December 3, 2009

Google Meets Harry Potter — Well Not Quite!

Nearly midnight on Saturday evening two weeks ago I was given a personal tour of the Bodleian Library at Oxford University. I was at my cousin’s birthday party in the Divinity School, which was used as the infirmary in Harry Potter’s films – the Duke Humfrey’s Library was used as the Hogwarts library in the same films.

The Bodleian is one of the six (and was the first) copyright libraries in the UK.  A copyright library is entitled to one of the first copies of every published work in UK, including manuscripts, books, journals, DVDs, CDs, film, etc.  The library was opened in 1488, although a separate university library had existed since 1320.  Following the usual local skirmishes in Europe at the time, Thomas Bodley rescued the library.  It was Bodley who negotiated the “copyright library” concept. Today the library has four million items and is rapidly expanding.

Google is digitizing the total Bodleian collection following a 2006 agreement.  It will be a long process, especially given the fragility of so much of the collection. They would appear to have scanned half a million titles already. Google is also digitizing national libraries in other countries.

The attendant copyright issues are now surfacing, now that politicians seem to have thought a bit more about the wisdom of this move.  On the one hand one can see the attractions of having the world’s information online and having a massive digital library.  But under guises of differing arguments, reactions are developing in the capitals of Europe.

Germany’s Angela Merkel has said that her government is opposed to this development, and the Paris courts have entered the fray on behalf of authors.

Now that the new EU structures are in place, one can see this becoming a major EU issue. The UK has already called for increased international cooperation in copyright matters.  This has the making of a major copyright and commercial issue for all parties.

Its unlikely that Harry Potter can help and meet Google back in the Bodleian Library, but a bit of his magic may be required to solve the emerging issues in an acceptable timescale for commercial interest.

Bill Jones is CEO of Global Village Ltd.

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Filed under Europe, Publishing, UK

December 3, 2009

Google Blinks on News Content

Google yesterday offered a concession to news publishers accusing it of stealing audience away from their paid-subscription websites by allowing them to view virtually unlimited articles through Google News.  Google closed a loophole in the Google News “First Click Free” feature that users could exploit.  Now Google limits users to reading five articles from any subscription news site in a given day.

This is a small step in appeasement to growing anger from News Corp. and other news publishers about Google’s ability to monetize news content.  This small gesture addresses the most egregious aspect of the dispute, the claim that Google siphons off subscription revenue from sites like News Corp’s wsj.com and Pearson’s ft.com.

Google may have been prompted to act by News Corp’s threat to accept money from Microsoft for blocking Google from crawling its sites — a deal that looks much better serving as a negotiating gambit in a greater game than it does on its own.

Google’s move may simply be a matter of appeasement to avert litigation, but it also could be interpreted as a sign of fear that it could lose News Corp content from its search results.  This would be an admission from Google that certain commercial content actually has more value than an equivalent volume of other random content on the Internet — the same admission that is implicit in its pending settlement with the book publishing industry.

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November 30, 2009

European Union Enters New Phase of Government

The Lisbon Treaty, which strengthens the European Union’s central government, has been ratified by all 27 states and comes into force today.  It creates a new set of relationships within Europe.

Whilst it’s commonly acknowledged that the Lisbon Agenda of nearly 10 years ago — with its wide ranging sets of objectives for the IT industries and technology — was too ambitious, the new constitution proposed at the time was transformed into a treaty and now comes into effect. This is a revamped EU.

Following my comments on this blog in June, the new EU is now a reality. It matters.

The two newly created formal posts of President of the European Council and High Representative for Foreign Affairs (and also Vice President of the European Council) have been filled.

The debate surrounding these appointments brought out the expectations for the roles. It appears that the heads of nation-states do not wish a President in the US style but more a chairman of a consensus-making Council. It’s unlikely that the current heads of states will wish a President to whom they look up as their appointed leader. At a time of economic challenges, the heads of the key nation-states of France, Germany, and Italy are center-right with an inclination to smaller government (like Republicans in the US). All the current indicators in UK are for a similar orientation after the elections due by June 6th of next year.

The principle of subsidiarity also holds.

Other EU institutions include The European Commission and European Parliament.  All have a role to play in intellectual property and technology.

One of the articulated benefits of the new arrangements is more efficient internal workings for the EU. Progress of copyright and technology issues (as for all others) have hitherto been slowed by the cumbersome processes. This will now change.

By having an internal market of 500 million people, it makes the EU the 3rd largest internal market globally after China and India and ahead of the US. So economics is one of the powerful drivers of the EU. The intent is to create a platform for competing with the US and BRIC countries (Brazil, Russia, China, India) on innovation and cost.

The EU already has significant technology R&D programs as well as competence and activities in Intellectual Property. The R&D programs are wide ranging and include many programs of interest to this blog. They also include programs on standards and new architectures.

The EU as well as its nation-states (i.e. peer group representation) also has representations in WTO, G8, G20 and at the UN, as well as others, within which Intellectual Property and Technology may play a part to a greater or lesser extent.

So what does this mean for businesses trading with and within the EU?

While naive businesses may ignore the power and role of nation states and head for the “center,” practical businesses will have to understand the nuances and dynamics between the role of the EU and the role of the nation states.

Whatever emerges on copyright and technology will not be a top-down approach, although the instruments are there to give effect to directives and EU laws, and the tendency of a bureaucracy will be in that direction. Instead, consensus will be required between nations before any EU approach will emerge. And in that there remains significant differences between nations on these issues.

Bill Jones is CEO of Global Village Ltd.

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Filed under Europe, Law

November 25, 2009

What’s Next for Nokia’s Comes with Music?

Nokia’s Comes With Music offering launched in October 2008 as a new way of bundling music subscription services with mobile phones. The company initially launched the product with a few handset models in the UK. Users get access to unlimited downloadable music service for a year. After that, they can keep the downloaded music on their mobile phones and their PCs.

I was curious to find out what would happen after the bundled music service expired. So I had a chat with Lenn Pryor, VP Product for Music at Nokia. He shared some of their findings from this past year and some of their thinking moving forward.

Depending on the country, Comes with Music (CWM) can be purchased directly through Nokia or through Nokia’s mobile operator or non-operator partners. CWM was first launched in the UK without an operator. Instead, the bundled product was sold through Carphone Warehouse, Europe’s biggest mobile phone retailer. Today, it is offered through 23 operators in 12 countries. The initial “free” music subscription period can vary between 12, 18, or 24 months, depending on the region.

While there is still no date for a US launch, Nokia is focusing on other markets. These include UK and Germany, Singapore and Australia, Brazil and Mexico, and soon Russia.

Nokia does not share specific data on the uptake of this offering. The official word is that the results have met and/or exceeded the internal targets, though this conflicts with reports hear around MIDEM earlier this year that uptake was only 15% of projections.

But Nokia believes users now have a new alternative to discovering and consuming music, and this is borne out by statistics that Pryor shared on CWM usage.  Without worrying about paying for each track, users seem to be more adventurous in their music consumption. According to Pryor, the average CWM user downloads 450 tracks in their first 30 days of use. This compares to an a la carte music user downloading 15 tracks. Also, CWM users tend to broaden their music horizons for an average of 7-8 genres per user versus an average of 3 genres for an a la carte music user.

These early data points show a correlation between higher music consumption to subscription services where users don’t have to make individual payment decisions. Of course, the downloading of 450 tracks in the first month includes some level of novelty factor and would be hard to sustain. And having a “free” music subscription can encourage that behavior.

The question then becomes: Can these high levels of interest and consumption be translated to paid subscriptions once the honeymoon period is over? That question will not be answered for at least another three months. For now, Nokia is offering free 3-month extensions as a gift to its initial CWM customers in the UK. The company plans to offer paid monthly or 3-month subscription increments after that — though ideally, Nokia would like to sell them a new CWM phone.

The users will get to keep their DRM-protected downloaded music on one mobile phone and one PC after the subscription expires. Regarding DRM-free music, Pryor says the Nokia a la carte music store is going DRM-free — which would be one of the first mobile music stores to do so.   They would like Comes With Music to go DRM-free too, but it is up to the music labels to make that decision.

Azita Arvani is Principal of Arvani Group.  Bill Rosenblatt contributed reporting.

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Filed under Mobile, Music, Services

November 24, 2009

Microsoft’s Search-Indexing Bribe to News Corp.

News publishers would like to eliminate what they see as “free riding” that the major Internet search engines do on their content.  The search engines index the content, make it available in search results, and monetize the traffic through ads and various other ways.  Users go to search engines for their news and don’t visit the news publishers’ sites (or those of the publishers’ syndication partners), thereby depriving publishers of traffic and revenue.

Back in 2007, many news publishers — particularly in Europe — got together to develop a standard called ACAP (Automated Content Access Protocol) that was supposed to solve this problem.  It would enable news publishers to specify what rights search engines should have to index their content and display it in search results.  The ACAP members tried to get the major search engines — such as Google, Yahoo, and MSN — to implement ACAP, on the grounds that doing so would encourage more news publishers to make their content available to search engines.

Fast forward to November 2009 and the depressing revelation that Microsoft is in negotiations with Rupert Murdoch’s News Corp. to pay News Corp. to block Google from indexing its web content.  This is perfectly feasible through the Robots Exclusion Protocol (REP) technology that ACAP purports to replace.

The problem with ACAP is, and has been, that while it benefits publishers, there is little in it for the search engines.  If everyone were to implement ACAP, the search engines would get additional content to index that amounts to a minute, minuscule increment to the oceans of content that they already index — and a somewhat less minute incremental amount of monetizable traffic, on the theory that name-brand news content is more popular than average.

In other words, the economic benefits of ACAP are not equitable; the standard is not a win-win for all participants.  So it’s little wonder that the elegantly-designed ACAP has been languishing; the list of ACAP participants is even no longer available on the ACAP website.

News Corp. was an early participant in ACAP through its subsidiary News Ltd. Australia.  But now it is circumventing a fair resolution of the free-riding question by taking advantage of Microsoft’s hunger to promote its new Bing search engine against Google.

News Corp. may rightly claim that it does benefit from having Google index its content for discovery through search, and therefore that it needs to be compensated for the loss of traffic it would incur from being excluded from the world’s most popular search engine.  But that, as we say in the technology biz, is not a scalable solution.

A proliferation of such deals will only lead to a world of confusion for users that gets even more confusing as the economics shift over time.  Throwing money at the free-riding problem brings it no closer to a solution.

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Filed under Publishing, Rights Licensing, Standards

November 19, 2009

Progressive Response in the UK?

Many observers of copyright developments in the UK expect Parliament to pass legislation instituting a so-called progressive response program for thwarting illegal uploading of content, in which repeat offenders would have their Internet connections suspended or even eventually revoked.  Such schemes are the law in Taiwan, South Korea, and (in attenuated form) France.

Even the Economist recently predicted that such legislation is forthcoming in the UK.  We advise against holding your breath.

Yesterday’s Queen’s Speech set out the legislative agenda for the next parliamentary session; it contained a piece on copyright in the Digital Economy Bill.  This essentially codified what’s emerged in the reports that have been published so far:

“The plans for tackling illegal file-sharing, detailed earlier this year, will be a two-stage process. Initially the government will aim to educate consumers and, those identified as downloading illegal content, will be sent letters.  If this proves insufficient, technical measures which will include the powers to disconnect persistent pirates, will be introduced in the spring of 2011.”

There will be scant more detail than this, since all the Queen and Government do is to get the headline intent into the process for detail to be worked out later. The Queen would only have read out “my government intends to pass legislation on…”  But the Digital Economy Bill will be much broader than this and contain many other contentious issues.  Copyright will be only be a minor component of the Bill.

The trouble is that the coming parliamentary session is now only 70 days in length for the House of Commons and 30 days for the House of Lords , because an election must be held by June 6th of next year.  The perception is that very little of the substance of this Queen’s Speech will make it through to legislation, because there isn’t enough time left.  The government (executive arm) will have to determine the priority that this bill will have within its apparently overburdened legislative program. Additionally, the House of Lords is likely to delay politically contentious issues to thwart the incumbent Labour party, which according to opinion polls and commentators is destined to be replaced by the Conservatives.”

Thus it’s unlikely that any progressive response legislation will pass in the UK until at least 2011.  By that time we should have enough data from countries with progressive response laws on the books to determine the effectiveness of such a scheme.

Bill Jones is CEO of Global Village Ltd.

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November 12, 2009

Good Old Fashioned Incompatibility

Princeton professor Ed Felten probably disagrees with me on various points, but one point on which I think we do agree is that “good old fashioned incompatibility” (as Felten aptly put it) can be an alternative to encryption-based DRM for controlling usage of content.

As I recently found out, Apple may have given up DRM for music, but in some ways it has replaced DRM with good old fashioned incompatibility for locking users into its iTunes/iPod media platform.

I recently recorded the audio of a personal event that consisted of speeches and performances of public-domain classical music.  I used an iPod Nano 4G with a Belkin TuneTalk microphone attachment.  The mic uses the iPod’s Voice Recorder functionality, which Apple had left unexposed to users until the latest version of the iPod Nano, the 5G, which has a built-in microphone.

It used to be that the iPod Voice Recorder recorded in uncompressed WAV format, which could be converted to MP3 easily within iTunes or by any of a number of music software packages, many of them free.  (I still have a recording of my daughter singing from about three years ago that was made that way on a long-defunct hard disk based iPod.)  But now, iPods record in ALAC, Apple’s lossless MP4 variant.  The files have, confusingly, the same .m4a extensions as files in the MP4 AAC lossy codec used in iTunes.

The resulting ALAC file was half a gigabyte in size — smaller than the roughly 1.5GB that a WAV file would have been, but not exactly convenient for downloading from the Facebook page I am constructing of the personal event.  I needed to compress the file further.   It wasn’t necessary to preserve the pristine audio quality afforded by the lossless compression.

First I found that Apple has removed the format conversion features it used to have in iTunes.  So I had to resort to third-party  conversion programs.  I tried about half a dozen of them on both PC and Mac.  None of them worked; they gave error messages, produced spurious results, or just crashed.  Now that’s what I call good old fashioned incompatibility.

Finally, someone who does professional audio production managed to convert the file to MP3 using an older version of iTunes from back when it still offered format conversion.  Otherwise, the only way to do it was to burn CDs in Redbook audio format from iTunes, and then re-rip them to MP3 in a program such as Windows Media Player or Rhapsody; iTunes doesn’t support this anymore either.  Not only was this a tedious process but it caused the audio to be split across multiple files because it ran longer than the capacity of a single CD.

Apple’s public story of freeing music by throwing off the shackles of DRM gets more and more disingenuous on deeper scrutiny.  It’s unfortunate that the effects of Apple’s restrictions had to manifest themselves on personal, non-copyrighted material rather than the “Big Music” that everyone assumes is the root of all evil.

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Filed under DRM, Music, Standards

November 4, 2009

Best Buy and CinemaNow to Build New Ecosystem for Video

Best Buy announced on Tuesday that it is partnering with Sonic Solutions to use its CinemaNow online video service as the basis for a new offering that will include an ecosystem of connected consumer devices available exclusively at Best Buy’s online and physical retail outlets.

The devices in the ecosystem will use DRM and other technologies from Widevine.  Various details have yet to be specified, such as a release timetable, a list of devices to be supported at launch, and any rules for interoperability of content among participating devices.

Still, this announcement represents the fruition of a strategy that Sonic/CinemaNow and Widevine have been pursuing for over a year.  With the Best Buy deal, the companies now have a major retail partner.  The last piece is now in place to make this service a potentially powerful competitor to the Apple iTunes/iPod/Apple TV axis as well as to services like Blockbuster Online that are based on Microsoft technology.

CinemaNow also incorporates home media interoperability technology from a company called Digital 5, which is now owned by Macrovision.  This technology enables some degree of DRM interoperability in the home, but again, it’s unclear to what degree the forthcoming service will use this feature.

Once this service rolls out, consumers should be able to download and play video on a variety of home and portable devices, including PCs, Internet TVs, set-top boxes, Blu-ray Disc and portable media players from makers including Archos, Dell, HP, LG, Microsoft, Nintendo, Pioneer and TiVo.

This could be Widevine’s ticket to the big time, after years of laboring in relative (if reasonably successful) obscurity primarily in the digital pay TV/IPTV content protection space.  It gives them access to a much wider variety of consumer devices and the potential to become part of a major digital video axis.

The market for Internet video services is still in early stages; the dominance of Apple in video is far from the foregone conclusion that some think it is.  The Best Buy-CinemaNow-Widevine axis could be a contender.

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October 25, 2009

Disney Prepares Rights Locker Initiative

The Wall Street Journal has reported on Disney’s imminent announcement of an initiative with the internal name of Keychest — a proposed standard for interoperability of online video content.  Keychest is a so-called rights locker technology, in which users who purchase video content from one site in one format get rights to watch it on any compliant device they own.

If you have been following the industry or reading this blog (and its predecessor, DRM Watch) for a while, this will sound familiar to you.  In particular, it may sound a lot like the Distributed Entertainment Content Ecosystem (DECE), an initiative led by Mitch Singer of Sony Pictures with participants including Microsoft, Comcast, and the other major movie studios.

DECE was formally announced over a year ago, yet it has not announced much progress this year.  Both Keychest and DECE expect the full impacts of their efforts to be years away.

Just what Hollywood needs: another format war.

This time, the studios can’t pin the blame on consumer electronics companies, the usual suspects in format wars.  (Let’s remember Blu-ray (Sony Electronics) vs. HD DVD (Microsoft, Toshiba), and the one before that, VHS (Panasonic) vs. Betamax (Sony again).)  At the same time, although studios are leading these two initiatives, technology platform companies are firmly at their backs: Microsoft in the case of DECE and, lurking in the shadows not far behind Disney, Apple in the case of Keychest.

The main differences between DECE and Keychest are that DECE focuses on video download formats, while Keychest focuses on “cloud” services and streaming.  Keychest intends to be compatible with a range of streaming formats, codecs, and devices.  DECE started that way for downloading but switched tactics to include a standard DECE file format in its specifications.

In truth, several elements of streaming are easier to handle than downloading.  Keychest implementers won’t have to worry as much about DRM and may not have to worry at all about issues like on-device file storage, backups, and the authentication complexities around device ownership.  DECE has to deal with all of these issues.  On the other hand, streaming of video content at decent quality depends on fast broadband infrastructure that many people just don’t have, especially from mobile devices.

It’s theoretically possible for DECE and Keychest to join forces, because at a high level, their specs are more complementary than competitive.  And according to the Wall Street Journal article, Disney executives are taking the position that service providers and movie studios could participate in both.  Singer took a similar position in an article in today’s New York Times.

But let’s not kid ourselves: there was never much hope that Disney would participate in DECE; now Disney is going a step further by launching a competitive response.  This is really about platform technologies and about the question that is weighing on many Hollywood digital executives’ minds: will Apple do to them what it has done to the music companies?

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Filed under Standards, Video

October 20, 2009

Barnes & Noble’s New E-Book Reader

Barnes & Noble announced pre-order availability of its new “nook” e-book reader, which is based on the Adobe Content Server and Digital Editions platforms as well as Google’s Android operating system.  America’s largest retail bookstore chain is mounting a major marketing push for the new device, explicitly going head-to-head with the Amazon Kindle.

One of the more remarkable things about the new device — besides its color touchscreen and overall sleek looks — is its ability to support e-book lending.  Users can lend their purchased e-books to friends for reading on various devices — iPhones, PCs, Macs, and various smartphones as well as other nooks.

B&N apparently implemented this feature itself, based on the e-book lending feature that Adobe has built into its platform software.  Adobe Content Server is currently used to support e-book lending from many public libraries across the country, but never to support one user lending to another.  The first user’s access to the e-book must be turned off while the book is “loaned,” then turned back on again when it is “given back.”

I haven’t found out whether it’s possible to do this by email or USB storage device, or whether the second user must download the “loaned” e-book from B&N’s server.  I suspect the latter; the former would be tricky to implement, plus the latter approach gives B&N an opening to market to the second user.  (Please post a comment if you know.)

In any case, Adobe and B&N refer to this feature as “social content protection” and intends to integrate it into its server software so that B&N — and presumably other service providers — can use it with devices other than the nook that use the Adobe platform, such as the Sony Reader.

This is something of a shift in strategy for B&N after its recent purchase of Fictionwise; now it’s apparent that B&N wanted Fictionwise’s e-bookstore retail infrastructure for its service.

In any case, this is a game-changer for Adobe.  With the largest US bookseller as its retail partner, it finally has a chance to compete seriously with Amazon.  Adobe is no longer destined to become to e-books what Microsoft has become for music: a platform provider with many device partners but very little market share.

Adobe is destined for a strong future with Barnes & Noble.  Publishers, who desperately need a strong competitor to Amazon to help prevent another music/Apple situation, should be working hard to ensure its success.

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