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August 29, 2011
Volume XXXVI, Issue 5

Apple CEO Steve Jobs: From Garage Developer to Tech Titan

Excerpted from eWeek Report by Nicholas Kolakowski

Apple CEO Steve Jobs announced on August 24th that he is resigning his position, ending a significant chapter in what's proven one of the tech world's more remarkable careers.

Jobs co-founded Apple (then known as Apple Computer) in 1977, spearheading the development of PCs (such as the Apple II) that helped popularize the machines as tools for everyday life. For that contribution alone, Jobs would have earned his place in tech history.

But it was the years after his mid-1980s ouster from Apple that cemented him as a legend in the business community. During his time in the wilderness, Jobs founded NeXT, his second attempt at a major hardware and software company. While NeXT didn't succeed on the scale of his first effort, its products proved enticing enough for Apple to acquire it in 1996.

By mid-1997, Jobs regained control of Apple and took radical steps to revive the company's flagging fortunes.

From that point forward, he oversaw years' worth of blockbuster products: From the first iMac to the iPod, from the iPhone to the iPad, Apple gained a reputation as an innovation and design pioneer.

While the Mac's market share never proved an existential threat to the legions of Windows PCs on the market, Apple has seized commanding shares of the smart-phone and tablet market, positioning it as a major player in the fast-growing mobility realm.

Even as Jobs' health forced him to step back from day-to-day operations at his company, Apple continued its heady expansion from boutique concern to one of the world's largest enterprises.

Verizon's CloudSwitch Buy Boosts Cloud Services Portfolio

Excerpted from CRN Report by Andrew Hickey

Verizon's acquisition of cloud software player CloudSwitch Thursday sets the stage for Verizon to be among the leaders in the cloud services game and in the company of other cloud giants like Amazon and Rackspace.

"It certainly sets us apart," said Chris Gesell, Chief Innovation and Strategy Officer for Verizon's Terremark business. "Verizon is in the best position to guide our clients through the private, public, and hybrid cloud."

Gesell said the addition of CloudSwitch, which makes software that enables companies to move workloads and applications between cloud and on-premise infrastructure without the need to tweak the application or manage it differently, "puts Verizon in the camp where we're a software originator and leader in the market."

Verizon's push to the cloud comes as traditional telecoms, carriers, and service providers are bulking up their cloud portfolios and looking to capitalize on the explosive growth of the cloud computing market. But Gesell said the acquisition of CloudSwitch, coupled with Verizon's $1.4 billion acquisition of cloud infrastructure provider Terremark earlier this year, extends Verizon's lead over the carrier competition and puts it in the same category as major cloud providers like Amazon Web Services (AWS) and Rackspace.

Gesell added that Verizon intends to maintain CloudSwitch's multi-cloud capabilities and not make it proprietary to Terremark clouds.

"We believe it's going to be a multi-cloud environment for our cloud customers," Gesell said, noting that Verizon is still hashing out its go-to-market for CloudSwitch, but that it will likely be sold as both stand-alone software and bundled with Terremark cloud services.

That go-to-market will also tie in the channel, Gesell said.

CloudSwitch Co-Founder and Vice President of Products Ellen Rubin said CloudSwitch, which has sold its software commercially for roughly a year, has drawn a lot of interest from systems integrators and consultants, and CloudSwitch will continue building out its channel strategy under Verizon and Terremark.

Rubin said the combination of Verizon and CloudSwitch creates a single-stop cloud shop where users can buy cloud, network, and a host of other services and the acquisition pushes the cloud market forward.

"There's a need in the market for a complete enterprise solution," Rubin said.

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyA district court ruling made this week could have significant impact on cloud-based content services in the US, including music services being advanced by industry-leading cloud technology innovators Amazon, Google, and Apple.

The case for which this judgment has been issued was Capitol Records' copyright infringement lawsuit against MP3tunes and heard by Judge William Pauley III.

Plaintiffs included EMI and fourteen record labels and publishers; defendants included MP3tunes' Founder Mike Robertson.

Capitol Records sued MP3tunes, which operates a cloud-based digital music storage service, in 2007, for copyright infringement, having had its request of the service to remove certain music tracks from users' lockers, for which the label claimed distribution rights, refused.

Judge Pauley granted the record company's motion for summary judgment on its claim against the music service of contributory copyright infringement with respect to unlicensed tracks in users' cloud-based lockers, for which takedown notices specifically and correctly had been sent.

He also granted the record company's related motion for summary judgment on its claim of direct infringement by Robertson, a principal of the music service, personally for "sideloading" unauthorized tracks (or to be more precise, de-authorized promotional tracks) from various music websites.

However, he denied EMI's motion in all other respects.

In addition, he granted the music service's motion for summary judgment on its defense under Digital Millennium Copyright Act (DMCA) safe harbor provisions with respect to tracks noticed in the takedown notices and not removed from users' lockers.

Relevant background for this somewhat complex case includes Robertson's predecessor service MP3.com, which was divested and later shut down under the weight of prior legal challenges from major record labels related to copyright issues.

Robertson subsequently launched MP3tunes.com, in 2005, as an online reseller of indie music tracks, later expanding the service's offerings to include storage lockers.

A second Robertson-owned website, sideload.com, enables users to search the Internet for free MP3s, link to relevant provider websites, and copy such tracks to their MP3tunes lockers. A third related application, LockerSync, enables fans to add album-art from Amazon.

Five years ago, EMI Music, Capitol Records' parent company, identified 350 song titles and websites involved in this process that allegedly infringed on its copyrights. And in an over-reaching move, it also requested that MP3tunes "remove all of EMI's copyrighted works, even those not specifically identified."

MP3tunes complied by removing links to the cited tracks, but not the copies already in its users' lockers. It also asked EMI for specifics regarding the "unidentified" tracks, which EMI declined to provide, claiming rather that its list of 350 tracks was "sufficient to obligate MP3tunes to takedown all other infringing material."

MP3tunes stood its ground and, a year later, EMI filed the lawsuit that has just been decided.

In essence, the record label's claim was based on asserting that the music service forfeited its DMCA safe harbor protections by not responding adequately to the label's complaints, while the service's defense was fundamentally based on relying upon the existence of such protections.

The judge's ruling stated that the DMCA "does not place the burden of investigation on the Internet service provider," adding that, "the terms 'free,' 'MP3,' and 'file sharing' are ubiquitous among legitimate sites offering legitimate services" and are not "tantamount to 'red-flag' knowledge of infringement."

However, he also said that defendants' music service "continued to provide locker services to its users even though it knew they had unlawfully downloaded plaintiff's protected material."

Commenting on the ruling, Robertson said, "We're pleased that the court upheld our fundamental business model and, more broadly, unlicensed cloud music. This is great news for those that are emulating our personal music service like Amazon and Google."

A Capitol spokesperson said, "We're disappointed that the court found that MP3tunes was entitled to a safe harbor under the DMCA. EMI believes that companies like MP3tunes should not be entitled to any DMCA safe harbor defense."

Indeed, the judgment represents a victory for the rights of users to upload and store material in the cloud, under the protection of the DMCA, and is also an endorsement of the concept of storage locker services.

It should protect Google and Amazon against charges of unlawfully launching their cloud services without the direct involvement or approval of the big record labels - users have a right to upload and play their own music tracks from the cloud, even if the service that they choose doesn't have an arrangement with major record labels per se.

Perhaps most importantly, this ruling also validates the practice of "scan and match" - whereby music tracks are organized and tagged in such a way that only one actual copy is stored on a server for access by many authorized users on various devices, obviously avoiding costly duplication.

The legitimacy of this practice will be essential to Apple's iCloud service going forward.

The DCIA believes that Judge Pauley's ruling augurs well for cloud-based content services. But despite this ruling, we expect that record labels will continue to have difficulties in keeping pace with technological innovation. Record labels will still trail in their acceptance, as well as their adoption, of new approaches for formatting, storing, and delivering digital music due to the extreme disruptiveness of these changes to established business models and operating practices. Share wisely, and take care.

New Television Viewing Models 

Consumers are fundamentally changing the way they view video and television. Personalization is the byword. As is choice. That's creating rich opportunities for operators and content providers alike to gain new revenue streams and take on new roles in consumers' lives. Learn more about these new opportunities in the free report, New Television Viewing Models.

In this report you will find, Operator Implications for TV Everywhere, Multiscreen; Cable Fights Back Against Subscriber Losses; and Mobile Video, Netflix Case Study, IBC Preview; and more.

How the Internet Is Reinventing Music 

Excerpted from Digital Trends Report by Molly McHugh

The music industry has been in a state of flux for awhile now. It feels like the moment Napster debuted, the entire market turned on a dime and has been grappling with the constant change every since. P2P download sites, iTunes, and the near-death of CDs has not been kind to music's profitability - but there is hope.

The Internet may have been too big a game-changer for the industry to immediately adapt to, but now it's shaping and creating new avenues for music to explore. And better yet - new ways to profit.

One of the best parts of the changing state of music is that music discovery sites have become hugely popular. We can remember the frustration of buying an entire CD only to be stuck with 10 songs you have no intention of listening to (and which the artists knew full well wouldn't see the light of day). You would just get stuck in a rut, listening to the same artists churn out the same music, only a fraction of which you liked.

And then sites like Pandora came along, and in its wake sites like MOG, Last.fm, and Grooveshark. They aren't catch-alls, and every so often you're bound to be annoyed by the ratio of hits to misses. But they could replace radio (which is losing listeners) as a jumping off point for new artists, and an introduction to new hits for more veteran acts. All while including advertising possibilities and pricing options.

The concept behind Bjork's groundbreaking app album Biophilia is so inspiring that we could see it becoming a major attraction for artists trying to sell their music. This progression seems only natural: Once CDs began to fade from style and consumers had moved to the computer, MP3 sales became a major platform, and now that buyers are spending so much time on smart-phones coupled with the explosion of the app market, artists (or at least Bjork) are adjusting. We're especially fans of the free album with in-app purchases, a business plan that has clearly proved able to rake in big bucks.

The idea behind Turntable.fm isn't necessarily a proven concept yet, but it's certainly an attention-getting one. When it launched this summer, the Internet sat back and took notice, and clamored for an invitation. And then, addictively, we sacrificed our time and diligently began created playlists in hopes or being voted "Awesome." If you don't know what we're talking about, then you never had to grapple with the obsessive, annoying tendencies that are symptoms of group DJ-ing sites like Turntable.fm.

Turntable.fm is part game, part music service, and all popularity-based - which is why users took to it so quickly and fervently. Whether or not it has staying power remains to be seen, but we think the idea could live on. We recently heard that MySpace was considering some sort of music competition woven into its forthcoming revamp.

So where would profit come in? Turntable.fm is free (for the moment), but advertising as well as possible fees for indie artists who want to break into the industry are just a couple of possibilities. We could also see premium rooms added, where artists themselves are DJ-ing and fans pay to get in, taking music interaction to a whole new level.

Subscription streaming is perhaps the most obvious and basic route for music, but subscription music services are relatively new. As it continues to gain steam, labels are starting to give the business scheme more credence. The all-you-can-eat, pay-as-you-go, and ad-free options are just too tempting for consumers that want the ability to pick and choose. Customization, flat payments, and instant access are just a few of the reasons it's such an attractive option for listeners.

And it's not like the profit plan is hidden: Users pay up-front for the service, which is how the services will be able to license the music, which is how artists get paid. Everybody wins.

The previous concepts have all been introduced, to varying degrees, but social integration is one we're still waiting to see take off. Plenty (if not all) have social networking features integrated, whether it be a share button or the ability to see what you're friends are listening. But the most popular social networking sites out there at the moment don't include their own integrated music options. Facebook and Google+ have just about every kind of digital media involved in their sites: Location-sharing, video and photo uploading, games, video chat - and the list is growing. Twitter even has a slew of features. And we've heard there's interest in media hubs for these types of sites. Rumor has it Facebook is working on fully-integrating Spotify into its site, and that might mean G+ will work Music Beta into its own offerings.

Many consumers want the whole experience, all of their Internet-media in one place. How popular this is becoming can be evidenced by Facebook: Users chat, video call (which is gaining momentum on both Facebook and G+), play games, post photos, and watch movies on the site. Why not integrate a music player directly into the dashboard? It's supposed to be on the way, and then we'll have a better idea how exactly music could grow here.

The Internet has actually given independent and new artists a much larger, more accepting jumping off point. Now, sites like Indie rock cafe, New indie bands, SomaFM, and OurStage are all ways to find new, undiscovered music. They're free for listeners, and a way to get the word out for unsigned musicians. That wasn't previously quite as easy, but thanks to the web, everything's only a few clicks away from being broadcast to nearly the entire world.

The Layperson's Guide to Distributed Networks 

Excerpted from Mashable Report by Christina Warren

As buzzwords go, few have conjured up as much debate and discussion as cloud computing.

The idea behind cloud computing is that software, services, and information can be provided to users over a network connection and through a web browser, rather than running locally on a computer or a local network server.

Popular cloud applications like Google Docs and Salesforce.com offer users robust ways to manage and access content, and the beauty of the cloud is that the content is accessible from any web browser or connected device.

Major cloud providers and companies include the following.

Amazon Web Services: In 2006, Amazon launched its cloud computing platform, Amazon Web Services. AWS is comprised of a number of different products that allows businesses and application developers to build their own cloud-enabled applications. These tools include Amazon S3 storage service and the Amazon EC2 cloud computing platform.

Amazon is a huge player in the cloud platform space, with major web companies like Groupon and Foursquare using various parts of Amazon's cloud infrastructure to power their products. Because so many businesses - big and small - have come to rely on AWS, system outages can cause problems for those companies.

Salesforce.com: When it comes to the enterprise cloud, Salesforce.com is a huge player. Beyond its flagship Salesforce.com CRM system, Salesforce.com also allows enterprises and businesses to build their own tools on its Force.com platform.

Since acquiring the popular Ruby cloud platform Heroku in December, Salesforce has pushed its cloud application offerings into even higher gear.

Google: Although Google offers its own infrastructure product by way of its Google App Engine, the search giant's bigger cloud ambitions are still emerging. Right now, most of Google's cloud offerings are accessible in the form of consumer- and enterprise-focused services, such as Google Apps and Google Docs.

Still, Google maintains its own cloud infrastructure and has helped define the idea of the modern cloud-based web application.

Perhaps its most ambitious cloud offering is ChromeOS and the new Chromebook line of computers. With ChromeOS, the operating system is in essence, the web browser. Every app and every action is built around the idea of cloud services and applications. It's a fascinating concept and could prove to be very disruptive for businesses that have their employees primarily interacting through web applications anyway.

Microsoft: Microsoft's Azure platform lets users build, host and scale their web applications using Microsoft's data centers.

Last summer, Microsoft launched its platform appliance aimed at allowing large customers like eBay, HP and Dell to offer their own cloud services using Microsoft's technology, but in their own data centers.

IBM: IBM has been working on various cloud initiatives for the last several years. In April, it launched its more robust set of offerings by way of the IBM SmartCloud and IBM SmartCloud Enterprise brands.

Consumer cloud services include these industry-leading examples.

Google Apps: Google Apps, which includes Gmail, Google Calendar and Google Docs, is one of the best known consumer cloud applications. Google Docs is tremendously popular with startups, businesses and individuals.

Box.net: When it comes to collaboration, document management and storage, Box.net is consistently one of most innovative players in the cloud computing space. The company started off as a more consumer-focused cloud storage company, but has pivoted quite successfully into a leading collaboration services offering that's geared toward small businesses and larger corporations.

What makes Box.net unique is that it has robust APIs and application support not just for other web apps, but for mobile and tablet apps as well.

Dropbox: Dropbox is one of the most popular cloud and file storage solutions because it makes sharing files with other users or across computers dead simple. The service is focused on consumers, but many businesses use it, too. Dropbox has an API and is supported by a multitude of web and mobile applications.

OnLive: The cloud is about more than just documents and file storage - it can also be used to deliver video games. Startup OnLive has really pushed the envelope in terms of what we can expect from cloud gaming in the future.

The idea of being able to play games from the cloud - no disc or download required - is something that is likely to catch on, big time, in the next few years.

iCloud: Later this fall, Apple will formally roll out its iCloud offering, and the general consensus is that this will be what brings the idea of cloud to the mainstream.

Already, Apple has made its iTunes in the Cloud music service available to users, and iCloud will be deeply integrated into both iOS5 and Mac OS X Lion.

Cloud computing is poised to take off in very real ways in the ensuing months and years.

Major technology companies, as well as small businesses and consumers, are seeing the benefits of the cloud and those benefits are only going to increase as products that heavily use cloud infrastructures and technologies integrate themselves into our lives.

Cloud Computing Company Wanova Raises $10 Million

Cloud computing start-up Wanova has raised $10 million in its second financing round from Israeli funds Greylock Partners and Carmel Ventures, and US fund Opus Capital. Wanova is considered a hot cloud computing company and the investors did not bring in a new investor to prevent dilution of their stakes.

Wanova will use the proceeds to build global sales and support teams to service the surge in demand for the company's holistic Desktop as a Service (DaaS) flagship product, Mirage. Last month, the company received a patent for its product, which provides enterprises with tools for the efficient management of terminals.

The products can manage a decentralized IT network, and remotely recover and correct PCs and customized applications, files, and operating systems. The system can also run and operate applications when the PC is offline.

Wanova was founded in 2008. It is headquartered in San Jose, CA, and has an office in Netanya, Israel.

Wanova CEO Sebastiano Tevarotto said, "Our accelerated growth is due to having a single, comprehensive product that solves many pain points in organizations of all sizes. This new investment will help us maintain the momentum we're experiencing with service providers and enterprises that are looking for an offering to improve agility, reduce costs, and enable company IT staffs to focus on projects that are strategic to their business instead of individually managing each computer."

Wanova's service cuts computing costs at large enterprises. The system collects all the content on each PC at the data center to manage and protect the content. The architecture enables enterprises to cut PC operating costs by improving the data flow.

In addition to Wanova, Israel has a several cloud computing solutions developers, including Gizmox.

Millennials Watch More TV Online

Excerpted from Media Daily News Report by Wayne Friedman

Young media consumers - Millennials - continue to consume much more television related to online, and less traditional television than other viewing groups.

Only 26% of Millennials - typically those in the 18-29 age group - watch more than 20 hours a week of TV, versus older viewing groups where 49% of those viewers watch 20-plus hours a week. These are among the results of a study conducted by Kansas City, MO based marketing company, Barkley, in partnership with Service Management Group and The Boston Consulting Group.

Millennials are much more likely to watch shows mainly on their laptops - 42% versus 18% for other viewers; on DVR playback - 40% versus 36%; or via video-on-demand - 26% versus 18% for other viewing groups.

Largely as a result of TV marketing and other efforts, Millennials - more than older consumers - are aware of youth-targeted cause campaigns. For example, the study says that for Dove's Campaign for Real Beauty, their awareness level was 33% versus 21% for everyone else. Gap's RED campaign earned a 26% number for Millennials versus 9% for other consumers.

Much of this activity comes from greater exposure to campaigns through social media - 40% versus 22% for other consumers - and online news, 28% versus 22%.

"Since the Millennials generation is larger than the Baby Boomers and three times bigger than Generation X, marketers' understanding of Millennials ' needs, tastes and behaviors will clearly shape current and future business decisions," says Jeff Fromm, Senior Vice President, Barkley.

The survey was based on more than 5,000 respondents and 3.9 million data points.

Kontiki Adds Live Video Events to Salesforce.com's Social Enterprise Platform 

Kontiki, the leading provider of enterprise video solutions, announced this week integration with Salesforce Chatter, enabling enterprise-wide, live video event collaboration.

Utilizing the recent introduction of Salesforce.com's powerful APIs, Kontiki has integrated its patented video delivery platform with Salesforce Chatter, significantly enhancing enterprise collaboration, transparency, and speed.

"We are excited to offer Salesforce.com customers a critical extension to the Salesforce Chatter platform," said Dan Vetras, President & CEO of Kontiki. "Live video events are the most influential vehicle for CEOs to communicate and create alignment across their employee base. By combining Kontiki's unique ability to address the enterprise video delivery challenge, ensuring a high quality viewing experience for every employee without impacting the corporate network and Salesforce Chatter's social interactivity, Salesforce.com customers will see a significant increase in employee engagement and event success."

The impact of "Social Enterprise" was best defined by Marc Benioff, Chairman and CEO of Salesforce.com in an interview with GigaOM, in which he said, "It provides this vast democratization. It empowers and enables the employees who are really making the difference."

By combining Kontiki's real-time video streaming solution with the instantaneous feedback of Salesforce Chatter, these benefits are not only greatly enhanced, but can change the way executives think about their business.

"It's changed how I look at running the company," added Marc, after inventing this approach for a Salesforce.com extended leadership meeting.

For a personal demonstration of this compelling solution, please visit Kontiki at Dreamforce 2011, August 30th through September 2nd at the Moscone Center in San Francisco, CA, booth 1529.

Broadband Adoption Linked to Pay TV Downgrades

Excerpted from Digital Media Wire Report by Lindsey Compton

Consumers categorized as "heavy TV users" are increasingly opting to downgrade their cable, satellite, and/or telco TV services within the last year, according to a report from analysts at Parks Associates.

According to the Dallas, TX based research firm, 13% of consumers who have broadband connections have made cutbacks within the last 12 months, with an estimated 9% more to come. The 13% of consumers includes 3.9 million people who watch Internet videos.

These users reportedly watch TV the most, and spend around $20 or less on monthly video services. The cause for these downgrades includes consumers' interest in watching more Internet videos as opposed to paying for broadband services. The report did not factor in external influences like unemployment levels.

"Consumers are demanding video content on multiple platforms, and service providers are stepping up to address that demand and stave off cord-cutting," said Brett Sappington, a senior analyst at Parks Associates.

"The technology for delivering and monetizing TV Everywhere continues to grow. The systems are within reach for any operator. The questions are of digital rights, business models, and competitive advantage. The next few years will be important in determining the future of how 'television' will be delivered to customers, both today and in the future."

The study recommends TV providers improve their on-demand video selections, offering a more extensive catalog such as Netflix and Redbox already provide to users. This can be seen in Parks Associates' report of 22% of all broadband households now using Netflix Watch Instantly service.

The research firm also ranked TV providers, with DirecTV coming in first and AT&T coming in second.

Forget TV - Broadband Is the Future of Cable

Excerpted from GigaOM Report by Ryan Lawler

Time Warner Cable CEO Glenn Britt made a surprising comment earlier this month when he told the Wall St. Journal that the operator was looking at broadband as its "anchor service." What's so surprising about that? Well, not only do video services still make up more than half of Time Warner Cable's revenues, but pushing broadband at the expense of pay-TV services has been shunned by many who are afraid such a move would relegate the cable operators to being a dumb pipe.

Please see What's So Bad About Being a Dumb Pipe? in GigaOM Pro for reasons why cable operators are afraid of putting their broadband services first, along with some reasons why cable operators shouldn't be afraid to transition from the business of TV to broadband delivery.

Two things are clear: First, broadband adoption is growing at a pretty rapid clip, while at the same time, video subscriptions are flat or down. And second, those broadband services are providing increasingly better margins while the margins on the pay-TV side of the business are being squeezed.

Last quarter, video subscribers declined in record numbers, according to Leichtman Research Group (LRG), which tracks the top 14 multichannel video operators. Meanwhile, the broadband side of the house continues to grow. Cable, satellite, and IPTV providers lost more than 325,000 video subscribers in the second quarter, while gaining 350,000 broadband users, according to LRG.

Those broadband subscribers are also a lot more profitable than TV subscribers according to Strategy Analytics.

Of course, there's an inherent danger to pushing technology that could cannibalize the pay-TV businesses. Cable operators don't really want to enable Netflix and its $7.99 a month unlimited streaming video plan to better compete with their traditional video offerings, especially when cable companies don't make any incremental revenues from online video services. At the same time, they don't have to share their profits with content creators that distribute online, either.

While video services still make up the bulk of cable revenues today, it might not be long before other cable operators join Time Warner Cable in viewing broadband - not TV - as their "anchor service."

Cable Is Beating out Telcos in Broadband Adds

Excerpted from GigaOM Report by Stacey Higginbotham

DSL is on the ropes, and cable companies are seeing their broadband numbers rise, according to data on broadband sign-ups during the second quarter.

Leichtman Research Group (LRG) found that the top 18 providers in the US acquired about 350,000 net additional high-speed Internet subscribers in the April-June period. Net broadband additions in the quarter were the second fewest of any quarter in the ten years LRG has been tracking the industry.

That's pretty significant. It means that new subscribers are hard to come by, so gains for providers will come from the competition - and so far, cable and fiber products are the winners there.

For every consumer that added service from a telecom provider, cable providers added three. The top cable broadband providers have a 56% share of the overall market, with 8.9 million more subscribers than the top telephone companies - compared to 7.85 million this time a year ago.

But all is not lost for telecom companies - at least those that are upgrading to fiber. AT&T and Verizon added 628,000 fiber subscribers in the quarter (via U-verse and FiOS), while losing 578,000 net DSL subscribers. No wonder Time Warner Cable's CEO thinks broadband is his company's future and AT&T's CEO says DSL is obsolete.

Inside Akamai and the Scary Future of Streaming Video

Excerpted from GigaOM Report by Stacey Higginbotham

When it comes to consumers watching YouTube or even streaming TV through a Boxee, the assumption is that aside from some buffering or pauses while the streams catch up, the experience will be fine.

But when we add live content and interactive elements to those video streams, it gets complicated. Thanks, to a paper detailing Akamai's content delivery network (CDN) in minute detail, we can see exactly how complicated it is today, and what sort of havoc interactivity might wreak.

In the academic paper written last year by researchers at Akamai, Harvard, and the University of Massachusetts, readers get an in-depth look at how Akamai's distributed CDN works, how the web itself works, and what the shift from static to interactive content means for content providers and the network itself.

Details such as Akamai's more than 90,000 servers located in more than 1,800 locations across 70 countries and nearly 1,000 networks pale in comparison to the section on how streaming video is going to get much more challenging in the coming years.

The paper offers up a timeline of big web streaming events, beginning with Steve Jobs' MacWorld keynote in 2001 that drew 35,500 viewers and required 5.3 gigabytes (Gbps) of capacity. President Obama's inauguration in 2009 drew 7 million simultaneous streams and required nearly 2 terabytes (Tbps) of capacity. Akamai noted it hit a peak record in 2010 delivering 3.45 Tbps of data.

But those numbers don't keep Akamai engineers up at night. The future does. From the paper:

"In the near term (two to five years), it is reasonable to expect that throughput requirements for some single video events will reach roughly 50 to 100 Tbps (the equivalent of distributing a TV quality stream to a large prime-time audience). This is an order of magnitude larger than the biggest online events today. The functionality of video events has also been increasing to include such features as DVR-like-functionality (where some clients may pause or rewind), interactivity, advertisement insertion, and mobile device support.

At this scale, it is no longer sufficient to simply have enough server and egress bandwidth resources. One must consider the throughput of the entire path from encoders to servers to end-users. The bottleneck is no longer likely to be at just the origin data center. It could be at a peering point, or a network's backhaul capacity, or an ISP's upstream connectivity-or it could be due to the network latency between server and end-user, as discussed earlier in Section 3. At video scale, a data center's nominal egress capacity has very little to do with its real throughput to end-users."

The paper goes on to say that because even an awesome data center can only provider a few hundred gigabytes per second of throughput to end-users, it's almost impossible to create a service with the scale to deliver the hundreds of terabytes needed to support video.

And while the paper reads like a highly technical advertisement for Akamai (and why the way it has built out its CDN is superior to other CDNs,) it's also a pretty detailed look into the complexity of the web.

I know many of us take it for granted that the animated GIFs that once slowed down our GeoCities page load times are now so commonplace we drop them into comment threads, but that's the beauty of driving ever-faster broadband speeds.

Sometimes it's nice to look behind the curtain and see how our infrastructure is keeping up with the increasingly complicated elements we're throwing at it.

Alex Winter Directing a Documentary about Napster's Rise and Fall 

Excerpted from First Showing Report by Alex Billington

We knew it was coming. With the success of "The Social Network," more tech dramas had to be on their way, but this one is unique.

Deadline reports that Alex Winter, better known as Bill from "Bill & Ted's Excellent Adventure," who's now a filmmaker, is ready to direct a movie about infamous file-sharing service Napster.

However, instead of making a narrative feature out of the story, Winter is now just going to make this as a documentary with the support of VH-1. He did 10 years of research for a script but Deadline says, "Winter is going back to all the sources for his script, armed with a camera."

Okay, this sounds like it could be great.

Winter himself spoke to Deadline about this new Napster project, and it's obvious he has a passion for this story and despite trying to get a narrative version together, is still going to his best to bring us the definitive version of the Napster documentary. Winter explains his interests and why it's such a fascinating story:

"The rise and fall of Napster and the birth of peer-to-peer (P2P) file-sharing technology created by Shawn Fanning when he was a college student, changed music to movies, and made possible everything from Julian Assange, WikiLeaks to the iPod and Facebook," Winter told me. "It became an expression of youth revolt, and contributed to a complete shift in how information, media and governments work. And it is a fascinating human story, where this 18-year-old kid invents a P2P file-sharing system, and brings it to the world six months later."

Word is that Napster founder Shawn Fanning himself will be involved, as well as a "group of label heads and musical artists he's still pulling together." That should be interesting to see. On whether this doc will side with one view or another, Winter explains that he doesn't really have a specific aim.

"It's a gray area. I can understand Fanning's side, but I can also empathize with the horror that Metallica's Lars Ulrich felt when a single that wasn't even finished ended up on the radio." Indeed, but let's hope they get equal time to tell their feelings, as I'm curious to hear what the recording industry says on camera about this entire situation.

This is actually a documentary I've been waiting to see ever since Napster got shut down and taken to court years ago. I hope it's the full-on tell-all, as that's what I'm hoping to see.

And if only Fincher could direct "The Music Network," written by Sorkin, I'd love to see Justin Timberlake back as Sean Parker, but let's not confuse the two, as Parker, an early Napster employee, is not the same Sean as Shawn Fanning, the official co-founder of Napster.

Anyway, I'll be following to see how this develops, as I'm sure it'll take some time for Winter to put together this doc, but I can't wait to see it at an upcoming festival.

Coming Events of Interest

TransmitCHINA Talks - September 14th-16th at the Great Wall of China. International leaders, thinkers, innovators, and creators will have an exclusive opportunity to hear a cross-section of preeminent thought leaders from some of the world's most innovative organizations in the digital and creative content ecosystem.

NY Games Conference - September 21st-22nd in New York, NY. The most influential decision-makers in the digital media industry gather at this event, now in its third year, to network, do deals, and share ideas about the future of games and connected entertainment. Lively debate on timely cutting-edge business topics.

OMMA Global - September 26th-27th in New York, NY. The semi-annual gathering of MediaPost insiders featuring the most up-to-the-minute news, information, and ideas about the hottest online sectors - mobile, social, video, direct, display - presented for easy access and consumption.

Digital Music Forum West - October 5th-6th in Los Angeles. CA. Top music, technology, and policy leaders come together for high-level discussions and debate, intimate meetings, and unrivaled networking about the future of digital music. Digital Music Forum is known worldwide.

Digital Hollywood Fall - October 17th-20th in Marina del Rey, CA. Digital Hollywood (DH), the premier entertainment and technology conference in the country, once again welcomes the Variety Summit, which has been co-located with its past three DH events.

Future of Film Summit - November 7th-8th in Los Angeles, CA. An exclusive group of industry thought-leaders discuss the current state of the industry, and how film and transmedia deals will be struck in the coming years. This is a unique opportunity for creatives, producers, buyers, and film financiers.

Streaming Media West - November 8th-9th in Los Angeles, CA. Attended by more than 2,500 executives last year, SMW covers the entire online video ecosystem from content creation and management, to monetization and distribution. The number-one place to come see, learn, and discuss what is taking place with all forms of online video business models and technology.

World Telecom Summit 2011 - November 9th-11th in Singapore. The 2011 program will focus on topics that demonstrate innovation across the telecommunications industry, both on a commercial and technical level, to improve profitability and quality of next generation technologies and customer experiences.

Future of Television - November 17th-18th in New York, NY. Top television and digital media industry executives discuss the increasing importance digital media for the future of the television industry. Topics include viewer trends; programming for non-traditional platforms including online video, VoD, HD, IPTV, broadband and mobile.

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This page last updated September 11, 2011
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