A new royalty structure approved by the federal Copyright Royalty Board has webcasters quaking. Formerly they paid the music industry's SoundExchange between 6 and 12 percent of their revenue. But under the new royalty structure, they'll pay $0.0008 to stream one song to one listener, rising to $0.0019 in 2010. That may not sound like much, but it would amount to 1.28 cents per listener per hour, more than estimated current ad revenue of 1.1 to 1.2 pennies per hour. And that's just for starters. Rates would continue to rise every year. More bad news for small webcasters: There would also be a minimum charge of $500 per year per channel. And the new rules don't apply to songwriter publishing royalties, potentially an additional expense. Whether all this will kill web radio as widely predicted remains to be seen. But the fledgling medium will certainly have to find a more lucrative business model if it wants to survive. So, a speculative question: Just how much would you be willing to pay for Internet radio?
I'm looking for a lead. Let's see, famous people named George. OK, my pick is George Harrison. Asked what he called his then-unusual Beatle moptop, he replied in a magnificently deadpan manner: "I call it Arthur." In similar spirit, Chestnut Hill Sound calls its iPod-centric compact audio system George.
Are you an AT&T Homezone customer? If so, the set-top box you're using to access video-on-demand has learned a new trick: cellphone-activated DVR programming. There's no charge except for the existing Homezone charge of $9.99/month. AT&T hopes that will keep you happy until U-verse, its fiber/copper hybrid IP-over-TV service, reaches more areas. If you're a Verizon customer, you needn't feel left out. A long promised arrangement with TiVo will come to fruition soon. The charge will be $1.99/month. Sprint is getting into the act too, in association with Comcast and Time Warner. A Jupiter Research survey quoted by Reuters said fewer than 10 percent of respondents were excited about cell-driven DVR recording. Then again, none of them had had a chance to try it.
Let's say you spot a bargain on the Best Buy website. You go to the local Best Buy to buy the product. Sorry, says the salesperson, that's not the correct price for that product. How can that be?, you ask. The salesperson boots up the site and shows you and then you feel like a ninny. But you're not a ninny--you've merely been robbed. Best Buy has confirmed to Connecticut state investigators that it maintains a second site, an intranet site, with different prices. I'll let "Consumer Watchdog" George Gombossy of the Hartford Courant tell the rest of the story: "State Attorney General Richard Blumenthal ordered the investigation into Best Buy's practices on Feb. 9 after my column disclosed the website and showed how employees at two Connecticut stores used it to deny customers a $150 discount on a computer advertised on BestBuy.com. Blumenthal said Wednesday that Best Buy has also confirmed to his office the existence of the intranet site, but has so far failed to give clear answers about its purpose and use. 'Their responses seem to raise as many questions as they answer,' Blumenthal said." Best Buy's serpentine response is to blame its employees: "We are reminding our employees how to access the external BestBuy.com web site to ensure customers are receiving the best possible product price."
Sales of Blu-ray titles have decisively pulled ahead of HD DVD sales. Nielsen VideoScan figures for the week ended February 18 gave Blu-ray a 65 percent share of the market. HD DVD had been faster out of the gate and had maintained its initial sales lead throughout most of 2006. But Blu-ray made its move shortly after Christmas, buoyed by sales of Sony PlayStation3 game consoles. Blu-ray also has more titles print, at 179 vs. 163, though that's a pittance compared to regular DVD and several video download services. The format war is still on and both formats are still struggling for survival. Progress has come in the form of combi players and lower hardware prices. Chin up, high-def disc lovers.
With government cuts in financial aid and sky-high student loans, getting through college isn't easy these days. It just got still harder thanks to the Recording Industry Antichrist of America. The RIAA is now sending courtesy pre-lawsuit notices (you read that right) to a dozen lucky universities. The notices make two demands: that the schools turn over the names of students tied to IP addresses suspected of file sharing, and that they pass on the notices to students. This leaves the schools in a curious position. The Digital Millenium Copyright Act requires them to crack down on the use of technology to violate copyrights. At the same time, the Family Education Rights and Privacy Act forbids them to turn over student records to every Tom, Dick, Harry, and Antichrist who wants them. If the universities rat out their kids and pass on the notices, lucky recipients will get to settle out of court for what the RIAA calls a "substantial" (but undisclosed) discount in lieu of the usual average $3000 damages. But only if they call the RIAA or register at p2plawsuits.com. The first round of courtesy notices has gone out to Arizona State, Marshall University, North Carolina State, North Dakota State, Northern Illinois University, Ohio University, Syracuse University, U-Mass Amherst, University of Nebraska at Lincoln, University of South Florida, University of Southern California, University of Tennessee at Knoxville and the University of Texas at Austin. This latest gambit echoes another recent RIAA move: Using ISPs, in lieu of the courts, to demand payouts from their own customers.
A promising new video display technology suffered a potentially fatal setback last week. SED stands for Surface-conduction Electron-emitter Display. Whether marketers would come up with a sexier name for the ultra-flat tube technology is something we won't find out in the near future because a federal judge has ruled that Nano-Proprietary, the licensor, can wiggle out of its agreement with Canon. The agreement dates from 1999. Subsequently Canon brought Toshiba into a joint venture that would have brought SED to market. That made sense--if you want to sell TVs, you work with a TV company. Meanwhile, with an eye on the burgeoning market for flat panels, N-P apparently became unhappy with the arrangement. So the company argued that by bringing in Toshiba, Canon had violated the licensing agreement. N-P refused to call off its legal pit bulls even after Toshiba sold its stake to Canon and cancelled plans to show an SED prototype at the Consumer Electronics Show two months ago. If N-P wins the appeals, Canon will have to negotiate a whole new licensing agreement with N-P, if it chooses, possibly in competition with Samsung. Fun facts:
A bipartisan group is pushing new federal legislation that would chip away at the worst abuses of the Digital Millenium Copyright Act--the law often cited by the Recording Industry Antichrist of America in its "legal" campaign against consumers. The Freedom and Innovation Revitalizing U.S. Entrepreneurship Act, also known as the Fair Use Act, is sponsored by Reps. Rick Boucher (D-VA) and John Doolittle (R-CA). It would allow audiovisual compilations for classroom use, commercial skipping, home networking, library archiving, and access to works in the public domain or those "of substantial public interest solely for purposes of criticism, comment, news, reporting, scholarship, or research." It would also give manufacturers some wiggle room, eliminating statutory damages for those who unwittingly aid others who commit copyright infringement, and shoring up the 1984 Betamax Decision by sanctioning devices "capable of substantial, commercially-significant non-infringing use." Critics say the bill does not go as far as Boucher's attempts in previous legislative seasons. They point out that while the acts listed above are sanctioned, the tools that perform them are not. The RIAA condemned the bill claiming it would "repeal the DMCA and legalize hacking." And the Consumer Electronics Association praised it, saying it would "reinforce the historical fair use protections" of existing law.
An unexpected legal snafu may have makers of music players and ripping software shelling out bigtime for MP3 or possibly even abandoning the popular audio codec. At the heart of the storm is Alcatel-Lucent, a networking-equipment company and heir to the legacy of Bell Labs. Alcatel claims that Bell brought two key patents to the table when Bell joined the Fraunhofer Institute of Germany and Thomson of France in developing the MP3 format as the audio soundtrack of the now-forgotten MPEG-1 video standard. This claim is a surefire money maker. Alcatel has already persuaded the federal district court of San Diego to hit Microsoft with $1.52 billion in damages for the use of MP3 in the Windows Media Player. That's half a percentage point of the value of all Windows PCs sold. Ironically, WMP didn't begin supporting MP3 till 2004 with Version 10; before that MP3 ripping was a third-party plug-in. Microsoft will appeal, arguing that one of the two disputed patents does not apply to WMP and the other was covered when Gates & Co. paid Fraunhofer $16 million to license MP3. Before you get all giggly and anti-Redmondian, consider the fact that iTunes also offers MP3 ripping, and that iTunes purchases in AAC account for only a tiny percentage of all iPod-stored content. If Steve Jobs wants to keep his gravy train rolling, he'll have to fork over too. As will every purchaser of every MP3-compatible product. Pray for Microsoft.
A major advantage of HD DVD over Blu-ray has diminished with Sony's announcement yesterday of the BDP-S300 at $599. True, it's still not quite as good a deal as the Toshiba HD-XA2 at $499. Moreover, the lowered price is not unprecedented. Sony has already been offering Blu-ray via the PS3 consoles for $499 and $599. But for non-gamers with an achingly empty space in the component rack, the new Blu-ray player costs significantly less than the BDP-S1 at $999. And, unlike the pricier player, the BDP-S300 plays CDs. Sony's latest move puts Blu-ray in a better position, building on the title-releasing momentum that may enable Blu-ray to surpass HD DVD's software sales this year.
Reading patent applications provides happy bloggers with ample fodder for blue-sky speculation. I rarely report these what-ifs for the same reason that I avoid Japanese new-product introductions: it may not happen, or it may not happen here. But the San Jose Mercury News uncovered an especially interesting what-if in an Apple patent application several months back, one that may affect the user interface of the iPod—revered by many as the Michelangelo's David of industrial design. Reporter Troy Wolverton explains: "The company had previously explored replacing the click wheel with a virtual one as part of a touch-sensitive display." As it has with the iPhone, touching off speculation. "But now," Wolverton continues, "Apple appears to be looking at a third option: a touch-sensitive frame surrounding the display. Rather than click a physical button or press a virtual one on the screen, users would touch an area on the frame to operate their iPod." Needless to say, Apple didn't return the reporter's calls, and this cataclysmic ergonomic shift may never happen.
Sawbones who play video games regularly are 37 percent less likely to make a mistake when doing something in your gut with a pointed object, according to a survey of surgeons at Beth Israel Medical Center in New York. Of 33 surgeons who participated in the study, nine had played video games for at least three hours in the preceding week, and 15 had never played them at all. Those nine were golden: Not only did they make fewer errors, they also performed 27 percent faster, and scored 42 percent higher in a surgical-skills test. The technique in question is laparoscopic surgery, in which a video camera on a stick is inserted into the patient's body, allowing for smaller incisions for the other sharp objects and less invasive procedures overall. "It's like tying your shoelaces with three-foot-long chopsticks," says the author of the study, Dr. James "Butch" Rosser. Yup, he's a gamer: "I use the same hand-eye coordination to play video games as I use for surgery." Maybe we shouldn't worry so much about video-game violence. This guy's itchy trigger finger is saving lives.
A draft report circulating at the Federal Communications Commission claims Congress can regulate violent television content without violating the First Amendment. Interesting fact: Under the Constitution, it is the Supreme Court, not the FCC, that makes such judgments. According to chairperson Kevin Martin, "there is strong evidence that shows violent media can have an impact on children's behavior and there are some things that can be done about it." Sitting alongside Martin, a Republican, was ranking Democrat Michael Copps: "This is not a red state or a blue state issue," he said. Of the remaining three commissioners, one sides with Martin and Copps, and the other two haven't officially taken a position, giving the pro-censorship bloc a potential 3-2 majority. Even Tony Soprano may not be safe from these guys. Martin wants to exert influence on the cable and satellite networks as well. On the bright side, he wants to do it by giving consumers a chance to buy channels "a la carte," an idea the cable industry has long opposed.
What's interesting about the proposed merger of the XM and Sirius satellite radio operations is that their licenses, issued by the Federal Communications Commission, specifically prohibit one company from owning both networks. A press release lists benefits of the monopoly as more program choices, advanced tech innovation, enhanced hardware offerings for OEM and retail partners, better financial performance, and more competitiveness. Some of these claims are more credible than others. Will combining the two result in more choices for listeners--or will overlapping programs eventually be cut? How exactly will the removal of competition spur technology? And the big question, of course: Will the FCC provide conclusive proof of incompetence and/or corruption by saying yes to a monopoly and destroying competition in satellite radio?