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October 18, 2010
Volume XXXII, Issue 8

Internet Is Top Medium Worldwide

Excerpted from Social Graf Report by Erik Sass

Any doubts about the ascendancy of the Internet should be removed by a new global survey from TNS called Digital Life, which found that the Internet is the most-used medium among people with online access. Specifically, around the world 61% of people with online access used the Internet every day, versus 54% for TV, 36% for radio, and 32% for newspapers.

In other words, to know the Internet is to love her. Of course, not everyone has Internet access, but that day may not be far off, given very rapid growth rates in Internet penetration in the developing world. What's more, Internet users in the developing world tend to be more frequent users than their peers in the developed world, with 56% of Egyptian Internet users and 54% of Chinese Internet users engaging in online interactive activities, versus just 20% in Japan.

This interesting trend carries over into activities like blogging, with 88% of Chinese Internet users and 51% of Brazilian Internet users saying they have written their own blog or posted to an online forum, compared to just 32% of their US counterparts. Meanwhile, 92% of Thai Internet users, 88% of Malaysians, and 87% of Vietnamese have uploaded photos to a social network or photo-sharing site, compared to just 48% of German Internet users and 28% of Japanese.

Social networks are popular across the board, according to TNS, although specific usage patterns show considerable variation between countries. The heaviest users are Malaysians, at 9.0 hours per week, followed by Russians, at 8.1 hours per week, and Turks, at 7.7 hours per week. Malaysians also lead in number of "friends" on social networks, with an average 233, followed by Brazilians with 231. At the other end of the spectrum are Japanese, with just 29 friends, and Tanzanians, with 38.

Mobile is the next big thing for social networks: in the US, 33% of online consumers expect to do more social networking via mobile over the next year, compared to 26% expecting to do more social networking via PC or laptop. In Australia the numbers are 26% and 44%, respectively, and in Sweden, 28% and 53%.

Cloud-Based Music Services Gaining Fast Over iTunes 

Excerpted from LA News Monitor Report

Cloud based music services are fast becoming the preferred way of accessing music as more and more people start to give Apple's iTunes the good-bye. New websites like Spotify, Last.fm and TheHypeMachine offer much cheaper and clutter-free music downloading, something that iTunes no longer offers.

Both Last.fm and Spotify have neat apps for both iOS and Android systems and are packed with musical content so much so that purchasing another piece of music from iTunes will be irrelevant soon.

The ease of use and amazingly accurate prediction of users taste in music is something that has made Last.fm extremely popular with users around the world. The website has radio stations which play music on user preferences and the tracks which have been heard can be stored on your iPhone as well!

Spotify grants users unlimited number of plays once the subscription has been bought which when compared to iTunes pricey ways can mean huge savings for music buffs. Also Spotify has an extremely user-friendly method of transitioning those using iTunes, as it allows users to import full song libraries form iTunes and play them from within Spotify, which could mean that one never needs to access iTunes again.

Microsoft is going to launch a similar service in the UK called a "Zune pass," which will let users download and share unlimited tracks across mobile devices, PCs and X-box and will be priced at $14.39 a month.

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyAs distributed computing has evolved from rudimentary data-sharing applications to much more advanced deployments, where software programs themselves are shared and even integrated remotely, so has the potential value of distributed-computing technologies to both large and small organizations.

But so have the questions related to which ones to deploy and when and how.

The latest trend, cloud computing, promises to be truly transformative in the sense of changing information technology (IT) from merely a functional discipline within an enterprise to a service that can actually perform parts of the business.

And we believe these benefits can even be brought to bear on entire industries, especially those with characteristics that have led to their being severely challenged by the seismic shift from the analog world to the digital realm.

The entertainment sector, including the music, motion picture, television programming, videogame, and print-publishing industries, could experience an unprecedented renaissance through industry-specific adoption of cloud computing for their respective core businesses.

Some areas within these businesses are more easily adaptable to the cloud than others. Collaborative efforts that involve accessing and moving large amounts of data are still a natural choice. Geographically distributed operations where workers in multiple locations perform similar tasks are another. Work processes that involve coordination among multiple customers or numerous suppliers (or both) are also rich areas for experiencing productivity gains and cost savings with cloud computing.

Industry observers who espouse such concepts as the "celestial juke-box" or "box-office in the sky" are not wrong, but they are only recognizing one attribute of cloud-based solutions - offsite content storage or the so-called "digital locker." There's actually much more that cloud computing can do for the fundamental businesses of content production, delivery, and monetization.

A core metric for evaluating whether a particular part of a business is suitable for migration to a cloud environment is the volatility of its demand for computing resources. The more dynamic the ups and downs a particular area experiences, the more likely it is a candidate.

This obviously applies to the life-cycle of popular entertainment properties, but it is also relevant to other aspects of their surrounding businesses, from transcoding to licensing to performance-reporting.

Many complex arguments have been made about the relative advantages of private and public clouds. A way to simplify this aspect is to ask whether a given application needs to be accessed only internally or also externally. If the answer is only within a single company - and especially if sensitive information is involved - then it makes sense for cloud computing to be deployed in an internal data center.

Could the entire music or print-publishing industry come together to make use of a private cloud for certain applications? Absolutely; but only as part of their deployment of cloud computing. For example, there should be cloud-based service bureaus for inventorying and protecting their respective content, and ideally these ought to be industry proprietary.

As soon as multiple entities need to access an application, however, then public cloud computing becomes a more logical choice. Cloud-based applications for business functions involving the interface of entertainment content rights-holders with potentially many thousands of online distributors, for instance, need to be conducted by means of a public cloud.

Security becomes an important consideration here because in the shared environment of a public cloud, additional capabilities must be added. But there's no reason that a public cloud should be any less secure than the most partitioned or encrypted area of the Internet.

When more than one application is involved, the question of interoperability also comes into play, and cloud service suppliers can and should be expected to provide this, including the integration of different applications among different cloud vendors. Published protocols and Internet standards, where they exist, should be used in order to facilitate this.

A beneficial side-effect of this level of standardization is the enabling of cloud-computing customers themselves to more easily develop and add innovative business applications to their own cloud environments.

A major and very agreeable adjustment for organizations that adopt cloud computing is the difference in the related financial considerations in contrast to what they have been accustomed to previously.

Traditionally, computing costs involve one-time-only payments or capital expenses that are allocated on a per-user basis and amortized over time. With cloud computing, which is generally purchased as a service, these upfront costs are eliminated and replaced by dramatically smaller ongoing payments, in the form of operating expenses, but which can still be allocated to individual users based on their amount of usage.

An example of the savings that accrues to institutions that replace traditional IT with cloud services is the ratio of servers to administrators. Instead of less than 100, the number should increase to a few thousand servers per administrator.

Another is as a result of effectively outsourcing the tasks of updating server software and training personnel to manage these aspects of IT. A proficient cloud-services supplier takes these responsibilities on for its customers, not only further reducing related costs, but also potentially freeing up these customers' resources to focus on their competitive advantages.

And still another is that with cloud computing, customers should expect their service suppliers to maintain and update the underlying software, not only by upgrading it with new releases as developed, but also by ensuring ease-of-use when implemented. The way cloud customers manage their utilization should not be significantly affected by these continual improvements.

In short, we are bullish on the potential of cloud computing to be of enormous value to the entertainment sector. And we're here to help make that happen. Share wisely, and take care.

TechniTrader Offers Report on Cloud Computing

Cloud computing is the fastest growing new technology in the software industry at this time with new companies emerging as fast as new application companies did during the early 1990s. 

This new technology is a much needed boost for the stagnant software industry. 

The software industry rose during the boom years between 1985 -2000 when technology for PC computers, software, electronics, and the Internet surged in popularity. The collapse that followed caused most software companies to plummet in value then slowly recover. 

The 2008 financial crisis saw another drop in stock values that have recovered almost back to the level these stocks had prior to the banking debacle. 

But still this industry is far from its prior heights. The software industry remained in slow growth due to a lack of new inventive, innovative ways to use and create software. 

But with the advent of cloud computing, a revolution in software technology is underway and growing exponentially even during a recession. This new approach to software technology is reviving and reinventing older software companies as well as providing a new opportunity for highly creative, imaginative, and inventive new entrepreneurs. 

Cloud computing is essentially software that is accessible and maintainable via the Internet. Instead of buying a software program on CD at your local Office Depot, you simply log onto your computer using the software remotely. 

Gone are the days of loading software onto your personal or business computer via a CD or an Internet download. Gone are the days of a huge staff of IT personnel to maintain corporate software programs. 

Cloud computing makes sense in a world that is ever increasingly mobile and portable. It makes sense with so many people using various types of computers, palm, and smart-phone devices for their day-to-day business activity. 

For more information or to obtain the rest of the report, please contact info@technitrader.com.

Cloud Services Change Customers' Service Expectations

Excerpted from VON Xchange Report by Charlene O'Hanlon

A new report by IDC shows that as more companies adopt cloud services, service providers will be forced to change from their current traditional labor-intensive models to an asset-based delivery model.

The change in business model will arise as a result of the industry's move to outsourced cloud services and the accompanying performance and relationship expectations of customers, according to the survey, US Customers Give Outsourcers a Thumbs Up in Performance, But Expectations Are on the Rise with the Move Toward Outsourced Cloud Services.

The increased use of new delivery models such as cloud services and software-as-a-service (SaaS) will change customer expectations regarding the performance of their providers and subsequently change their relationship with providers, the study noted.

As a result, traditional outsourcing companies will have to change their current delivery models.

"Perhaps the greatest lesson of the great recession is the need for companies to be much more adaptable to changes in the market," said David Tapper, Vice President, Outsourcing and Offshore Services Market research at IDC, in a release announcing the study.

"This fundamental need is a major force driving considerable shifts in the outsourcing industry - shifts that not only involve provisioning more targeted and innovative solutions, but also involve the transformation of the outsourcing industry from a labor-centric model of service delivery to more asset-based services involving cloud-based outsourcing."

Specifically, the report noted, service providers will need to develop robust road maps that show how customers are looking to adopt these utility-based services that cut across entire organization requirements. Additionally, many outsourcers and providers will need to make major adjustments to their delivery capabilities, partnership ecosystems, business models, and service offerings, and will need to examine their roles and position within and beyond the traditional market of IT and business process services, according to the report.

Atrinsic to Build and Expand Kazaa Digital Music Service

Atrinsic, a marketer of direct-to-consumer subscription products and an Internet search marketing agency, has entered into amendments to its existing Marketing Services Agreement and Master Services Agreement with Brilliant Digital Entertainment and entered into an agreement with Brilliant Digital to acquire its Kazaa assets.

The two Agreements govern the operation of Brilliant Digital's Kazaa digital music service, which is jointly operated by the parties. Among other things, the amendments extend the term of these Agreements from three years to thirty years, provide Atrinsic with an exclusive license to the Kazaa trademark in connection with Atrinsic's services under the agreements, and modify the Kazaa digital music service profit share payable to Atrinsic under the agreements from 50% to 80%.

As consideration for entering into the amendments, Atrinsic will issue 4,161,130 shares of its common stock to Brilliant Digital.

The amendments are part of a broader transaction between Atrinsic and Brilliant Digital under which Atrinsic will acquire the Kazaa digital music service assets, as well as certain other assets of Brilliant Digital, in accordance with the terms of an asset purchase agreement entered into between the parties on October 13th.

The purchase price for the acquired assets includes the issuance by Atrinsic of an additional 7,125,665 shares at the closing of the transactions.

Under the asset purchase agreement, Atrinsic has agreed to appoint two individuals to be selected by Brilliant Digital to serve on Atrinsic's Board of Directors effective upon the closing. Kevin Bermeister, Brilliant Digital's Chief Executive Officer, is expected to be one of Brilliant Digital's nominees.

Mr. Bermeister has been a Director of Brilliant Digital since August 1996 and has served as its President and as its Chief Executive Officer. Mr. Bermeister previously founded and served as Chief Executive Officer of Sega Ozisoft which commenced business in 1982. Mr. Bermeister also founded and served as a director of Packard Bell NEC Australia. Mr. Bermeister has served on numerous advisory boards, including Virgin Interactive Entertainment.

Kazaa has been at the forefront of the transformation of the distribution of digital music and the acquisition of the Kazaa business is likely to have an equally transformative effect on Atrinsic. Brilliant Digital's relationships with the major record labels, its multi-device on-demand digital music delivery platform, and the Kazaa brand, will enable Atrinsic to build on and improve the Kazaa digital music and entertainment service.

This transaction offers Atrinsic a ubiquitous entertainment brand and licensed music content to complement its traditional strengths in the cost effective acquisition of customers. Atrinsic believes it can effectively combine resources and assets to extend the life of its customers, grow its subscriber base, and enhance and expand recurring revenue by delivering long-term value to subscribers across distribution and billing platforms.

Alcatel-Lucent Unveils Strategic Alliance Program for Velocix

Alcatel-Lucent this week announced a strategic alliance program for the Velocix Digital Media Delivery Platform to ensure that service providers can benefit from a range of pre-integrated technology components to accelerate the deployment of multi-screen consumer solutions. 

Initial members of this alliance program include: 3Crowd, Adobe, Aspera, Blue Coat Systems, Clearleap, Elemental Technologies, Inlet Technologies, Microsoft, RGB Networks, Rights Tracker, thePlatform, and VidZapper. 

Focused on digital media delivery solutions, this program expands Alcatel-Lucent's relationships in the application and content provider space and aligns with the company's leading role in the award winning, multi-industry "ng Connect Program," which focuses on the development and rapid deployment of next generation broadband services based on long term evolution (LTE). 

This open collaboration will result in innovative and creative bundled multimedia offers that service provides can quickly deploy and take to market. 

This new strategic alliance program brings together key players throughout the industry to foster collaboration in four main focus areas: Manage - For content management, ingestion, and encoding; Publish - players, EPG/UI and feed aggregation; Monetize - ad management, Revenue enablers, transaction Processing; and Deliver - Velocix Digital Media Delivery Platform provides the delivery capabilities. 

Alliance members will benefit from direct interaction with engineering and development teams to accelerate solution design and enable knowledge and skill sharing to accelerate deal cycles. 

"It is a key moment, with the emergence of service providers as leaders in media delivery, the time is right to embrace the diversity of the market to bring the right solutions to our customers," said Paul Larbey, General Manager of Velocix. 

"By establishing a strong set of key partners with best of breed technologies, we can provide our customers with superior, pre-integrated solutions." 

In creating the program, Velocix will leverage its unique experience in working with services providers to implement content delivery network (CDN) platforms and its prior operation of a global CDN servicing the world's largest media companies. 

The Velocix platform is a key element of the Alcatel-Lucent's High Leverage Network architecture - a fully converged, scalable, next generation, all-IP multiservice infrastructure that enables operators to deliver traffic more reliably, efficiently and at the lowest cost, while also leveraging the network to generate revenue from sophisticated managed services and applications.

Verizon Business Expands Asia-Pacific Cloud Capabilities

Adoption of cloud services in the Asia-Pacific region continues to grow dramatically, and Verizon Business is meeting that demand by extending its flagship cloud-computing solution into the company's recently opened Hong Kong data center.

The company's latest in-region expansion of its Verizon computing-as-a-service (CaaS) solution enables Pacific Rim enterprise clients to better meet region-specific performance, security and compliance requirements. These localized capabilities are increasingly important, given the region's projected economic growth. For example, recent International Monetary Fund forecasts show that Asia's developing economies will expand 9.2% in 2010, outpacing growth of 2.6% in advanced countries.

"Driven in large part by its overall economic prosperity, the Asia-Pacific region is leading the world in embracing cloud computing," said Andrew Dobbins, Regional Vice President - Asia-Pacific, Verizon Business. "Cloud computing offers enterprises significant advantages over traditional IT models, and helps accelerate time to market and enhance productivity."

A recent global Gartner study of 1,587 information technology (IT) professionals in 40 countries found that 39% indicated that they allocated IT budget to cloud computing as a key initiative for their organization.

"As more companies in Asia-Pacific continue to move their resource-intensive applications to the cloud, the increasing need for in-region advanced data centers is becoming more inherent," said Bon Igou, Research Director, Gartner.

Hong Kong is strategically located at the heart of the Asia-Pacific region and serves as the gateway to China and India for multinational corporations, making Verizon's new data center particularly well situated to meet growing in-region demand. The center - the most advanced yet built by the company in the Pacific Rim - is located in a highly resilient facility and connects directly to the Verizon global IP network, reducing latency and making interconnection more convenient.

The Verizon CaaS platform is supported by round-the-clock support and multiple levels of physical and logical security, including compliance with the Verizon Security Management Program. Verizon Business is also the first global SAP-certified provider of cloud services.


Rob Shambro, CEO of GenosTV, the first IPTV operator to utilize existing consumer broadband connections to deliver established television programming services to Internet-connected televisions and other consumer electronics devices will deliver a keynote address at the inaugural CONTENT IN THE CLOUD Conference within CES, to be held during the International Consumer Electronics Show(CES) in Las Vegas, NV on January 7th. Mr. Shambro's presentation is entitled, "Benefits of Cloud-Delivered Content for Consumers: Ubiquity, Cost, Portability Improvements."

The presentation will include the first public exhibition of GenosTV's flagship service, launching in early 2011 and exclusively offering consumers low-cost access to traditional broadcast and cable/satellite television programming over their current home broadband Internet connections, delivering greater choice, convenience, and value than current pay television offerings. GenosTV is the first television service designed to integrate directly into the next generation of Internet-connected televisions and consumer electronics devices.

"Consumers are demanding more entertainment choices than ever before and we are thrilled to be able to show them what GenosTV is capable of delivering," said Rob Shambro, chairman and chief executive officer of GenosTV. "The 2011 International Consumer Electronics Show is the ideal platform to unveil our service and the CONTENT IN THE CLOUD Conference within CES is tailor-made for such an unveiling."

The GenosTV service will launch in early 2011 and be made available to consumers on Internet-connected TVs, and through proprietary and partner IPTV set-top boxes and games consoles, with later extension to personal computers, mobile devices, and other Internet-capable platforms as determined by participating programmers.

GenosTV is a subsidiary of the ShambroWest Corporation, with offices in Las Vegas and Amsterdam. Founded by Rob Shambro, co-founder of SAVVIS Communications, StreamSearch, and Infinium Labs; Kevin Bachus, co-creator of the Xbox; and Mike West, subject matter expert in consumer electronics and a former technical leader at IBM, GenosTV provides a cost-effective way to access premium linear television programming using existing broadband Internet connections directly on connected televisions and related devices.

PlayFirst Closes $9.2 Million Financing for Social & Mobile Games

PlayFirst, a leading publisher of engaging interactive entertainment, has completed a $9.2 million financing comprised of $5.2 million of venture capital from existing investors including Mayfield Fund, Trinity Partners, DCM and Rustic Canyon Ventures, and $4.0 million in debt financing made available by Comerica Bank.

Proceeds from the financing will be used to fund the company's continued move into the burgeoning market for both mobile and social games.

PlayFirst also announced that Eric Hartness, most recently Chief Marketing Officer at PlaySpan, has joined the PlayFirst management team as Vice-President and General Manager, Social Games. At PlaySpan, Hartness led PlaySpan's monetizaton-as-a-service (MaaS) platform marketing efforts. In this new role, Hartness assumes responsibility for the overall strategy, execution and results for PlayFirst's growing social game business.

"This financing enables us to keep our focus on the opportunities in the mobile and social gaming sectors and provides the flexibility to quickly respond to changes and opportunities as the market continues to shift rapidly. With this capital, we will continue to aggressively optimize the PlayFirst brands that consumers love, like "Diner Dash," to social and mobile platforms and look for growth through partnerships and potential acquisitions," said Mari Baker, President and CEO of PlayFirst.

"PlayFirst, with its unique combination of best-selling casual game titles and emotionally engaging content, is well-positioned to thrive in today's quickly growing market for social and mobile games," said Gus Tai, General Partner, Trinity Ventures. "We see tremendous market opportunity ahead and PlayFirst will continue to be part of that story."

PlayFirst also announced the following staff additions: Matt Levy joins PlayFirst as Architect, Social Games from Loomia where he was Chief Architect developing personalization engines related to the web. Lars Berg joins the company from Playdom as Senior Product Manager; Roxanne Gibert joins as Senior Product Manager from Playdom and Zynga; Ray Holmes joins as Senior Game Designer from Playdom and Zynga, and Vamsi Prakhya joins as Lead Engineer from Zynga.

Over the past year, PlayFirst has continued to experience success across all platforms.

Content Caching Deployments Double Over Past Six Months

Sandvine, a leading provider of intelligent broadband network solutions for cable, DSL, FTTx, fixed wireless, and mobile operators, this week announced that within the past six months the Sandvine-PeerApp pre-integrated content caching solution has doubled its deployments and is now being used in 11 service provider networks serving over two million cable and DSL subscribers worldwide.

"Increasingly, people are seeking on-demand entertainment through their Internet connection," said Tom Donnelly, EVP Sales and Marketing, Sandvine. "YouTube states that users watch more than two billion videos a day. With that kind of appetite for streaming video and rich media, operators are deploying caching solutions to maintain the best quality of experience for users across their networks. Sandvine helps by making those solutions scale more efficiently."

Transparent Internet caching is a sophisticated traffic optimization tool that targets popular file transfers such as Internet video (YouTube, Metacafe, etc.) by temporarily storing the content locally, on a service provider network. When that content is requested again by any other subscriber, the cache satisfies the request from its temporary storage, eliminating data transfer through expensive transit links and reducing network congestion. It can also serve the file or video four to ten times faster than a traditional Internet link.

"A transparent caching solution generally saves 20-to-30% of transit link and circuit costs for a typical operator," said Frank Childs, PeerApp's Vice President of Marketing. "By pre-integrating and pre-packaging this solution with Sandvine, our customers can quickly and easily attach it to the network, begin saving money immediately and improve their service quality to their subscribers."

The Sandvine-PeerApp integrated transparent caching solution leverages Sandvine's Policy Traffic Switch (PTS) detailed protocol identification capabilities to reduce overall solution capex. Sandvine ensures that only the relevant traffic is cached within PeerApp's UltraBand product that focuses on multi-service, multi-protocol caching for video and download services.

Sandvine has a proven Solutions Partner Ecosystem with numerous complementary technology vendors, such as PeerApp, that offer service providers a suite of pre-integrated joint solutions designed to rapidly deploy new services, improve subscriber retention and enhance subscriber online quality of experience.

All Sandvine customers referred to above were won in previous quarters together with PeerApp as part of a technology partnership that began in 2008.

With service provider customers in over 80 countries serving hundreds of millions of fixed and mobile subscribers, Sandvine is enhancing the Internet experience worldwide.

Website Allows Fans to Listen to Unreleased Music

Daily Illini Report by Grace Lien

Kazaa. Napster. LimeWire. In the 21st century world of file sharing, the music industry has taken a pitfall from the days of purchasing CDs of our favorite bands.

When Will Leinweber and Adam Steele, two graduates of the University, took a technology entrepreneurship class in fall 2008, their common interest in music led them to start thinking about a business plan that would allow the music industry to make a profit.

Launched on June 16th, Merge.fm is a web application that allows fans to listen to and provide feedback on unreleased songs uploaded by artists. To get access to the artists' works, fans pay $4.99 a month and the profit is split between Merge.fm and the artists themselves.

"It's a whole dimension of different experiences," said August Knecht, the third co-founder and graduate of the University.

"The real thing that we offer is the ability to see the different versions that a song goes through," Leinweber said. "That's sort of like our core difference between iTunes, where you just get the individual finished song."

Allowing fans to listen to multiple versions of their favorite artists' unreleased songs wasn't always the original idea behind Merge.fm, though.

"Originally it was a different idea," Leinweber said. "It was going to be sort of Wikipedia for musicians, where musicians could collaborate and work on a song together without having to be in the same location."

Leinweber said the problem with their original idea was that independent musicians don't have a lot of money, and so building a product to sell to them would be a challenge.

"After a while of talking to potential customers, we came to the idea of having the musicians sell their creative process to their fans, and getting their fans engaged in the music before it's even released," Leinweber said.

Currently, five employees work at Merge.fm, including the three co-founders and two undergraduate students that work part-time.

"One of the fun things about being a small start-up and a web application is that several times a week we upload different changes to the site, hopefully to make it better and improve it all the time," Leinweber said.

Among the major changes Merge.fm hopes to implement soon is their pricing model.

While fans now pay a monthly subscription, the new payment model will allow fans to buy access to individual songs.

"It is really exciting because if you come to the site and see your favorite artist working on a new album, you can then buy those songs before they're released," Leinweber said. "Or if you come to the site later and the album's already been released, you can then go see the history of the songs that you like the most and see where they came from and gain a new appreciation for it."

Of the dozen artists featured on Merge.fm, most are local bands, such as Elsinore and Withershins.

"Our plan is to prove that it works for these smaller cases, and if it does work, we can spend the time to go bigger and attract a lot of bands after that," Leinweber said.

As for challenging other web applications, such as Indaba, which has been compared to Merge.fm, the staff at Merge.fm think their business model stands out.

"They do more that kind of Wikipedia music kind of thing, which is what Merge.fm originally started out doing." said Roshan Choxi, one of the two undergraduate students working at Merge.fm said. "We're kind of opening up this entirely different revenue model of selling the experience and not the final product."

Choxi said with mainstream artists such as Radiohead and Kanye West releasing their music for free, Merge.fm comes at a time when the music industry is in need of a change.

"There are a lot of these bands that are trying new things out there, and we'll be a great platform for them to experiment with the way they interact and distribute their music to their fans," Choxi said.

For now, the biggest goal for the five employees at Merge.fm is to increase their revenue stream.

Currently funded by Illinois Ventures and working out of an incubator office at Enterprise Works at the University's research park, the group is looking for an angel investor.

Despite the small paycheck, the five employees know it's their common passion for the company that keeps them going.

"Every once in a while, we hit a pretty big success, like a milestone, that helps us to keep pushing forward," Choxi said.

Choxi added, "Have you seen "The Social Network?" We're going to do that for us too. We just need a year or two. I think Justin Timberlake will play Will."

Big Media Wants More Copyright Enforcement from Google

Excerpted from CNET News Report by Greg Sandoval

When it comes to fighting online copyright infringement, some music and film industry executives think Google could be doing more to help.

At a time when Google is negotiating with television, movie, and music producers for the recently launched GoogleTV and an upcoming digital music service, the company has been sending mixed messages about how much help it will provide in removing links to unauthorized songs from its search index.

Last month, executives from two music-industry trade groups, the Recording Industry Association of America (RIAA) and the International Federation of the Phonographic Industry (IFPI), asked Google if it could provide a means to help them track down infringing material more efficiently. Typically, copyright owners are responsible for finding unauthorized links and alerting Google, which is required by law to quickly remove the links.

But Google's response raised eyebrows at some of the labels.

James Pond, a Google manager, wrote in a letter dated September 20th, that Google would be happy to help - for a price, according to a source who had seen the letter.

Pond wrote that after discussing the music industry's request with the team "that runs the web search API product," Google planned to provide three options for third parties to access the API. The first one was designed for third-party services that display Google ads alongside search results. The second was for developers and would include only a very low number of searches.

The third was a paid product called Site Search, Pond wrote. "The only option for the IFPI/RIAA to access our web search API will be the third option," Pond wrote, according to the source who had seen the letter.

"I understand we charge a standard rate of $5 per thousand queries, which is charged to recover our costs in providing this service," Pond wrote.

A music industry source estimated that such charges could add up to several million dollars a year.

Google confirmed the authenticity of the letter. A representative said Google fully complies with copyright law and wanted to make it clear that the company does not charge to remove links to infringing material.

"As always, Google honors valid legal removal requests," the representative said in an e-mail to CNET. "We don't charge for removals and have no plans to. We have a great relationship with the music industry and have worked consistently with them to advance their interests through services like YouTube ContentID, our music search feature, and our developer tools."

According to one music industry insider, few in the music industry will find comfort knowing Google isn't charging them to take down infringing links but does charge them to search for the links.

Google's often contentious relationship with the entertainment industry doesn't end with the music business. There's plenty of grumbling going on in Hollywood about ads from Google and other online services found at numerous infringing sites.

Disney and Warner Bros. filed a lawsuit against Scottsdale, AZ-based Triton Media in August, alleging that the company committed contributory copyright infringement by providing ads to several sites they accuse of either distributing unlicensed films and TV shows or linking to them. Some of the sites named were free-tv-video-online, supernovatube, and donogo.

The suit was conspicuous in that the studios could have leveled some of the same accusations against Google, a far larger advertiser, but didn't.

"From my point of view, Google fences stolen goods," said Ellen Seidler, an independent filmmaker, who last month told CNET that piracy cost her money when her small-budget film, "And Then Came Lola," was distributed without authorization online. "These sites want to drive traffic to themselves and they do it by infringing films. They are paid for the ads on their site by Google and others. What we need to do is force Google to be more vigilant in preventing filmmakers from getting ripped off."

The latest attempts to enlist Google in the copyright enforcement fight come at a time when the search engine seemingly enjoys close ties to content creators. After years of criticism and lawsuits, Google has created a filtering technology that has won accolades from NBC Universal and other big studios. Google has licensed films and TV shows to sell or rent via YouTube. And the search engine has cut licensing deals with the major music labels to obtain rights so users could include copyrighted songs in their clips.

More recently, the four top record labels have been sprinkling rose petals in Google's path in hopes the company will march into the digital music space and do battle with Apple. The record companies desperately want someone to loosen Apple's hold of digital music. Sources in the music industry told CNET that Google could launch a music store this year. What this means is that Google isn't a big enough copyright headache to prevent some in the entertainment world from doing business with it.

Still, even the US government is beginning to nudge Google to do more. Last month, Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and senior Republican member Orrin Hatch (R-UT) introduced a bill called Combating Online Infringement and Counterfeits Act (COICA). If passed, the bill would hand sweeping powers to the Department of Justice (DoJ), including under certain circumstances, to close down search engines like Google.

If the DoJ can convince a judge that a website is dedicated to infringing content, then the government can order the site's registrar to pull its web domain. For sites that reside outside the US, the bill would empower "the US Attorney General to serve the court order on other specified third parties, such as Internet service providers (ISPs), payment processors, and online ad network providers."

ISPs could be required to cut off access to the sites. Credit-card companies could be ordered to cease processing transactions for them. Google, if not closed down, could be forced to stop paying these sites ad revenue.

Supporters of the bill failed to get it to the Senate floor in time for a vote last month before lawmakers adjourned to hit the campaign trail, but expect it to be reintroduced following the November elections.

Google supporters say that copyright owners are the ones responsible for policing the web. Google critics argue that it doesn't matter who's on patrol because Google has set itself up to profit from infringement regardless of who is patrolling the web.

Some in the music sector feel that by charging content creators to find infringing material, Google is making them pay Google for protection against Google.

"Google makes money on the advertising from these infringing sites," said Rick Carnes, President of the Songwriters Guild of America. "Now they want to make money helping creators find out how to take the stuff down. Everybody keeps talking about making the Internet free and open. How about we get a fair and just Internet?"

"Three-Strikes" Law Judged Unenforceable by High Court

Excerpted from Irish Times Report by Ciara O'Brien

UPC has won a legal action taken in Ireland's High Court by record labels over unauthorized downloading and file sharing.

Warner Music, Universal Music, Sony BMG, and EMI Records had been attempting to force Internet service providers (ISP) to adopt a "three-strikes" rule to halt copyright infringement by Internet users.

The High Court ruled that laws to identify and cut off Internet users for copying unauthorized music files were not enforceable in Ireland.

In a judgment published this week, Justice Peter Charleton said recording companies were being harmed by Internet piracy.

"This not only undermines their business but ruins the ability of a generation of creative people in Ireland, and elsewhere, to establish a viable living. It is destructive of an important native industry," he said.

However, the judge said laws were not in place in Ireland to enforce disconnections over unlicensed downloads despite the record companies' complaints being merited. He also said this gap in legislation meant Ireland was not complying with European law.

In a statement, UPC said it would work to identify and address the main areas of concern in the file-sharing debate.

"UPC has repeatedly stressed that it does not condone online copyright infringement and has always taken a strong stance against unlawful activity on its network. It takes all steps required by the law to combat specific infringements which are brought to its attention and will continue to co-operate with rights holders where they have obtained the necessary court orders for alleged copyright infringement," it said.

"Our whole premise and defense focused on the mere conduit principal which provides that an ISP cannot be held liable for content transmitted across its network and today's decision supports the principal that ISPs are not liable for the actions of Internet subscribers."

ISPs have been awaiting the outcome of the case against UPC. However, it is not yet known what effect the UPC judgment will have on Eircom's agreement with record labels, which it settled on out of court last year.

A spokesman for Minister of Communications Eamon Ryan said this week's ruling raises a number of important issues and he will meet representatives from the music industry and Internet providers to "formulate an agreed approach." 

Irish Recorded Music Association (IRMA) Director-General Dick Doyle said his office would pressure the government to reform the law in favor of record labels. "The High Court has acknowledged that Irish artists, composers, and recording companies are sustaining huge losses and Internet providers are profiting from the wholesale theft of music," Doyle said. 

"The judge made it very clear that an injunction would be morally justified but that the Irish legislature had failed in its obligation to confer on the courts the right to grant such injunctions, unlike other EU states."

"We will now look to the Irish government to fully vindicate the constitutional rights of copyright holders and we reserve the right to seek compensation for the past and continuing losses from the state." 

Meanwhile, mobile operator 3 Ireland, which along with rival O2 is facing a separate lawsuit over unlicensed downloads, said this afternoon it did not condone copyright infringement and is willing to work with the music industry to resolve the problem. 

In a statement, the firm said it welcomed the proposal from Mr. Ryan earlier this month for roundtable talks with record labels and "is keen to find a practical and appropriate solution to address the issue."

Coming Events of Interest

Digital Hollywood Fall - October 18th-21st in Santa Monica, CA. Digital Hollywood Spring (DHS) is the premier entertainment and technology conference in the country covering the convergence of entertainment, the web, television, and technology.

Digital Media Conference West - October 27th in San Francisco, CA. Don't miss Content in the Cloud: What Does the Future Hold? at this full day of in-depth discussions and networking focused on the top business issues impacting digital media companies.

P2P Streaming Workshop - October 29th in Firenze, Italy. ACM Multimedia presents this workshop on advanced video streaming techniques for P2P networks and social networking. The focus will be on novel contributions on all aspects of P2P-based video coding, streaming, and content distribution, which is informed by social networks.

Streaming Media West - November 2nd-3rd in Los Angeles, CA. The number-one place to come see, learn, and discuss what is taking place with all forms of online video business models and technology. Content owners, viral video creators, online marketers, enterprise corporations, broadcast professionals, ad agencies, educators, and others all come to Streaming Media West. 

Fifth International Conference on P2P, Parallel, Grid, Cloud, and Internet Computing - November 4th-6th in Fukuoka, Japan. The aim of this conference is to present innovative research results, methods and development techniques from both theoretical and practical perspectives related to P2P, grid, cloud and Internet computing. A number of workshops will take place.

International CES - January 6th-9th in Las Vegas, NV. With more than four decades of success, the International CES reaches across global markets, connects the industry, and enables consumer electronics (CE) innovations to grow and thrive. The International CES is the world's largest consumer technology tradeshow featuring 2,700 exhibitors.

Content in The Cloud - January 7th in Las Vegas, NV. The DCIA's Conference within CES explores this cutting-edge technology that promises to revolutionize entertainment delivery. Six keynotes and three panel discussions focus on cloud-delivered content and its impact on consumers, the media, telecom industries, and consumer electronics (CE) manufacturers.

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