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CDT on watermarks and privacy

Center_for_democracy_and_technology 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.

Continue reading CDT on watermarks and privacy »

Two-way battle over; cable wins

Sony_logo After a couple of years playing hard to get, Sony got into bed with the cable industry Tuesday and embraced CableLabs' tru2way standard for interactive-cable-ready devices. That makes at least six four major consumer electronics manufacturers who have signed onto the CableLabs standard for two-way plug-and-play (and, more important, the license agreement that so many CE executives deplored), the others being Panasonic, Samsung and LG.

This subject is more than a little esoteric, but there's a couple of real-world effects that are easy to identify. One is that Sony's move strikes another blow against the cursed cable converter box and its monthly rental fees. The box's functions should have been built into TV sets years ago, but cable operators and set makers were unable to agree on a standard approach to interactivity that would work on any system across the country. With Sony's acquiescence, tru2way (formerly known as OCAP) is now effectively that standard. The second real-world impact is that Sony's capitulation means there's little chance we'll see a cable-ready digital TV that fully integrates cable networks and services with complementary and competing programming from the Internet. The deals signed with CableLabs consign Internet content and other non-cable services to a program guide separate from the cable guide. The stricture rules out a guide that, for example, mixes on-demand movies from Netflix or Hulu with those from HBO.

Continue reading Two-way battle over; cable wins »

aPC: Can't take a hint?

Apocalypse production crew aPC warez pre-release music site defendant convicted of criminal copyright infringement 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.

OVGuide, combing through the online video haystack

OVGuide online video guide index movies TV shows 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.

Continue reading OVGuide, combing through the online video haystack »

MPAA wins more $$$ judgments

Antipiracy 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.

Continue reading MPAA wins more $$$ judgments »

Netflix, Roku bridge the Internet-TV gap

Roku_playerTwo things struck me about Roku's newly announced $100 Netflix Player, a book-sized set-top box that lets people watch streamed video files from Netflix on their TVs. First, it was priced lower than anything I'd previously seen in the "digital media adapter" category (i.e., devices that bridge the gap between the Internet and the TV). And second, it delivered less than any of those other devices. All it can do, in fact, is connect to Netflix's website, select a movie or TV show to stream, then display the chosen program on a TV set.

And that's all it should do, at least for now, argued  Anthony Wood, Roku's founder and CEO (and the guy who started ReplayTV, which introduced the DVR alongside TiVo). Some consumer-electronics gurus would disagree, noting that people are reluctant to stack more black boxes into living-room shelves already crowded with disc players, recorders, amplifiers, game consoles and cable or satellite boxes. But Wood has developed and marketed a series of digital media adapters over the past 5+ years, so he speaks with some authority on this issue.

Continue reading Netflix, Roku bridge the Internet-TV gap »

Napster and MP3, together again

Napster_kitty_loves_mp3 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.

Continue reading Napster and MP3, together again »

The future of entertainment, USC style

Usc_entertainment_technology_center 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.

Etc_screen_grab_3 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.

Continue reading The future of entertainment, USC style »

Napster CEO's new incentive

Napster_kitty It's not unusual for chief executives to have rich severance packages, or to have some extra compensation promised if they lose their post in a corporate takeover. Nevertheless, you have to admire Napster Chairman and CEO Chris Gorog's new deal with the company. Under the severance clause in his previous employment contract, Gorog had been entitled to a cash payment of 165% of his base salary of $625,000 (a little more than $1 million, for those of you unable to use the calculator in your cell phone), plus immediate vesting of his stock options and free health insurance for 18 months. The payout was the same if he were fired without cause or he left in the wake of a buyout. The latter's relevant because Napster put itself on the block in September 2006, hiring an investment bank to evaluate suitors. The new deal keeps Gorog's base pay at $625,000, but ups the cash portion of the severance package to 240% of his base salary ($1.5 million) if there's no takeover in the works. If a takeover should happen and Gorog should leave within 12 months thereafter, the cash portion jumps to 299% (about $1.9 million), plus a cash bonus "equal to the average of the three prior cash bonuses" he received. Not bad for a company that has never reported a quarterly profit from its online music business, and whose stock price has been stuck in the single digits for more than four years. The stock peaked near $25 in April 2002; today's close was $1.53.

Canada: Death from Above 2008

Antipiracy The copyright industries' assault on Canada, which the U.S. Trade Representative declined to join last month, picked up some support in Congress today. The Congressional International Anti-Piracy Caucus declared Canada to be one of the "ignominious three," alongside China and Russia, when it comes to protecting intellectual property.

The complaint against Canada is that it hasn't "modernized" its copyright law for the digital age. The International Intellectual Property Alliance -- a trade group backed by studios, labels, software companies and publishers -- has been pushing Washington to prod Canada into complying with the WIPO treaties. Among other things, it wants Canada to adopt anti-circumvention language a la the DMCA, "create strong legal incentives" for ISPs to help combat piracy, and "clarify that illicit file-sharing services are a violation because they authorize infringement." Of course, the United States hasn't really done the latter two things, either, at least not to the extent that the copyright community desires. That's one of the reasons the push to punish Canada has drawn scorn north of the border.

UPDATE -- For a good discussion of anti-circumvention rules, see this post today by Bill Patry.

With that in mind, here's a few words from the geniuses at South Park:

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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