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Yahoo rethinks, offers refunds for DRM-wrapped songs

Yahoo_music_logo One week after notifying customers that it would soon stop supporting the DRM-wrapped songs they had purchased, Yahoo has offered to make whole anyone concerned about a loss of tunage. That's quite a concession, yet it's not a huge surprise -- shortly after Microsoft made a similar decision to shut down MSN Music's DRM servers, it reversed course and said it would keep the servers plugged in for at least three more years. Could it be that two of the world's most powerful Internet companies actually listen to the EFF?

Here are the details, according to the Associated Press: customers who bought downloadable tracks from Yahoo's defunct music service can obtain coupons that they can redeem for replacement MP3 files at Rhapsody, the RealNetworks-MTV joint venture that took over Yahoo's subscription music service. If a coupon doesn't cut it for you, Yahoo may be willing to cough up an actual refund.

My previous post on this issue has provoked an often hilarious exchange between DRM critics and advocates, one of whom dismembers my arguments in unusually vivid terms. Not that it takes a surgeon's skill to do so, but it's still pretty entertaining.

UPDATE: Carrie Davis at Yahoo provided these nuggets of detail: if you're looking for a coupon or a refund, contact Yahoo's Customer Care department. There's no need for proof of purchase. The offer expires at the end of the year. By the way, coupons can be redeemed for any track at Rhapsody, not just the ones the customer purchased from Yahoo. Sounds like a chance to trade in all those disappointing Jimmy Eat World tracks for some Deastro!

More (DivX) ways to get movies from the Web to the TV

Divx_logo_2 DivX announced another ally today: the downloadable movie site CinemaNow. On some unspecified date in the future, the latter will offer customers the option of downloading movies in the DivX format (using the DivX DRM) instead of CinemaNow's usual Windows Media files. DivX's codec is impressive, but the main improvement the deal offers consumers is an easier way to play the movies they rent or buy on their TV set. The DivX DRM enables people to play the files on every DivX-certified device in their personal domains. For most people, that would be a DVD player. And unlike other DRM approaches in the market, DivX enables rented movies to be burned onto disc, not just download-to-own files. In other words, it's a practical living-room solution for online movie rental sites.

Cinemanow_logo Apple, Netflix and Amazon.com have a different strategy for delivering rented movies to TV sets: they stream the flicks to specialized set-top devices (such as the Apple TV, Roku's Netflix box and Sony's back-of-the-TV Bravia Internet Video Link). DivX plays in that arena, too, with its DivX Connected boxes (currently available only from D-Link). The D-Link set-top is a solid entry into the field, although it suffers from the same limitations as everybody else's "media extenders": it's compatible with only a portion of the vast online universe of video. The challenge for DivX and CinemaNow will be to persuade more studios to embrace the DivX format and DRM; so far, the only announced taker in Hollywood is Sony Pictures. They'll need a much more comprehensive lineup than that to make the DivX option a meaningful addition to CinemaNow's service.

The NFL takes games online

Nfl_logo My colleague Meg James reported Saturday that the NFL will be going online this year with its Sunday night games -- not exactly its most valuable product, but not a bad place to conduct an experiment in online distribution. Although this is close to a no-brainer, it represents something of a leap forward in advertiser-supported sports programming online. All told, 17 games will be shown live on NFL.com and NBCSports.com (NBC has the TV rights to the game), starting with a Giants-Redskins game on, umm, Thursday Sept. 4.

The most significant thing about this one-year test is that, unlike what NBC and other networks do with their prime-time schedules, the free online football games will compete directly with the versions on TV.

Continue reading The NFL takes games online »

A Paramount movie integrated into Sony web programming

Angus Thongs and Perfect Snogging movie promoted on Bebo through Sofia's DiarySofia's Diary branded entertainment on Bebo This is so meta, I'm having trouble wrapping my brain around it. Sofia's Diary is an "interactive Web drama" that's produced by Sony Pictures Television International. Its episodes and related programming -- e.g., the main character's blog -- are on Bebo.com. Sofia's Diary is branded entertainment, which means that its characters and plot twists are designed to advance an advertiser's message. Anyway, today Bebo announced the integration of a new advertiser into the program: Paramount Pictures UK. Characters and other elements from a new Paramount teen movie,  "Angus, Thongs and Perfect Snogging," were inserted into the world of Sofia's Diary for a two-episode run, timed to the movie's opening weekend. In other words, Sofia's faux reality was tuned to promote a faux reality from a different medium (film).

Continue reading A Paramount movie integrated into Sony web programming »

The Layaways and Billy Bragg contemplate new business models

The_layaways_logo The Digital Audio Insider blog is a good read for insights about the way the online music business works for indie artists, offering nice details about wholesale prices, royalty rates and the like. Its author, David Harrell, is also in a band called The Layaways. Awesome band name! Anyway, yesterday Harrell's blog post asked the musical question, should his band give away its new album? The tactic seemed to have worked well for Nine Inch Nails and Radiohead, but those bands are well-known quantities with loyal followings. There's also an argument for unknown new bands using their recordings as loss leaders, given that they make their livings (such as they are) off of live performances anyway. My guess is that the wisdom of giving one's music away will depend on one's ability to attract attention to the offer. Plenty of bands have given songs and albums away over the years, so The Layaways wouldn't grab headlines just by joining the pack. Anyway, tell me what you think, but more important, tell David. He's the one with skin in the game.

Billy_bragg_2004_at_afl_cio_hq Another musician with a blog worth reading is Billy Bragg. As dedicated followers of this blog know (OK, it's probably an exaggeration to use the plural form of follower), I'm completely in the tank for the guy. Bragg's blog is mainly about the adventures of a working musician; he seems to prefer publishing his musings about the economics of the business in dead tree media, such as this letter to The Guardian in the UK. In it, he scoffs at the idea of ISPs sending warning letters to suspected file-sharers (as the six top Internet providers in the UK agreed to do yesterday). I'd quibble with his notion of a cozy relationship between ISPs and the labels, as well as his suggestion that the ISPs could be held liable for their users' infringements. But I agree with his bottom line -- the most promising path is to provide an unlimited amount of music for a flat fee or free, with advertiser support. That's the direction the labels are headed, albeit slowly, through initiatives such as Universal Music Group's deal in the UK with BSkyB, ad-supported music sites such as iMeem and SpiralFrog, and Nokia's effort to bundle free downloads with cellphones. Bragg also makes the case for letting royalties flow directly to artists, which is what U.S. law requires for about half of the fees raised from webcasters, satellite radio and non-interactive cable music services.

UK ISPs to warn file-sharers, but then what?

BPI RIAA deal with MPAA and ISPs in UK to warn p2p file sharers Let's see how many acronyms I can squeeze into this lede. In a deal brokered by the BERR, BPI (the UK version of the RIAA) announced that six leading ISPs had agreed to send warning letters on behalf of the labels and the MPAA to people suspected of illegal p2p downloading. BERR is the UK government's Department for Business, Enterprise and Regulatory Reform, which is analogous to the U.S. Department of Commerce. Essentially, pressure from BERR and the threat of legislation motivated the ISPs to stop stiffing the BPI and start compromising. But today's deal involved a relatively painless concession for ISPs. A more interesting question is what enforcement mechanisms, if any, the ISPs will put in place to give the warning letters teeth.

Continue reading UK ISPs to warn file-sharers, but then what? »

Yahoo pulls an MSN Music (only faster)

Yahoo_music_logoThis afternoon, Yahoo alerted customers of its erstwhile downloadable music store that it would no longer provide support after Sept. 30 (download the cheerful e-mail here). The upshot: starting Oct. 1, said customers won't be able to revive frozen tracks or move working ones onto new hard drives or computers, because Yahoo won't be providing any more keys to the songs' DRM wrappers. But hey, they can always buy MP3 versions from Yahoo's new partner Rhapsody!

Yahoo is cutting off support at an unusually speedy pace for a company that's not going out of business. Consumer backlash prompted Microsoft to extend support for tracks bought from the defunct MSN Music store by at least three years. And Sony, which closed its Connect music store in March, will continue to support those tracks until the end of the year. Perhaps Yahoo will feel a similar blast of heat and maintain its DRM servers for a while longer. Or maybe it sold so few tracks that no one will care.

I've already said that my outrage needle isn't really moved by decisions such as Yahoo's. Plenty of online music sellers crashed and burned before the major labels stopped demanding that 99-cent downloads be warped wrapped in DRM. Consumers should be used to this routine by now. Beyond that, buyers should have been backing up their purchases onto DRM-free CDs to protect their data. If they hadn't been doing so, the email from Yahoo Music should provide enough incentive to do it now. Yes, they may lose some fidelity in the translation from DRM'ed file to CD to MP3, depending on the bit rates involved. But that's a small price to pay for extended life in an era of accelerated obsolescence.

It's also worth saying that Yahoo Music's last two top executives, Dave Goldberg (now a VC) and Ian Rogers (now at Topspin Media) were both strong advocates of a DRM-free approach to music. That's why it would be ironic for consumers to be ticked off at Yahoo, which didn't have either the leverage to change the labels' policy or the patience to wait on the sidelines (a la Amazon.com). Nevertheless, consumers are most likely to direct their ire at the company that sold them the soon-to-be irreparable goods, not at the wholesaler responsible for the defect.

Consumer groups blast MPAA proposal (a dog bites man story)

Mpaa_logo If you had the chance to watch a movie on cable or satellite TV before it came out on DVD, what sort of trade-offs would you be willing to make? Would you pay more to watch it than a DVD rental or even a movie ticket? Would you accept having to watch the movie in one sitting, with no breaks for phone calls or snacks? Would you lose interest if you couldn't record the movie to watch again later?

These are the sorts of questions the market typically answers, but that's not how it necessarily works in the entertainment industry. This week, seven consumer advocacy groups urged the FCC not to let the studios conduct the experiment they proposed in early video-on-demand releases. The reason: the MPAA wants to deploy an anti-piracy technique that, in the advocacy groups' opinion, would give the studios too much control over the technology used in homes.

Continue reading Consumer groups blast MPAA proposal (a dog bites man story) »

More royalties for songwriters?

Us_copyright_office_logo In an overlooked notice of proposed rulemaking last week, The Library of Congress' Copyright Office lived up to the worst fears about government agencies. It took up a nearly eight-year-old petition and, rather than settling a current dispute, created a new one. It also provided yet more evidence that copyright laws written in the analog era don't map well to the Internet and digital technologies.

The issue has a rich back story, much of it laid out in the notice. But here's a distillation. The Copyright Office was asked in late 2000 to resolve a disagreement between the RIAA and music publishers over how large a mechanical royalty, if any, should apply to two types of music services: on-demand streams from an online jukebox, and "tethered" downloads that expire after a certain number of days or plays. Such streams and downloads are at the heart of subscription music services such as Napster and Rhapsody. In its proposed rulemaking Wednesday, the Copyright Office basically punted on that question. But it unexpectedly held that music publishers were entitled to an additional royalty for non-interactive streams -- e.g., webcasts, satellite services and digital over-the-air radio signals. The size of the royalty was left to a three-person arbitration panel, which has been considering the rates for interactive streams but, apparently, not for non-interactive ones.

Representatives of the music publishers were still digesting the decision when I talked to them Friday, so it's not clear how they'll respond. Nor is it possible to say what impact, if any, there would be on webcasters already struggling to pay royalties to the labels. “This is more than we have ever asked for," said Laurie Jakobsen, senior director of communications for the Harry Fox Agency (a royalty collector for the publishers). Added Jay Rosenthal, general counsel for the National Music Publishers Assn., "We're still reviewing the rulemaking documents, but so far we're optimistic."

Continue reading More royalties for songwriters? »

Amazon remodels Unbox

Amazon_unbox_logo_2 Here's an interesting Adams Media Research stat I learned from Scott Hettrick's fine Hollywood in Hi-Def blog: revenue from Blu-ray disc sales this year is expected to be three times the entire market for downloadable movies. Perhaps that explains why Amazon is adding a costly (to Amazon) new feature to its online movie service, Unbox: on-demand streaming. Instead of having to download DRM-encumbered files that can't easily be moved onto TV sets or portable devices, customers now have the option to stream them from Amazon's video jukebox in the ether. Well, those who sign up for the beta program can do it now; everyone else will have to wait until the general release. Even more interesting, Amazon is offering online storage for the movies customers buy, too, so they can stream the films to any compatible device.

Continue reading Amazon remodels Unbox »

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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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