Two announcements today about downloadable movies illustrate Hollywood's one-step-forward, one-step back approach to this market. Jaman, an online video-on-demand service that specializes in indie fare, announced a licensing deal with Paramount that gives the site its first major-studio content. It's a nice pick-up for Jaman, which distributes moves in part through a secure file-sharing network -- the kind of technique that was once a non-starter with Hollywood. But unlike the other films offered by Jaman, Paramount's titles won't be available in high definition. The restriction reflects the widespread aversion in Hollywood to sending high-def movie files to PCs -- you won't find high-def titles at Movielink, CinemaNow or Amazon's Unbox, either. Nor will the films be available to rent on Jaman as soon as they reach the local video store; instead, they'll have to wait several weeks for the video-on-demand window.

The studios have been willing to provide high-def downloads to a handful of specialized living-room devices, such as the XBox 360 game console, the Apple TV, the Vudu box and now the Sony PS3. (Kudos to my colleagues Dawn Chmielewski and Alex Pham for breaking that story months ago.) On the plus side, the PS3 download service uses the Marlin DRM developed in part by Sony and Intertrust Technologies (a company that counts Sony as a major investor). Marlin, which is designed to interoperate with other DRMs, can grant playback rights to a set of personal devices. Initially, Sony will use it to let people move downloaded films and TV shows from their PS3s to their PSPs. What it won't do, though, is let people move the programs they rent or buy to their laptops or desktop PCs -- at least not right away. That's a galling omission, particularly for download-to-own titles. Marlin DRM licenses can be updated remotely, so if Sony changes its mind and allows movies to be transferred onto computers, the new flexibility can be applied retroactively to movies already purchased. But even if Sony does relax the restrictions, high-def titles probably won't be allowed outside the PS3-PSP-TV world. That begs the question of why anyone would buy a title when the only way to preserve the bits is to tie up scarce space on the PlayStation's hard drive.

Sony's CEO, Sir Howard Stringer, has made interoperability and connectivity a priority for the company. In fact, he pledged last month that 90% of Sony's product categories would include devices with networking capability within three years. It will be interesting to see how Sony meshes that goal with its high-definition evangelizing and its studio's reservations about the PC.

Nifty "Trust" illustration courtesy of the Intertrust website.

It's been an article of faith for the entertainment industry that unauthorized copying = lost sales. The MPAA seems to be the market leader on this front, citing mind-boggling estimates of the billions of dollars in revenue siphoned off by piracy. This week, Futuresource Consulting Ltd., a UK research firm, released a study that purports to confirm the conventional wisdom, at least in part. According to the study, about a third of those interviewed said they had made copies of pre-recorded DVDs in the previous six months. That's up from about a quarter in 2007. Had they not been able to make those copies, a high percentage of those surveyed -- 77% in the U.S., 63% in the U.K. -- would have bought at least a few of them. Strong stuff, but not surprisingly, there are some notable caveats.

The first casualty of this decade's digital music revolution has been music sales, as consumer switched from CDs to 99 cent singles or free downloads. But some industry executives see a chance to reverse the trend and sell music in significantly larger bundles -- more songs, in fact, than the average consumer buys in a year. That's the home-run swing promised by initiatives such as Nokia's Comes with Music, which signed up its third major record company today, Warner Music Group. Universal Music Group, an early advocate of this kind of thing, and Sony BMG were already on board, with EMI still in licensing talks.

The Comes with Music proposition is simple: buy a specially designated Nokia phone, get an unlimited number of seemingly free song downloads for one year. That's seemingly free, not actually free, because the price of the phone will include a hidden sum that Nokia will split with the labels and music publishers.

Knowledge Ecology International, a group that seeks to reduce the control wielded by patent and copyright holders, recently posted a list of suggestions that the RIAA purportedly sent to the U.S. Trade Representative for what to include in the proposed Anti-Counterfeiting Trade Agreement. Ars Technica's Nate Anderson took up the issue today, accusing the record companies of trying to disembowel the safe harbor provisions of the DMCA. I checked the legitimacy of the Knowledge Ecology post with Neil Turkewitz, the RIAA's point man on such things, and he said it looked accurate. Not surprisingly, however, he offered a somewhat different take than Ars. Yet he acknowledged that some aspects of the RIAA's proposal for ACTA go beyond U.S. law on the enforcement of copyrights online.

Today, Rhapsody (a joint venture between RealNetworks and Viacom's MTV Networks) launches another initiative aimed at selling its subscription music service. My colleague Michelle Quinn has the details here , such as Rhapsody's answer to the new Napster MP3 store, but I wanted to drill down on a couple of elements from the announcement.

To me, the MP3 store is the least interesting feature. Yes, it has more DRM-free tracks than the iTunes store, but so does Napster's. More intriguing are the partnerships aimed at introducing more people to Rhapsody's vast celestial jukebox, the core feature of its subscription service. These deals, especially the one with iLike, may mark the first time Rhapsody or any other subscription-music service has been effectively marketed. (When it comes to selling digital music products and services, Apple has been in a league of its own.) Sometime in July, iLike's 28 million users will be able to play for free just about any song mentioned on its network of sites, not just 30-second samples or the handful of full-length tracks posted by selected artists. The same capability will be rolled out gradually through Yahoo and MTV Networks' online properties, such as CMT.com and VH1.com.

There is, however, a non-trivial caveat.

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.

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.

The Center for Democracy and Technology weighed in today on the delicate subject of privacy and digital watermarks, recommending a series of best practices for protecting consumers against the unauthorized use of personal information. It's a tricky issue because watermarks -- unique digital identifiers that can't be detected with the naked eye -- are emerging as an anti-piracy tool, in which case the whole point is to identify the source of an infringing file. Nevertheless, as the 17-page report (download here) notes, even watermarks used for such purposes are subject to abuses that could invade innocent consumers' privacy or, worse, expose them to lawsuits for infringements they did not commit. And as the use of watermarks in online and digital media spreads, the threats proliferate. As the report puts it:

Perhaps the most frequently raised privacy concern is the idea that watermarks could enable increased monitoring, recording, or disclosure of an individual’s media purchases or usage. The fear, in other words, is that watermarking could compromise an individual’s ability to use and enjoy lawfully acquired media on a private, anonymous basis. Particular media usage choices could be sensitive if exposed, or could contribute to the creation of profiles of individuals’ overall media purchase and consumption habits, which might be used in ways that the individuals do not expect or understand. Other possible privacy concerns include the risk that watermarks could contain personal information that could be exposed to third parties, and the risk that errors in or manipulation of watermark data could paint a false picture of an individual’s behavior and perhaps lead to adverse consequences, including potential legal liability.

The original Napster didn't invent the MP3 format, but it did more than any other software company to popularize it. That, of course, was its undoing. Now, almost seven years after Napster went under, the company that bought the its name in a bankruptcy auction is making its first foray into selling MP3s. It's late to the party, but at least it's making a big entrance -- the new Napster has more than 6 million MP3s for sale, the largest collection of any online retailer (excluding those with dubious licenses). Like Amazon.com, it has MP3s from all the major record companies. But Napster Chief Operating Officer Christopher Allen says his company's selection is about three times the size of Amazon's because of the extensive offerings from indie labels and artists.

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 industrial strip 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 eight 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 to add, 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.

Apple closed two gaps today with its announcement about downloadable movies for sale through the iTunes Store. The one it emphasized was the agreement by six major studios to pony up their films the day they were available on DVD. This was a no-brainer for Hollywood. In fact, according to a publicist for Vudu, the studios have long been providing downloads for sale through other online vendors "day and date" with DVD releases. The more interesting element here is that Apple has finally persuaded Hollywood's largest studios to sell movies through iTunes.

EFF Executive Director Shari Steele fired off a nastygram today to Microsoft CEO Steve Ballmer, blasting the company for abandoning customers who bought 99-cent downloads wrapped in a soon-to-be-defunct DRM. Although I think the letter is unrealistic on some points, Steele hints at a step Microsoft could take that would be truly helpful to buyers stuck with song files that just won't play.

This morning, CinemaNow announced a mobile version of its downloadable movie site. Happily, the point isn't to supply movies to your cell phone (not that there's anything wrong with that). Instead, it lets people use their phones to order movies and have them delivered electronically to their PC or a variety of other devices.

Microsoft has an uphill climb with Silverlight, the browser plug-in technology it's developing to compete with Adobe's ubiquitous Flash technology. To boost its chances, it's taking a distinctly un-Microsoftian tack: it's designing the technology to work on software platforms and devices outside the Windows universe. And in that vein, it's working with Widevine to supply a non-Windows DRM for content delivered via Silverlight.

The idea of putting kiosks in retailers to burn music or movie discs on demand is one whose time may never come. I've heard a number of pitches for them over the years, almost all of which sounded far more promising than they proved to be in the marketplace. Still, companies keep trying. The latest is Nero, maker of a leading brand of disc-burning software, which expects to be powering movie-burning kiosks in major retailers this summer.

Warner Music Group announced today that its head of digital strategy, Alejandro Zubillaga, is stepping down to (as he put it) "get back to my entrepreneurial roots." In other words, he's still mulling his next move. Warner took some grief four years ago when it named music-industry novice Zubillaga -- a former telecom exec in Venezuela and venture capitalist whose firm, Lexa Partners, was part of the group that took Warner private -- to lead the all-important work of developing new digital revenue streams. The appointment had a patina of nepotism, given that Zubillaga's brother-in-law, Edgar Bronfman Jr., led the Warner buyout and became the company's chairman. But his leadership led Warner to make what strikes me as the flagship deal for the entertainment industry going forward: a pioneering agreement with YouTube to share advertising revenue.

Just how compelling is free music? SpiralFrog, which offers free downloads with the copyright owners' blessings, went from zero customers in September to more than 1 million unique visitors per month in late January. And in a visit here Friday, board chairman Joe Mohen touted a new milestone: SpiralFrog has signed up than 500,000 registered users. (Registration is required to download content from SpiralFrog.com; otherwise, visitors are limited to reading music news from Billboard, listening to song samples and streaming music videos -- the kind of thing that's available on lots of music sites.)

The rapid growth is important, given that SpiralFrog needs to attract millions of eyeballs to survive off of advertising revenue. But what Mohen couldn't yet say is how long SpiralFrog's registered users tend to stick around. The service is only a few months old, after all. SpiralFrog's main advantage over legal outlets such as iTunes and Rhapsody is that it costs nothing, which matches what tens of millions of consumers want to pay for music online. That's what makes SpiralFrog and other emerging ad-supported music-on-demand services -- such as iMeem and Last.fm -- so promising conceptually. But to hit that magic price point, it imposes trade-offs that the masses may not abide.

Television networks have garnered a lot of attention in the past year for making their programs available for free online, be it through their own sites (e.g., cbs.com and comedycentral.com), joint efforts (hulu.com) or social networks (MySpaceTV). Many of these efforts rely on Adobe's well-nigh ubiquitous Flash format, which works on Macs as well as PCs. One consequence of using Flash is that the streams aren't encrypted, which means they can be recorded and redistributed. That's not necessarily a bad thing for advertiser-supported programming, but not a good thing if people routinely clip out the commercials before passing the video along. Where there is a vulnerability, there will be tech companies trying to exploit it -- and, inevitably, others trying to fend them off with tighter security.

Reader James Lubin of Los Angeles pointed out something I'd overlooked in my post Tuesday about Apple's new movie rental service. One of the differentiators between Apple and other downloadable movie sites is that rented films can be transferred to pocket-sized portable players in addition to laptops. Previously, that was something only DivX-enabled services such as Film Fresh could do with rentals, and until this month, no major studio had approved the use of DivX's DRM on its movies. But Lubin pointed me to a post on The Unofficial Apple Weblog reporting that movies rented from iTunes can be transferred only the latest iPods, i.e., the Touch, the Classic, the iPhone and the redesigned Nano.

Apple CEO Steve Jobs confirmed this morning its long-rumored entry into the online movie rental business, saying it had deals with all the major Hollywood studios to offer downloadable films for $2.99 (older titles in standard definition) to $4.99 (new releases in high definition). The company's approach is plagued by many of the same studio-imposed problems that have burdened pioneering download sites Movielink and CinemaNow, but it also has a couple of advantages unique to Apple.

Here's an unusual first. Paramount Pictures announced a deal Wednesday to let MusicGiants, an online music store that caters to audiophiles, sell collections of movies loaded onto hard drives. Buyers will be able to transfer the contents of those drives onto personal  computers or, more likely, home media servers. The deal marks the first time Paramount -- and probably any major Hollywood studio -- has let its films be a) delivered on hard drives and b) loaded in bulk onto home servers. MusicGiants will also be able to sell downloadable titles one by one through its new online video store, dubbed VideoGiants, although it doesn't plan to do so until later this year.

Heard this one before? A tech start-up company plans to install movie-rental kiosks in airports, train stations and convenience stores. This go-around, the would-be entertainment retailer is PortoMedia of Galway, Ireland, whose business plan revolves around tiny, souped-up flash drives. The company is backed by IBM, which is supplying the kiosk technology, and claims to be in late-stage talks with the major Hollywood studios. The kiosk idea has been floated (and sunk) many times, most recently as a way to burn DVDs on demand at video stores and other retailers. What makes PortoMedia a bit different -- in a way that bodes well for its business -- is shorter wait times for customers and lower equipment costs.

San Diego-based DivX announced this morning that Sony Pictures has agreed to let online video stores and services distribute its movies with DivX's DRM, an alternative to the electronic locks developed by Microsoft, Apple and Intertrust, a company partly owned by (wait for it ... ) Sony.

It's the first major studio landed by DivX, which has been wooing Hollywood for years with little to show for it. But time and recent history may be on DivX's side here. Like the MP3 format for music, which the major record labels shunned for a decade before accepting, DivX's compressed video format has gained wide support among consumer-electronics companies and (ahem) unauthorized sources of movies. The difference -- and this works in Hollywood's favor -- is that DivX's format can be copy-protected with DRM, while MP3 cannot.

Philips has announced that it is integrating RealNetworks' Rhapsody subscription music service into its new Streamium boomboxes. This moves subscription music, which had previously been available on computers and portable players but not much in between, into an important new middle ground of accessibility. And it raises the question: What took so long?

The Streamium line, which features boomboxes and stereos that can connect to a home network, had previously offered little from the Internet other than webcasts and a limited ability to download. With Rhapsody, customers will be able to tap into an online jukebox with 4.5 million tracks, albeit for upward of $10 a month.

Providing one glimpse of how home video might evolve, Macrovision and CinemaNow have integrated their technologies to make it easier for consumers to watch movies from an online video jukebox on their TV sets and portable devices. Another glimpse comes from Netflix and LG, which are integrating technologies into a new set-top box, but that one has some non-trivial (although temporary) shortcomings.

What better way to welcome the new year than to write about the latest development in my favorite long-running copyright infringement lawsuit, MGM v Grokster? Complying with U.S. District Judge Stephen P. Wilson's order from October, StreamCast Networks, the company behind the Morpheus file-sharing software program, is inviting an array of content-recognition companies to submit proposals for filtering out unauthorized works. The task is complicated by Wilson's desire, as reflected in the permanent injunction issued last year, not to interfere with non-infringing uses of the technology.

Wal-Mart probably had a lot of reasons to get out of the downloadable movie business, most notably the withdrawal of Hewlett-Packard, its technology provider. Underlying both companies' decisions, though, is the sense that it's still too hard for the masses to watch a downloaded movie on the big TV screen in their living room.

Studio executives keep saying they've learned from the mistakes made by the music industry, and yet many of their actions seem straight out of the major labels' playbook. Today, the Financial Times reported that 20th Century Fox's home video unit, Fox Home Entertainment, had agreed to offer new titles for rent through Apple's iTunes store and sell DVDs with an extra copy of the movie locked in Apple's proprietary FairPlay DRM. If the latter proves to be true (no mention of it in the NYT piece), it means the movie industry may be on its way to the same DRM incompatibility problem that has vexed the music industry.

Warner Music Group --home of Lupe Fiasco,  Faith Hill and a bunch of acts in between -- announced today that it would sell MP3 versions of its artists' songs on Amazon. Now, Sony BMG stands as the only major label still insisting on wrapping its downloads in DRM. WMG chief Edgar Bronfman Jr. said the deal with Amazon was the first of many to come in the weeks and months ahead, and he dropped an intriguing hint at a new approach to unauthorized file-sharing.

Starting the legislative ball rolling, a House Judiciary subcommittee held its initial hearing today on HR 4279, a bill to crack down further on counterfeit and pirated goods. Subcommittee chairman Howard Berman (D-North Hollywood) used the occasion to fire a warning shot across the bow of critics who say copyright law is already too stringent. The not-too-subtle message to tech advocates who've railed against the bill: you're not the only ones who want changes.

Leading cellphone manufacturer Nokia grabbed headlines galore for its deal this week with Universal Music Group to supply a "free" music service to owners of selected Nokia phones next year. I say "free" because Nokia will reportedly pay Universal for the tunes (reportedly $5 per user per month), which means that at least some portion of the cost will be passed on to consumers in the form of higher phone prices up front. Not that buyers will notice, necessarily; the N-series phones in question are pricey even without the music.

I noted in an earlier post that the most important use of content-recognition technology may be in promoting legal, monetized distribution of content, rather than blocking unauthorized distributions. A good example of this comes in an Associated Press report this morning on a deal that Yahoo inked with Sony BMG.

RCRD LBL, the advertiser-supported music venture from Peter Rojas (founder of Engadget) and Downtown Records (the label behind Art Brut, Justice and Eagles of Death Metal, among others), launched today. There's a good Wall Street Journal story here, which includes the following money graf (after the jump):

I have a column on latimes.com today discussing a couple of different business models that companies such as Grooveshark, Qtrax and Mashboxx (remember them?) are trying to bring to file-sharing. They're divided into two basic camps: one tries to persuade p2p users to pay for songs, and the other tries to persuade advertisers to pay for access to a law-abiding p2p audience. The latter is obviously the bigger departure from the status quo ante Napster. After all, the major record companies once fretted that low-cost online approaches would devalue music and crater sales. Now they're signing licensing deals with ventures like Qtrax that let people play songs on demand for free.

As I mentioned in my last post, the MPAA and MovieLabs' tests of 12 content-recognition technologies found several that performed quite well in the lab. According to information released at a joint MPAA-University of California event last week, seven of the technologies correctly identified at least 80% of the test files, and three got better than 90% right with no false positives. But several speakers at the event predicted that the technologies would prove much more useful for distributing content than for blocking it.

Two months after Sony Connect's first reported death rattle, Sony made it official: it's phasing out the overlooked and handicapped music outlet (along with its overlooked and handicapped video service) next year, as early as March. Instead of trying to provide its own storefront, Sony is belatedly equipping its Walkman line of portable music players to work with the vast majority of stores and subscription-music services operated by other companies. That means dumping Sony's DRM technology, OpenMG, in favor of Microsoft's PlaysForSure DRM.

I noted a few months ago that a group of tech and consumer-electronics companies had complained to the FCC that the cable industry was stonewalling a technology that the CE industry had embraced for home networking and was already building into its products. They shelved that complaint this week, though, and the cable operators agreed to support the disputed technology, DTCP-IP.

The deal hastens the day that consumers are able to transfer cable programs over Ethernet or Wi-Fi networks. DTCP-IP is an anti-piracy technique that guards against unauthorized copying and preserves usage restrictions as data travels from one device to another (say, from a cable set-top box to a DVR, or from a DVR in one room to an HDTV in another). It's already been adopted by the Digital Living Network Alliance, a group drawing up home-networking specifications to promote compatibility among different manufacturers' products. That kind of security is critical to persuading Hollywood to embrace home networking and let consumer gear transmit movies from room to room. Not surprisingly, the three major Hollywood studios that have signed on as DTCP-IP licensees are the ones most willing to support new distribution technologies: Warner Bros., Sony Pictures and Disney.

Cable operators persuaded the licensing agency behind DTCP-IP to give them a say over changes in the technology that could affect the level of security it provides. According to Multichannel News, Hollywood studios also won assurances that cable operators would send and DTCP-IP compliant devices would respond to a particular type of anti-piracy message embedded in programming. Such System Renewability Messages, which can revoke a specified device or devices' ability to receive programs, could be used to prevent movies from reaching a DVR or storage unit whose anti-piracy controls had been hacked.

The future of Rhapsody America, the joint venture between RealNetworks and MTV, depends to some degree on MTV's marketing prowess -- not what it once was, but better than nothing. And when it comes to marketing Rhapsody, "nothing" is a pretty good description of what Real has done. CEO Rob Glaser just doesn't like to spend money the way Steve Jobs or even Chris Gorog does.

More important, though, is for Rhapsody to show the benefits of subscribing to a service instead of collecting music. It's not clear what, if anything, MTV can do for the joint venture on that front. Subscription music services are easy to demonize -- music "rentals" that leave you empty-handed when you stop paying the monthly fee -- because the value proposition is complex when compared to the iTunes Store. The best way to convey that value is by saying that Rhapsody lets you hear anything you want to hear, anywhere you are. Unfortunately, neither part of that statement is quite true, not just yet.

I'll confess, I'm freakishly interested in all things DRM. So I've been eagerly waiting for Universal Music Group to announce that it would try selling DRM-free tracks -- something that's been rumored for a while, but only became official today. And while the actual tracks haven't shown up yet, I can't help but feel ... disappointed. The more I thought about it, the less important it seemed, at least in terms of music sales.

Dang. I was poised to write yesterday about the EMI deal with VerveLife, but then got sidetracked writing an editorial about Michael Vick (which, I suspect, many of you would argue isn't worth the time spent on it). Then Coolfer beat me to the punch, making the point I was planning to make: that by making tracks available sans DRM, EMI will do more than simply add incremental sales on iTunes and other online stores.

But don't take it from me; here's what Justin Jarvinen, CEO and founder of VerveLife, had to say about EMI's willingness to offer tracks without electronic padlocks: "Our relationship will expand dramatically as a result of their opening up their tracks to MP3," he said in an interview late yesterday afternoon. "Our clients have been asking for major-label material for some time."

Snocap finally bagged a big one. Shawn Fanning's second act announced this morning that it had signed its first agreement with a major label to distribute MP3s -- EMI, the only one not allergic to files without DRM. Snocap already has agreements with numerous indie labels and MySpace, and it recently launched an intriguing arrangement with social network iMeem to monetize shared streams. The EMI deal is of a different order of magnitude, though, because it could put Snocap's tools to work for some real musical tonnage-movers.

[This post has been updated to reflect the fact that EMI is the first label to do an MP3 distribution deal with Snocap. Previously, Warner Music Group had signed on with Snocap to distribute copy-protected WMA files.]

Back in April I wrote about Film Fresh, an online store specializing in indie films, getting into the downloadable-film market with the help of DivX, which was supplying the software to compress, play and burn the files. The store's approach offered something that has largely eluded other downloadable movie ventures: an easy path to the TV set, at least for the tens of millions of people with DivX-capable DVD players in their living rooms. Or rather, that's what the folks at DivX promised. I recently downloaded a couple of movies from the site and found that the claim was pretty much true: within minutes of the movie's arrival on my PC, it was playing on my TV.

In today's LA Times:

Like many a Hollywood release, video games based on movies typically sell well despite drawing raspberries from critics. Alex Pham writes about how game developers are trying to turn those thumbs around.

You've probably read that the line to buy iPhones has already started forming outside Apple's store in Manhattan. You may find that the guy who's first in that line seems a tad familiar. Thomas Mulligan explains why.

Jim Puzzanghera reports on a Senate hearing Tuesday on TV violence, which demonstrated the sharp split among lawmakers over whether to regulate broadcasters on that front.

I'll confess, this one has little or nothing to do with tech, but I was fascinated by Meg James' take on NBC Entertainment's youthful, you-gotta-lovable new co-chairman, Ben Silverman.

Finally, there's an interesting piece in the other Times about MySpace's new strategy for video. It plans to launch a separate site (www.myspacetv.com, a dead link as of this writing) for video clips, and it appears to be betting heavily on professionally produced material. That could help settle the question about what's more important to the success of YouTube: is it Hollywood content (particularly the unauthorized kind), or is it the material spawned by users, often in response to that content?

Well, that's one way to address the DRM incompability problem. PaidContent.org reports that Sony is all but killing its online music and video store, dubbed Sony Connect. Evidently, the new Sony gives up more quickly on misbegotten initiatives than the old Sony, although frankly I'm surprised Connect lasted even this long.

In for a penny, in for a pound. Concord Music Group's Hear Music label (a joint venture with Starbucks Entertainment) announced today that its latest release -- Paul McCartney's "Memory Almost Full" -- will be available on eMusic -- the subscription service that sells discounted MP3 files. Concord has been making its releases availabe on eMusic since 2005, and "is consistently among the site's top five labels," according to the press release (download the release here).

Why isn't anybody commenting on the irony of RealNetworks' announcement yesterday that its new media-playing software can capture streams, turning temporary on-demand transmissions into permanent downloads? Real went to court in 1999 to stop another software company from distributing a program that captured Real Audio streams. The main difference -- and it's not a trivial one -- is that Streambox's software bypassed the encryption that Real used to protect its streams. Real CEO Rob Glaser stressed that the new RealPlayer software won't save encrypted streams. It also captures the ads that are attached to streams, Glaser told the audience at the All Things Digital conference, adding, "We support the content creator's business model."

Umm, no, not really.