CEO Ed Kozel hopes will make P2P a viable place to advertise.

The P2P network space is "very large; it’s very viral and as a channel it’s largely centered on entertainment," said Kozel, a former Cisco Systems executive and current Yahoo board member.

The company is expanding the ad service it launched in October to include dynamic advertising built into audio and video files. For example, if a P2P user downloads a sponsored music video, "events" placed within the video files will trigger ads served at particular spots while the video plays.

Using Apple QuickTime, these events might launch "bug overlays" on the videos, or serve ads that appear as part of the video and link to a web page featuring a targeted message. Ads can be targeted by entertainment genre, geography or date, if, for instance, an advertiser is promoting a live event.

The video service is launching in Gnutella, an open source distributed network accessible through clients such as LimeWire. Because it is a decentralized system, the number of Gnutella users is difficult to peg; however, the network reportedly hit the two million user mark in 2005. More recent estimates from DCIA industry data resource BigChampagne show over nine million average concurrent users in September 2006.

Until now, the P2P ad experience has been dominated by pop-up-launching files, decoy files featuring songs, or snippets of songs placed by entertainment companies for viral marketing efforts, and banner ads served within the search interface.

P2Pads, for instance, is a company serving banners and pop-ups embedded within content that’s distributed in P2P networks; ads are targeted by keyword, demographic, or category.

Megasoft Intros MYPeers to P2P

Excerpted from Techtree Report

Megasoft has announced that its telecom division XIUS has unveiled MYPeers, an innovation in P2P communication.

MYPeers was entirely developed at the XIUS R&D centre in Hyderabad. XIUS is the first vendor to develop a smart-tagging and context-based advertising engine for the communications industry.

GV Kumar, Managing Director & CEO, Megasoft & XIUS, said, "XIUS has endeavored to develop innovative products and solutions for the global telecom industry year after year. For the end-mobile user, MYPeers will revolutionize the way he/she communicates with peers. For industry players, in today’s falling ARPU scenario, MYPeers will add a potent revenue stream to MVNOs, MNOs, and other telecom service providers by enabling them to provide enhanced P2P communication tools."

To explain the application, between two peers, when ‘A’ sends an SMS to ‘B’ asking B to meet him at Cafe Coffee Day (CCD), the MYPeers engine adds to the message, additional and useful information, such as contact numbers for a taxi, directions on how to reach CCD, etc. Such context-based messaging assists ‘B’ to reach CCD without having to make any additional effort. The application is designed to help end-users get relevant help based on content sent from the source peer.

Company sources said this is the first time a telecom solution of this kind is being introduced in the world, and that there is huge potential for the solution across the world.

P2P value-add in active communication is touted as the next "killer application" in communication. The adoption of this new innovation, in P2P active content enhancement, will enable service providers an additional stream of revenue from the content and advertisement industry, and indirectly through service subscription.

Microsoft Groove 2007

Excerpted from PC Authority Report

Groove is a newcomer to Office, acquired when Microsoft bought Groove Networks in April 2005. Building on the networking, communications, and replication technology involved in Notes, Groove is a P2P file-sharing and collaboration application inwhich you can create workspaces and invite people to share them with you.

All the participants in a workspace share the tools and are kept up-to-date with other people’s changes whenever they’re connected. Groove works both within and between companies, and is great for virtual teams where members may be scattered around the globe. There’s some overlap with document libraries and workspaces in SharePoint and other "presence and chat" tools such as Windows Live Messenger, but Groove really scores with a mobile workforce.

The Groove launchbar looks like an instant messenger, but lists workspaces as well as contacts. Workspaces open inseparate windows, where you can seethe shared files and the discussion about the workspace. You can add extratools to a workspace, such as a calendar, issues list, pictures, or notes, and design forms to gather data in Groove itself, or use InfoPath forms if youhave the latter installed. You can also link your Groove workspace to a SharePoint document library to take advantage of the central store, metadataand workflow capabilities. Groove is an interesting addition, available in Office 2007 Enterprise and Ultimate editions, or as a separate app through volume-licensing plans. A companion product, Groove Server, lets IT departments manage and control thousands of Groove users, integrating itwith Active Directory, enforcing policies and monitoring usage. It also gives companies a central relay point so files can be replicated more efficiently and can connect Groove workspaces to centrally held enterprise data, so remote, disconnected workers can be up-to-date with the latest information.

P2P Music CD Sales Effect Virtually Zero

Excerpted from Bit-Tech Report

Has everyone noticed that the first thing the RIAA goes for when it discusses copyright infringement is lost sales? Often, those who infringe argue that if they didn’t do it, they wouldn’t buy the music anyway. Apparently, they aren’t lying. A new study takes a look at empirical sales data over two quarters in 2002, following over 1.75 million songs through both sales and unauthorized downloads.

The findings? P2P network activity has a whopping 0.7% negative effect on sales - well less than the margin of error for the study. Even taking the most negative figures (counting the margin of error in favor of the RIAA’s claims), the study can only account for 6 million out of the 80 million units of lost sales the RIAA blames on infringement in 2002. This means 74 million units just plain didn’t sell, and that had nothing to do with infringement - even if everything that could have gone wrong with the study did.

According to the study, much of the loss of sales has to do with how the RIAA chooses to account for units in the first place. Rather than counting units sold to consumers, it counts units shipped to retailers. Therefore, since many retailers have reduced how much they order as stock to sit on shelves, the RIAA says "sales are down" and blames the numbers on rampant copyright infringement.

Before online shopping became such a big thing, stores that carried music would order a plethora of stock and let it sit - since there was nowhere else to conveniently buy it, it would eventually move. Nowadays, in order to keep prices down and competition high, most stores just don’t keep as large of an inventory at one time.

Of course, this will all likely end up as every other study on the issue does - buried ten feet deep on some desk somewhere while the execs keep spouting off about lost revenue. However, at least there is an empirical study now to back up the claim everyone has been saying for years - the people who infringe either weren’t going to buy the music anyway, or go and buy it afterwards.

Coming Events of Interest

  • ISOC-IL/IPv6 Forum-Israel Conference – February 19th-20th in Tel Aviv, Israel. The IPv6 Forum-Israel is presenting two days of panel sessions, tutorials, and hands-on training in IPv6 at the Annual 2007 ISOC-IL (Israel Internet Association) Conference. The IPv6 Forum-Israel program can be found at www.ipv6forum-israel.com. To register, please visit www.isoc-il-org.il. Or for further information, please e-mail info@ipv6forum-israel.com.

  • CONSUMER 2.0: Meeting the Demands of the Connected Consumer - February 21st-22nd in Toronto, Canada. The era of mass media is giving way to one of personal and participatory media. People no longer passively consume media but actively participate, which usually means creating content, in whatever form and on whatever scale. To remain relevant, advertisers and the media need to tap into this energy for innovation and communication by integrating the social media with their marketing mix.

  • Digital Music Forum East – February 27th–28th in New York, NY. For the past six years, the most influential decision-makers in the music industry have gathered at Digital Media Wire’s annual music conference. They come to network, do deals, and share ideas about the future of the music business. The DCIA will present a session on the Pros & Cons of P2P and Music.

  • IPTV World Forum – March 5th-7th in London, England. Mikkel Dissing, CEO of DCIA Member RawFlow, will speak on "TVoverNet: Threat or Opportunity." The company will also demonstrate SelfCast, its revolutionary new live publishing tool for user-generated broadcasting at Booth 70. SelfCast can be built into any existing social community site to allow for live broadcasting of video and audio.

  • Cross-Media Metadata Summit for Content Description, Visibility, Search, and Discovery – March 9th at the Frontline Club, London W2, England. The summit will identify strategies and tactics to drive adoption of metadata syndication ecosystems that enable content owners to increase visibility of their content.

  • National Association of Broadcasters (NAB) – April 14th–19th in Las Vegas, NV. Whether you’re making the transition to HD; looking to invest in new technologies like P2PTV; seeking new tools to create content and build revenue streams; or just trying to stay ahead of the competition, NAB 2007 is your essential destination. The DCIA is participating.

  • P2P MEDIA SUMMIT LA – June 11th in Santa Monica, CA. This is the DCIA’s must-attend event for everyone interested in P2P. Keynotes, panels, and workshops on the latest breakthroughs. Held in conjunction with the new Digital Hollywood Spring conference and exposition.

  • International Broadcasting Convention (IBC) – September 6th-11th in Amsterdam, Holland. IBC is committed to providing the world's best event for everyone involved in the creation, management, and delivery of content for the entertainment industry, including DCIA Members. Run by the industry for the industry, convention organizers are drawn from participating companies.

  • PT/EXPO COMM – October 23rd-27th at the China International Exhibition Center in Beijing, China. The largest telecommunications/IT industry event in the world's fastest growing telecom sector. PT/EXPO COMM offers DCIA participants from all over the world a high profile promotional platform in a sales environment that is rich in capital investment.

Copyright 2008 Distributed Computing Industry Association
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