December 05, 2005
Intellectual Property Developments
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In the final analysis money is made when the public directly or indirectly pays to purchase, rent, view or use the IP. Sometimes it is advertisers who subsidize a presentation in exchange for access to eyeballs as in the case of broadcast TV and search engines. IP protection requires a system of laws and the willingness and ability of governments to enforce these laws. Many nations trail the US in providing IP protection.
considerations. Many early PC programs required that a master disc be in the drive as much to overcome memory limitations as for security purposes.
Over time the technology for copying has progressed exponentially. We see this most dramatically in the music industry. With the advent of file sharing program one could share the collective music libraries of millions of people and freely download just about any song or artists you could think of. The most widely used peer-to-peer file sharing program was Napster founded in 1999 by an 18 year-old college drop out, Shawn Fanning.
legal battle with songwriters and music publishers, and an additional $10 million against future royalities. Napster declared bankruptcy and its assets were acquired by Roxio in November 2002. Roxio merged it with PressPlay, another acquisition, and began offering a portable music service.
Today Napster offers three ways to obtain music: as a member, Napster on the Go and the Napster Light Music Store where you can purchase a song “ala carte” for $0.99 or an album from $6.95. With a Napster subscription consumers can enjoy unlimited on-demand streaming and unlimited tethered downloading of songs to the hard drives of three PCs for as long as they maintain their subscription. Membership in Napster costs $9.95 a month.
Shawn Fanning, founder of Naspter, founded SNOCAP, Inc. in 2002. The firm is an end-to-end provider of digital licensing and copyright management services for the digital music marketplace. SNOCAP's content registry and clearinghouse enables record labels, publishers and individual artists to sell their entire catalogs through peer-to-peer networks and online retailers.
In the last quarter Apple shipped 6,451,000 iPods, a 220 percent growth over the year-ago quarter. This generated $1.2 billion in revenue. This compares to shipments of 1.2 million CPUs for $1.6 billion. A number of firms have introduced similar devices.
forecasts that the total volume of ringtone sales will approach the 100 million mark by 2009, and that by then, 4 in 10 wireless subscribers and customers will be ringtone purchasers. Master track or sampled ringtone sales have exploded in the past year, and IDC estimates that by 2009 nearly two-thirds of all ringtone revenue will be generated in this category.
Xingtone is a startup whose application bridges personal computers and mobile phones, empowering Internet users to utilize their MP3 and CD libraries to create custom ringtones and upload content, such as images and games, to their own wireless handsets. Ringtone Maker sells for $19.99, $9.95 for additional copies. Xingtone does not work with files that are digital rights-protected.
Apple and Motorola are working on a deal to put iPod technology on Motorola cell phones. Nokia has inked a deal with Loudeye to create a music platform that will let network operators build their own music services on top of Nokia phones. EMI, Sony, and Universal all have divisions devoted to distributing some of their artists' work as mobile ringtones. Even individual artists are in on the act. Alain Levy, CEO of EMI Music, for one, has said that digital sales could be 25% of his company's total in five years, with cell-phone downloads and subscriptions making up a big chunk.
The music industry has been turned on its head by new technology and yet technology may prove to be its savior by providing different types of end user experiences and therefore different opportunities for revenue.
The event that triggered this editorial was the content protection or digital rights management effort undertaken by Sony BMG, a joint venture between Sony Corporation of America and Bertelsmann A.G. and the second largest music label.
In November Mark Russinovich, a security expert with Sysinternals, discovered that Sony BMG had installed a hidden rootkit on some (~50 titles) of its music CDs. A rootkit is commonly used to circumvent antivirus software and take over control of a computer. Common PC monitoring mechanisms cannot detect them. They can capture passwords and message traffic to and from a computer. They can allow a hacker to provide a backdoor into a system. The software was developed by First4 Internet Ltd, a UK based developer of content management technologies providing Digital Asset Management, Copy Protection and Image Content Filtering solutions.
Sony's explanation for using this technology was: “The software was intended simply to prevent copying beyond the level appropriate for personal use. The content protection software was designed to enable you to listen to the music while the disc is in your computer, move the music tracks to your computer in a variety of file formats and make a limited number of backup copies of the audio on the disc. It also permits you to move the music files from your computer to compatible portable devices. “
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-- Jack Horgan, EDACafe.com Contributing Editor.
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