A little more than a year ago, the creators of Azureus -- a file-sharing program based on the BitTorrent protocol -- launched Vuze, a version that ignored bootlegs in favor of authorized copies of TV shows, movies, games and other programming. The idea was to create a file-sharing environment that content owners would want to participate in, and that would present less risky revenue streams. By focusing the software only on authorized files, Vuze could charge fees for files or sell advertising around them without fear of being sued for profiting from piracy. It soon attracted content from dozens of producers around the globe, including the BBC, PBS and TOKYOPOP, although the major Hollywood studios largely kept their distance.
This month, Vuze did an about-face. Unleashing the software's search engine, it enabled users to find and retrieve content indexed by some of the world's most popular BitTorrent search engines. These include Mininova, an index site in the Netherlands now under legal assault from Dutch anti-piracy authorities. As a result, users don't have to fire up a second file-sharing program to find free, pirated versions of the titles Vuze offers on a pay-per-view basis. They can do it through Vuze's search engine.
CEO Gilles BianRosa acknowledged that the move didn't meet with universal acclaim from the companies providing content on Vuze. Yet he said that the change merely acknowledges the reality of the marketplace, and argued that it would help content owners compete better with online bootleggers.
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It's a needle-in-a-haystack world for new TV shows, particularly when they're on cable. That's why so many networks put pilot episodes online well in advance of the series premiere. Still, the Viacom-owned cable network Spike seems to be going one important step beyond its peers in its efforts to build an audience. Not only is it making the first episode of the new series "Factory" available in advance on its website and through downloadable video stores, it's also trying to spread it through Limewire and other file-sharing networks. Without DRM, or seemingly any form of copy protection.
Spike is working with Jun Group, a firm that specializes in promoting media through p2p networks. Mitchell Reichgut, a principal in Jun Group, acknowledged that other TV programmers had used p2p technology to distribute shows (witness the broad support for Joost, or NBC's work with Pando Networks). But those distributions "have taken place in
enclosed, rights-protected `fish bowls,'" Richgut said in an e-mail, while "Spike is swimming in the `ocean' - open
P2P networks - where Spike's viewers regularly seek out the latest and greatest
new content." In other words, Spike isn't using p2p technology to cut its distribution costs. It's doing it to chase viewers.
Todd Ames, a marketing vice president at Spike, said in an interview that putting the show on file-sharing networks was an acknowledgment of "what people are really doing, and the way consumers are really looking for content." Using DRM, he said, would be self-defeating. "I don’t think there’s a marketer out there who hasn’t been
told, `Get me that viral thing.' And `get me that viral thing' when it’s handcuffed
and ball-and-chained is pretty difficult."
It's not something he'd do for just any show, but it made sense for "Factory," a semi-scripted comedy about four working-class buddies (it aspires to be a blue collar version of "The Office" or "Entourage."). "There is no better marketing tool for the show than the show
itself, but you’ve got to be seen," he said. "I’m dealing with something that has no real celebrity, and
has never been seen before.... We’re trying for a bit of a ubiquity here, to go
where the people are."
Still, those file-sharing networks are hotbeds of TV piracy, so Spike's approach is more of a toe-dip than a cannonball. You won't see any TV commercials on Spike touting the availability of "Factory" on Limewire. (All the same, Richgut expects more than 1 million downloads of the pilot. Jun Group's secret sauce is its ability to use metadata and other techniques to help the files it promotes bubble to the surface in p2p searches.) Nor does Spike plan to make later episodes available through file-sharing networks, although it expects bootleg versions to wind up there anyway. "My goal is not website traffic," Ames said. "It's really about driving tune-in for the television network."
Of course, if Spike could guarantee an additional million views of "Factory" through p2p, it might make sense to distribute the whole series that way -- with commercials, that is. But Ames said the medium still has to prove its ability to deliver individual shows to the kinds of mass audiences they can reach on cable. The Spike network is available in 96 million cable and satellite homes, after all. The online video business isn't there yet.
"Factory," which has been available online since Tuesday, premieres June 29. Here's a taste of the show, courtesy of the Spike website:
An astute reader of my earlier post regarding a possible new, earlier window for movies at home pointed out something significant that I'd missed. Rather than being an isolated initiative, the earlier window fits into a continuum of efforts to create a secure, copy-protected pathway into and around the home for high-def programming. Those efforts could eventually give Hollywood inordinate influence over the technologies used in home networks and device-to-device communications.
To recap: the MPAA has asked the Federal Communications Commission to let it use a copy protection technique called "selectable output control" on high-def movies made available through cable and satellite TV operators before the titles were available on DVD. SOC enables studios to turn off the analog and unencrypted digital outputs from cable boxes and satellite receivers to prevent unauthorized copying. The FCC had banned the technique for existing services, such as pay per view, but left the door open to it being used in connection with an innovative new offering.
The MPAA's petition says that titles would be affected only during the period prior to their release on DVD. Once the movie is in Blockbuster, the people who'd been shut out by SOC -- those whose TV sets relied on analog or unencrypted digital inputs -- would have no trouble viewing it. But a pair of footnotes that I'd overlooked in the petition point out that next-generation home-video formats may also include SOC. These include downloadable movies and Blu-ray discs. So if Hollywood restricts high-def releases of movies to the new early-release window, Blu-ray discs and downloadable files, it could make SOC the rule, not the exception -- at least until the films reach HBO and broadcast TV.
That's not to begrudge Hollywood's desire for more protection on high-def titles. The problem here, IMHO, is the potential for the studios to control which protection technologies devices use. Under the FCC's broadcast flag rules (which a federal court struck down in 2005), the commission, not copyright holders, had the power to decide which anti-piracy techniques were acceptable. One example of why this matters: the commission approved the anti-piracy scheme for TiVo's TiVo To Go feature over the objections of the MPAA and the NFL. But with SOC, the FCC has no say over what's an acceptable level of protection. That leaves Hollywood with a great deal of sway over which anti-piracy technologies get deployed. Of course, the studios want their movies to be seen, too. If consumers rally behind home entertainment and networking equipment that's not compatible with the studios' favored protection techniques, the studios will have to adapt to that reality. That's one of the reasons the major record companies finally embraced unprotected MP3 files -- they proved to be the best way to reach the largest audience.
Show of hands: how many of you have bought a used CD or DVD stamped "Not for Sale/Promotional Use Only"? Tuesday, a federal judge issued what appears to be the first ringing defense of the promo market, rejecting Universal Music Group's lawsuit against someone who sold promo CDs on eBay. UMG claimed that, as the CD cases clearly stated, the promotional discs were merely "licensed" to their recipients. The license agreement barred the discs from being sold, so when defendant Troy Augusto peddled the CDs, he violated UMG's copyrights (specifically, the company's exclusive right to distribute the works). But U.S. District Judge S. James Otero in Los Angeles held that UMG gave up ownership of the CDs when it mailed them to reviewers, publicists and other industry insiders with no expectation that they would be returned. As a consequence, Otero ruled, Augusto was the rightful owner of the discs, and under the "first sale" doctrine, he was entitled to sell them (provided that he didn't keep a copy). And no, Otero ruled, the fact that the CDs were sent out as gifts doesn't affect the recipients' right to sell them.
It's an important ruling, and not just for used CD buyers. It adds weight to the growing body of case law holding that companies can't stop buyers of copyrighted products from reselling them. Just last month, for example, a federal judge in Washington state rejected a lawsuit by Autodesk against someone selling used copies of AutoCAD software on eBay. And for Augusto, who was represented by lawyers from the EFF and Keker & Van Nest, it should mean a respite from record company litigation. Universal , in fact, was the second of the four major record companies to sue. He had agreed to a consent judgment with EMI in 2004, but when Universal sued last year, he figured it was time to put up a fight in court. Looks like he was right.
The MPAA has offered a deal to the Federal Communications Commission that could bring movies to cable and satellite viewers more quickly after their original release. The trade-off, though, is that the movies couldn't be viewed by some high-definition TVs, nor could they be recorded by stand-alone TiVos. The FCC moved quickly to invite public comments on the MPAA's petition, meaning that it could decide the issue later this summer.
Ars Technica reported this story over the weekend, emphasizing the restrictions on recording and the unusual alacrity of the FCC's response. To me, however, the more intriguing element is the studios' interest in creating a new release window for home viewing of high-def movies. Today, studios release the DVD version of a film about four months after it hit the multiplexes (bombs often are released sooner, and hits sometimes take longer). Cable pay-per-view and VOD services have to wait another 30 to 45 days for the movie, although Warner Bros. has started experimenting with simultaneous DVD and VOD release. These delays are designed to preserve box-office and DVD sales, but they also concede the market to bootleggers. There's no legitimate way to watch "Kung Fu Panda" at home today, but there's no shortage of illegitimate ones.
In its petition, the MPAA says each of the major Hollywood studios wants to explore deals with cable and satellite operators that would make high definition versions of their movies available prior to their release on DVD. No details about the price or timing were included, but one would expect the movies to carry a premium. To a family of four, paying $30 to see a (relatively) new movie in high def at home might seem like a reasonable offer, compared to paying $50 for tickets and popcorn at the multiplex. Of course, the reasonableness of the premium would depend on how soon the movie became available.
Now here's the tradeoff.
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Promusicae, the Spanish trade association for the major record companies (e.g., the Madrid version of the RIAA), filed suit in Spain this week against p2p developer Pablo Soto, creator of the Blubster, Piolet and Manolito music file-sharing networks. Soto's networks represented the second generation of p2p, which eliminated the central controls that got the original Napster into legal trouble. He later added a layer of anonymity to sharing, making it harder to identify those who were swapping songs illegally. I can't read Spanish, so I can't even pretend to analyze the legal claims made by the labels. But their press release accuses Soto of developing software with the intent of profiting parasitically from other people's works. It also argues the the networks were created specifically to share songs online:
All the promotional slogans on
Soto’s websites urge users to swap music recordings. Their wording, always in
English, encouraged the user to “enter into the world of free music downloads,
to download music while you chat with your friends” or said that “million users
in the whole world can share their music files and help the online community to
In addition, it notes that Soto's networks "all lack any kind of filter to avoid the exchange of files protected by authors, producers and performers’ intellectual property rights." Those allegations wouldn't take the case very far in the U.S. For starters, it's legal to share songs online if the copyright owners grant permission to do so -- not something the major labels have done, admittedly, but some independent labels and artists have. And it's not necessarily illegal to facilitate unauthorized sharing, particularly if the technology has a legitimate use and its creator can't monitor or control what people do with it. Nor is there any obligation to use filters to block infringements, at least not yet.
In an interview, Soto said, "What they claim is that we are competing with them and we are breaching their IP [intellectual property]." But he insisted that unlike Napster, his programs give him no way to watch what users do. He also noted that numerous independent musicians use Blubster to distribute their songs. "Many of those musicians need to use p2p software because they can't get distribution deals" from the major labels, he said.
The case raises the same set of issues that the RIAA and MPAA litigated here against Grokster and StreamCast (distributor of the Morpheus software), and both here and in Australia against the companies behind the Kazaa software. The labels won those cases with the help of internal company records and testimony showing that the companies planned to encourage and capitalize on piracy. The Supreme Court's ruling in the Grokster case doesn't apply to Spain, though, so the courts there will be following a different legal roadmap.
The lawsuit seemed a little odd, given that Soto's networks are small potatoes compared to BitTorrent and other third-generation p2p applications. Soto suggested that the labels were running out of options for deterring piracy in Spain. The record companies' efforts to identify individual infringers on p2p networks have been blocked by the courts, as have their claims against sites to bootlegged songs.
UPDATE: I got a bit more insight into the complaint from Beatriz
Sanchez-Eguibar, director of legal services for Promusicae. Although
there's no concept of "contributory infringement" in Spanish law, she
said, the complaint against Soto accuses him of infringing copyrights
by making software available to people who used it to make unauthorized
copies of songs. It also accuses him of unfair competition because his
profits came at the expense of the labels' works. Soto has about three
weeks to reply to the complaint, and hearings on the case could be
wrapped up within a year. As for the links sites, Sanchez-Eguibar said
that some had been temporarily sidelined, but the cases had yet to be
decided. And in regard to lawsuits against individual infringers, she
said Spanish law recently was changed to make it easier for Promusicae
to force ISPs to disclose the identities of customers whose accounts
may have been used for piracy. "A new door has opened," Sanchez-Eguibar
said, although the labels have yet to walk through it.
In response to John Mitchell's request (see his comment below), I asked Sanchez-Eguibar to send me a copy of the complaint, but she said it was confidential. So all I can offer on that front is jpegs of five pages supplied by Soto's publicist. I have no reason to doubt their authenticity, but I can't vouch for how complete they are. Here you go (click on the images to get a full-size view):
The Justice Department put out a press release late last night touting the conspiracy conviction of 25-year-old Barry Gitarts of Brooklyn, a member of an online music and software bootlegging group known as aPC (aka the aPOCALYPSE pRODUCTION cREW or the Apocalypse Crew). The jury verdict was notable to the RIAA because it was the first federal criminal trial of a defendant accused primarily of online music piracy. That's not what got my attention, however.
Gitarts was actually the 15th member of the group to be convicted. The other 14 pleaded guilty to crimes related to the activities of the aPC, which once was one of the release groups that sat atop the online piracy pyramid. More interesting, all but one of these defendants were identified and charged months after the former leader of the aPC, then 21-year-old Mark Shumaker, pleaded guilty to federal charges of criminal copyright infringement stemming from a series of raids in December 2001.
Although some online commenters say Shumaker wasn't part of aPC at the time of the raid, the feds focused on his activities in that group when they announced his conviction. In other words, anyone with a clue at aPC should have found something else to do with his or her free time. Instead, the group remained active until the following April, when FBI agents swept in and seized servers, logs and other incriminating evidence of the group's activities. The fact that more than a dozen aPC members have joined Shumaker among the ranks of felons is a sign of the insularity of the warez scene and its participants' sense of invulnerability, founded in part on their anonymity (scene members often know nothing about one another except the names they use online). Most members of the scene don't get caught, it's true, just as most file-sharers don't wind up on the receiving end of an RIAA lawsuit. Still, given the heads-up provided by Shumaker's arrest and conviction, you'd think the aPC would at least have changed its name.
The APC logo above was created by an artist who goes by the initials rnz.
As mentioned in the previous post, defenders of embattled movie indexing sites such as TorrentSpy and Peekvid argue that they're doing essentially what Google does -- helping people find material stored elsewhere on the Web. But for a glimpse at an online video site that really does resemble Google, see Beverly Hills-based OVGuide. Actually, it's a cross between Google and Yahoo -- a hybrid of a search engine tuned to find videos online and a directory of video sites organized by genre. Yes, you can use it to track down pirated movies and TV shows. In fact, when I visited OVGuide this afternoon, all five sites topping the directory provided working streams of "Iron Man," and three delivered the latest Indiana Jones movie. But most of the more than 1,700 sites indexed on OVGuide aren't devoted to movies or TV shows. Instead, they're focused on games, sports, cooking, education, cars, travel, science and scores of other interests. That's what sets OVGuide apart.
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The MPAA announced today two more verdicts in its battle against sites that provide links to unauthorized movies. This month, U.S. District Judge George Wu entered consent judgments against Cinematube and Showstash, two sites that aggregated links to video streams from other sites. Like settlement agreements, consent judgments are entered into voluntarily by both sides. In nearly identical court orders, each company was found to have engaged in "contributory copyright infringement and inducement of copyright infringement by actively searching for, identifying, collecting, posting, organizing, indexing, and posting on his website ... links to infringing material, which has been posted on third-party websites." Cinematube was ordered to pay $1.375 million in damages for 55 pirated titles (download the judgment here), and Showstash $2.765 million for 108 titles (read it here). That's about $25,000 or $26,000 per flick.
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The entertainment industry has been pressuring colleges directly and indirectly to teach students the do's and don'ts of copyrights, hoping such lessons will help abate online piracy. But at USC's Entertainment Technology Center, students often are the ones giving lessons to Hollywood and the high-tech world about the right way to deliver movies and TV shows to consumers who are increasingly mobile and digital.
The ETC, a 15-year-old branch of the university's School of Cinematic Arts, was established as a forum for tech companies and studios to collaborate -- a good example being the center's work on digital cinema. A more recent project is the Anytime/Anywhere Content Lab, a place for ETC staff to put a variety of cutting edge (or even bleeding edge) entertainment equipment and services together to see how they work. Or don't, as the case may be.
David Wertheimer, the ETC's executive director and a former digital guru at Paramount, said that while studios focus on their product, the lab concentrates on the user. The hope, he said, is that its work will show studios and tech companies how to "meet in the middle and provide new kinds of products" that appeal to the next generation of consumers. In addition to interviewing USC students on campus every week about their media consumption habits and attitudes, the ETC brings about 20 students into the lab to talk to its board and try out some of the gear it has assembled. It's not a scientific sampling, but the ETC does try to draw
specimens participants from a
range of backgrounds and fields of study.
The lab takes up a portion of the ETC's office, which is planted in an
between the USC campus and the 110. The current configuration includes
a home theater, a conference area and a room for testing and
experimentation (i.e., a place to answer questions like "Can I make it
do this?"). The centerpiece, though, is an 18' x 20' demo room with
flat-panel screens hung on the walls at eye level. Below the screens sit black metal boxes of various shapes and sizes --
amplifiers, disc players, computers, hard drives, iPods, cell phones,
networking gear and the like. It's a bit like an
electronics retailer's showroom, designed to make it easy for the staff
subtract and connect things. "It could end up looking like NORAD and be
totally stressful to people," Wertheimer cracked. The intended vibe,
though, is more like the living room you wish you had at home. If you
were me, that is.
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