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Best Buy begins rebate elimination program

1/25/2006 3:25:17 PM, by Peter Pollack

Many of us have bought into the rebate concept at one time or another. A device that is tempting at US$139.99 might look nigh irresistible at US$99.99 after rebate. Manufacturers and retail stores make good use of this phenomenon, with the result that rebates have been offered on just about every product imaginable. The key to many retail store rebates, however, is not that the manufacturer wants to give away money, but that the manufacturer doesn't want to give away money. Often, rebates are offered in place of outright discounts because it is assumed that the consumer will fail to take advantage of the rebate that convinced them to buy the product in the first place.

It is for that reason that rebates enjoy a mixed level of popularity among consumers. Clearly, rebates increase the odds of a product being purchased, but failing to properly assemble the collection of paperwork and proofs-of-purchase required to redeem them can leave consumers with a vague feeling of having been scammed. Added to that is the fact that sometimes, even when a consumer dots all of the Is and crosses all of the Ts, the rebate never shows up.

Best Buy, which is in the business of selling extended warranties at least as much as consumer electronics, has decided that it makes good economic sense (for them, anyway) to do away with rebates, or at least make them easier to get. In April 2005, they announced that they would be phasing out rebates over the next two years, and they've started to make good on that plan.

As of Jan. 1, customers started receiving instant savings on notebook computers, eliminating the need to mail-in rebate forms and wait for their rebate check. Additionally, Best Buy customers will begin receiving instant savings on a majority of computer accessories by the first week of February. These new means of savings are a result of strong vendor partnerships and the commitment of Best Buy to keep customers first.

Note the phrase, "strong vendor partnerships." Since so much of the rebate model is based on the customer never receiving the check, a 100% response means something has to give. That thing is the vendors, who apparently need Best Buy more than Best Buy needs any particular one of them. Vendors will look to make their profit back somewhere, so its likely that we'll start to see lesser discounts offered in place of too-good-to-be-true rebates. That's good news for those of us who have an embarrassing number of unredeemed rebate forms floating around their desks, but less so for avid rebate fans.
http://arstechnica.com/news.ars/post/20060125-6055.html

 

CD DRM: Threat Models and Business Models

cdBefore analyzing the security of any system, we need to ask what the system is trying to accomplish: what its threat model is. In the case of CD DRM, the system’s goals are purely economic, and the technical goals of the system exist only to protect or enable the business models of the record label and the DRM vendor. Accordingly, any discussion of threat models must begin and end by talking about business models.

It is important to note that the record label and the DRM vendor are separate entities whose goals and incentives are not always aligned. Indeed, we will see that incentive differences between the label and the DRM vendor can be an important factor in understanding the design and deployment of CD DRM systems. Freedom to Tinker » Blog Archive » CD DRM: Threat Models and Business Models

CD DRM: Threat Models and Business Models
Tuesday January 24, 2006 by Ed Felten

Alex and I are working on an academic paper, “Lessons from the Sony CD DRM Episode”, which will analyze several not-yet-discussed aspects of the XCP and MediaMax CD copy protection technologies, and will try to put the Sony CD episode in context and draw lessons for the future. We’ll post the complete paper here next Friday. Until then, we’ll post drafts of a few sections here. We have two reasons for this: we hope the postings will be interesting in themselves, and we hope your comments will help us improve the paper.

Today’s excerpt is from a section early in the paper, where we are still setting the scene before the main technical discussion begins:
Threat Models and Business Models

Before analyzing the security of any system, we need to ask what the system is trying to accomplish: what its threat model is. In the case of CD DRM, the system’s goals are purely economic, and the technical goals of the system exist only to protect or enable the business models of the record label and the DRM vendor. Accordingly, any discussion of threat models must begin and end by talking about business models.

It is important to note that the record label and the DRM vendor are separate entities whose goals and incentives are not always aligned. Indeed, we will see that incentive differences between the label and the DRM vendor can be an important factor in understanding the design and deployment of CD DRM systems.
Record Label Goals

The record label would like to prevent music from the CD from becoming generally available on peer-to-peer file sharing networks, but this goal is clearly infeasible. If even one user succeeds in ripping an unprotected copy of the music and putting that copy onto P2P networks, then the music will be generally available. Clearly no CD DRM system can be nearly strong enough to stop this from happening; and as we will see below, real systems do not even try to achieve the kind of comprehensive coverage of all major computing platforms that we would needed as a prerequisite for stopping P2P sharing of protected music. We conclude that the goal of CD DRM systems cannot be to prevent P2P file sharing.

The record label’s goal must therefore be to stop many users from making disc-to-disc copies or from engaging in other forms of local copying or use of the music. By preventing local copying, the record company might be able to sell more copies of the music. For example, if Alice cannot make a copy of a CD to give to Bob, Bob might buy another copy from the record label.

By controlling other local uses, the record company might be able to charge extra fee for those uses. For example, if the record label can stop Alice from downloading music from a CD into her iPod, the label might be able to charge Alice an extra fee for iPod downloads. Charging extra for iPod downloads creates a new revenue stream for the label, but it also reduces the value to users of the original CD and therefore reduces the revenue that the label can extract from CD sales. Whether the new revenue stream outweighs the loss of CD revenue depends on detailed assumptions about customer preferences, which may not be easy for the label to determine in practice. For our purposes, it suffices to say that the label wants to establish control over the uses made by at least some users, because that control will tend generally to increase the label’s profit.

We note also that the record company’s profit-maximizing strategy in this regard is largely independent of the contours of copyright law. Whether the label would find it more profitable to control a use, as opposed to bundling it with the CD purchase, is a separate question from whether the law gives the label the right to file lawsuits relating to that use. Attempting to enforce copyright law exactly as written is almost certainly not the record label’s profit-maximizing strategy.
Monetizing the Platform

Even beyond its effect on controlling copying and use of content, CD DRM can generate revenue for the record label because it installs and runs software on users’ computers. The label can monetize this installed platform in various ways. For example, the DRM software comes with a special music-player application which is used to listen to the protected disc. This application can display advertisements or other promotional material that creates value for the label. Alternatively, the platform can gather information about the user’s music listening habits, and that information can be exploited for some business purpose. If these tactics are taken too far, the DRM software can become spyware. Even if these tactics are pursued more moderately, users may still object; but the record company may use these tactics anyway if it believes the benefits to it outweigh the costs.
DRM Vendor Goals

The DRM vendor’s primary goal, obviously, is to provide value to the record label, in order to maximize the price that the vendor can charge the label for using the DRM technology. If this were the only factor, then the incentives of the vendor and the label would be perfectly aligned and there would be no need to consider the vendor’s incentives separately.

However, there are at least two ways in which the DRM vendor’s incentives diverge from the record label’s. First, the vendor has a much larger tolerance for risk than the label does. The label is a large, established business with a valuable brand name. The vendor (at least in the cases at issue here) is a start-up company struggling to establish itself. The label has much more to lose than the vendor does if something goes horribly wrong. Accordingly, we can expect the vendor to be much more willing to accept security risks than the label is.

The second incentive difference is that the vendor can monetize the installed platform in ways that are not available to the record label. For example, once the vendor’s software is installed on a user’s system, the software can control copying and use of other labels’ CDs. Having a larger installed base makes the vendor’s product more
attractive to other labels. Because the vendor gets this extra benefit from installing the software, the vendor has an incentive to be more aggressive about pushing the software onto users’ computers than the label would be.

In short, the vendor’s incentives diverge from the label’s incentives in ways that make the vendor more likely to (a) cut corners and accept security and reliability risks, and (b) push its software onto more user’s computers, even in some cases where the label would prefer to do otherwise. If the label knew everything about how the vendor’s technology worked, then this would not be an issue — the label would simply insist that the vendor protect its interests. But if some aspects of the vendor’s design are withheld from the label as proprietary, or if the label is not extremely diligent in monitoring the vendor’s design choices — both of which are likely in practice — then the vendor will sometimes act against the label’s interests.
http://www.freedom-to-tinker.com/?p=959

 

Senate Committee Considers Broadcast Flags to Combat Piracy

Bill seeks restrictions on individuals' recording of digital television and radio programs.

Melissa Bell, Medill News Service
Wednesday, January 25, 2006

WASHINGTON -- Taking up one of the first items on its 2006 agenda, the Senate Commerce Committee today began considering legislation that would enable broadcasters to block the recording of certain audio and video programs in an effort to combat piracy.


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The Federal Communications Commission instituted broadcast flag rules last year, but in May a federal appeals court said that the FCC had overstepped its authority and struck down the rules. Those rules would have allowed broadcasters to encrypt programs with status bits indicating that the encrypted program could not be recorded or could be recorded only with certain restrictions, such as a lower-quality recording or a one-time recording. Digital recording devices would then have recognized the bits and alerted ("flagged") the viewer or the listener about the restrictions.

Broadcasters say that such flags help prevent piracy, but researchers and consumer groups counter that the flags intrude too far into fair noncommercial use of broadcast material.

Senator Ted Stevens (R-Alaska), who chairs the Commerce Committee, said that the committee had asked the FCC to create the regulations and that he intends to push for passage of a bill sponsored by Senator Gordon Smith (R-Oregon) to authorize the implementation of flags. "We have to take some action," Stevens said.

Broadcasters Favor Rules

Broadcasters today asked the committee to support the legislation because of the threat of piracy. Andrew Setos, president of engineering at Fox Entertainment Group and co-creator of the flag technology, said that retransmission of content threatened the quality of "uniquely American" free local TV broadcasts.

If multiple retransmissions were not stopped, Setos said, providers of high-quality content would take their material to cable channels, which have the right to protect it, gradually lowering the quality of free television. "Local television will wither and die," he said.

Jonathon Band of the American Library Association, however, said "the flag is detrimental to the public." His main complaint relates to flag technology's infringement on the retransmission of copyrighted work over the Internet for educational purposes.

Leslie Harris of the Center for Democracy and Technology contested the legislation, too, saying that it would endanger civic discourse. For example, she said, it would no longer be possible to air a portion of a news show on a political blog.

"The flag rule requires ongoing government involvement," she added. "[This bill] would make the FCC the gatekeeper for new innovations."

Art Brodsky of Public Knowledge, a consumer advocacy group that took the initial FCC ruling to court, agreed with Harris. "When companies [take new technology] to the FCC, they take out features that may cause too big a fuss. It's self-technological censorship."

Danny O'Brien of the Electronic Frontier Foundation, another litigant against the FCC in the May case, said, "There is a real danger of killing something before it's been born."

Audio Flags

Music industry officials who testified concentrated on the audio flag rule in the legislation. Audio flags weren't included in the original FCC regulations but are included in the Smith bill.

Mitch Bainwol, CEO of the Recording Industry Association of America, said that the music industry would suffer much more than the television industry because new digital radio services would "effectively turn radio into a music library."

While the video flag has support from manufacturers, content providers, and broadcasters, the music industry has not reached a consensus on implementing audio flags. According to Dan Halyburton, testifying on behalf of the National Association of Broadcasters, the association supported the video flag but had concerns that the audio flag could stall the roll-out of digital radio.

Stevens acknowledged that the audio flag provisions in the bill added their own complications, but he said that there must be a timetable in the bill to induce the radio industry to work toward a compromise.

Technological Impact

Though some manufacturers have already made digital recorders that are compatible with the flags, manufacturers like Philips Electronics want at least 18 months to prepare for the change if the bill becomes law. "It's a normal cycle to integrate the solutions," said Philips vice president Tom Patton.

If the legislation does not pass, products equipped with the flag technology and already on the market will not be affected.

Bill's Future

Stevens said that the committee would work on the bill before turning it over to the full Senate for a vote, but O'Brien of the Electronic Frontier Foundation remained hopeful that there would be no bill. "The more people look at the idea, they see how complicated it can be," he said.

"There should be a tweaking of copyright law or perhaps allowing the market to sort itself out," O'Brien said. "All along, that has been the best idea."

Stevens said a lot of the opposition to the bill came from within the committee. Senator John Sununu, R-New Hampshire, a member of the committee, questioned the need for the bill, saying that whenever a new technology, like the radio or the VCR, is introduced, it is seen as a threat to the broadcast industry. "Maybe the sky really is falling this time," Sununu said, "but I think it's worth offering a little bit of skepticism on this."
http://pcworld.com/news/article/0,aid,124499,00.asp

 

Google: China search censor

p2p news / p2pnet: While 'Do no evil' Google wallows in all the terrific press it's getting for refusing to hand data over to the Cheney / Bush administration, it has no qualms whatsoever about actively helping Communist China keep its citizens under a black-out, and worse.

In 2004 p2pnet was the first to reveal Google was censoring news from within mainland China by excluding certain sites.

"We ... considered the amount of information that would be omitted," it said by way of excuse. "In this case it is less than two percent of Chinese news sources. On balance we believe that having a service with links that work and omits a fractional number is better than having a service that is not available at all."

As we suggested at the time, logic suggested the most sensitive sites would be the ones 'omitted'. Otherwise, why bother?

Now, "Internet search giant Google Inc. will block politically sensitive terms on its new China site, bowing to conditions set by Beijing in return for access to the world's number-two Internet market," says Reuters.

"The voluntary concessions laid out on Tuesday by Google, which is launching a China-based search site as it officially enters the market, would parallel similar self-censorship already practised there by most multinationals and domestic players."

In a statement, "In order to operate from China, we have removed some content from the search results available on Google.cn in response to local law, regulation or policy," said Andrew McLaughlin, Google's senior policy counsel.

"While removing search results is inconsistent with Google's mission, providing no information (or a heavily degraded user experience that amounts to no information) is more inconsistent with our mission."

Google will run the service from China under.cn after getting a business licence to operate in the market last year, hiring two key executives to head its China operation and signing up an initial round of partners to market some of its ad services, says Reuters, adding:

"Google officials said they planned to notify users of its Google.cn service when the company has restricted access to certain search terms or the Web sites behind them."

Item 6 in the company's Corporate Information page says, "You can make money without doing evil". But it's not talking in general terms, only about advertising.

However, Item 8 states unequivocally, "The need for information crosses all borders. Though Google is headquartered in California, our mission is to facilitate access to information for the entire world ..."
http://p2pnet.net/story/7721

 

Norway group attacks iTunes

p2p news / p2pnet: The Consumer Council of Norway (CCN) wants the country's Consumer Ombudsman to investigate alleged Apple iTunes violations of Norway's Marketing Control Act.

"When you purchase music from iTunes they give themselves the right to single-handedly change your rights at any given later date," says the council's Torgeir Waterhouse, quoted on Forbrukkerådet.

CCN says considers iTunes terms to be part of an "ongoing development" which undermines user rights.

"The Apple owned iTunes Music Store dominates the market of music downloads, the only portable mp3 players capable of playing music from iTunes are Apples own iPod series," says Waterhouse.

But Apple is alone in attracting the CCN's attention.

Many other download services such as CDON.com, prefueled.com and MSN.no also have similar terms of use tand he council wants them reviewed as well for potential breaches of the Marketing Control Act.>>>>>>>>>>>>>>>>>>>>>>>

The Consumer Council of Norway files a complaint regarding iTunes’ terms of service
Posted by Jo Singstad - Forbrukkerådet

In order to purchase music from iTunes the consumer has to agree to a set of terms. After a review of these terms the Consumer Council of Norway found several of to be highly questionable.

- The terms of use are unreasonable so we are asking the Consumer Ombudsman to use § 9a of The Marketing Control Act to force a change of the terms, says senior advisor Torgeir Waterhouse.

- iTunes can change the your rights to the music after you downloaded it. This is a violation of basic Principles of consumer contract law. Consumers who want to play they're music on a non-iPod player must first remove the copy protection, this removal for legitimate private use is however stopped by iTunes DRM technology and Terms of Use. iTunes stopping this removal for legitimate private use like playing the music on a non-iPod mp3 player is obviously in violation of the Copyright Act, says Waterhouse.

The Consumer Council of Norway finds the terms to be unbalanced and highly in favour of iTunes as one party in the entered agreement.

- The consumer is granted few or no rights while iTunes provides itself with several unfair rights according to Waterhouse.

English law

iTunes Europe operates from Luxemborg and terms of use stipulate that they are governed by English law. The Consumer Council of Norway does not agree to this choice of legislation.

- iTunes.no is only available to Norwegian consumers. They're using a Norwegian domain, the site is only available in Norwegian and the prices are listed in Norwegian currency.

- All these point lead us to conclude that Norwegian consumer legislation is the correct choice and that iTunes.no [should] fall under the regulation of Norways Marketing Control Act, says Waterhouse.

The Consumer Council of Norway has thus asked the Consumer Ombudsman to review and censor iTunes standard contract terms.

Limits liability

The iTunes terms of use limit the consumers rights to damages the terms of use state :

Apple does not represent or guarantee that the service will be free from loss, corruption, attack, viruses, interference, hacking, or other security intrusion, and Apple disclaims any liability relating thereto. You shall be responsible for backing up your own system.

- Consumers are cut off from claiming damages if iTunes should create a breach of security that that could be exploited by hacker or malware. Waterhouse points out that this is a highly relevant issue, like we've just seen in the Sony BMG case.

Limiting the consumer's rights to claiming damages is is a violation of basic principles of consumer contract law. The Consumer Council of Norway regards this term as unreasonable.

iTunes is not the only one

Since many other download services like CDON.com, prefueled.com and MSN.no operate with similar terms of use the Consumer Council of Norway has requested that these services are also put under review for potential breach of the Marketing Control Act.

Digital rights are under pressure

The Consumer Council of Norway is following the development in the download business closely.

It's important that the terms of service cater to the needs of the consumers as well as the content providers, says Waterhouse.

It's equally important for us to work for increasing use of open standards in consumer electronics and content services.

- Consumers should be free to choose the equipment and software he or she prefers. The access to content should not be blocked my a random choice of technology. If your next mp3-player is not an iPod you'll not be able to listen to the music you've bought from iTunes, says Waterhouse.

(Thanks, Reidun)

(Thursday 26th January 2006)
http://p2pnet.net/story/7732

 

Hollywood bounty hunters

p2p news / p2pnet: Hollywood is fostering an upgrade to its Asia-Pacific scalp hunter scheme, originally launched in 1998.

The new bounty plan, "provides significant cash rewards for people who provide information that leads to the arrest of copyright infringers involved in the production, distribution and/or sale of pirated optical discs," says the MPA, an MPAA clone.

And in accordance with long-established movie industry practice, it's being run by a publicly funded entity, in this case, the Hong Kong Customs & Excise Department.

"The MPA supports and operates a number of anti-piracy reward schemes around the Asia-Pacific region, including the just-launched MPA DVD Rewards Scheme in Malaysia," it says.

The, "cancer of piracy" is "damaging the health of creative industries in Hong Kong and around the Asia-Pacific region," intones MPA spokesperson Mike Ellis.

The scheme was organized by the MPA, Business Software Alliance, Entertainment Software Alliance, Hong Kong Optical Disc Manufacturers Association, International Federation of the Phonographic Industry (Hong Kong Group), Motion Picture Industry Association and Sony Computer Entertainment.

(Thursday 26th January 2006)
http://p2pnet.net/story/7733

 

Technology
Portals: Beta-VHS clash offers insights into coming DVD war

Wednesday, January 25, 2006
By Lee Gomes, The Wall Street Journal

I don't know who will win the coming high-definition DVD format war, but I can tell you how to know when the battle is over: when the side that is behind takes out ads proclaiming it is still in the game.

That is what happened in 1984, during the first great video-format war between the Beta and VHS standards for home-video tape recording. The Beta camp, aka Sony, declared via full-page trade-magazine ads that, "The Beta business is stronger than ever." In fact, by that point, Beta was in an irreversible decline, as it had been since the day VHS showed up.

Alas, the world is on the brink of a new standards war between the Blu-Ray and HD-DVD formats, which are vying to succeed the current DVD. That makes it worthwhile to briefly retell the story of the earlier fight -- especially because much of what people remember about it is wrong.

In the early 1970s, Sony, just then emerging as one of the world's great consumer brands, became intent on designing a compact home TV-recording system. Sony's legendary chairman, Akio Morita, wanted a videocassette small enough to fit in a coat pocket.

Many of the patents used with the Beta had been shared by Sony with its rival. JVC, a division of Matsushita, as part of an earlier business deal. Nonetheless, Sony assumed it would have the home video recording market to itself. The company was shocked when JVC announced that it, too, was building a home recorder.

There were numerous technical differences between the systems, but one of the most obvious was that JVC's cartridge was 7 1/2 inches in length, or 1 1/2 inches longer than Beta's.

Sony viewed that bigger cartridge as an example of the technical inelegance of its competitor's offering. In fact, the bigger cartridge would lead to VHS's eventual triumph.

Sony's product came out first, late in 1975, costing nearly $2,000 and recording an hour of TV.

But the VHS system, with its bigger cartridge, could hold more tape. Combined with other innovations, that meant a VHS cassette could record for twice as long as a Beta could.

For consumers, that was a deal clincher. Despite being second to market, VHS overtook Beta in sales immediately upon its 1976 introduction, a position it never gave up. VHS systems had a 70 percent share of the market in 1978, according to a study by economist Sangin Park. That figure dropped to 57 percent the following year, but it returned to 70 percent in 1980, and kept growing every year afterward.

Had it been operating with today's conventional wisdom on economics, which stresses "network externalities" -- a fancy name for the idea of a tipping point that permanently changes a situation -- Sony would have seen the handwriting on the wall and withdrawn from the fray, lest it continue to throw good money after bad.

But Sony persevered, driven by a mix of ego and tenacity. The result is the deservedly infamous Beta-VHS standards war of the early 1980s, which pitted neighbor against neighbor.

Still, the competition also had benign consequences, including unrelenting innovation. In 1982, for instance, Sony introduced Beta Hi-Fi, claiming sound quality that it said VHS would never be able to match. A year later, though, the VHS camp proved Sony wrong with VHS Hi-Fi.

SONY'S BASIC problem was that no matter what it did, it could never match VHS on recording time. By the time Beta was able to claim its users could record entire movies, VHS was bragging about the football games its machines were taping.

In 1984, with VHS at 80 percent of the market, the Sony camp was forced to take out its "We're still here" ads. It took four more years, by which point VHS had 98 percent of the market, for Sony to effectively throw in the towel.

By then, of course, the DVD had begun its ascent. It is now mostly forgotten, but a similar standards war over DVD was averted 10 years ago when International Business Machines forged a last-minute compromise between Sony and Toshiba, each of which was pursing a different approach. Those are also the two players in the looming standards war over high definition; peacemaking attempts failed last year.

It's common to hear today that in the Beta-VHS battle, the "wrong" technology somehow won. Beta, by this telling, was supposed to have had a vastly superior picture quality.

But economists Stan Liebowitz and Steve Margolis have argued that any alleged technical advantages of Beta weren't obvious to ordinary consumers, who quite rationally preferred the longer recording time of VHS and who voted accordingly with their dollars.

What, if anything, does the Beta-VHS battle presage about the coming high-definition war? Marc Wielage and Rod Woodcock, trade journalists who wrote extensively about the earlier tussle, say the advantage of longer playing time augers well this time for Sony, whose Blu-Ray disks hold more than those of rival HD-DVD.

HD-DVD boosters respond that its disks are cheaper to make. We're not going to get in the middle of that fight. Our only prediction is that this battle will be over much more quickly than the last one. Just keep watching for the ad that protests too much.
http://www.post-gazette.com/pg/06025/644076.stm

 

i always said there is help for ye all for stress

Sex before stressful events keeps you calm

* 26 January 2006
* From New Scientist Print Edition

GOT some public speaking to do? Here is a tip to keep stress at bay: have sex beforehand. But make sure it's penetrative sex - the magic vanishes if you pursue other forms of sexual gratification.

Stuart Brody, a psychologist at the University of Paisley, UK, compared the impact of different sexual activities on blood pressure when a person later experiences acute stress. For a fortnight, 24 women and 22 men kept diaries of how often they engaged in penile-vaginal intercourse (PVI), masturbation or partnered sexual activity excluding intercourse. After, the volunteers underwent a stress test involving public speaking and mental arithmetic out loud.

Volunteers who'd had PVI but none of the other kinds of sex were least stressed, and their blood pressure returned to normal faster than those who'd only masturbated or had non-coital sex. Those who abstained had the highest blood-pressure response to stress (Biological Psychology, vol 71, p 214).
NS Forum
What other methods do you use to reduce stress and stay calm?
Discuss this story >>


Brody also made psychological measurements of neuroticism and anxiety in the volunteers, as well as work stress and partnership satisfaction. Even taking these factors into account, differences in sexual behaviour provided the best explanation for the range of stress responses. "The effects are not attributable simply to the short-term relief afforded by orgasm, but rather, endure for at least a week," says Brody. He speculates that release of the "pair-bonding" hormone oxytocin between partners might account for the calming effect.
From issue 2536 of New Scientist magazine, 26 January 2006, page 17
http://www.newscientist.com/article.ns?id=mg18925365.500

 

RIAA's latest file share claim

p2p news / p2pnet: The members of the Big Four Organized Music cartel are spending endless streams of cash and instructing legions of lawyers in their efforts to gain total control of how, and by whom, digital files are distributed online.

At the tip of their carefully orchestrated US game-plan is their sue 'em all campaign under which they're using their RIAA (Recording Industry Association of America) to try to sue former customers into buying product.

In their latest effort, they're attempting to re-hoist an argument - that merely having a shared files folder that can be accessed is copyright infringement - already explicitly dismissed by judge Marilyn Hall Patel in her Napster decision.

In 2004, the Big Four, Warner Music, Sony BMG, EMI and Vivendi Universal, tried to get a Canadian court to force five Canadian ISPs to reveal the identity of 29 clients so the Big Four could sue them.

However, justice Konrad von Finckenstein ruled, "No evidence was presented that the alleged infringers either distributed or authorised the reproduction of sound recordings. They merely placed personal copies into their shared directories which were accessible by other computer user(s) via a P2P service."

Now New York social worker Tenise Barker is under attack with the RIAA arguing that simply making a file available for distribution in and of itself constitutes a copyright infringement.

"Were the courts to accept this misguided view of copyright law, it could mean that anyone who has had a shared files folder, even for a moment, that contained copyrighted files in it, would be guilty of copyright infringement, even though the copies in the folder were legally obtained, and even though no illegal copies had ever been made of them," Ray Beckerman (pic), one of the attorneys representing Barker, told p2pnet.

Interestingly, Sony BMG of rootkit DRM spyware fame voluntarily dropped its case against Barker, although the other plaintiffs are still going ahead.

Recording Industry vs The People has a scan of the court document here.

http://www.lifeofalawyer.com/riaa/elektra_barker_oppositiontomotion.pdf

Also See:
five Canadian ISPs - Keep on downloading! Cdn file sharers told, March 31, 2004

(Thursday 26th January 2006)
http://p2pnet.net/story/7736

 

How Turned Around Is Sony?
The electronics giant's third-quarter earnings should hint at a brighter future. But Chairman Howard Stringer still has to push through lots of tough changes


The news at Sony (SNE ) has been so dreary for so long that even the smallest glimmer of hope is enough to cheer up shareholders. On Jan. 26, investors may see just such a ray of light when the Japanese electronics and entertainment giant releases third-quarter earnings. Not only are those results likely to beat expectations but the company might also upwardly revise its earnings estimate for the fiscal year through March, analysts say.


Depending on whom you ask, Sony's full-year profit forecast could be anywhere from $150 million to $475 million. That's a big change. As recently as September, newly appointed Chairman Howard Stringer was glumly predicting Sony would show a net loss of $86 million.

The market, however, seems to have been feeling fairly good about Sony for some time. Since October, its share price has shot up 35% in Tokyo trading, outstripping the 21% rise of the Topix Electric Appliances Index, a benchmark for Japanese electronics makers. "We think [Sony's] electronics segment overall did better than management's expectations," J.P. Morgan analyst Hiroshi Takada wrote in a Jan. 23 report.

CUTTING LOSSES. But don't put all your chips on Sony just yet. Stringer is in the midst of a top-to-bottom, $1.7 billion restructuring largely focused on turning around the ailing consumer-electronics and TV unit (see BW Online, 1/9/06, "Hitting the Right Notes at Sony"). Analysts say it could be another year before Stringer, a 63-year-old Welshman, whips all the loss-making units into shape. That's crucial because while the electronics division accounts for 70% of Sony's overall sales, it has been a drag on profits the past two years.

And many analysts say they haven't factored in the fallout from a public-relations fiasco caused by a virus-like copy-protection program installed on CDs sold by its Sony BMG Music Entertainment unit (see BW Online, 12/30/05, "Sony BMG Ends a Legal Nightmare "). "Sony still has a long way to go," says Credit Suisse First Boston analyst Koya Tabata.

Even Stringer seems to be proceeding with caution. "The worst thing that can happen to you is for things to go too well too soon," Stringer said in a recent interview with BusinessWeek. "I'm slightly nervous because I don't want Sony to fall back into any form of complacency."

CATCHING UP ON TV. So why the rosier outlook? The two main reasons have little to do with Stringer's reforms: a weak yen and a rising Tokyo stock market. The yen's fall against the dollar helps Sony because the value of its overseas income rises, and strengthening stocks are adding to robust profits at Sony's financial unit because of its Japanese stock holdings.

But one nugget of good news suggests Sony may finally be getting a handle on its real problems: better-than-expected TV sales. Sony's share of the TV market in the U.S. rose to 28% in December, 2005, up from 10% from October of last year, according to Japanese market-research firm BCN. And holiday shoppers in Europe and Japan also bought more Sony TVs, CSFB says.

The TV unit's problems have symbolized Sony's recent sluggishness in anticipating consumer trends. A one-time dominant force in TVs -- its Trinitron cathode-ray-tube displays were the gold standard for decades -- Sony waited longer than rivals before shifting to flat-panel sets. To catch up, Sony formed a joint venture in liquid-crystal displays (LCD) with Korea's Samsung Electronics. Now, Sony's Bravia sets -- a 40-inch TV sells for around $3,500 in the U.S. -- rank No. 3 globally among LCDs, behind Sharp and Philips.

MASTER PLAN. In Stringer's September reform blueprint, he vowed to cut jobs, close divisions, and retire products, while shifting part of Sony's manufacturing base in Japan to less-costly locales. Only now are the details of the plan finally taking shape. On Jan. 25, Sony said it will shut TV glass and tube plants in New Stanton, Pa., and Rancho Bernardo, Calif., shifting all the work to China and Malaysia. Sony also plans to stop making its Walkman music players in Saitama, just north of Tokyo, the first Japanese facility to be closed under the restructuring.

Stringer's ultimate goal is to merge Sony's gizmos and content, which would let consumers download the company's video games, movies, TV shows, and music to play on everything from big-screen TVs to laptop PCs and portable game consoles. Once he's finished, Stringer hopes to fatten profit margins for Sony's electronics division to 4% by March, 2008, from their current dip in the negative territory, and for all divisions combined to 5%, from 1.6% now.

Few analysts see how he'll succeed so quickly. In a recent report, Merrill Lynch called the target "optimistic." And CSFB's Tabata says, "We think the electronics division's margin will still only be 3% by March, 2008."

RISK TAKING. The logistics of carrying out the reforms are more complex than they might seem. Stringer has to mercilessly cut costs while unifying the rank-and-file and curbing the internal rivalry among engineers that has led to a confusing lineup of products and a diminution of the once-vaunted brand. And he will have to do that without crushing the culture that has long spawned a winning lineup of cool gadgets. In recent months, Sony officials say Stringer has been hosting social gatherings and working the crowd to sell engineers on his plan and get them to work more closely with each other.

This year, he'll be mobilizing resources as Sony prepares to launch two technologies that could make or break it. The PlayStation3, containing the highly promoted Cell microprocessor, and a Blu-ray high-definition DVD player, set for launch this spring. And more Blu-ray products will be up against the rival HD-DVD format as early as April.

Sony is counting on the royalties from both to produce a steady stream of future income. Overall, it's a strategy that holds huge risks. But if Stringer gets things right, it might just brighten the day for Sony's shareholders.
http://www.businessweek.com/bwdaily/dnflash/jan2006/nf20060125_2555_db039.htm

 

The Bug in Microsoft's Ear
The software giant is mulling its own digital device that adds gaming to music and video, in an effort to compete with Apple's iPod empire

After getting trounced for four years in the digital music business by Apple Computer (AAPL), Microsoft (MSFT) finally seems poised to do something about it. BusinessWeek has learned that the software giant is working on plans to develop its own portable digital media device to rival the iPod, rather than just providing technology to partners. Microsoft hasn't decided if it will go ahead. But sources inside the company and at its partners say Microsoft has put together a team that's considering the business end of such an initiative.


Going forward with it would be an acknowledgement that the current strategy isn't working. Chairman William H. Gates III has argued that consumers would prefer a vast choice of devices to the limited selection from Apple. That's why Microsoft has relied on dozens of partners to come up with sleek devices and clever online-music services that use its software.

LIMITED APPEAL? But each year, Apple extends its lead in digital music. In 2005, Apple's share of portable media devices sold in the U.S. grew to 67% from 52% in 2004, according to NPD Group. Making its own device, despite an uneven track record in consumer electronics, may be Microsoft's only viable alternative.

What would it look like? Xbox boss Peter Moore says any Microsoft media device would have to leverage the company's most significant consumer strength, video gaming. "It can't just be our version of the iPod," says Moore, who nonetheless would not confirm that Microsoft is considering making such a device. So in addition to playing music and videos, a Microsoft device would include games. Microsoft would probably use the Xbox brand to market the gadget. "I think the brand is an opportunity," Moore says.

True, perhaps, but also risky. If the new device comes with the Xbox brand, most consumers will view it as a game player, like Sony's (SNE) PlayStation Portable. That might limit its appeal, since the portable gaming market is much smaller than the one for digital media.

TARGETING THE LIVING ROOM. There's also the risk of alienating partners. If Microsoft fashions its own gadget, those device makers could abandon Microsoft's digital media technology and devise their own software. "Everybody will try to do their own thing to differentiate," says Sim Wong Hoo, chief executive of Creative Technology (CREAF), the No.2 digital media device maker. "What Microsoft was trying to build will collapse."

With $39.8 billion in annual sales, Microsoft isn't particularly interested in increments from the digital media device business or online music. It's after a spot in consumers' living rooms. The more consumers purchase iPods, the more they'll buy songs and videos from iTunes, and the various iPod accessories to play music and video around their house. That in turn convinces more entertainment companies to partner with Apple. "The stakes are incredibly high," says Michael Gartenberg, vice-president and research director at JupiterResearch (JUPM).

The question still remains: Will Microsoft really do it? It has abandoned efforts over the years to make everything from computer speakers to PC-connected telephones. The company gave some clues in December, when it put its digital media software unit and its MSN Music service under Robert J. Bach, president of the Entertainment & Devices division. "It's a lot easier to talk about the end-to-end scenarios, because it's all under Robbie," says Microsoft's Moore. Indeed, the soup-to-nuts approach has been the key to Apple's success. For Microsoft, it may be worth the risk.
http://www.businessweek.com/technology/content/jan2006/tc20060126_148049.htm

 

Wal-Mart launches online music service

JAN. 25 9:37 P.M. ET Wal-Mart Stores Inc. launched an online music video and audio service with exclusive studio performances Wednesday, part of a broader strategy to make itself trendier and draw consumers already in the store for cheap staples into other departments.

Dubbed "Wal-Mart Soundcheck", the service features studio performances and interviews with new and established bands and musicians, the Bentonville, Ark.-based company said in a statement. First up were punk pop fivesome Yellowcard and rock band Switchfoot.

The segments, each with four to six songs, will play for free on http://www.walmart.com and on television screens in Wal-Mart electronics departments. There will be a viewing event in stores of the complete 30- to 40-minute performance every few weeks on Friday nights and fans can also download audio tracks from the performances for a fee from the Web site.


The artist selection will cover genres including rock, pop, punk, country, hip-hop and R&B. New acts will follow monthly.

------
http://www.businessweek.com/ap/tech/D8FC3C203.htm?campaign_id=apn_tech_up&chan=tc

 

MP3s The Big Security Risk In 2006

wwwOnce again the problem of mobile device security is raising its head. Yet that is the world we live in. Like it or not, the miniaturisation of disk storage technology means that the amount of data that can be stored on mobile devices continues to climb.

The solution often seems simple, ban them. That would mean, however, banning all USB flash devices and requiring employees to leave their personal phones, PDA’s and MP3 players at the office door. This is clearly not only unworkable but liable to stress employee/employer relations to snapping point. HNS - MP3s – The Big Security Risk In 2006
_____________________________________________________________________


MP3s – The Big Security Risk In 2006
by Martin Allen - MD of Pointsec - Wednesday, 25 January 2006.

Once again the problem of mobile device security is raising its head. Yet that is the world we live in. Like it or not, the miniaturisation of disk storage technology means that the amount of data that can be stored on mobile devices continues to climb.

The solution often seems simple, ban them. That would mean, however, banning all USB flash devices and requiring employees to leave their personal phones, PDA’s and MP3 players at the office door. This is clearly not only unworkable but liable to stress employee/employer relations to snapping point.

This Christmas MP3 players were the hottest and most popular present. The danger is that this New Year all the happy recipients are desperate to use them and will very quickly find out how excellent they are not just for storing music for also for storing lots and lots of data. Even the £20 MP3 players can store 256MB of data. At the top end of the market, digital jukeboxes with storage of 20GB start at under £150 while a 60GB Apple iPod Video player can be had for just £300. That is the same storage capacity as a lot of corporate notebooks.

What makes this market even more dangerous is the number of devices that IDC estimates will have been sold by the end of 2005. European sales of devices with a capacity of less than 4MB will top 20m while the larger MP3 jukeboxes and video players will exceed 5m devices.

These numbers are more than twice the sales for 2004 and while the sales growth will slow during 2006, higher capacities and the introduction of large scale storage in devices such as Smartphones will continue to push the market forward.

While these devices are aimed at a consumer market, there has already been an increase in their use within the corporate environment and this is set to increase as more people recognise that they are ideal for listening to corporate presentations on the move. Others might use them to listen to audio books or even watch training courses. In meetings, the MP3 player has already replaced the mini tape recorder due to battery life, capacity, ease of file storage/sharing and cost.

Consumers want to use these devices on their corporate networks today to download content. While there are figures showing that some of this content is illegal, there has been a big move towards legal content. One of the drivers of this has been the strengthening of the audio book market. Whereas, just a few years ago it was novels or self-help books that dominated the audio space, now there is a huge array of general business books on the market. This market is also being targeted by educational publishers who are moving their existing content into a new market. For these publishers, getting users to play “skills enhancement” books on MP3 players is as much a B2B as a B2C play.

Then there is the big emerging market of the year – Podcasting. In the same way that the DVD recorder and Sky+ box have revolutionised the way we handle the time-shifted world of television, Podcasting is doing the same for audio and it seems everyone is doing it. In the UK, the most popular Podcast is the BBC Radio 1 breakfast show. Unsurprisingly, it is most often downloaded during the day, probably by people who missed it while travelling into work.

It is not just audio that is driving the Podcasting market. The BBC and several other channels have committed to putting their TV programs out via broadband. They are also allowing them to be downloaded from websites. As this requires a reasonable bandwidth to get several programs, it is not unreasonable to expect that this will often be done at work.

The mobile video market has no doubt been helped substantially by the entrance of Apple with a video iPod. However, there are numerous other vendors, such as Archos, that have had high capacity video jukebox players for a number of years now. The storage in these devices is set to soar with the introduction of new perpendicular disk drives. We are already seeing the first 160GB disk drives and they will only get bigger.

While this is ideal for very high quality video it also poses a massive and significant risk to corporate data. The capacities at this high end equate to a laptop drive. This means that vast amounts of corporate data can be removed on a small consumer device that sits in the pocket.

Introducing measures to prevent such devices from connecting to corporate resources are failing. As fast as vendors bring out software to identify and block the devices, device manufacturers and software companies are releasing utilities to hide the devices from network administrators. A common approach now is to just report them as removable CD players. This allows them to avoid many of the restrictive practices introduced by the network administrators.

The goal, then, is not to exhaust resources trying to ban the devices, but find a way to encompass their existence within the corporate data security policy.

One of the first problems is that devices are likely to have content put on them at different locations. There are no anti-virus, anti-spyware programs for the majority of these devices although software to protect Smartphone’s is beginning to appear. With multiple connection points for the mobile device, corporate desktops and laptops MUST be updated with the relevant software.

As the capacities increase, another measure, if these devices are to be tolerated, is to introduce transfer quotas. These allow you to restrict the amount of data that can be moved to an individual device. While this will not prevent data being taken out of the building it will restrict the quantity that can be taken at any one time.

A major problem with consumer devices is that they are not looked after carefully and attract thieves. This is where companies can take a very positive step to protect data. There are products that insist on encrypting data as it is being moved onto portable devices.

One advantage of this approach is that should the device be stolen, the data is protected. Another is that the larger capacity devices can be utilised as pseudo backup devices for mobile workers while keeping the data secure.

So, if you want to make sure that this New Year you keep your staff happy and the company safe and secure be sure to look at investing in strong encryption on all devices that enter and leave your office. Make encryption mandatory and educate your users so that they are aware of the risks to themselves and to your company if they lose one. That way you’ll ensure you’ve done a great job which will guarantee a great big fat bonus to enjoy for yourself next Christmas.
http://www.net-security.org/article.php?id=894

 

Movies File Share Top Ten



p2pnet.net Feature:- p2pnet's Movies File Share Top Ten is compiled from statistics supplied by p2p research company Big Champagne.

Only on p2pnet.

If you want to see how BC develops them, head over to the music FSTT, or go to our Q&A with ceo Eric Garland here.

(Note: If a movie returns after being out of the charts for two weeks or longer, it's designated 'new'.) 'Return' means back after a week's absence.

Movies Top Ten File Share Downloads, Global
Week ending January 26, 2006
Ranking Movie Number of Downloads
01 >>> The Chronicles of Narnia (unchanged) 1,048,864
02 >>> The Wedding Crashers (new) 1,029,238
03 >>> King Kong - #2 1,016,178
04 >>> Harry Potter& The Goblet Of Fire - #3 983,515
05 >>> Mr. & Mrs. Smith - #4 967,278
06 >>> Four Brothers + #8 962,229
07 >>> The 40 Year Old Virgin - #6 961,186
08 >>> The Exorcism of Emily Rose (new) 918,616
09 >>> Fun with Dick and Jane + #10 914,373
10 >>> Redeye (new) 909,395

Movies Top Ten File Share Downloads, USA
Week ending January 26, 2006
Ranking Movie Number of Downloads
01 >>> The Wedding Crashers + #10 568,239
02 >>> The Chronicles of Narnia: LWW - #1 556,575
03 >>> Fun with Dick and Jane + #8 547,878
04 >>> King Kong - #2 545,610
05 >>> The 40 Year Old Virgin + #7 526,835
06 >>> Mr. & Mrs. Smith - #3 523,186
07 >>> Harry Potter & The Goblet Of Fire - #5 520,901
08 >>> Four Brothers - #6 510,584
09 >>> The Exorcism of Emily Rose (new) 496,687
10 >>> Yours, Mine and Ours (new) 468,976




(Thursday 26th January 2006)

 

Star Wars 'Sith' p2p uploader

p2p news / p2pnet: When Star Wars: Episode III - Revenge of the Sith arrived on the p2p networks, "There is no better example of how theft dims the magic of the movies for everyone than this report today regarding BitTorrent providing users with illegal copies of Revenge of the Sith," raved MPAA (Motion Picture Association of America) boss Dan 'Jedi' Glickman (right).

Oh, those evil, wicked kids with Sony camcorders.

But, "The illegal distribution of 'Sith' started during the week before its May 19 release, when Albert Valente, 28, of Lakewood took a DVD copy of the film from a post-production facility where he worked," says the Los Angeles Daily News.

"The firm was hired by the studio for the post-production work," the story has US assistant attorney Brian Hoffstadt saying.

After Valente (no relation to ex-MPAA boss Jack Valenti) gave copies to, "Jessie Lumada, 28, of Long Beach, who gave it to another friend, Ramon Valdez, 30, also of Long Beach," says continues the LA Daily News. "Valdez took 'Sith' to the cable company where he worked and allowed co-worker Michael Fousse, 42, of Monrovia to upload it onto the company's internal network.

"Dwight Wayne Sityar, 27, of La Crescenta, who also worked at the cable company, then burned the movie onto three CDs and gave them to co-worker Stephani Gima, 25, of Los Angeles. Gima gave the movie to her brother-in-law, Joel De Sagun Dimaano, 33, of Los Angeles, who brought it to his work at MGM Studios and lent it to Hoaglin, his co-worker.

"Hoaglin uploaded the movie onto the Internet."

Does that mean Valente and friends could land in jail for up to 17 years or perhaps be fined $250,000, as advocated by Hollywood friend, and chairman of House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property, Lamar Smith?

That was what Curtis Salisbury was looking at after allegedly camcording The Perfect Man and Bewitched, "and then distributed them through illicit computer networks that specialize in piracy".

But No. That fate doesn't, apparently, await the Hollywood insiders and their friends.

Despite, "going over to the dark side by getting their hands on copies of 'Star Wars: Episode III - Revenge of the Sith' before its theatrical release" and pleading guilty to federal piracy charges, the seven are getting off with misdemeanor charges.

"If they'd done it for financial gain or profit, then that could have become a felony, but ... that wasn't the case for these folks," said Hoffstadt.

But what about Hoaglin who uploaded the movie, causing such grief for Glickman and his employers at the MPAA? Jail and a heavy fine?

Nope. Since he pleaded guilty, "prosecutors are recommending home confinement instead," says the LA Daily News.

OK, then. But that's because Hoaglin's theft was an isolated incident, surely? Nope.

An AT&T Labs report said a total of 285 movies its researchers sampled on the p2p networks, 77% were leaked by industry 'insiders'; actor and studio owner Mel Gibson sued a Hollywood post-production house for the online appearance of his Passion movie; and, Russell Sprague got 130 movies from Academy of Motion Picture Arts and Sciences member Carmine Caridi, who was ordered to pay Warner Bros a paltry $300,000 for providing Sprague, who died in an LA jail cell, with the copies."

Meanwhile, "Any competition 'Sith' faced from the online version did not keep it from earning $50 million at the box office its opening day," adds the LA Daily Times.

"The box-office take set the record for the biggest opening day of any movie, and it was also the biggest single-day gross ever."

Also See:
Dan 'Jedi' Glickman - 'Sith' leak man pleads guilty, December 14, 2005
Los Angeles Daily News - Revenge of the law falls on 'Star Wars' film pirates, January 26, 2006
fined $250,000 - Lamar Smith crows over victory, October 3, 2005

(Thursday 26th January 2006)
http://p2pnet.net/story/7741

 

States stomp Net smoke sites

p2p news / p2pnet: Big Tobacco's Philip Morris USA says it'll stop supplying cigarettes to, "illegal Internet and mail order dealers" as part of an agreement with attorneys general for 37 states and territories.

Its, "voluntarily agreed to end shipments of any of its products to customers, Indian tribes and enterprises that the states deem illegal, says New York AG Eliot Spitzer, quoted by the Associated Press.

For "voluntarily" read "had no choice but to".

There's a lot of similarity between Big Tobacco and Big Music.

Neither gives a damn about their customers, they both lie through their teeth and keep on doing so even when they've been proved to be lying, they both use law-slingers Shook, Hardy, Bacon, to defend their indefensible positions, and each has teams of expert truth adjustment specialists to con the media.

Most First Nation tribes say they're sovereign states and therefore, North American tobacco taxes are none of their concern.

Levies on cigarettes and other tobacco products vary wildly state to state and, in Canada, province to province.

This opened a window for a number of First Nations in the US and Canada who were, and still are, selling tax-free smokes. And many of them used the new income to improve the appalling conditions on their reservations .

Philip Morris, together with the other companies such as RJR Reynolds, were often accused of cross-border, inter-provincial and state smuggling, and of supplying cheap cigarettes to First Nations, knowing full well they'd be sold sans taxes directly from the reserves, and under-the-counter off them.

When the Net became popular, a number of tribes launched web sites featuring low-priced smokes.

Now, "The action is the third prong of the states' efforts to curb the sale of cigarettes to minors over the Internet and by mail order, often to avoid substantial state sales taxes," says the Associated Press." In March, major credit card companies agreed to stop processing payments from Internet retailers. Months ago, shippers DHL and UPS Inc. agreed to stop shipping packages from the vendors."

Spitzer is leading attorneys from 33 states, three territories and the District of Columbia, says AP, which has Philip Morris spokeswoman Denise Keane saying, "Our voluntary agreement ... sets a framework for continued information sharing with law enforcement and support of their efforts to eliminate illegal sales of Philip Morris USA products".

This is akin to Sony BMG, Vivendi Universal, Warner Music and EMI claiming they have customers' best interests at heart.

"The attorneys general consider all Internet cigarette sales to be illegal because they violate one or more state or federal laws aimed at stopping sales to underage smokers and collecting sales taxes," says AP.

"They said many of the sales through foreign Web sites also violate federal smuggling, cigarette labeling, money laundering and contraband laws."

Also See:
Associated Press - Philip Morris to stop supplying dealers, January 26, 2006
http://p2pnet.net/story/7739

 

"Making available" == copyright infringement, says RIAA

1/26/2006 2:11:54 PM, by Anders Bylund

Elektra v. Barker is not the latest issue of Daredevil: The Man Without Fear!, but rather one of the RIAA's ongoing court proceedings, wherein the record companies seek damages from a Denise Barker. The case started out as a John Doe, until Verizon—faced with a subpoena, not a court order—released the name of the customer associated with an IP address through which the indefatiguable sleuths at Elektra's disposal had found 611 songs shared, some of which surely violated their copyright.

The defendant filed a motion to dismiss the case on the grounds of a lack of evidence that any songs were actually shared; the fact that the RIAA invesigation turned up a list of available files is not sufficient to prove that any files changed virtual hands. On Tuesday, the RIAA lawyer team filed opposition papers against the motion for dismissal, and that's where the real fun begins. You see, according to the RIAA (PDF), copyright is breached the moment content is made available through any medium, and there's no need to prove anything happened beyond the listing:

The Ninth Circuit in A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) also found that "making available" constituted copyright infringement. In Napster, the court evaluated the situation where an individual made copyrighted sound recordings available for distribution on a peer-to-peer program, but did not submit evidence of actual distribution. The court held that "Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights." Id. at 1014. This same analysis was also applied in Matlow v. Solomon, No. Civ. 04-6109, 2005 WL 309976 (D. Or. Feb. 7, 2005). In Matlow, the defendant "offered for sale unauthorized copies of [plaintiff's] photographs by listing them on the eBay internet auction web site." Id. at *1. Without proof of actual distribution, the court held that "it appears undisputed that defendant violated the copyright act." Id.

The cited case law appears to give the argument solid support, but only until you do your homework. Take, for example, the A&M Records, Inc. v. Napster, Inc. case they refer to as a precedent for deeming a list of downloadable files equal to actual distribution. After Napster went bankrupt, the case changed its name to UMG Recordings Inc. et. al. v. Bertelsmann AG Inc. et. al. and continued to the next level of the judicial system, where US District Judge Marilyn Patel dismissed the case (PDF):

http://www.lifeofalawyer.com/riaa/elektra_barker_oppositiontomotion.pdf

... it is apparent that plaintiffs' "indexing" theory falls well short of meeting the requirements for establishing direct copyright infringement. Rather than requiring proof of the actual dissemination of a copyrighted work or an offer to distribute that workfor the purpose of its further distribution or public performance, plaintiffs' theory is premised on the assumption that any offer to distribute a copyrighted work violates section 106(3). This is not sufficient to satisfy plaintiffs' burden of proving that Napster or its users directly infringed their copyrighted musical compositions and sound recordings, as they must do if they are to hold defendants secondarily liable for that infringement. Accordingly, the court holds that defendants are entitled to summary judgement on this issue.

The executive summary: your copyright is only breached if you actually sell, lend out, or give away unauthorized copies of protected content, and you need to prove that it happened, rather than point at a list of downloadable files and guess that it did. Maybe the RIAA lawyers missed that stage of their precious support case because of the name change; maybe they chose to ignore it in the hopes that District Judge Kenneth Karas and his staff won't catch on. Whatever the case, the RIAA seems to have moved into full desperation mode, crying for stronger DRM everywhere, bullying teenagers into perjury, and turning the concept of "innocent until proven guilty" on its head. All the while, they spin record dollar sales as declining CD shipments, and blame it all on piracy.

As a direct result of piracy over the P2P networks, Plaintiffs have sustained and continue to sustain devastating financial losses. [...] Plaintiffs' losses from online music piracy have resulted in layoffs of thousands of employees in the music industry.

The last time the RIAA released actual sales data was for the the first half of 2005, and that release bemoaned a 6.5 percent drop in physical CD shipments, clearly due to piracy. Fast-forward a bit to the full-year stats calculated from SoundScan data, and that 6.5 percent drop is covered by the 7.3 percent market share of legal downloads. The real issue here is that the recording industry is losing the tight control they once had over where and how you could buy music, and they don't want to lose the double-dipping revenue streams they currently enjoy.
http://arstechnica.com/news.ars/post/20060126-6057.html

____________________________________________________________________

RIAA lawyers bully witnesses into perjury

12/30/2005 1:35:16 PM, by Anders Bylund

If you're into reading legal proceedings verbatim, here's a doozy for you. It gets even better if you like to see RIAA lawyers dragging themselves, rather than their chosen targets, through the dirt. Let's get a feel for what's going on here:

In Motown v. Nelson, pending in federal court in Port Huron, Michigan (Eastern District of Michigan, Southern Division), the defendants -- Mr. and Mrs. Nelson -- have made a motion for attorneys fees against the RIAA attorneys, pursuant to 28 U.S.C. 1927 for unreasonable and vexatious litigation and improperly interfering and/or obtaining false testimony from a prospective witness.

Got all that? Good. For the rest of us, here's what it means. The RIAA sued the Nelsons, who in turn are basically asking for the case to be dismissed and their legal fees reimbursed, because the RIAA lawyers got the testimonies they wanted from some witnesses through coercion and/or extortion.

The transcript of the deposition that followed this motion gives us a glimpse into exactly how far the recording industry is willing to go to justify their crusade against file sharing. It's also very long, so I'll just give you a taste here:

Q. What other areas do you feel that Mr. Krichbaum put words in your mouth?

A. I don't remember any specifically. Just trying to get me to say that Angie and Jim or I had ripped the music off.

[...]

Q. It wasn't true. And you felt that Mr. Krichbaum was trying to get you to say something that wasn't true?

A. Yes.

Q. And did he get you to say something that wasn't true?

A. From the statement I read, yes.

Ms. Granado went on to testify that Mr. Krichbaum had urged her to provide false and inaccurate testimony with regard to the entire portion of her original testimony implicating the Nelsons.

Q. Did he tell you why he needed you to stick with your original false story?

A. Because he said he didn't have a case unless I did.

Q. So, he told you that he didn't have a case unless you stuck with the original false story?

A. Yes.

This is a 15-year-old girl, telling the story of how lawyers of a major industry group told her she had to commit perjury, just so they could win their case. Some might call that racketeering, and it's most certainly a highly illegal way to win a court case. The deposition strongly suggests that the RIAA knew they didn't have a leg to stand on, and that they were perfectly happy to do anything in their power to win anyway. Funny how rather than open their own wallets to settle, they prefer breaking the law themselves. (Cue Radiohead's Karma Police. On second thought, don't. I'll get sued for not paying license fees.)

In response, counsel for Mr. Nelson then asked Plaintiffs' representative to provide a factual and legal basis for its position. Plaintiffs' representative responded that 'It didn't matter, someone is going to be responsible and someone is going to have to pay.' Plaintiffs' representative further threatened that unless Mr. Nelson paid $4,000.00 immediately, his client authorized him to conduct extensive discovery which would only increase the amount that he would eventually owe.

Nice. We've known all along that it's all thud and blunder, a wave of scare tactics meant to force the small folks to settle in the face of bigwig lawyers dropping of intimidating subpoenas. Sometimes they're obviously just guessing, and all they're doing is forcing the actual file sharers further underground where they're harder to find, which leads to the next round of lawsuits hitting an even lower ratio of bad guys to innocent people. They're way out of feet in which to shoot themselves, and if albums sales drop a little, maybe it's because they're scaring away their own customers. Or, more likely, they're simply proving time and time again at this is an industry that doesn't deserve our business.
http://arstechnica.com/news.ars/post/20051230-5871.html

______________________________________________________________________

RIAA Releases 2005 Mid-Year Shipment Data

WASHINGTON -- Music shipments of all physical formats to retail and other outlets declined by 5.8 percent in the first half of 2005, while a growing legal digital marketplace helped to offset the overall decline, according to data released today by the Recording Industry Association of America (RIAA).

While the area of legal digital downloads showed some progress, the music industry continues to be impacted by illegal online downloading, rampant unauthorized CD burning and traditional counterfeiting of physical products. These various forms of piracy are the primary culprits for a 6.5 percent decline in CD shipments from record companies to various distribution channels.

Even as the overall market declined, legal digital sales of singles grew 154 percent in the first six months of 2005, compared to January – June of 2004. In the first half of 2005, 148.7 million digital singles were downloaded, compared to 58.6 million in the first half of 2004; 5.1 million full-length albums were downloaded from legal online music sites in 2005, compared to 1.5 million full-length albums downloaded in the first half of 2004. The total estimated retail value of digital singles and albums sold in the first half of 2005 was $198 million, compared with $73 million for the first half of 2004 (estimate derived using current prices of $0.99 and $9.99, respectively).

Despite important and effective strides by the music community to begin to slow the effects of piracy, it remains an ongoing threat to the legitimate sale of music online and in record stores. Analysis by the NPD Group reveals that "burned CDs" accounted for 29 percent of music obtained by listeners in 2004. The NPD study showed that among households with Internet access that are burning CDs, 17 percent of those are burning more than 10 CDs per month. According to Nielsen SoundScan, record store sales of the Top 200 albums, the most frequently illegally burned and downloaded, declined from 102.8 million units to 93 million units, when comparing the first half of 2005 versus the first half of 2004.

When shipments of all physical products are combined with sales of digital downloads, the total unit count for the first half of the year is 343.9 million, which represents a 2.4 percent decline (counting both digital and physical singles as 1/12th of an album).

The growth and potential of the emerging digital marketplace is also reflected in new RIAA surveys and analysis. According to a June 2005 survey by Public Opinion Strategies (POS), on behalf of the RIAA, twice as many adults (ages 18 – 54) have paid to download music as compared to a similar survey last year – 13 percent in 2005 versus 6 percent in June 2004. Additionally, according to that same survey, the percentage of adults who have paid to download music legally is now higher than the number of adults who have downloaded music from an illegal peer-to-peer network – 13 percent have paid to download while 12 percent say they have downloaded illegally from a peer-to-peer site.

“Even as we continue to transform ourselves and transition to the digital marketplace, the music community is still suffering enormously from the impact of various forms of music theft,” said Mitch Bainwol, Chairman and CEO of the RIAA. “One of the stories we need to repeatedly tell in the coming months is that illegal downloading and burning continue to compromise the industry’s ability to invest in the new bands of tomorrow.”

“We are encouraged by the growth of the digital music marketplace,” added Bainwol. “Music labels are working closely with their technology partners to offer fans an incredible, high-quality experience – from download to subscription to legal peer-to-peer sites. And by handing down the unanimous Grokster decision, the Supreme Court has done its part to help level the playing field for all legitimate players. The debate about right and wrong has been settled.”

The RIAA’s CEO also said that the music companies have worked diligently over the last several years to respond to consumers’ demands by offering high-value music experiences. Fans’ passion for music, as well as the importance that it plays in their lives, is as high as ever. According to a survey conducted for the RIAA by Taylor Research, 91 percent of adults polled said that listening to music is important in their daily lives.

In addition to an unprecedented array of digital ways to access music – download services, subscription services, nascent legal peer-to-peer services, cell phone ring tones and ring tunes, and Internet and satellite radio – music companies are working closely with retailers and others to develop exciting high-value offerings in physical formats. DualDisc, an innovative new product that combines music, film and video on a single, two-sided disc, shipped more than 7 million units in the first half of 2005, including two consecutive No. 1 albums earlier in the year.

“In a relatively short amount of time, this industry has revolutionized itself and the way it does business,” Bainwol said. “We are responding to consumers, working with our partners in various technology industries, and delivering some of the best music ever to our fans.”

A copy of the report can be found here.

#####

The 2005 statistics are supplied by PricewaterhouseCoopers, LLP to the RIAA and are broken down by U.S. music shipments from record companies to retail outlets, and all U.S. music shipments from record companies (including retail shipments and direct-to-consumer sales and special markets). Dollar values are based on suggested retail list price for the record companies' shipments.
http://www.riaa.com/News/newsletter/100305.asp

 

Prion disease found lurking in deer muscle

* 19:00 26 January 2006
* NewScientist.com news service
* Debora MacKenzie

The infectious prions that cause Chronic Wasting Disease, an infection similar to BSE that afflicts North American deer and elk have been found in the parts of the animals that people eat. No one knows if CWD can jump to humans, but if it does hunters in affected areas might be at risk.

CWD was first diagnosed as a spongiform encephalopathy in captive deer and elk in Colorado in the 1970s, and in wild deer and elk in the region in the 1980s. But in the 1990s it spread widely within the elk farming industry, jumped to wild deer, and now affects two provinces of Canada and 13 US states.

Like the related sheep disease scrapie – though unlike BSE – CWD spreads from animal to animal, says Glenn Telling of the University of Kentucky at Lexington, US. Deer housed with infected animals, or fed infected brain experimentally, contract the disease.

Because of this there are fears that the CWD prion might be distributed widely in the deer’s tissues – as scrapie is in sheep. Efforts to find the infectious prion in the muscle of infected animals, by seeing whether antibodies to the prion could find any and bind on, have previously failed.

But Telling’s lab has now shown that diseased prions can reside in muscle of deer infected with CWD, by using transgenic mice.
Transgenic mice

The team replaced the gene for the normal mouse version of the prion protein with the normal gene from deer, so the mice made the normal, healthy deer protein. They then injected the mouse brains with tissue from infected deer. Twelve to 18 months later, the mice developed encephalopathy.

Tissues from both the infected deers' brains and thigh muscle caused disease. Muscle took slightly longer to cause disease than brain tissue, showing it had slightly less prion.

“We don’t know that it is transmitted in the wild by animals eating muscle from infected animals,” cautions Telling. “We now have to see where else the prion might be,” including saliva and even excrement, using more transgenic mice.
Brain warnings

“Because we tested deer that were already ill,” he told New Scientist, “we don’t know what the distribution of prion is in animals that are still incubating the disease.” Hunters have been warned by wildlife agencies not to kill and eat obviously ill animals, but an animal not yet showing signs of the disease might still carry the abnormal prion, albeit less of it.

It is also unknown whether people can catch encephalopathy by eating CWD-infected meat, as they can from eating BSE-tainted meat. Anecdotal reports that hunters develop the human prion disease CJD in unusual numbers have never been confirmed. State officials have issued warnings to hunters not to eat brain or spinal cord – the tissues most affected.

“If I were a hunter I would be cautious about eating deer in areas affected,” says Telling. But he notes that not much testing of wildlife has been done, and it is not clear how prevalent the infection is.

Journal reference: Science (DOI: 10.1126/science.1122864)
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Patti Santangelo fights on

p2p news / p2pnet: Activists Aid Woman in Music Piracy Case, says ABC News. Internet activists help get lawyer for woman accused of piracy, says the Boston Herald. Activists aid woman in music piracy case, says Business Week, Activists Aid Woman in Music Piracy Case, says Forbes and on the other side of the world, Internet activists help get lawyer for woman accused of piracy, says the Malaysia Star.

And they're all talking about you and your efforts to help new York mother Patti Santangelo single-handedly take on the Big Four record label cartel's RIAA (Recording Industry Association of America). There's a whole raft more of similar headlines on Google, Yahoo, and so on. But you get the point.

You've been contributing to the Fight Goliath campaign and thanks to you, as I write this, $6,378.88 has so far been poured into the kitty. And it's allowed Patti to retain lawyer Jordan Glass to help her.

Because there's no way on earth she can take on the likes of Shook, Hard Bacon by herself.

Most of the headlines refer to Jim Fitzgerald's Associated Press national report, or re-hashes of it.

Yesterday, I heard from him in an email saying Patti was in court. When he asked her how she was now able to afford a lawyer, she credited you – all the people not only in North America, but from around the world who've donated dollars, lira, pounds …….

Most of the stories, such as the one in Forbes, were based on Fitzgerald's story and among the questions he asked was, "What kind of people are the donors?"

"Ordinary kids, musicians, students, moms, dads, writers, waiters, programmers, bus drivers, artists," we said. Another was, "Can you tell me why you started raising money for her case?"

We're, "trying to help Patti take on what's become the common enemy - the corporate music industry, with its bottomless pockets and legions of lawyers," we said.

So – pat yourselves on the back : ) But remember: tyis is the start, not the finish. And if you're wondering, read Alex H's thoughts.

For now, keep it going. Make a donation - doesn't matter how much or how little - through the button below, and/or by adding one to your web site. Get the code here.



If you don't like PayPal, you can send your contribution by snail mail to the address below:

Patricia Santangelo
c/o Ray Beckerman
Beldock Levine & Hoffman LLP
99 Park Ave (16th Fl)
New York, NY 10016

And here's a list of the sites which are sponsoring Fight Goliath buttons:

* http://jasonrohrer.n3.net $1864.69
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* http://virtualturntablefourstonesnet $72.22
* http://wwwbl0gcouk/ $47.75
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* http://theangrywoodchuckblogspotcom/ $22.40
* http://psgcom/ $19.12
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* http://wwwtomb-of-nilcom $19.12
* http://wwwpod2peerblogspotcom/ $18.92
* http://wwwlivejournalcom/users/obscure411 $14.45
* http://blogandrlikorg $14.26
* http://wwwswissreporterch $12.18
* http://psx00com $10.08
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* http://wwwsoundnetcouk/ $4.50
* http://wwwpdmediaorg $2.61
* http://bandnetorg/ $2.55
* http://scattermallcom $0.67

Stay tuned.
Jon

(Friday 27th January 2006)
http://p2pnet.net/story/7743

 

7 plead guilty for allowing one to upload an unreleased film
Posted by Seán Byrne on 27 January 2006 - 00:05 - Source: BBC News - Entertainment

At first, it seems like making a copy of a movie to give to a friend may pose no harm. Well, Albert Valente likely thought the same when he took a copy of George Lucas' Final Star Wars movie from a Los Angeles post-production facility and made copies of it to pass to 6 Star Wars fans he knew. At the time, the movie was not even in the cinema yet. Unfortunately, one of his fans who received a copy, Mr Dimaano passed it on to a work colleague, who in turn made it available over the Internet.

In the US, it is federal crime to illegally distribute a movie online before its DVD release. While it is not clear how these people were caught, they admitted to piracy charges and the 6 men and one woman all pleaded guilty to criminal conduct as a result of allowing the 8th person to get a copy of the movie and make it available over the Internet. Sentencing is due to take place on April 12th in which each will face a penalty of up to a $100,000 fine and one year jail term.

The MPAA announced that they are glad to see these thieves brought to justice, in which Hollywood claims that piracy costs the movie industry $3.5 billion each year. Thanks to both heystoopid and sidz who used our news submit to let us know about the following news:

Seven Star Wars fans have admitted copying Revenge of the Sith a week before its cinema release.

They admitted piracy charges after copying and passing a DVD copy of the movie among them last May.

The six US men and one woman also pleaded guilty to criminal conduct in allowing an eighth person to obtain the film and upload it onto the internet.

They each face a maximum penalty of a $100,000 (£56,000) fine and one year in jail when sentenced on 12 April.

As the movie came from a post-protection facility, chances are that it is not watermarked to a given individual as opposed to the screeners that get sent out for reviewers. So in the case, it gives an indication that the movie industry is keeping a good eye on the first sightings of a new unreleased movie and quickly close in on the culprits once anything is spotted. Unfortunately just like a virus, by the time they catch the culprit, the movie they released will have become widely available by that stage.

heystoopid added: Oh well, I knew star wars fans could be obsessive, but I love the claim "Hollywood studios said movie piracy cost the film industry $3.5bn (£1.95bn) per year." , which is offered, without formal proof! Now RIAA, makes very but larger value for music piracy world wide as well! For me this would indicate, for given the total value of world wide sales of this media, that the pirates would need to maintain some very large factories and retail sales outlets, with a very strong presence in every pub and sunday market in the land selling the pirated media by the multiple car bootfull, just to reach the $ value claimed. But don't you love, the modern news media corporations, repeating verbatim, the fictitious propaganda and extraordinary claims, from all the music and video companies, without formal proof! But alas, how strange we don't hear from the powers to be, about regular busts and raids made on these factories? Oh well, let the cynics among us, remain alive and well!
http://www.cdfreaks.com/news/13000