Adapting to Massive Media Change Seminar UCLA Extension: Summary

An excellent cross section of industry professionals attended the annual one day Seminar on Adapting to Massive Media Change held at UCLA on 5 December 2008.

Keynotes, and other related materials, are available from my Executive Briefing Web Page.

Special thanks to our three outstanding guest speakers:

• A Producer with MTV Networks, and an experienced film and video maker." (name withheld )
  
• Hannah Bubis, Director of Business Development, The Search Agency. The Search Agency was recently named as one of the ten “Rising Stars” on Deloitte's 2008 Technology Fast 500.
• Dominique Shelton, Partner, Wildman, Harrold, Allen & Dixon LLP

The class began with my view of the 10 major global trends in the media and entertainment sector:

1. The Internet is becoming the dominant platform for media, entertainment, and communications worldwide.
2. Wireless broadband is becoming a dominant distribution platform for the Internet, especially in the developing world.
3. Convergence of industries and devices continues and consumption habits are changing. Gaming is a large factor. Blu-Ray will hang on as the last physical format.
4. Everything is becoming available on-demand.
5. YouTube, Internet video, social media and social networks are becoming important platforms for distribution, promotion and communication and are competing with search as ad platforms.
6. Digital production, and digital distribution are increasingly important economic and business factors in the TV and movie industry.
7. Advertising and branding are being transformed as budgets shift to contextual, hyper-targeted internet platforms and brand integration.
8. The Music business has been transformed.
9. Hollywood / Media Power is shifting and consolidating as the audience fragments and conglomerates grow.
10. Digital Piracy, Cybercrime, organized crime, and the “Darknet” remain ominous clouds over the new media horizon.
    
    A recent case in point:

August 2008, Internet Business Law Services (www.ibls.com) : The U.S. Department of Justice filed charges against 11 individuals who allegedly obtained identity information over wireless networks from nine major U.S. retailers, resulting in the theft and sale of more than 40 million credit and debit card numbers. The hackers apparently garnered tens of millions of dollars from a broad-based scheme that involved citizens of the United States, Estonia, Ukraine, China and Belarus. Attorney General Michael Mukasey said, "so far as we know, this is the single largest and most complex identity theft case ever charged in this country, which they then allegedly sold to others or used themselves. And in total, they caused widespread losses by banks, retailers, and consumers."

I delivered a lecture on the music business presenting a Cartesian grid model of digital music services with on a continuum on the x-axis from user in complete control as in an audio CD, to the programmer in control as in terrestrial radio, and a continuum on the Y-axis from Paid to free. Along the continuum have bloomed a variety of “interactive” music services including the likes of Pandora, Last.fm, Ruckus, Slacker, playlist.com and iMeem. These personalizable, interactive services confound the traditional boundaries between performance royalties paid by traditional radio and mechanical royalties paid for downloads and physical media. The Copyright Royalty Board sets the statutory rates for Internet Radio.

MTV’s digital evolution was discussed and how it evolved into one of the coolest brands in the world, became tired and less relevant and has reinvented itself through aggressive youth market research and by diversifying away from music videos.

Launched in 1981 as a VJ guided music video channel, it has grown into a global media empire and the crown jewel of Viacom’s media properties (NYSE:VIA). According to Viacom’s website, MTV Networks includes over 342 million households viewing 150 channels in 17 languages around the world and 300 interactive properties. Sometime in the late 90s and early 2000s MTV began to break its own first principle; “don’t let your marketing show”. The antithesis of cool is commercial and corporate.

We talked about the youth culture research MTV does and how the network evolved away from Music videos into original programming and sponsored, brand integration. From programmed for the audience to being more controlled by the audience as in the late great TOTAL REQUEST LIVE. We then discussed the evolution of MTV online including the ill-fated milestone 2004 re-design, and the launch of the “Overdrive” site, which worked well with the equally ill-fated Windows Media Center Edition. MTVs partnership with Microsoft and its Zune digital audio player has also met with demise in the face of the iPod/iTunes juggernaut. Despite MTVs best efforts, those initial “portal” sites fell flat. MTV’s online strategy has rapidly evolved into a plethora of blogs, podcasts and videocentric websites. Of particular note is the “Twilight Effect”. MTV deftly capitalized on access to the set of Summit Entertainment’s TWILIGHT and created an online sensation as well as a new line of business for MTV in movie blogs. MTV Networks is an example of media adaptation at its best.

Hannah Bubis dove right into the nitty gritty of Search Marketing, first making the important distinction between organic search and paid search. The former is driven by search engine optimization or SEO and determines what comes up, in what order on the search engine results page. The latter is where budgets are rising almost as fast as complexity. Otherwise known as “pay-per-click”, this form of advertising circumvents traditional media buying by creating algorithmically run hybrid auctions whereby advertisers bid on prime placement. Yet no matter what the high bid, relevancy as measured by click-through rates, comprises a significant factor in determining placement. Hannah described how The Search Agency works with clients on there online strategy and to navigate the complexities of this new world. She emphasized that the greatest benefits of pay-per-click are measurability and that the advertiser only pays for actual clicks and not impressions. Hannah touched on the advanced methods of contextual, hyper-targeted advertising whereby click-streams are captured and analyzed in order to put the right message in the right place at the right time. Some of the class noted that there is a backlash to hyper-targeting when consumers get the creepy feeling that they are being cyberstalked!

I contend that inevitably more overall dollars from the finite ad budget pie will find their way into Hannah’s domain. Many questions remain, especially how pay-per-click combines best with video / IPTV viewing.

Dominique Shelton provided an expert briefing on some key aspects of the Digital Millennium Copyright Act (DMCA) focusing on the four safe harbors. This corpus of law is what keeps many Internet companies in business by indemnifying them from a wide variety of Copyright in infringement and other crimes.

1. Transitory communications
   ISPs are carriers and can’t be liable for the unexamined bits traversing their pipes.
2. Caching
   At some point almost everything you have access to online must be stored or at least temporarily “downloaded”.
3. Storing information at the request of users
   This covers UGC sites like Youtube. The users put the infringing content up not deep-pocketed Google.
4. Information Location Tools (aka Search)
   Without this one Google could not make its billions by pointing users to copyrighted content.

Safe Harbor comes with caveats pointed out by Ms. Shelton. First, you have to respond quickly to takedown notices via a registered agent, and second, you are still responsible to the Communications Decency Act.

Dominique regaled us with some case law including the “Perfect Ten Trilogy” that has tested various aspects of Safe Harbor including:

• If you show copyrighted images in a search is that infringement? No.
• If you are Visa and enable billing for the purchase of unauthorized copyrighted material are you guilty? No.

We were also lucky to get one of the best explanations Fair Use I have ever heard.

Many questions will remain unanswered for years to come regarding grey areas such as interactive music services and the extent of UGC liability, such as in the cases of Warner Music Group Vs. Seeqpod, and Viacom Vs. Youtube. Many of these situations may be better left to creative business agreements than to the courts. Sphere: Related Content

Class #10, Guest Speaker, Jon Fitzgerald, Right Angle Studios

Only 2 classes left! This is therefore your last chance to turn in any late homework. Please refer to the syllabus if you have any questions about the 5 assignments:

1. I think everyone has a checkmark next to contributing a news story
2. Media Diary
3. Mystery Shopper
4. Book Report
5. Pitch or Research Paper

Anyone who is presenting a pitch will be giving it in class Sept 3. You will be limited to 10 minutes max. Be sure to include the basic elements:

1. The market, who needs it, the market size
2. The business model. How does this make money? If its not-for-profit then how does it solve the problem or meet the goal of the org.
3. The competition, why is your idea better?
4. Optionally you can elaborate on the team and how you will execute your plan. How much money / resources will it take? Will you do it by strategic partnerships? Bootstrapping?
5. For our purposes we can skip the financial analysis
6. Try to tell the “story” of your idea with emotion and concrete examples.

Class #10 featured Mark Heninger’s lecture on DRM: What it is, how it works, some of the different standards (Microsoft and Apple), and some different types; passive and active. We discussed some of the reasons for DRM pro and con. One reason is to simply keep track of who’s watching/listening to a piece of content.

Guest Speaker Jon Fitzgerald of Right Angle Studios told the class his story from Film Major, the Mail Room at a major agency to a “Desk”, to indy filmmaker to founding the Slamdance film fest and going on to direct major fests around the world include AFI and Abu Dabai. Jon became head of programming for iFilm, one of the first attempts at an online “channel” (Both iFilm and Atom.com now owned by Viacom, the latter under MTV Networks) Jon’s current company Right Angle Studios, has a slate of projects in development and one in production: THE BACK NINE. We learned about how difficult it is to get distribution for one of the 5,000 independent features made annually (not including the several thousand out of Bollywood). And how many are “coming of age” themes. Jon had some great insight into a career in film and the future of the industry and we are grateful to him for sharing his experiences so generously. Sphere: Related Content

Summary of Building Blocks Conference, San Jose CA.

Making digital media more convenient for advertisers so they can allocate more money to it from traditional media budgets. That’s my vote for the central theme of The Digital Hollywood Building Blocks conference in San Jose held last week from August 5-7. 4 tracks of 56 panels featured over 250 speakers with 25 sponsors and exhibitors. Attendance was brisk the first two days with plenty of interesting executives, entrepreneurs and technologists to network with at every opportunity. I participated in one of the last panels: “Contextual Media, Search, Ad Serving Networks and Advertising Applications in Broadband and Mobile”. A topic broad enough to warrant a conference of its own, yet it made for an interesting session with Dr. David Saad, CEO of Clupedia moderating.

From the non-stop talkstreams about clickstreams and lifestreams I did manage to glean some personal relevancy to my vocational context.

Firstly, it is becoming clear that the single most important revenue source for Internet and mobile media, behind burning through investor cash, is selling advertising. Ad Networks inventory it, and advertising technology companies seek to wedge their way into the sale for a slice of the buy. All this while audiences get better at avoiding advertising messages of all kinds, especially 30 second commercial spots by ad-skipping, or by simply turning their attention to another screen. David Tice, VP at Knowledge Networks SRI highlighted research demonstrated that only 30% of viewers stick around to attend to pre-rolls.

Not to say that downloading and subscriptions services are nill, they are just nowhere near the business model solution that will lift the digital media industry and rescue traditional media from declining sales and rampant piracy. Rhapsody, Napster and the like remain publicly optimistic. I personally believe that bundling media services with other utilities will prevail.

Much of the talk, especially on the Television 2.0 track, attempted to address what to do about video advertising. Pre-roll, mid-roll, and post roll are generally considered problematic. Overlays and “attached” ads, less intrusive. Some studies say that as much as 92% of Americans watch less TV due to competition form other media including so-called “over-the-top” programming, AKA Video over the Internet. Other studies say that TV viewing is still up, but what about attention and engagement?

TV still commands the lions share of advertising dollars, over $65 billion overall in the USA. Larry Gerbrandt of Media Valuation Partners points out, using Nielsen data, that Youtube comprises only 1% of all video-viewing minutes, mobile a fraction of a percent, TV over 98%. Larry pointed out that although Internet video viewing is still a sliver, ubiquitous broadband availability would be the game changer. Other thought that the game has already changed, the advertising dollars are just lagging behind.

Larry, with Seth Shapiro of New Amsterdam Media and James C. Roberts of the Global Capital Group, presented the MVP session on media valuation, which was especially informative delving into the hard-core fundamentals of what makes content worth what. Turns out it is much harder prove the intrinsic value of media content than I thought. You have to prove revenues, you have to have a “locomotive” that can drive audience, you have to have clear intellectual property rights which, as pointed out by Mr. Roberts, is often difficult to discern, especially in the EU. If the program has legs, if it comes with adequate indemnifications also all come into play.

Cynthia Francis, CEO of Reality Digital (A hosted service platform
for storing, sharing, managing and monetizing user-generated content
including video, photos, games, text and more) pointed out that in spite of the fact that TV still dominates the Advertising landscape, niche video driven networks are working citing the examples of cardomain.com, hook.tv, newbaby.com. She assets that we are at an “inflection point” similar to when brand websites became necessary, is upon us whereby consumers are no longer willing to be “told” what to like or want. They want to be “engaged differently”. In that same session General Partner in Caanan Partners, a VC firm, failed to clarify what social media strategies would attract new investment.

There is no end to the ingenuity being applied to replace, bolster, or otherwise modify the TV commercial for targeted, contextual, less intrusive, Internet delivery. On the “Bridging TV and Broadband” Panel, Daniel Leon, Head of Strategic Partnerships for Hiro Media emphasized the roll of “Legal” P2P. Hiro inserts a “positive DRM”, “mid-roll” advert into a video for advertiser support P2P delivery. Akin to what Spiral Frog and a few others are trying in the music space. A small piece of a very large puzzle which I doubt will thrive on its own but only as part of a much larger solution for flummoxed advertisers.

Although retrospectively obvious, a common thread that ran implicitly throughout, was that all forms of advertising affect all others. Amid constant cravings for more, better and different metrics, is the almost impossible to isolate multi-variant reality of the complex interplay between all media. Media and advertising converge on a persons psyche as a whole, and whether I finally click on the Gieco banner or watch their video, or call their customer service center in Bangalore, could just as well be attributed to another annoying 30 second Lizard TV spot as to the immediacy of the carefully measured, behaviorally targeted, lower-third overlay on a 15 second pre-roll. My co-panelist Kevin Lee, Executive Chairman of the fabulously successful Didit, explained that offline advertising very often drives people to search for particular terms or phrases. Remember the lawsuit, Geico Vs Google, complaining that Google could not piggyback paid search on the back of a trademark?

Although a common term of art for ad biz folks, I first learned the term “Brandlift” in the Video advertising panel. As you might expect there are plenty of market researchers keeping busy measuring this, although I would be very skeptical on their ability to attribute brand affinity and intent-to-purchase to any one campaign or methodology. In any case almost every panel mentioned “Metrics” more than once as the way to get more ad dollars into their Internet or mobile media business. I learned that the industry is awash in metrics. What is lacking is the holistic analysis and interpretation of the data, and the ability of advertisers to make strategic shifts. Many speakers agreed that it is just a matter of time until, as one panelist noted, there is the “Monsterization” of TV advertising. Referring to the way Monster.com almost overnight undermined the job classified business. The now shrinking $65 billion TV advertising industry will dramatically begin to reallocate those dollars. Many believe that the future will be much more akin to the Direct Response advertising business whereby “pull”, opt-in, requests, search and the like become the norm.

There was much talk of contextual advertising based on profile data are so called “Datastream” marketing. Behavioral Targeting is also a controversial technology, which follows a user to every site they visit and makes inferences based on those actions. Privacy concerns were recognized but it was generally thought that they would not stop the imminent and allegedly anonymous, use of such data.

Broadband and The Social Media Platform Track highlighted the importance of MySpace, Bebo, Hi5 and others. Brett Wilson, CEO of Tubemogul hyped his sites ability to allow creators to “syndicate” to multiple tube sites concurrently while aggregating viewing data form multiple tubesites for advertisers, this making it easier for content creators, and by implication their sponsors and advertisers, to measure their reach. New and promising uses of the social media nets are popping up. For example now Facebook allows companies and organizations to have pages as well as Bebo, which has been successful with commanding hefty sums for sponsored episodics on its site, namely Kate Modern and Sam King. These programs achieve a high degree of “turbo” brand integration, which was the subject of another panel.

Brand Integration is supercharging the art of product placement. Funny thing, both Radio and TV advertising began that way. The Colgate Comedy Hour complete with skits featuring the product, Hotpoint sponsoring Ozzie and Harriet in their perfect modern suburban household, the Texaco Comedy Hour, The Hallmark Hall of Fame etc. In addition to the above examples, there were several others. The examples Bebo examples above are joined by a myriad of other attempts to elevate advertising to the level of content. i.e. advertainment. Jordan Mauriello, is Founder and Creative Director of moreYellow , an agency that specializes in “Integrated Brand Engineering”. He showed off his www.facesofoolong.com site built for Konami Mobile which is an advergame that gets prospects involved in the brand via an amusing game. Sphere: Related Content

Class #5 Summer 08

The news items discussed included the rapid growth of Broadband around the world especially via wireless access, which will grow to 2.1 billion by 2015. Wired access will allegedly be around 499 million by that same year. An article from Melanie in THR.com, Broadband adoption on torrid pace reported on this market research. It was also pointed out in class that there is a resurgence of interest in Vinyl records because of the superior sound quality to MP3.

Thanks all of the discussion about diaries and mystery shopping assignments. It becomes clear that media and entertainment consumption behavior is becoming increasingly complex and diverse. Some people eliminate regular programmed TV completely. Many rely on DVRs for almost all their viewing. Many are use multiple screens concurrently.

Bundled Vs. Un-bundled services was a theme for the night. Our mystery shoppers generally concluded that if you shop smartly you can get a better deal by purchasing your services and content ala carte. It is clear the up-selling and cross-selling bundles of content and services is a key for success in the media space.

The lecture topic was Media Megacorps and the overview of the business topology of the industry from a US Centric perspective. I also brought up the issues of media consolidation and concentration of ownership via the Bill Moyers Speech on youtube. By observing what the majors do we can begin to compare strategies are discern what works and what may work for our own needs. It was good to get some first hand info form classmates working in the trenches.

I am off to the Digital Hollywood Building Blocks Conference in San Jose and will be reporting and checking in from there.

As we reach the halfway point in the course, make sure you are on track with book reports and final presentations. We would like to begin presentations by class #9 so we are not rushed. Also please email Mark and I any comments on the class. What you want to see more/less of. Sphere: Related Content

Recent Readings and Observations

One of the books in the Bibliography is THE CULT OF THE AMATEUR by Andrew Keen. It posits that an unintended consequence of Internet Media is the undermining of professional journalism and a general dumbing-down of public opinion. Since the Internet is the great equalizer whereby any blogger can sound be heard and command a pseudo credibility, professional journalists are devalued. You can’t appreciate their research, fact checking, adherence to Journalistic standards. Every sound bite and web page and podcast can have equivalent distribution. Another proponent of this point of view is Chris Hedges. This recent article underscores the anti-intellectual effect of the Internet and the demise of professional news journalism; Bad Days for Newsrooms—and Democracy . I tend to agree. It is perilous to have so few controlling so much of our news, and to have so many reading and contemplating so little. What do you think?

Also in this vein is the work of Professor Mark Bauerlein and his book THE DUMBEST GENERATION. He argues that “screen intelligence” is no replacement for traditional literacy. Pervasive use of social networks, superficial blogging (mia culpa!), short texting and the obsession over keeping constantly attached to your friends and peers, comes at the price of focused concentration and deeper thought. He sites a number of statistics supporting is assertion that the overall level of younger intellectual achievement is on the decline. A review of the book is published in the LA Times and of course you can find it on Amazon.

Rock 'em, sock 'em TV providers
On the digital media consumer front, the Chicago Tribune had a great piece comparing Comcast Digital CATV with AT&Ts U-Verse Broadband IP TV service. Comcast still came out the winner although U-Verse posed a formidable challenge. The article diplomatically concludes “With prices for HDTVs gradually coming down, Comcast is the better choice for homes with more than one HDTV” . My personal opinion is that eventually AT&T will be able to offer more feature and a better overall bundle with your telephone services. Comcast is better at organizing and aggregating programming but AT&T will hire and develop that expertise. The final battle will be pricing and customer service. The consumer wins. U-Verse is still years away from having the reach of Comcast.

Thanks to Michael Fitzgerald for this link about brain - computer interfaces. I was privy to some EMOTIV UI work being done by a local Interactive shop last year. Sphere: Related Content

Hello From U of I at Champaign Urbana: IL. Ventures

Today I am in Urbana / Champaign IL. at the Univ. of IL. at the offices of Illinois Ventures.
Illinois Ventures is a unique VC focused on R&D Spinouts from the University if Illinois system. They have a great portfolio of companies in biotech and information tech. I met with Sr. Director Rob Schultz and Program Director of One Llama Media, Amit Sudharsan on some new strategies for the ad supported digital music industry.

There are thousands of streaming music sites and music services. Most of the ads on these services are randomly placed with no apparent recognition of context or demographics. This is unlike terrestrial radio in which ads are carefully placed based on zipcode and format and priced via Arbitron ratings. Google has its audio ad service (Audioads!?) which includes an "Ad Creation Marketplace" so that you commission an audio or video ad via a bidding process and place audio ads into 1600 radio stations via an adwords-like systematic process. Google also has the equivalent "video" version of this service emerging. I assume the first platform for this will be YouTube, however they are also aiming at CATV and VOD. As advertisers shift more of their budgets to the Internet, ad serving technologies for targeting and accurate metrics will be increasingly important and present a increasing competitive challenge to traditional methods. Sphere: Related Content

Hello from Chicagoland, Northwestern University

Hello from the Intelligent Information Lab at Northwestern University’s Ford Design Center. It’s a beautiful building on a beautiful campus and I got to bike all around it and swim in the lake. The Chicago / Evanston beaches are nicer than many in LA. To my surprise the water was still colder than the Pacific but refreshing nonetheless!

My client here is a spin-out from the Info Lab, Beyond Broadcast Media. They specialize in automating the laborious process of supplementing media with highly relevant information. For example, you're watching your favorite Emmy award winning program, MAD MEN. The BBCast Media system has sifted through all the metadata associated with all of the episodes of Mad Men no mater how poor it may be. The system has structured the data into a “canonical” form and from that it goes on to create carefully structured queries that return incredibly contextually relevant results based upon pre-determined domains such as additional videos, fansites, news, blogs and shopping, I got a demo of their latest software tools for managing media related metadata. We also discussed how important metadata is to the user experience and to monetizing almost any form of media.

Earlier in the day I met with Associate Professor Michael Smith, Director of the Media Management Program at the Kellogg Graduate School of Management. We discussed how media companies need to adopt new strategies to survive including institutionalizing innovation, giving next generation workers more opportunities, making partnerships and placing a business focus beyond just numerical performance goals.

I also met with Justin Kerr, the Executive Director and Publisher of Site of Broad Shoulders (www.sobs.org). A great not-for-profit niche site dedicated to publishing Chicagoland Artists. They are about to launch an Internet radio service. They have an interesting work style whereby everyone gets together weekly to “produce” the site. While Justin talks content and editorial, Jake Eldridge, CEO, tweaks the software and the Content Management System. Sphere: Related Content

Class #3 Summer 08: Digital Production, Mace Camhe

Big thanks to Mace Camhe, Founder and Head of Production from The Outfit Media Group (www.theoutfitmg.com). We all benefited greatly form his first-hand experience, which he so generously shared. Mace discussed his job of wrangling talent and educating clients while managing schedules and budgets to get projects to completion. Mace was excited about how the RED ( www.red.com ) is actually transforming acquisition and how is shop is currently hot on the Panasonic HD P2 Format for its speed of no-tape workflow. He enlightened me about how Oakley makes its own “glass” and that it is of superior quality. We discussed “workflow” in the contact of production and post and how Mace keeps a Post Supervisor on staff to Sheppard the process through. Production budgets are being constantly squeezed while quality is still going up due to an evolving talent pool and excellent tools. Speed of production and post is what he says “fills in the holes” and continues to “push the envelope”. Mace talked about how his company becomes part of team that serves clients along with PR companies and advertising agencies. We discussed what makes video viral and how this is more of the future. Mace was good enough to share with us the newly minted teaser for the “Follow-Series” on Kira Plastinina, teenage fashion mogul. Thanks again Mace!

NEWS
Shannon pointed out the NYT article on the success of the latest WHERE THE HELL IS MATT, AKA “DANCING MATT” viral video accruing over 20 million views on You tube and Stride gum as a sponsor. It sparked our discussion on what makes something viral. It was reported in Wired.com that Mark Cuban’s HD NET is going to release movies on HD TV ahead of theatrical turning the traditional “Windowing” upside down. Cuban believes that this will not cannibalize a theatrical release. Nielsen has come out with its “3 Screen” product measuring consumer consumption of content across mobile, PC and TV. Someone else reported that digital cable seems to be getting better uptake than Direct Broadcast Satellite TV. Is it pricing? Quality? Content? Services? User experience? I brought up the FISA law amendment and was informed that it passed the Senate making it Law that the tacos have immunity and could not be prosecuted for complying with the government in granting access to customer’s electronic communications. Any guarantee to your right to electronic privacy has been revoked.

CLASS: Digital Production and Distribution
The Slides for this class can be viewed at this link (I added some additional detail)
We covered digital acquisition, post-production including Digital Intermediate, and digital theatrical distribution with electronic projection. There are a many HD Formats to choose from Prosumer camcorders such as the Cannon VIXIA to the high-end Electronic New Gathering (ENG) and Field Production cameras like the SONY XD Cam and Panasonic P2. The XD Cam uses optical media and the P2 records onto a flash RAM card. No transferring form tape! The higher end digital Cinema cameras include the F900, CineAlta, Viper, and the revolutionary RED. I spoke with an experienced Gaffer, Jimmy Scott who confirmed that the image quality from the RED can be as good as most 35mm shoots and in some cases can reveal even more detail because there is no grain. RED’s latest product will be a 5K-resolution camera.

Digital Intermediate is the process by which all the finishing steps of a film are done digitally. Any filmed elements are scanned and digitized. The final master is indeed digital and can be output to film via a film recorder or encoded into a Digital Cinema Package (DCP) for digital projection. The two competing digital projector manufacturers are Christie Digital and Sony. Sony has the XRD 4K model, which project mind-blowing images up to IMAX size.

3D using the REAL D or 3ALITY system is rolling out. The 10 July LA TIMES ( In 3D! Oh wait... The studios may be ready, but many theaters still aren't) reported that it is now in only 800 of the 35,000 US screens but is viewed as the antidote for flagging feature film attendance, which has dropped over 12% since 2002. Revenues have kept up due to rising ticket prices. The article goes on to herald the forthcoming increase in digital 3D releases.

Electronic Projection also enables exhibitors to show pre-show ads and special events such as the Metropolitan Opera. In the near future digital cinema 3D concerts and sports events will become common.

We also discussed that “Windows” for movie distribution are changing. Mark Cuban announced that he would release some movie on his HD NET TV Network before, or at the same time as in theaters.
Big thanks to Mace Camhe, Founder and Head of Production from The Outfit Media Group (www.theoutfitmg.com). We all benefited greatly form his first-hand experience which he so generously shared. Mace discussed his job of wrangling talent and educating clients while managing schedules and budgets to get projects to completion. Mace was excited about how the RED ( www.red.com ) is actually transforming acquisition and how is shop is currently hot on the Panasonic HD P2 Format for its speed of no-tape workflow. He enlightened me about how Oakley makes its own “glass” and that it is of superior quality. We discussed “workflow” in the contact of production and post and how Mace keeps a Post Supervisor on staff to shepard the process through. Production budgets are being constantly squeezed while quality is still going up due to an evolving talent pool and excellent tools. Speed of production and post is what he says “fills in the holes” and continues to “push the envelope”. Mace talked about how his company becomes part of team that serves clients along with PR companies and advertising agencies. We discussed what makes video viral and how this is more of the future. Mace was good enough to share with us the newly minted teaser for the “Follow-Series” on Kira Plastinina, teenage fashion mogul. Thanks again Mace! Sphere: Related Content

Class #2 Summer 2008

Hope you all had a great July 4th Weekend!
First, let me welcome the new adds to the class:
Mike is direct from a hellish stint as an exec assistant where he was driven to distraction by being ordered to perform meaningless, life sucking tasks and is recovering his self-esteem with the UCLA Producing Certification Program. Exchange Students Vladimir form Russia, Banu from Turkey and Yvonne from Kenya are all in the Cert program too. Vladimir is also a freelance Editor. Gautam is an Engineer and articulate D.J. blogging at http://thesmoothdj.com. Ece is in the Music Business Certification program studying tour management.


NEWS
Vincente tuned us into the new streaming box VOD of over 10,000 movies over the Netflix “Ready” device for $99 from Roku. I was amazed to here that after buying the box you can pay just $8.99 per month for the 1 DVD over the mail and you can watch unlimited movies over the box. Roku was one of the first CE companies to create media “adaptors” which bridge the Internet to the home entertainment devices starting with Internet radio to stereos.

We debated about eBay’s liability in the counterfeit goods case for which a court in Europe ordered eBay to pay $61 million in damages. Most believe that eBay should not be held liable for this would be poor precedent for other Internet e-commerce providers.

Hulu, the new Internet Video “channel” from Newscorp and NBC Uni had some news. More people watch comedies on Hulu than on the Network sites, whereas the opposite is true for dramas. We debated as to why that is. Some say it is the short form nature of comedy. It could also be in the user experience and the way that comedies are showcased on Hulu Vs NBC.com and Fox.com. It could also have to do with the demographics of who is logging on to the respective sites.

Nokia announced that it had made a licensing deal with Warner Music Group. This is an example of new business model for the NOKIA MUSIC STORE, which, I think, is aimed squarely at iTunes and is similar to Verizon’s Vcast Music with Rhapsody. In Nokia’s case, their store will be carrier agnostic and probably be the music solution for many international carriers.

Shannon pointed out this NYT Article about a new Google sponsored media / entertainment initiative with Family Guy creator Seth MacFarlane (NYT Article : Google and Creator of ‘Family Guy’ Strike a Deal)

I mentioned the Android / Google article in the July issue of Wired and how important it could be the burgeoning wireless world.

CLASS
I covered part II of the “Trends” lecture. Recapping demographics and moving on to the megatrends of:

1. Convergence
2. Booming CE Industry
3. Any Screen Anywhere Anytime
4. Wireless Broadband
5. Digital Production
6. Internationalization of the Movie and Entertainment Industry

Next Class we have a guest speaker:
Mace Camhe a Principal of The Outfit Media (www.theoutfitmg.com). We will hear about the Outfit Media Group and talk about digital production trends. Sphere: Related Content

Summer 08 Class #1 - Intro

Welcome to the Class. We have a small and interesting group! Your intros are summarized below:

• Day works on media for the XPrize Foundation. Hard to work for a more interesting place than that! She needs help on choosing a CMS / DAM with web services and is interested in the broad scope. She has a background as a doc producer for National Geo.
• Daryl come big corporate Boeing and is finishing the Management Cert.
• Shannon works in traditional Film and TV production and is interested in cross training for interactive. She recommends the book EVERYTHING THAT's BAD IS GOOD FOR YOU.
• Tiffany handles digital asset publishing and traffic for Disney.
• Monet is our number cruncher on International TV from Sony
• Charles is developing CMS platforms at MySpace and FIM.
• Dominique is getting certs in Producing and Directing
• Vincente Produces for MTV News
• Melanie is working in production and getting her producing Cert.
• Misha is looking for his next gig fresh from a nightmare PA job.
• Steve is a publicist ready to take advantage of the Internet and the Digital Milieu
• Deg is working on a broadband start-up after a tenure as a product manager at Microsoft
• Susan is a QA Engineer and horse trainer getting her cert and ready for online business ventures

We covered the syllabus, attempting to clarify the course objectives and assignments. Daryle will take the mystery shopping assignment for a HD TV, monet will compare Time Warner CATV to DirecTV.

I covered the first megatrends including some basic stats:
of the 6.6 Billion people in the world there are 2.5 billion mobile devices, 1.3 billion people use the Internet. Of 116 million US HHs, about half have broadband and YouTube is the World's 4th most visited site. The Middle East and Africa are the regions with the fastest Internet usage growth rates followed by Asia. Wireless is destined to become the most common way of getting online.

I recommend this podcast for the application of Social Media to PR:
http://ontherecordpodcast.com Sphere: Related Content

Last Class (#12) Winter 2008

Thanks for a great quarter! The final class was jam packed with great pitches. Some of the best were:

• Ozan’s witty DIGI-THINK presentation of futuristic direct brain interfaces may indeed happen. Check out www.emotiv.com
• Andrew’s innovative futuretabloid.com Rumor exchange
• Laureen and Jennifer presented JUMPERINN.com home stay exchange and social network complete with layouts and mock-ups.
• Kahraman’s code-safe security device (written)
• We also heard about several content distribution models including Any and Raquel who want satellite TV wherever they go and Evghenia who wants unlimited content for a flat monthly subscription.

I summed up the course through a 50,000 foot view of some of the largest companies in the media and entertainment industry in the US ( Media Mega Corps ).

We can see how they are formulating interactive strategies through reorganizations and acquisitions. We can also see how the companies are vertically and horizontally integrated. For example GE, which has the largest market cap of all the media giants, owns Universal Studios and NBC, both a large film studio a TV Network and individual TV Stations. NBC is also a partner in HULU with NewsCorp and a $100 million Equity Partner, Providence. Comcast is partners with Sony on its stake in the the largest movie library from MGM, which is also partly owned by Providence. Content companies know they must be in all mediums: Film, TV, Publishing, Internet. They must seek the synergies and minimize piracy and cannibalization of their traditional businesses. They are often at odds within themselves.

Ah the tangled webs we weave. My friend Philippa Burgess from Creative Convergence (www.creativecvg.com) points out how the entire entertainment business has transformed over the past 10 years and all the silos have been broken down. TV Actors and properties cross into features and vica versa. Properties also cross over into games and publishing. CATV has become a rival to the broadcast networks for original series. All players are attempting to understand the impact of the Internet as the WGA strike so aptly pointed out.

It has been great having everyone in class and we look forward to staying in touch! Sphere: Related Content

Class 11, 19 March 2008

Thanks for the presentations this week. They included:

• Online Vault with tiers of service
• Online Newspaper publishing and UI platform,
• Out-of-Home Digital Video Ad Network
• iPhone Personal Productivity Tools
• An online web application for video editing
• A presentation about how online advertising works.

Relevant to out-of-home advertising, I was surprised to discover in my online research wanderings, that Google filed a Patent Application (705014000; 705001000) for “Allocating advertising space in a network of displays”. Here is the abstract:
“Advertisers may upload advertisement messages to a server specifying information such as budget, price per impression, preferred billboards and/or other constraints. One or more keywords or other descriptors are specified for each advertisement message. The system then generates an advertising campaign specifying where the advertisement message is to be output and send the messages to the specified displays. The output may consist of various forms including video, audio, printed incentive, interactive data transfers and/or combinations of these.”

Turns out that Google has a similar patents covering advertising in almost any situation.

The 20 March, LA Times had an article (http://www.latimes.com/entertainment/news/music/la-fi-apple20mar20,1,4485461.story) discussing how Apple is considering moving to a subscription music service for the iPhone. I personally think this is inevitably how it will go. I believe bundled subscriptions, especially via mobile carriers will become a dominant model for music distribution. Nokia is already doing it as well as carriers in other parts of the world.

One of our book reports covered THE FUTURE OF MUSIC by Gerd Leonhard. The book also argues that this “music as a utility” users subscribe to is inevitable.

Also noted this past week is Time Warner’s AOL acquisition of bebo.com the third largest social network with 40 million users for $850 million in cash. No doubt AOL is looking to leverage its 80 million AIM/ICQ users in new ways. Sphere: Related Content

News Bytes: Classes #9 and #10

3 March 08: The Chicago Tribune’s Jon Van reported that the FCC Auction for the analog TV spectrum could yield $20 billion, way more than anticipated. The 214 bidders included Verizon, AT&T and Google. No doubt that these airwaves formerly used for free over-the-air television will be recycled for wireless broadband Internet access that will compete with WiMax, EVDO and even Qualcomm’s Media Flow for wireless streaming video. Widely available wireless broadband will expand the market for mobile devices and mobile content services.

Dateline 15 March 08, Wall Street Journal superstar tech Journalist Walter Mossberg took a look at HULU with a balanced critique. He liked the UI and feature set and pointed out that the selection of videos was, of course, limited to NBC-UNI and Newscorp Content. Essentially Hulu clones YouTubes most popular features: fast search, embedding, emailing, fullscreen viewing. The networks finally get that the Internet is simply an extension of every other form of TV distribution and will rapidly equal or even dominate consumption. The networks are grasping that consumers have a limited tolerance for advertising. The reduced ad load in HULU’s delivered programming reflects this. I still believe that in the long run HULU will NOT become the mass destination its architects desire. The Internet is too fungible, and endless choice via endless search will dominate.

www.aimeestreet.com got a big PR boost from the Spitzer scandal when it was instantly discovered that his service provider, Ashley Alexandra Dupre, aka Kristen, had two tracks on the site. The site prices tracks based on popularity and her two offerings quickly rose to the max of 98 cents.

On the ad front as reported in the NYT 14 March 08, PepsiCo opted to go the event, experiential marketing route for its Tava brand. Aside from the soup of synthetic compounds that go into these “natural” beverages, including “vitamins”, I admire the www.tava.com website as an exercise in branded media. Top level navigation of Events, Music, and Art reveal the strateg of pairing the beverage experience with emerging artistic experiences. Combine with strategic sampling in the offices of influencers at MTV, Google and others, Tribal DDB ( a unit of Omnicom) seeks to mirror the bottom up success of the likes of Red Bull. Free music downloads sweeten the tea.

Any contributed a link RE Intel’s WiMax chipset:
http://www.pcworld.com/article/id,143577-c,tabletpcs/article.html# The article supports the imminent coming of ubiquitous, cheap wireless broadband.
And Facebook’s new privacy options:
http://www.pcworld.com/article/id,143579-c,webservices/article.html

Joyce pointed out this WSJ article discussing the challenge imposed by exponential increases in Internet traffic.
http://www.nytimes.com/2008/03/13/technology/13net.html?ex=1363233600&en=37c92cf02bd0601f&ei=5124&partner=permalink&exprod=permalink
Massive amounts of P2P, video and music uploading and downloading is going to strain the system. Improvements in compression, and expansion in bandwidth will probably keep apace. Some ISPs and their customers who may not have adequate infrastructure may suffer. I see a tiered structure imminent whereby bandwidth limits are imposed with tariffs to begin balancing usage.

Flora sent a link to a Reporter summary of Disney CEO Robert Iger discussing its billion dollar online revenue outlook at Digital Hollywood. 4 million movie and 50 million TV episode downloads on iTunes are impressive stats. He claimed this was incremental revenue an no cannibalization of DVD sales, although I doubt that. Sphere: Related Content

Class#8 One-Wilshire, CRG West

The trip to One Wilshire provided excellent and unique insight into how the Internet works and how a major access point operates. Thanks to Mr. Sam Proudy for his excellent briefing and tour.

One 664,000 square-foot One Wilshire building was the first building to scrape the downtown LA Skyline in 1966. It became an alternative for the closed AT&T network shortly thereafter.

By touring Wilshire One we got to see first hand what a major global Internet Exchange (IX) looks like and get a sense of how it operates. We also got some rare insights into the operation of a major carrier hotel and data center.

The heart of CRG West’s One Wilshire is the Meet-Me room and its Any2 Exchange. This is the essence of the Internet. The Internet is, and was originally designed to be a network of networks. A priori, to achieve this, the networks must exchange data freely or “Peer”. Carrier neutral peering is what makes the Internet work. Seeing the Meet-Me room is a rare glimpse of Peering. Just beneath the visible, vast runs of copper and fiber interconnects, lay the switches and invisible software that manage an average of over 17 Gbps of traffic interconnecting about 120 users. This makes One Wilshire one of the busiest places on the global net.

Some of the interesting facts we learned on the tour:

• The limiting factors in data center operations are power and cooling. The data center is designed for about 150 Watts/Sq Ft. Paradoxically, smaller “blades” simply create much more density and more difficult cooling requirements. Therefore we saw some cages with a lot empty space since the max number of servers can fit in many fewer racks. This is also why Google and Microsoft are building super sized data centers where power is cheap.
• I was surprised to learn about the enormous price differences in power from 2 cents in Oregon where hydroelectric power is cheap, to 9 cents in LA to 13 cents in San Jose.
• Wilshire One sucks up a whopping 25 Megawatts per month. The City of Santa Monica uses about 15.
• Redundancy including failover power and cooling backup is essential. The blackout in Florida on Wednesday is a case in point. The 4 submarine trans-pacific fiber cables that were interrupted a couple of weeks highlighted some of the vulnerabilities and why CRG has separate facilities that back each other up.
• The US is one of the few places where major carriers from around the world can “peer” without government interference. That makes the One Wilshire Any2 Exchange extremely important in the global grid.
• CDNs or Content Delivery Networks such as Akamai and Limelight play an important role in optimizing data distribution.

Sphere: Related Content

UCLA 405.23 Class #7, 20 Feb 2008

News
Will provided an NYT article heralding a major change in Google’s tactics (http://www.nytimes.com/2008/02/21/technology/21google.html?ex=1361336400&en=71c9da34cdbfcedd&ei=5124&partner=permalink&exprod=permalink ). Christian Oestlien, a Google product manager announced the launch of Google’s Ad Sense for video with a network of 20 partners including Revver and Blip.tv. The latter is a site I had not previously explored. Blip.tv has some interesting syndication and ad serving features. The NYT article goes on to mention that Google has chosen to use lower thirds overlays that will be contextually served. You need a million video’s served per month to get in on the action. I assume that Google is looking at metadata to decide which ads to serve where and and when.

Will also referred me to digitalmedialaw.blogspot.com which published the link to the summary of the WGA agreement at http://www.wga.org/contract_07/wga_tent_summary.pdf .
Elizabeth sent me a Variety article about NBC’s decision to stream full eps of over a dozen TV classics. Part of their Hulu strategy no doubt.

Alana put me on to www.artstechnica.com and its’ summary of the state of the music biz (http://arstechnica.com/articles/culture/state-of-digital-music-2007.ars )

John gave me a Forbes article about Adblock Plus which is a threat to the 20 Billion Internet Ad biz since it makes it devilishly easy to block banners and even Google sponsored text ads.

Mark mentioned the increase in Global Click Fraud and read parts of an article detailing stats on Internet Video usage including the stat that 80 million Americans or 43% of the population have watched a favorite TV show online and 20% do it regularly. There are also impressive stats on the increase in time-shifted viewing and commercial skipping via DVRs.

Lecture Notes
My lecture was on the importance of metrics in the media and entertainment industry. It’s hard to sell what you can’t measure. The Internet has an advantage over traditional forms of advertising because you can accurately measure every click, therefore you can sell advertising by cost-per-click or cost-per-action. Nielsen is the juggernaut in media metrics. The $70 billion broadcast TV economy depends on Nielsen numbers for its valuations. VOD, time shifting, mobile and Internet viewing require new metrics. Branded media also requires new metrics. Nielsen is beginning to measure all of the former and its new “Place Views” product strives to measure the latter.

Straight from Nielsen, here are the two most important definitions:
Rating: Estimated percentage of the universe of TV households (or other specified group) tuned to a program in the average minute. Ratings are expressed as a percent.

Share: The percent of households (or persons) using television who are tuned to a specific program, station or network in a specific area at a specific time. (See also, Rating, which represents tuning or viewing as a percent of the entire population being measured.)

Mark covered network topology and concept of “switching fabric” and Network Access Points where packets are exchanged between tier one carriers. We will see this first-hand at Wilshire One, one of the world’s busiest NAPs. We mentioned how important trans-oceanic fiber is to the worlds Internet infrastructure. Mark explained what Content Distribution Networks like Akamai, Limelight, Mirror Image, Level 3 and Edgecast.

Network topology is a complex topic that will provide a deeper understanding of the Internet actually works.

It is interesting to note that Google is building gigantic server centers near cheap power and high-speed fiber landings. Its largest cost is power for cooling. Sphere: Related Content

UCLA 405.23 Class #6, 13 Feb 2008

NEWS
Rebekah brought up the legislative machinations around Net Neutrality and Telecom "wiretapping". She summarized a WSJ article about the move to legislate Net Neutrality so that the carriers can not play favorites with bits. My opinion is that their will be tiering and eventually premiums will be paid for high volume users and bandwidth hogs. Emre mentioned that it works like that in Turkey now. Rebekah also shared that Bush's bill to grant retroactive immunity to Verizon and AT&T for allowing digital wiretapping has not yet been passed. This could still leave them open to liability for breaking all kinds of privacy laws.

We discussed the IAB Video Ad Overview contributed by Will and the WSJ article on the Chinese Music battle between Baidu and Google brought in by Andrew.

I mentioned the Economist article predicting the eventual success of MSFT takeover of Yahoo and Kahraman showed me the other Economist Article likening MSFT and Yahoo to two large clouds colliding and how it highlights dramatic changes in the balance if IT power towards media and search.

LECTURE
I covered ATSC and digital TV including interfaces, standards, and HDTV specs. Mark compressed his talk on compression and compared compression for text, music, still images and video. He explained MPEG 4, AVC, H.264, Flash, and Quicktime.

KORY KLEM
The VP of Content for REVVER discussed the Revver's history, business model and demonstrated many of its functions including ease of publishing, search, syndication, embedding and ad serving. We also had fun seeing some prime example of online video success stories. He compared Revver to Veoh, YouTube and others and speculated on the future. Thank you Kory! Sphere: Related Content

UCLA 405.23 Class #5, 6 Feb 2008

NEWS DISCUSSIONS
Alana bought to our attention an article claiming that 1//3 of the TV audience have changed their media consumption habits because of the writers strike. Benefiting from the change has been gaming and DVD watching. I suspect that there is also more Internet video usage. It was also mentioned that the last writers strike might have caused a permanent decrease in TV consumption. Might this facilitate a further decline in Network audience share?

Several people including Joyce and Stefan discussed the possible purchase of Yahoo by Microsoft for $44.6 billion, and what it might mean for the industry and if it would be considered monopolistic. At this price even mighty MSFT would have to go into debt to finance the deal. Would Microsoft destroy the uniqueness of Yahoo? Interestingly it was reported that Google has offered to help Yahoo stay independent. (Media tycoon Rupert Murdoch plays down speculation that he is interested in launching a rival bid for Yahoo.
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The Chicago Sun-Times reported that the Sun-Times News Group, of which it is a part, was up for sale, citing declining revenues attributed to Internet competition. They have slashed costs to make themselves a more attractive target. This is consistent with a general trend of declining print ad sales, both classified and display. How can you beat Craig’s List and Google Ad Words?

USA Today ran two articles last week on “Social” ad-supported Music. 27 year old Dalton Caldwell founded Imeem in 2003. USA Today reported it now has 20 million users and attracts about 65,000 new people per day (http://www.usatoday.com/tech/webguide/music/2008-02-05-social-networking-imeem_N.htm). In another article USA Today discussed recent ad supported music ventures including Qtrax, which was launched last week at MIDEM and just as quickly lost its alleged support from the majors ( http://www.usatoday.com/tech/webguide/music/2008-02-05-tech-social-music_N.htm ).

Sylvia brought to our attention another “Web” series being brought to TV called Sanctuary from Sci-Fi Network. This is similar to the situation with Quarterlife, which was an Internet MySpace TV exclusive and has been picked up for broadcast by NBC. Is this a trend?

LECTURE
I covered more trends including worldwide increasing Internet usage, always-on/wireless broadband, and exponential improvements in computing power, storage, and ultra-miniaturization. We then moved on to Internet Video and Youtube, paying particular attention to the new advertising methods being experimented with. According to ALEXA, Youtube is the 4th most visited URL in the world, an amazing meteoric success that has made Internet delivered video commonplace. Dozens of new ventures are experimenting with competing business models in both distribution and original content delivered online in competition with more traditional TV formats and delivery platforms. The opportunity now exists to create successful niche “channels” such as www.airshowbuzz.com and www.macexperience.com . Sphere: Related Content

Privacy, Not

Privacy has been an ongoing theme of discussion in several class sessions. Students have expressed concern about agreeing to the onerous terms-of-service form the likes of Google. Google, Tivo, AOL, Amazon, Facebook, and just about any Internet service you register for, collects mountains of data on its users. Clickstream data is collected on just about any site you visit, with cookies used for identification. What the corporate overseers do with this data has often been called into question. Allegedly registered user data is applied “anonymously” for targeting ads, metrics and “personalization” features, however monumental breaches in security have been well publicized.

In spite of egregious errors and some corporate misconduct, usually due to incompetence rather than malfesciance, I feel that allowing Google and the like to spy on me is the least of my computer privacy worries. Malware, SpyWare, phishing, and other forms of criminal computer identity theft are much more worrisome.

But computer identity theft can be mitigated by firewalls, antivirus/anti-malware software, email filters, and just plain being careful.

Of much greater worry is data collected by financial and credit organizations on every credit card and financial transaction of every kind. Data is collected and stored every time you use your social security number, drivers license, mobile phone, home address bank account, every time you check in or out of a hotel, get a prescription filled, change addresses or get a car. The real trouble is with data aggregators that can “match” data from an assortment of databases and assemble a dossier on millions of us. What is even worse is the existence of organizations that sell personal data online and continue using methods like “pretexting”, impersonating a legitimate authority, to obtain personal information. It’s bad enough that the laughably named US Patriot Act removes any illusion of protection from big brother, we also have to watch our backs form the likes of Intelius, bestpeoplesearch, searchpublicinfo and docusearch. I haven’t even begun to scare myself about what the major credit beaureas like Experian and TRW are doing with my data. I know from experience the lingering nightmare of ID theft, having seen a friend loose her passport to a burglar. It just as easily could have been myself as the Apartment we shared was ransacked.

If you really want to worry, look no further than the mile wide breaches in computer security that have led to the loss of millions of SS#s and credit card numbers, many of which are inside jobs resulting for the theft of data or simply stupidity.

Digital conveniences such as WiFi and multi-gigabyte SD Flash drives are also a feast for thieves and a constant threat. A few gigs is plenty of room for millions of credit card numbers and credit histories, let alone a terabyte drive that fits in a small pocket or purse.

The future looks bright for security and ID theft countermeasures. Keep fraud alerts on everything, check your credit reports, lock up your files. Resist allowing RFID tags on Passports and being surgically implanted upon birth. I support National, Photo, biometric ID cards. At least identity theft will be more difficult, the bad guys will have a harder time with aliases and slipping past borders, and when your being spied on they will know its really you using your debit card at Starbucks and holding up the line. Sphere: Related Content

More History of Content: THUNDERSTRUCK

After my Co-Instructor Mark’s presentation on the history of content and subsequent discussions, my interest was piqued about a History book I had heard about by Erik Larson; THUNDERSTRUCK. Mr. Larson authored another great read on the history of my home city, Chicago, entitled DEVIL IN THE WHITE CITY.

To the point, THUNDERSTRUCK details the history of “wireless” AKA radio from the discovery of “Hertzian” waves and the intrigue and high drama around Marconi’s invention of the wireless in turn of the 19th Century London. Amazing how history repeats itself. In the 1890s the scientific establishment was intrigued with discoveries about the electromagnetic spectrum but did not recognize its practical value until Guglielmo Marconi (1874-1937) invented the first devices usable for wireless telegraphy. Six months after his company was established in 1897 at the age of 23 Marconi’s stock was worth about $20 million in today’s dollars. Forthwith he began establishing a “standard” and imposing exclusivity conditions on his contracts including the condition that his shipboard installations were only allowed to communicate with other Marconi stations and that no other wireless vendors could be used for 14 years. Marconi demonstrated the first transatlantic communication in 1901 defying the widely held belief that “electrical” waves could only travel in straight lines. It wasn’t until 1907 that the “Wireless” was in widespread use paving the way for Radio. Similarly the Internet and was an academic and quasi military technical feat until the invention of HTML, the World Wide Web and the IPO of Netscape.

A noteworthy mention in the book was from one of Marconi’s competitors who was fast on his heels with wireless inventions but had a greater vision. In the June 1890 edition of The Century Magazine, Nikola Tesla wrote, “We shall be able to communicate with one another instantly irrespective of distance,” “Not only this, but through television and telephone we shall see and hear one another as perfectly as though we were face to face.” There you go, the first historical mention of Television.

An aside: Marconi’s fellow countryman Allesandro Volta (1745-1827) demonstrated the first electrochemical battery in 1800. The first rechargeable lead-acid battery came in 1859. Battery technology lags far behind electronics.

The parallels to today strike me. As Rebekha from class has pointed out to Mark and I, The world divided into competing Television standards, namely NTSC, PAL and SECAM which have created barriers to global broadcasting. Consumer DVD players are region specific so that international territorial distribution boundaries can be respected. The list of digital media standards and variants is formidable: MPEG2, MPEG4, H.264 (a variation of MPEG 4), MP3, AAC, AIFF, WMC, AVI, AVC, Quicktime, Real etc. Telecom and IP related standards are even more numerous and the distant cousins to Marconi’s wireless standards are even more prolific including a variety of competing system for broadband wireless (AKA 3G) and mobile TV. Competing Mobile TV schemes include South Korea’s DMB-T (Digital Multimedia Broadcasting – Terrestrial which can also work via DMB – S for satellite), Qualcomm’s Media Flo, and Panasonics Mobile Handheld offering. What works for 1:1 Internet connectivity is ill suited for the 1 to many nature of Television broadcasting.

The saving grace of digital files is that they are easily compressed, converted, transcoded or otherwise manipulated using software with the caveat that any conversion can result in some loss of data so that a digital “master” must be maintained. The master is immune to the analog foibles of degradation, noise and other forms of degeneration and remains pristine provided the digital recording medium remains intact, which certainly should not be taken for granted whether optical or magnetic. Sphere: Related Content

Music Biz News, WMG seeks demise of SeeqPod

My mind is still on the Music biz these days. Probably because I am feeling depressed about not being at MIDEM in Cannes this year, since it was an amazing time being there last year. There is so much dynamic vitality in the music world from so many points-of-view. There is an abundance of new digital music services and devices and easy access to music of all kinds. Music as a social network means and medium is enjoying exponential growth, i.e. imeem, MyStrands etc. All this makes the massively depressing ’07 music sales stats even more ironic. The numbers cited and the ’08 projections are even more dismal than most pessimists predicted.

The Economist 10 Jan Articles “From Major To Minor” concludes: “Universal and its fellow majors may never earn anything like as much from partnership with device-makers as they did from physical formats. Some among their number, indeed, may not survive.”

The article posits a trifecta of woe for CD sales:
1. Reduced retail floor space due to reduced sales resulting in further reductions
2. Decreasing Label budgets for releasing new records resulting in further diminution of the biz
3. A reduction in capitalization and investment due to poor returns.

This vicious cycle is likely to make 2008 feel like dropping off a cliff to the recorded music industry and bolster competitive efforts by companies such as Live Nation and artists that are going direct.

The article reports the Nielsen SoundScan number of US CD sales dropping 19%. Both The Economist and Digital Music News report that the 2007 sales were just as bleak worldwide:
• Spain: -22%
• Canada: -21%
• France: -17%
• Australia: -14%
• Italy: -12%

NAPSTER REDUX
In an inevitable move, one of the majors, WMG, has gone after the new Napster (by which I mean the old Napster that started the MP3 download craze and was successfully shut down in July 2001), SeeqPod.

Seeqpod is in some ways easier, better, and even more pernicious to the established music industry than Napster. It allows you to search for any music or video by artist or title, play it instantaly, store it onto a playlist and share the playlists.

In its 57 page complaint to the California Central District Court, The Warner Music Group (Warner Brothers, Atlantic, Elecktra and Rhino) does not mince any words. They are going after the Seeqpod Inc. and their “Angel” investors for both direct and contributory infringement for the max $150,000 per instance of which there are 100s of thousands. They plainly articulate how Seeqpod is egregiously enriching itself by growing its user base at the direct expense of the copyright holders.
SeeqPod has attempted to play dumb by claiming that it is only a search engine like Google, albeit specialized for the deep vertical media niches. True, Seeqpod does not store nor serve, nor even maintain an (Old) Napster-like directory. It merely points to extant mp3 files and provide a convenient means to store your searches and play them.

This will be an interesting case since it may also have implications for the Googles of the world who, it could be argued, also enrich themselves by searching for copyrighted work.

The labels measure how much a music service impacts them by how much of a replacement that service is for an untethered, unrestricted CD. Indeed with SeeqPod’s iPhone app and ubiquitous edge network access it is not far off. Sphere: Related Content

UCLA 405.23 Class #3, 23 January 2008

Great class last night. Thanks for your enthusiastic participation!

NEWS TOPICS

Joyce cited a Cynopsis story about the growth in subscription services. Maybe it will finally catch on. It has been slow going for subscription music services like Rhapsody and Napster the past couple of years. Cynopsis also had a brief item about www.last.fm (owned by CBS) going to an Ad supported model with 3.5 million tracks and the support of the 4 majors.

Sylvia discussed a piece in www.arstechnica.com about music licensing starting a debate about what music licenses should cover. Donna was in favor of consumer convenience while Mark emphasized that artists need to get paid more directly without the traditional creative accounting of the Labels referencing the anecdote of Sting going bankrupt by being indebted to the label at one time. Bill, our class legal source mentioned the system of compulsory Vs blanket royalty pools. A subject for another course!

In my own work I am currently working on an Internet Radio service and will be registering with the government sanctioned SOUND EXCHANGE that administers the $.0018 per performance Internet Radio compulsory license fee with lots of restrictions.

I brought up the 700 Mhz Wireless spectrum auction that begins today as a milestone heralding the imminent demise of analog TV and the rise if ubiquitous wireless broadband. An interesting article in Infoworld on this is linked to here:
http://www.infoworld.com/article/08/01/24/How-the-wireless-spectrum-auction-could-change-your-life_1.html?t=sendEmail.jsp

Another great article in Infoworld is the 25 biggest tech flops of all time. Funny how things come around again in different forms.
http://www.infoworld.com/article/08/01/21/03FE-25-tech-failures_1.html?t=sendEmail.jsp

HISTORY OF CONTENT
Mark covered the history of content including the origin and evolution of Radio, TV and Film.

TRENDS
Stuart lectured on Media Tech megatrends and got through changing demographics and psychographics and the global growth in Internet usage to the current estimate of 1 billion people with China and Brazil growing the fastest.

We also did the informal survey on your monthly total ICE bill, Information, Communications and Entertainment discovering that it can easily top $500 per month. This demonstrates that pricing and economics will become increasingly important as there is more competition for a finite pie of discretionary consumer dollars.

MISC.
Fair Use
This comes up frequently and is frequently misunderstood. Its no surprise that are many busy copyright attorneys. So, to both clarify and add to the confusion, here is the actual text from the UNITED STATES CODE COPYRIGHT LAW ON FAIR USE:

§ 107. Limitations on exclusive rights: Fair use⁴⁰
Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Cool Video
Mark sent me this remarkably informative synoptic video about the evolution of Internet tech:
http://youtube.com/watch?v=NLlGopyXT_g

I will be in Chicago or Miami next week.

Our first speaker will be on 13 Feb, the Founder and CEO of FABRIC INTERACTIVE (www.fabricinteractive.com) Erlend Wilhelmsen. A hot shop specializing in social network marketing.
Sphere: Related Content

UCLA 405.23 Class #2, 16 January

Material Covered: CES 2008
Photos at: http://gallery.mac.com/svolkow#100235&bgcolor=black&view=grid

News Items and Issues Discussed
Donna brought up Facebook's controversial BEACON feature which announces behaviors to your network. There was an anecdotes regarding the purchase of a diamond ring which was not longer a surprise to the intended recipient. This raises the whole question of privacy and who much personal/behavorial/clickstream data are users willing to share with each other and advertisers. Bill mentioned that some sites have a policy of keeping data for up to 7 years. A similar controversy erupted when Google revealed that it was "reading" gmails in order to display relevant ads. The outcry blew over in a few months and now Gmail users don't seem to worry about it.

Tivo records almost every click of the remote and it's a good bet that many of our favorite sites including Google, Amazon, YouTube, Rhapsody, Last.fm and Netflix, store extensive user data which is used for ad targeting and personalization. Allegedly the data is held anonymously so advertisers can't see actual IDs.

Stefan defended the newest Apple notebook PC the AIR as excellent for portability. Others thought it might be too stripped down.

Jeff discussed Wal-Mart's shuttering of its download store. Might they have ceded the digital download biz to the likes of Amazon Unbox and iTunes? Rival Target launched a "Digital Partners Program with a DRM free John Legend Album of 19 tracks for $9.99. The experiments will continue no doubt.

The CES presentation stimulated good questions about "Fair Use", compression, HDTV/Digital TV and the viability of IPTV business models which all foreshadow class sessions to come.

Posted by Stuart W. Volkow at 5:59 PM 0 comments

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