Amazon Kindle Cloud Reader Lowers the Speed Bump for E-Books August 31, 2011
Posted by Bill Rosenblatt in DRM, Publishing, Services.8 comments
Amazon launched Kindle Cloud Reader a few weeks ago. This version of the Kindle e-reader app runs within web browsers and therefore on a wider variety of platforms than its hardware Kindle devices and pre-existing e-reader apps for platforms such as Apple iOS and Android.
The main intent of Kindle Cloud Reader is to get around app stores, so that Amazon can make e-books available on iPads, iPhones, and Android devices without having to pay Apple or Google — both competitors in the e-book space — a percentage of its revenues. Yet Kindle Cloud Reader is different from the others in a way that could turn out to be just as important as its interoperability: it doesn’t encrypt e-book files.
Various people have discovered that Kindle Cloud Reader is a straight HTML5 app and that the server sends it unencrypted content a chapter at a time. It would be fairly easy to build a program that captures the HTML and stores it locally. This would be roughly equivalent to “stream capture” for audio and video, except that the result would be a perfect browser-renderable copy of the e-book.
This means that Kindle Cloud Reader does not operate in the same way as other web-based e-readers, such as Google Editions or Amazon’s older Amazon Pages technology. These display page images that would have to be fed sequentially to an OCR engine in order to capture the text – a higher “speed bump” than Kindle Cloud Reader uses.
E-book DRM technologies have generally been hacked, but this move by Amazon lowers the e-book copying “speed bump” significantly — not as low as DRM-free music downloads, but getting there.
Furthermore, Kindle Cloud Reader lacks certain functionality that other e-readers have, such as copy-to-clipboard. Google Editions allows copy-to-clipboard with limits. Ironically, the lack of copy-to-clipboard in Kindle Cloud Reader has inspired hackers to figure out how to add this functionality and thereby stumble upon the fact that the content is not encrypted.
Three questions arise out of this development. First, why is Amazon doing this? Second, do the publishers that license material to Amazon know about it? Third, would a program that captures e-book content in Kindle Cloud Reader be illegal under anticircumvention law (DMCA 1201 in the United States)?
The first question is most likely answerable. This development indicates that Amazon is confident enough about its leadership position in the e-book market that it does not feel as much need to lock customers into its platform, as it has done (more strongly) with its DRM.
It also shows that Amazon intends to make its e-book money more on e-books themselves than on reader devices. This is in line with analysts’ projections that the tablet market will grow faster than e-reader devices and therefore that e-readers will come under increasing price pressure. Amazon’s intention to launch a tablet device of its own by the end of this year corroborates this.
The third question is an interesting one. The anticircumvention law was designed to place liability for hacks to “technical protection measures” (TPMs) on hackers themselves rather than on the suppliers of the TPMs. This has led to the question of how strong a TPM has to be in order to qualify for protection under this law.
The 7th Circuit appeals court addressed this question in Universal v. Reimerdes (2000) regarding the hacked CSS encryption scheme for DVDs: the defendants in the case suggested that CSS shouldn’t qualify for legal protection because it was so easily hacked. The court did not want to establish a test for TPM effectiveness, so it declined to address that issue.
More recently, a company called SunnComm that made CD copy protection technology threatened to sue a researcher for discovering that its technology was trivially easy to circumvent: just press the Shift key on a PC when inserting a protected CD into the PC’s drive and the copy protection mechanism could be bypassed. SunnComm withdrew the lawsuit. One reason for this could have been fear of the repercussions of an adverse court decision — which would most likely have resulted in just such a test for TPM effectiveness.
If a publisher sues someone under the anticircumvention law for making a program available that extracts e-book content from Kindle Cloud Reader, then we’ll see what the answer to the third question above is (if the suit goes to trial). Or, if a publisher sues Amazon for breach of licensing agreement over the lack of encryption, we’ll know the answer to question number two.
Of course, there is also a fourth question: is this the beginning of the end of DRM for e-books? I suspect the answer is yes, although this should happen more slowly (or not at all) for certain segments of the publishing market, such as higher education and expensive professional/technical content. In general, I don’t believe it will happen as quickly as it did for music.
The digital music industry is moving from a model based on file ownership to one based on cloud storage. Storage of content on servers instead of on users’ devices goes hand-in-hand with elimination of file encryption. This transition is just beginning and will take years to complete. Even so, cloud-based e-reading seems like more of a stretch than cloud-based music: although the “celestial jukebox” model has been available for several years, its uptake has been slow. People are only just now starting to envision a world without physical music ownership. It will take them considerably longer to envision a world without physical books.
Mixed Verdict for EMI against MP3tunes.com August 23, 2011
Posted by Bill Rosenblatt in Law, Music, Services, United States.4 comments
A federal district court judge in New York this Monday delivered a mixed-bag opinion in long-running copyright litigation between a number of record companies led by EMI and MP3tunes.com, led by that veteran of music industry litigation, Michael Robertson.
The summary judgment decision affirmed yet again the principle that online content providers have no obligation to proactively “police” their sites or services for their users’ copyright infringements — which has been established in such recent cases as Viacom v. Google (YouTube) and Universal Music Group v. Veoh, at least at the district court level. As long as service providers respond “expeditiously” to takedown notices under the Digital Millennium Copyright Act (17 U.S.C. § 512) and terminate the accounts of egregious repeat offenders, they aren’t liable for their users’ infringements.
MP3tunes provides what has come to be known as a locker service: users can upload their music to the service and access it from any Internet-connected device. That aspect of MP3tunes.com got a clean bill of legal health from Judge William Pauley.
Another feature didn’t, though: the “sideload” feature. MP3tunes operates a separate website called sideload.com, which lets users search third-party sites that contain free music files (whether legal or not). Users can search all of those sites with a single search command, select files from them, and copy the files into their MP3tunes lockers. Sideload.com currently claims access to over 160,000 tracks. MP3tunes responds to takedown notices on such files by removing its links to them from sideload.com search results, but not removing copies of the actual files from users’ lockers. Judge Pauley didn’t buy MP3tunes’ argument that doing the latter would violate its users’ privacy and personal property; instead he found MP3tunes liable.
Michael Robertson is a wealthy man, having sold his previous music venture, MP3.com, to Universal Music Group for over US $370 Million back in 2001. Now it seems that he spends his time and effort designing technology products and services that provocatively test the boundaries of both copyright law and copyright owners’ patience. Robertson started MP3tunes.com in 2005, and in doing so, he invented the idea of “cloud sync” locker services, which are now virtually mandatory checklist items for online music services. Other vehicles for Robertson’s copyright nose-thumbing include AnywhereCD (buy a CD, get the MP3 for free) and Linspire (Linux-based operating system that runs Windows programs), both now defunct.
As Judge Pauley’s order reveals, MP3tunes.com looks like a site that was designed by Robertson in consultation with copyright law experts with the objective of figuring out just how much they can get away with without record company licenses. As an example of this, consider a feature in some locker services known as scan and match. With scan and match, a locker service need not upload a user’s actual files. Instead, the service scans each file and identifies the music through various means such as examining ID3 tags (metadata in MP3 file headers) and acoustic fingerprinting. If it has that music in its online catalog already, it skips the upload step and gives the user access to the copy of the file that the service already has.
Scan and match has two big advantages over uploading. First, uploading could take hours, days, or even weeks depending on the size of the user’s collection. Second, scan and match eliminates the need for the service to store many files of the same music; it only needs to store a single copy.
Scan and match is a controversial feature; record companies claim that it requires a license from them to cover the “master” files that the service provider hosts. Apple has a license to implement scan and match for its forthcoming iTunes Match service. Catch Media has a license for this as well. Google and Amazon do not.
MP3tunes finesses this issue by actually uploading users’ files but only storing a single copy. It claims to be able to restore the copy that a user actually uploaded when she wants it — possibly by storing some information about how the uploaded file differs from the file that MP3tunes stores and then using that information to reconstruct the user’s original file on demand. In other words, MP3tunes has it both ways: it presumably avoids the need for record company licenses (by doing actual uploads instead of scanning and matching) while also avoiding both the storage overhead and the copyright liability of storing multiple copies of the same music on its servers (because each copy is a separate possible infringement, and each infringement carries high financial penalties). MP3 tunes thus does not actually source its music from record companies; it sources the files from its users. Another service that operates this way is Grooveshark, which has also found itself in legal hot water.
The point is that MP3tunes’ implementation has nothing to do with the user experience and everything to do with treading on the knife-edge of the law.
Similarly, sideload.com is based on the legal principle that because users don’t know whether the music on the third-party sites to which it links is unauthorized or not, the company should not be liable for contributory infringement for those files. The judge concurred with this.
Robertson’s comments (e.g. on CNet) on the heels of Judge Pauley’s decision reinforce the impression that he is doing this as a professional goad to the music industry: he seems to be much more interested in the decision’s impact on Google and Amazon than on his own site and its 300,000 users. This decision doesn’t seem to help Google and Amazon much, though: at bottom, it merely reiterates findings from the Veoh and YouTube cases at the district court level. We won’t know much more about the legal boundaries of online storage services at least until an appeals court renders a decision in one of these cases.
How High Will Spotify’s Paid Subscribership Go? August 10, 2011
Posted by Bill Rosenblatt in Business models, Europe, Music, Services, United States.1 comment so far
More on the direct consumer revenue trend: the first set of results of Spotify’s US launch are in, courtesy of the Wall Street Journal’s All Things D. As of earlier this week, only a month into the service’s US presence, Spotify has signed up 1.4 million subscribers, of which 175,000 are paying. At 12.5%, that’s a bit lower than the 15-16% paid subscribership Spotify is enjoying in Europe, but it doesn’t change Spotify’s overall paid-subscriber rate very much.
All Things D’s Peter Kafka points out that the US conversion rate from free to paid is likely to be lower because US subscribers get more free music during the first six months of the US launch than European free subscribers do. But I would also argue that the conversion rate is lower because Spotify is new in the US, and people are just trying it out — many of whom may already subscribe to a competing service such as Rhapsody.
Given that the addressable market for Spotify increased by 150% when it launched in the US (about 150 million Internet users in the seven European countries in which Spotify operates vs. about 220 million in the US), Spotify’s total subscribership could end up in the multiple tens of millions fairly quickly. But to me, the more important question is: given the steep growth in its percentage of paid subscribers, where does that growth stop?
Here’s a poll:
Good News for the New York Times July 22, 2011
Posted by Bill Rosenblatt in Business models, Publishing, Services.6 comments
A short postscript to yesterday’s article on the strong recent uptake in paid subscription music services:
Today the New York Times revealed that 281,000 users are paying to receive its content digitally, including 224,000 in its new Digital Subscriber program and the remaining 57,000 paying for Times subscriptions through e-readers. The Digital Subscriber service launched in March. The Times has already beaten its stated goal of 200,000 digital subscribers by the end of the first year. 224,000 is 26% of the paper’s daily print circulation; the figure does not include the 756,000 print subscribers who also have digital subscriptions. The 26% ratio is about the same as the percentage of digital to print subscribers to Cook’s Illustrated.
To put those numbers in context: the goal that the Times surely has in mind is 400,000. That’s the number of paid online subscribers to the Wall Street Journal. The other interesting number in the periodical publishing space is that of Consumer Reports, which is the largest paid online publication at 3.3 million online subscribers (as of November 2010). Neither Consumer Reports nor Cooks Illustrated carries advertising.
Different subject: How do you like the new site layout?
Do Paid Music Subscriptions Indicate a Tipping Point? July 20, 2011
Posted by Bill Rosenblatt in Business models, Music, Services, United States.3 comments
Maybe it’s reflective of consumers’ generally increased willingness to pay for content, now that more paid models are out there. Maybe it’s the launch of legal content services that are really easy to use and represent what users, as opposed to record labels or online retailers, want. Maybe it’s both factors and more. But whatever the reasons, consumer sentiment towards respecting copyright and paying for legitimate content seems to be moving in a positive direction — at least for music.
Let’s get one thing out of the way quickly: yes, digital copyright infringement is still massively rampant, and it’s not going away. And the changes I’m observing are small in magnitude. But they indicate trends that could become larger.
I’m seeing comments to stories on mainstream tech sites such as CNet News.com and TechCrunch that are more balanced than they have been about the need to respect copyright and ensure that content creators can get paid. As I mentioned last week, the reaction to the recent Copyright Alert System announcement from major ISPs and content owners was more measured than I would have expected. There were even anodyne statements such as “Educating users about copyright is a worthy endeavor” and “…important educational vehicle that will help reduce online copyright infringement” from EFF and Public Knowledge respectively. Could this be a sign that extremism in the “copyright wars” is mellowing?
The biggest quantitative sign of a tipping point is that the music industry has reversed its long slide and reported an increase in revenue for the first time since 2004. The overall increase is only 1%, but digital sales are back on the rebound too, at double-digit increases.
Yet there’s a more telling statistic that no one seems to be talking about: the dramatic uptake in paid subscription music services over the past year. This chart from Spotify data, culminating in 1.6 million paid subscribers on the eve of its recent US launch, tells the story best:
Rhapsody’s subscriber numbers are up, too, reversing a decline that bottomed out in early 2010 before it spun out from RealNetworks as an independent company:
Pandora’s revenues from paid subscriptions also rose dramatically in the last year. The company’s recent IPO filing documents indicate an increase in revenues from subscribers to its Pandora One paid service (no ads, better sound quality, unlimited skips) from 6% to 9% to 14% over 2008-2010.
Pandora’s percentage of paid subscribers (as opposed to revenue) is much lower than that of Spotify; it’s only about a third of a percent. But it is also growing much faster than overall subscribership. And interestingly enough, that’s exactly the same as the New York Times’ percentage of paying online subscribers, when expressed as a ratio of paying subscribers to unique monthly website visitors. (The Times figure was released in April 2011, only a month after the paid service went live.)
The difference between subscription music services on the one hand and the Times and Pandora on the other is easily explained as a matter of consumer expectations. Newspapers and “radio” are services that consumers expect to get for free. Getting them to pay was always going to be a tough proposition. But subscription music services have no such legacy in the pre-digital world; they represent a new value proposition.
Rhapsody only operates in the US; until now, Spotify only operated outside the US. Now they’re direct competitors. Before its US launch, Spotify had paid subscribership that amounted to about 1.1% of the Internet-connected populations in the seven countries in which it operated. Rhapsody’s subscribership in the US is 0.36% of the net-connected population. Of course, Rhapsody has more direct competitors in the US, including Napster, Rdio, and MOG, though their subscription numbers are smaller.
The burgeoning Rhapsody-vs.-Spotify rivalry is generating a healthy buzz about subscription music services that should buoy all of the players. You can see the nature of the competition in blogs and support forums. Rhapsody has more features and a steadfastly loyal subscriber base. But Spotify has a cleaner design and, more importantly, a far better mobile experience than any of the US-based competition. Music has been enjoyed on portable devices ever since the advent of the transistor radio over half a century ago. The use of PCs and Macs for playing music will soon be viewed as a detour from its natural evolution.
It will be interesting to see how high paid subscription service subscriber numbers climb. It’s the first born-digital business model for music that actually makes money. It may even become a keystone in the re-stabilization of the music business. I’ll report back after Spotify has been in operation in the US market for a year.
The Copyright Alert System: A Cautious Experiment July 10, 2011
Posted by Bill Rosenblatt in Law, Services, United States.2 comments
Last Thursday, a coalition of content owners and ISPs announced the creation of a Center for Copyright Information (CCI) and a framework for “Copyright Alerts.” Briefly, the Copyright Alert system identifies a six-level system of interventions that ISPs should take with subscribers if they receive evidence of suspected copyright infringement. They start with simple “educational” messages, move to messages that require user acknowledgement, and culminate in “Mitigation Measures” that could include bandwidth reduction (throttling) or account termination. The CCI analogizes the Copyright Alert system to credit card fraud alerts. It positions the framework as a starting point towards a set of best practices for how ISPs should deal with online infringement.
Perhaps the most encouraging sign about this development is that several organizations representing indie content creators have either signed onto the initiative or issued statements endorsing it, including the Independent Film & Television Alliance, American Association of Independent Music, and Future of Music Coalition. In other words, this is not just the MPAA and/or RIAA. Another good sign for the future is that the announcement has received relatively tepid reactions from entities that one would expect to sound alarms. I can summarize the substantive concerns that have been raised by putting them in a few buckets:
- This initiative may sound inoffensive, but it’s really a foot in the door; future versions of the Copyright Alert system will become more draconian.
- All the language on the Center for Copyright Information website that says “This is not ‘Three Strikes’” is disingenuous: ISPs do have the option to terminate users’ accounts if they are still accused of copyright infringement after a suitable number of warnings.
- The system is based on accusations from copyright owners, not from any sort of objective source, thereby laying the system open to false positives and other abuses.
- There is an issue with presumption of innocence: you can appeal your accusation of infringement to the CCI, but it could cost you $35 to do so; there does not seem to be any redress mechanism for entities that file egregious complaints.
As is often the case, I think Nate Anderson of Ars Technica got it right: the Copyright Alert system does seem sensible, though it would have been easier to swallow if it had been introduced several years ago, instead of after several years of more drastic actions such as lawsuits against individuals and attempts at blunt-instrument legislation (and blunter-instrument levy schemes).
Fear of worse things to come based on worse things that already came explains #1 and #2 above. ISPs have always reserved the right to terminate a subscriber for breach of their Terms of Service anyway.
As for #3, what are the alternatives? ISPs can’t be relied on to self-police. Copyright owners have to produce their own evidence of infringement. The only other possibility would be the government, perhaps through the FBI or some newly created entity.
First of all, this is not supposed to be about law enforcement and criminal charges. Secondly, a fundamental premise of this type of arrangement between industries is to avoid governmental intrusion — and it was most likely created in the first place because the White House and then-New York Attorney General (now Governor) Andrew Cuomo threatened government intervention if the two factions couldn’t reach agreement by themselves. Finally, involvement of some government entity would raise concerns about taxpayer funding, which would be tantamount to the deeply misguided antipiracy levy that was proposed in the UK in early 2009.
I have to admit some sympathy for #4, though, once again, this is not law enforcement. The reason for charging the $35 fee is supposedly to discourage people from abusing the system (i.e. overworking the Copyright Information Center) by bombarding it with cycles of illegal upload, appeal, illegal upload, appeal, etc. If the point is to prevent scalable abuse, then a Captcha system on the appeal form ought to suffice. But if the real reason is to foist the cost of this mechanism onto consumers, then once again, that’s wrong — and this is a particularly poor way to do it, given that at least some of the users who appeal will be innocent.
Yet otherwise, this ought to count as yet another of the many instances in modern life where you have to put up with inconvenience and cost to shake off a false accusation. Anyone who has had a credit card charge refused because of the card company’s hair-trigger fraud detection mechanism, was issued a bogus parking ticket, or found mysterious long-duration calls to Eritrea on their phone bill, will understand — not sympathize, perhaps, but understand. (Yes, all of those things have happened to me.)
What the Copyright Alert system is not is an opportunity for providers of technology to detect infringement on networks, such as content identification (watermarking and fingerprinting) or traffic monitoring, to sell more of their services. Content owners will most likely continue to use the infringement detection services that they currently use. The Copyright Alert system gives them a mechanism through ISPs to inform subscribers about allegedly infringing activities and potentially some actions to take against repeat offenders.
As to the question of whether five or six strikes can ever get you out — i.e., get your Internet access terminated — I suspect the answer is no for the foreseeable future. The Electronic Frontier Foundation has described what’s likely to happen here. ISPs will naturally object to cutting customers off from the products they’ve paid for. The EFF suggests that content owners will believe that they have leverage against ISPs under the DMCA: they will argue that ISPs that refuse to cut off infringers should not enjoy the benefits of DMCA safe harbor (i.e. not being held secondarily liable for users’ infringement). The issue may well end up in court.
In that case, there will be litigation over the meaning of the DMCA — not unlike the current long-running litigation between Viacom and YouTube — that would be destined for high level appeals courts. In other words, a definitive answer to the question of “can ISPs get away with not terminating repeat infringers’ accounts?” will (barring any preliminary injunctions) be several years away, and until that day, the answer will be yes.
The Copyright Alert system is, at bottom, a cautious and reasonable experiment — one that, as many have argued, could have been launched ten years ago to better effect. Many details have yet to be determined, as does the system’s effect on ISP subscribers and on copyright infringement. It’s best thought of as a “watch this space” initiative, to put people on notice. Any conclusions drawn about it are premature, and that’s how it should be.
iCloud Cuckoo Land June 7, 2011
Posted by Bill Rosenblatt in Music, Services, United States.6 comments
As part of Apple’s iCloud announcement this week, Steve Jobs announced a “cloud sync” feature similar to those launched by Amazon and Google in recent weeks. This service had been heavily rumored and even partially pre-announced for weeks. The announcement answers most questions about how iCloud differs from the Amazon and Google offerings, and what Apple is able to offer now that it has licenses from the major recording companies while the others don’t… yet one tantalizing point remains unexplained.
iCloud automatically stores users’ iTunes music tracks online. It automatically downloads newly purchased tracks to all of a user’s connected iTunes devices, which include iOS devices (iPhones, iPod Touches, iPads) and Windows PCs (Vista or higher; XP isn’t supported) and Macs with iTunes software. Users can choose which of their previously-purchased iTunes tracks are copied to all of their devices. It’s all free to iTunes users, but you have to use an Apple device or Apple iTunes software to use this feature of iCloud.
Apple doesn’t make any mention of streaming content from iCloud to Internet-connected devices, whether Apple or otherwise. It all seems to be file copies and downloads.
This leads one to wonder: just why did Apple pay $80 Million for the streaming infrastructure of Lala.com in December 2009?
Apple is ambiguous (at best) on this point.
The iTunes Match feature adds to the mystery. iTunes Match, which will launch this fall, lets users store their non-iTunes tracks in iCloud, regardless of their origin and as long as they are in a standard DRM-free format.
iTunes Match incorporates a feature that has come to be known as “scan and match”: it identifies music on the user’s device, using techniques such as examining ID3 metadata tags in MP3 files and acoustic fingerprinting. If it finds a match and the track exists in the iTunes catalog, then it need not be uploaded to the Cloud; Apple will simply make a copy available for that user. If iTunes doesn’t have the track, then it’s uploaded to online storage.
Apple charges users $24.95 per year for this feature, a chunk of which will go to record labels as royalties. Given that most “non-iTunes” tracks are likely to be of dubious origin (downloaded from file-sharing sites, ripped from friends’ CDs, etc.), this amounts to a “piracy amnesty” fee. It’s also worth noting that Apple didn’t originate this technique. Apart from Michael Robertson’s MP3tunes.com, which had to drop that feature under legal pressure from the record labels, CatchMedia offers this feature today in the UK, in partnership with Carphone Warehouse. It has record company licenses and charges consumers a fee that amounts to double Apple’s price.
The scan-and-match technique has two advantages over the Google and Amazon schemes, which require every track to be uploaded. First, uploading takes time. Depending on the number of tracks in a user’s collection and the Internet connection speed, uploading could take hours, days, or even weeks. Scan-and-match takes seconds per track as long as it finds a match. The other advantage is that for matched tracks, the user gets iTunes’s high-quality (256kbps AAC) version of the track regardless of the quality of the track on the user’s device.
The question is, how does the user get this track? Is it downloaded to the user’s device(s) or streamed? If it’s downloaded, does the user’s original file stay or disappear? Again, Apple does not say. The web page uses language that sounds intentionally ambiguous: “the music iTunes matches plays back at 256-Kbps … quality.” The press release says “replaces your music,” which is a bit more suggestive of downloads; yet it also says “it makes the matched music available in minutes (instead of weeks to upload your entire music library)”, which implies that “replacing” does not involve downloads that could be as time-consuming as uploads. Furthermore, Apple’s acquisition of Lala tips the balance back towards streaming.
Even knowledgeable commentators have mixed views; some (like CNet and the New York Times) say download, while others (like the Associated Press via Eric Garland of online media measurement firm BigChampagne) say stream. Others such as Music Ally and Digital Music News are hedging their bets.
The difference is certainly important. So why isn’t Apple forthright about this aspect of iTunes Match? Leaving aside Apple’s penchant for secrecy before launch — which Apple otherwise didn’t exercise this time — there are a few possible explanations. The options, as I see it, are these:
- Apple intends to let users stream their tracks to any Internet-connected device, not just iOS or iTunes devices, using a web interface. Google and Amazon offer this.
- Apple intends to let users stream their tracks, but only to iOS devices or PCs/Macs running iTunes, using some type of proprietary secure streaming protocol that excludes non-Apple devices.
- Apple will download copies of iTunes Match tracks to users’ iTunes devices.
The first of these strikes me as unlikely, given that everything else about iCloud and iTunes Match seems designed to recapture the platform lock-in that Apple enjoyed when it used DRM. Now it’s lock-in through the convenience of seamless, automated cloud sync. Yes, you can copy your tracks to non-Apple devices, because they are DRM-free, but it’s a hassle compared to the automated ease of iCloud.
Furthermore, because Amazon and Google offer streaming, wouldn’t Apple want to publicize it heavily instead of using ambiguous language? Apple is not shy in using a competitive matrix to claim its superiority over the others.
The second is a distinct possibility. It would also explain Apple’s ambiguous language: it’s the type of “feature” that critics would pounce on, given that it’s clearly less open than Amazon and Google, and includes what could be called DRM. If this is what Apple intends to offer, it’s not surprising that Apple would be reticent or evasive about it now.
The last option is also a possibility. It is consistent with platform lock-in; moreover, it increases the possibility that users will use iTunes and iOS devices as their only music players. It could be a feature of the financial deal that Apple struck with the record companies.
But there are two problems with this option. First, it would cost Apple much more money, as royalties on downloaded copies would be much higher than on streams. Second, this option “elevates” non-iTunes tracks to the same status as tracks purchased from iTunes. It sends a message that users need not purchase tracks from iTunes, yet those tracks can become full-fledged iTunes tracks anyway. That’s the status quo for tracks stored locally, but it’s inconsistent with Apple’s opportunity to re-establish lock-in through the Cloud.
What do you think? Here’s a poll:
In any case, what Apple is definitely not offering with iCloud is the ability to stream any of the music from its vast library on demand, as is the case with services like Spotify, Rhapsody, Napster, Rdio, and MOG. Instead, Apple is sticking with the paid-download model. It boggles my mind why journalists and analysts aren’t focusing on this distinction, which to me seems far more important than “cloud sync.”
I have said that cloud sync is now a “checklist item” for online music services. I’ll go further and state that it may turn out not to be a particularly valuable feature. For those who use streaming subscription services, it’s irrelevant. And for those who hoard thousands of MP3s on their hard drives — a crowd that overlaps considerably with the crowd that actually uses more than one or two music devices actively — cloud sync could become a nuisance once their 8GB or 16GB portable devices fill up with tracks that the almighty Cloud puts there automatically (for that scenario, Apple needs to invent iCache).
Furthermore, if you have multiple music devices, the odds are that you listen to different types of music on each device anyway. My PC is used mostly for background music in the office; my Android handset is for active listening while commuting; my iPad is for home with the kids. I have a moderate-size digital music collection (a few thousand tracks) and use Rhapsody and Pandora as well as file-based music players. Occasionally I want to copy music files from my PC to another device; a cable or Bluetooth works just fine. Cloud sync doesn’t help me.
HP Snapfish Goes into Stock Image Business May 30, 2011
Posted by Bill Rosenblatt in Images, Rights Licensing, Services.5 comments
Last week HP and LicenseStream, a startup formerly known as ImageSpan, launched Snapfish Stock Images, a stock image service integrated with HP’s Snapfish image sharing site. LicenseStream handles rights management, royalty compensation, and unauthorized use detection for professional and amateur photographers who wish to upload and monetize their images on the site.
The wall between the major photo-sharing sites and online stock image agencies has been breached. This is a watershed moment in the evolution of the digital image market, and potentially the beginning of a breakthrough for photographers who are despairing of dwindling opportunities for monetizing their content.
Snapfish and LicenseStream’s scheme for uploading and monetizing images is analogous to Scribd‘s scheme for monetizing documents. You can upload images and decide whether you want to charge for them or give them away. If you want to charge, you get a percentage of the purchase price that is considerably higher than what you would get with a traditional stock image agency like Getty Images or Corbis. It will no longer be necessary for photographers to upload images to photo-sharing sites merely in hopes of getting promotional exposure so that maybe someday an image buyer will go over to Getty or Corbis to license their work for money.
At the heart of this service is LicenseStream’s scheme for license management, royalty compensation, rights management, and detection of unauthorized uses. LicenseStream uses Digimarc’s image watermarking technology to embed watermarks in images so it can detect them on the Internet. LicenseStream alerts the content licensor when it finds unauthorized uses of content and provides a choice of actions, such as offering a license, assertion of copyrights, or allowing the usage.
Services like this exist today for text content from Attributor and iCopyright; one difference with LicenseStream is that it uses watermarking instead of the pattern-matching schemes, akin to fingerprinting for audiovisual content types, that Attributor and iCopyright use. Other vendors like PicScout do the usage tracking but not the license management.
The advantage of watermarking over fingerprinting is that it is guaranteed to be accurate in identifying images, whereas fingerprinting is ultimately an “educated guess.” The disadvantage of watermarking is that the watermark has to be inserted into the content before it’s published. But LicenseStream’s integration with Snapfish makes that straightforward; the content can be watermarked as part of the upload process. LicenseStream is in the process of expanding its solution to work with other types of content, which would mean integrating content identification technologies for those other content types.
Getty and Corbis became a de facto duopoly over the past few years as the online stock image market began to shrivel up. The tipping point came in 2008 when Getty acquired JupiterImages from Jupitermedia, itself a rollup of over a dozen small online stock image sites. The only other stock image sites are small boutiques that cater to special interests.
HP’s move is at once a democratization of the stock image industry and a potential blow to the duopoly that currently runs it. It’s also an admission by one of the major image-sharing sites not only that there is money to be made from the millions of images that flow through it daily but that it’s the right thing to do for content creators.
It is refreshing to see one of the big three image-sharing services finally step into the world of paid content. It doesn’t detract from the experience of everyday users sharing personal images, and it should raise the overall quality of images on the site, thereby giving Snapfish a competitive advantage. Why haven’t any of the big image-sharing sites done this before? The technology to do so has existed for years. It has to be a sign that the tech industry is maturing its attitudes about copyright and paying content creators.
So how about it, Picasa (Google) and Flickr (Yahoo)? Will you follow?
Music Forecast: Even Cloudier May 11, 2011
Posted by Bill Rosenblatt in Law, Music, Services, United States.add a comment
Earlier this week, Google announced Music Beta by Google, its long-awaited music service. It’s currently an invitation-only beta, and it has gotten mixed reviews including negative press from the New York Times, Wired, and elsewhere. Like Amazon’s Cloud Player/Cloud Drive, it is not licensed by any of the record companies.
Google evidently decided to release an incomplete product after licensing talks with the major record companies broke down. This decision could be a negotiating tactic, a “just try and stop us” gambit to get the record companies to improve their terms. It could also be a rushed-to-market response to Amazon’s recent launch as well as a way of beating Apple to market with a music streaming service.
Whatever the reason, Music Beta by Google hardly bears comparison to full-featured music services like iTunes, Spotify, Rhapsody, etc. It is essentially as much functionality as Google believes it can offer without music licenses. It’s little more than a subset of Amazon’s offerings, with more free storage.
Its functionality is quite similar to that of Amazon Cloud Player/Cloud Drive: it lets users upload and store music they already own onto an Internet file storage service and stream it to any web-connected device with a music player. It also (again, like Amazon) incorporates an app for Android devices that has various additional functions. Of these, the most interesting for our purposes is the ability to store music on Android devices for listening without a network connection (“offline listening”).
Google’s service keeps a limited amount of most-recently-played music on the handset for offline listening. It also allows users to specify which tracks or albums they would like to store on their Android devices for offline listening. As I have mentioned previously, other services such as Spotify, MOG, and Rhapsody offer similar functionality, but they have music licenses. (This means, among other things, that the locally-stored copies must be protected with some form of DRM, even though the services aren’t using that term.)
The record companies must now decide whether to let Amazon and Google continue operating their services without licenses or to put legal pressure on these two tech giants. Their decisions will be based on several interrelated technical, legal, and business issues.
To understand these issues, first we should be more specific about what features these services are and are not offering. Essentially they let users do three things:
- Upload and store copies of their music files online.
- Stream those files onto virtually any network-connected device with a music player.
- Store some files on a user’s Android device for offline listening.
- Google does not actually supply music. In other words, it does not provide a way for users to get music they don’t already have; it doesn’t even recommend or point to new music. (Amazon has an MP3 download store for that purpose.)
- Both use Flash for their player apps and thus won’t run on iOS devices (iPhones, iPads, iPod Touches).
Now’s let’s turn to the business issues. As I mentioned last month, a number of startups have been offering similar sets of services with licenses from the record companies. So-called “cloud sync” services like DoubleTwist and Catch Media enable file distribution across multiple types of devices, not just Android devices. But Catch Media in particular charges users for this service and pays royalties to music companies, whereas Amazon and Google offer it largely for free and do not pay royalties. This must cause the Catch Medias of the world much pain and resentment. The same goes for paid subscription services like Spotify, Rhapsody, and MOG, which supply music in addition to offering Internet streaming and cloud sync features.
The record companies are going to have to decide whether to press Google and Amazon for licenses or risk the wrath of existing licensees, which are presumably paying for the right to offer certain features including those that Google and Amazon are offering without licenses.
So what exactly are those features that require licenses? Both Google and Amazon claim that they are simply offering personal online file storage capabilities, similar to those available from “online backup” services like Norton Online Backup and Trend Micro SafeSync — or even general file-sharing services like RapidShare and DropBox. These services simply enable users to exercise Fair Use rights, and none of them have licenses from copyright owners, so why should we need them? …goes their argument.
This brings us to the technical and legal issues, which are intertwined. The fact is that all of the services mentioned in the previous paragraph offer more than just online storage of a user’s files. For example:
- Google, Amazon, and RapidShare (paid premium accounts) offer streaming of music files.
- RapidShare, DropBox, and SafeSync offer ways for users to give other users (friends, colleagues) access to their online files.
- RapidShare, Norton Online Backup, and SafeSync let users publish links (URLs) to their online files.
- RapidShare and DropBox let users download files onto any computer where they log in with their user IDs.
- Google and Amazon will download certain files onto users’ Android devices.
The right to store copies of one’s existing files on a network server is not really settled law in the United States. The recent Cablevision decision in the Second Circuit, which determined that server-based PVR (personal video recording) services are legal, is somewhat but not exactly relevant. Nevertheless, none of these services have been sued just for enabling personal online file storage. The ambiguities — and therefore the potential legal battlegrounds — lie in the other features.
Here we get into the meanings of words like “copy” and “cache.” A “copy” is something that is presumably covered under copyright law. A “cache” can imply something known as an “incidental copy,” which has a certain meaning under copyright law and is often assumed not to require licensing. (For example, streaming buffer data kept in RAM usually falls under the “incidental copy” rubric.) Google, in its description of Music Beta, circumlocutes these terms by using phrases like “will automatically be available offline.” Amazon uses the more straightforward phrase “download to your device” while still avoiding words like “copy” and “cache” in its description of Cloud Player/Cloud Drive features.
The Cablevision appeals court decision of 2008 established some precedents for determining “when is a copy not really a copy,” but it did not cover the use cases here, which are of uploading a user’s own copies of copyrighted content to a network file storage service for later retrieval and downloading them onto a user’s device for offline playback. Arguments would need to be made in litigation over whether features such as those mentioned above qualify as fair use exceptions to copyright infringement or require licenses from copyright owners. If the music industry decides to sue Amazon or Google, then both sides will have work to do to get courts to see things their way.
Amazon To Enter Library Lending Market April 20, 2011
Posted by Bill Rosenblatt in Devices, DRM, Publishing, Services, United States.2 comments
Amazon announced today that it is launching Kindle Library Lending, working with OverDrive to support Kindles and Kindle apps on other platforms on OverDrive’s digital lending platform for public libraries. The timing of the announcement was unclear, given that the service won’t be available until “later this year.”
OverDrive is apparently adding server-side support for Amazon’s Kindle DRM technology, so that it can distribute e-books that are readable on all Kindle devices and apps. This will make OverDrive the first third-party service provider to support the Kindle DRM
This announcement throws an interesting twist into the recent controversy over lending of e-books from public libraries. One of the complaints that library and user advocates have made about digital lending is that DRM has prevented e-books from being readable on and portable across different reading devices and software. The distinction between the two is important, so let’s examine them.
Currently, patrons of libraries that use the OverDrive service can borrow e-books and read them on just about any popular device except Amazon Kindles. OverDrive uses the Adobe Content Server/Digital Editions platform, which runs on just about every e-reader devices except Kindles, as well as on software apps for Windows, Mac, Linux, Android, iOS (iPhone, iPad, etc.), and BlackBerry. When Kindle Library Lending launches, that limitation will be removed.
Instead, library patrons will most likely have to choose which e-book format they want based on what device they have. This will, ironically, lead to overlap: you will be able to choose either format if you have a PC, Mac, Android device, or Apple iOS device. If you have a Nook, Sony Reader, Kobo Reader, or IREX, you’ll choose the Adobe format; if you have a Kindle, you’ll choose the Kindle format. As far as portability is concerned, e-books will be readable across these two highly overlapping subsets of devices. Amazon’s Whispersync feature will even preserve margin notes you write on borrowed e-books without revealing them to other borrowers.
You still won’t be able to “re-lend” your e-book to a friend or family member unless they use your reading device or your user account, and you still won’t be able to move your e-book from a device in one of the ecosystems to one in the other ecosystem — for example, from a Nook to a Kindle or vice versa. But that’s a pretty low number of restrictions, given that this is library lending we’re talking about, not purchase and ownership.
Given the recent price drops, it looks like the Kindle is on its way to being a loss-leader product for Amazon — which will make up the revenue through its margins on e-book sales. So why would Amazon want to support library lending? Apparently because library e-book borrowing is popular, and the Kindle’s lack of support for it gives Amazon’s competitors a differentiating feature that consumers consider to be important. As Amazon’s press release suggests, the Kindles’ ability to read library e-books is up there with their display quality, battery life, and other features in the ultra-competitive e-book reader race.
Bill Rosenblatt
Azita Arvani
Bill Jones
Niels Thorwirth
