The major record labels are looking for a means to make a buck out of the internet music distribution. Having been unsuccessful in suing their way to megaprofits they now look to do it with Hulu? Fat chance in my book –

Plans under discussion include: a partnership with Hulu, the online television and film joint venture between News Corp and NBC Universal; the creation of a premium service on YouTube, Google’s video sharing site; and a stand-alone venture between some or all of the four largest recorded music groups.

Industry members had hailed deals struck with YouTube last year as a new way to profit from the popularity of professional music videos and from the soundtracks to amateur efforts on user-generated content sites.

However, some are now questioning whether either side has made much money from arrangements that require YouTube to share advertising revenues and, in many cases, pay a few 10ths of a cent to the music company each time a video is streamed, regardless of how much advertising is sold.

Universal Music, the industry leader, has said it makes “tens of millions of dollars” from YouTube.

Warner Music failed last week to agree a deal with the site, however. It said it was not being adequately compensated and demanded that the site take down its artists’ videos and amateur content using songs from its publishing arm such as “Happy Birthday To You”.

Representatives of two music companies, who would not be named, said they were in discussions with Hulu, and added that no partnership announcement was imminent but that the site appeared to be the favoured partner.

“If it happens at all it will be with Hulu,” one said.

Both added, however, that any such deal to create a standalone music video service would not replace existing deals with YouTube. There was interest, they said, in supplying content for a potential premium service on YouTube, which has begun to offer high-definition videos.

The issue is not the medium anymore. That was an issue 6 years ago when the ‘how’ of delivery was to be formulated. But no longer. Companies like Amazon and WalMart have broken that nut. Packaged digital delivery is a reality today. Essentially the record labels ceding that function to the top three distributors.

The real issue is the cost per song which the labels refuse to adjust to. In their heydey the labels used to garner $1.50-$2 per track pricing model. The world today is such that a band can make a gob of money selling tracks at .25¢ per. They just go direct. The labels have not adjusted to that reality. Till they do venues like a Hulu deal may garner them $$ but not the floods of cash they are used to.

Music is headed back to a cottage industry style of operation. No not that it will be garage bands with websites, though that is a possibility. But it is now possible for a world smash record label to consist of no more than 50 staff. The label is a mutual stock company owed by the bands that contribute to it. Things like cover art, post production, physical prepress, legal services and tour management are consolidated to increase efficiencies of scale for the bands. (eg 20 bands don’t need 20 lawyers.) The individual bands operate their own studios since it is so cheap today. Everybody operates on a commission basis and the bands are the members of the board of directors. Yes, and most distribution is done digitally.

Till the current labels realize that is where the industry is headed they can flail all they want.

Linky.

We devote a bunch of energy talking about how the old media is fighting inevitable change, and going one worse by twisting new laws to stop the rest of us from embracing that same change. This change is as fundamental as how performing art is produced and distributed. Performing art is a work of knowledge, and the Third Pipe world frees any interested party to be a producer, distributor or both. That upsets old media’s toll booth mentality. When that happens we’re all expected to pay up or suffer the consequences. That’s how music fans become defendants in RIAA law suits.

Want to learn more? If you have a little time today, I strongly urge you to watch the above documentary. It will give you a new perspective on  why the big labels want to control all how you access all music and how much you will pay.

The documentary film has built a passionate following as “the most important film a music fan will ever see” (XM Radio) by providing “a balanced overview of the state of the rock scene of America” (The Wall Street Journal) and adding “passion to the eternal debate about the industry” (The New York Times).  (Google)

you can buy an extended version for as little as $2.99 here

Busted! The RIAA has exhausted their appeals in the Thomas case. A retrial is scheduled for rehearing the case. If Thomas prevails in the guise that actual distribution must occur, the ability of the RIAA to further any suits will be seriously hampered. It would be extremely hard to monitor the P2P traffic from the source without breaking other computer laws. –

A federal judge is denying the Recording Industry Association of America’s request to appeal his decision granting a retrial in the RIAA’s only file sharing case to go to trial.

U.S. District Judge Michael Davis of Minnesota declared a mistrial in the Jammie Thomas case months ago and nullified the jury’s $222,000 award against the Minnesota woman for sharing 24 songs on the Kazaa network. The judge declared a mistrial a year following the 2007 trial after concluding that making available copyrighted songs for download on peer-to-peer networks did not amount to copyright infringement, as he erroneously instructed the jury.

The RIAA sought permission to appeal, a decision the judge has now rejected (.pdf) for the same reason he declared a mistrial.

Davis said “actual” distribution of copyrighted music must be shown — meaning that the RIAA must prove that others are downloading the music being shared. The RIAA said it was virtually impossible to detect whether people were downloading music from an open peer-to-peer share folder on Kazaa, Limewire or other sharing services.

This probably explains why the RIAA is moving to the ISP for protection of their property. Though if the distribution requirements hold up it will be a tough case to go to court with.

FCC Chairman Martin just won’t give up on his free wireless proposal. Oddly enough no one likes the idea including his telco buddies.

Martin told Ars Technica that he didn’t want the Web filtering provision to kill the whole proposal. So he took it out.

“I’m saying if this is a problem for people, let’s take it away,” Martin told Ars Technica. “A lot of public interest advocates have said they would support this, but we’re concerned about the filter. Well, now there’s an item in front of the Commissioners and it no longer has the filter. And I’ve already voted for it without the filter now. So it’s already got one vote.” (Cnet)

Maybe he’ll clear the net neutrality zealots with the removal of the filtering requirement, but problems remain. For me there are several:  The auction process that grants a large swath of public bandwidth to one company. The business model that can’t work as it stands, meaning we’re in for something less than we are being promised. This will result either sell out to one of the incumbent providers who will work to revise the free rule. The other possibility is a complete failure that will leave the spectrum in limbo, or  public funding will be used to rescue the failed venture (we’ve seen a lot of that lately).

If I had chairman Martin’s ear, I’d strongly urge him to open this spectrum to low power unlicensed / medium power small footprint license use. We’ll get a lot more public broadband much faster this way. Unfortunately, I’m in no position to reward Mr. Martin with anything more than a “thanks for doing the right thing”, so I’m sure he won’t be interested.

Pew research conducted a survey of where Americans in 2008 were getting their news content. Needless, the outlook for pulp is looking entirely drab. This year more people of all age brackets were getting their news off the net rather than off the newsstand. –

For the first time ever, more people cited the Internet than newspapers as their primary source for news, according to the latest Pew Research Center survey, conducted Dec. 3-7 among nearly 1,500 adults in the U.S.

Currently, 40 percent of the respondents say that they get most of their national and international news from the Internet, up sharply from 24 percent in 2007. Newspapers remain the top source for 35 percent, about even with the past three years, but down significantly from the 50 percent as surveyed in 2003.

pewpulp

In the usually critical 18-29 demo, the web was even with TV at 59% of those polled. The fact is regardless of whether the pulp news sources stem the current tide the long term is a slow decline. The younger generation considers a paper yesterdays news. What’s the line? - “It’s not just what he knows, but when he knows it.”

Sad.

Linky.

If you’re a Geek you are probably at least aware of Tor the anonymousizing (is that a word?) transport service. For those that are not, Tor provides a means of hiding your source point providing a level of privacy to your communications. Closest example I can think of is partyline VPN. The downside to Tor? Well it is a user space service, or was till OnionCat showed up on the scene –

Tor provides so-called “Hidden Services”. These are services which are location hidden within the Tor network. This means that not only users are hidden but also services (destination). Tor manages this by assigning virtual addresses to them, so-called .onion-URLs. Tor builds all connections based on them.

Unfortunately, access to hidden services is currently not very user-friendly which makes them unattractive although they could provide high privacy in today’s world.

OnionCat provides an IP-transparent service which does on-demand connections to designated hidden services. This is a Tor-specific virtual private network (VPN). Because of its IP-transparency any client program can use hidden services without further workarounds.

If you used Tor you generally used it per application and would have to work each connection in turn. With OnionCat the Tor network transport the IP source tunneled within its IP network. In that guise a full suite of IP client-server traffic could traverse the Tor network without any client side manipulations. Makes an interesting case for reasonably secure message trafficking among other things.

Guess I should apply a disclaimer. Tor is not perfect. If you don’t follow their rules of use your ’security’ is out the window. Nor would I consider it a replacement for business level VPN or IPSec links. But for the occasional need for a secure link Tor is a great tool. Treat it accordingly.

Chaos Conference link.
OnionCat website.

Well it looks like it is taking shape. Back at the Chaos Conference there is a talk on the very subject of an FOSS based GSM suite. This could prove very interesting –

On the Ethernet/IP based Internet, we are used to Free Software and general-purpose hardware. The worlds second largest communications network GSM couldn’t be any more different. Even though the protocols are standardized and publicly available at the ETSI, all implementations are highly-guarded proprietary secrets of a few major players in the industry. The hardware is even more closed, as there is not a single GSM subscriber or base station chipset with even the least bit of publicly known information.

Nonetheless, in recent years there are a number of different projects working on driving a wedge of Openness into this world. You might have heard about other projects like the THC GSM sniffer project (pure wireshark-like functionality) and OpenBTS (a software defined radio based GSM base station interfacing with the Asterisk VOIP server).

This presentation is about yet another new GSM related Open Source project. A project that follows the GSM specs more closely and actually aims at interoperability with existing equipment such as hardware BTS hooked up via S2M interface to a Linux-running PC.

On Mr. Welte’s blog –

Funny enough, after initializing OML and RSL, the first unsolicited message I got was the error event report about the ‘intrusion detection’ at the BTS, since I was operating it with open connector panel

So now I’ve returned to the actual BSC/MSC subset implementation. I’m still confident to finish something that can handle reliably handle voice calls between two handsets registered to that BTS. All on one TRX, no frequency hopping, not using any A5 encryption. POGS (Plain-Old-GSM-System).

I’m very excited about everything that I’ve learned about the various higher-layer parts of GSM in the last weeks since FOSS.in.

Let’s hope that our software plus the presentation at 25C3 can trigger other people to show similar enthusiasm about this topic. There’s an almost endless number of opportunities for GSM related security research out there.

So lets say these gentlemen get it all working per GSM specs. No reason they should not be able to either. GSM is a published specification. No trade secrets involved. What happens next?

Well try this on for size. Unserved areas on the US file for exemption and build their own dark GSM wireless networks. Their biggest hurdle is getting frequency approval from the FCC. A small Linux server and a T1 link or two to serve the system. But this would be well within the confines of a municipality to accomplish. Fact is you could pair this effort with the yet still unfulfilled ‘D’ block to get municipal GSM services off the ground.

Chaos Conference
Mr. Welte’s blog

It just might be if you can believe this NYT article. Senator Kohl is inquiring as to the cost structures to support texting while the carriers are reluctant to discuss the matter at all as texting is almost free for them in as part of the overall wireless infrastructure.

So, in September, Mr. Kohl sent a letter to Verizon Wireless, AT&T, Sprint and T-Mobile, inviting them to answer some basic questions about their text messaging costs and pricing.

All four of the major carriers decided during the last three years to increase the pay-per-use price for messages to 20 cents from 10 cents. The decision could not have come from a dearth of business: the 2.5 trillion sent messages this year, the estimate of the Gartner Group, is up 32 percent from 2007. Gartner expects 3.3 trillion messages to be sent in 2009.

The written responses to Senator Kohl from AT&T, Sprint and T-Mobile speak at length about pricing plans without getting around to the costs of conveying text messages. My attempts to speak with representatives of all three about their costs and pricing were unsuccessful. (Verizon Wireless would not speak with me, either, nor would it allow Mr. Kohl’s office to release publicly its written response.)

The carriers will have other opportunities to tell us more about their pricing decisions: 20 class-action lawsuits have been filed around the country against AT&T and the other carriers, alleging price-fixing for text messaging services. Timothy P. McKone, AT&T’s executive vice president for federal relations, told the senator that the suits had been filed “since your letter was made public” and said that he was “eager to clear up any misunderstanding.”

If you aren’t mad by the time you read the piece then you are already dead.

In business it pays to either be big and essential or nimble. Take your pick. In this case big went after nimble and won to the tune of $33m. The cybersquatter OnLineNIC was doing the registration tango playing with verizon as part of the name. –

A federal court in the Northern District of California has awarded Verizon $33.15 million in a “cybersquatting” case, Verizon reported Wednesday.

The Basking Ridge, N.J.-based company (NYSE: VZ) said San Francisco-based OnlineNIC used Internet names that were “chosen to be easily confused with legitimate Verizon names.”

OnlineNIC “unlawfully registered at least 663 domain names that were either identical to or confusingly similar to Verizon trademarks. The court concluded that OnlineNIC’s bad-faith registrations of Verizon-related domain names were designed to attract web users who were seeking to access Verizon’s legitimate websites and calculated an award based on $50,000 per domain name. Neither OnlineNIC nor counsel representing the company appeared in court in OnlineNIC’s defense,” Verizon said.

As much as we aren’t kissy kissy with the big Telcos this is one of those situations where we give Verizon a thumbs up. We hate the cybersquatters even more. The only thing that would have made us even happier is if VZ has listed ICANN in the lawsuit. Its high time that ICANN tightened up its domain registration procedures. Pulling the window down to two days for completion would cut out a lot of this cybersquatting.

The trick to all this? Verizon won by default as the defendant did not show in court. Had they a full set disclosure may have ensued. The court does not know a legitimate address for the firm OnLineNIC.

Linky.

Apple has relaxed its standards as to what it will permit in the Apple Store for iPhone Apps. Good move right? Guess it depends on your point of view. Do you want cash or class? If it’s cash you want then iPhone Whoopie Cushions are your ticket. To the tune of $10k a day for one provider –

Websites such as CNN.Money, TechCrunch, and VentureBeat have reported that iFart - the most popular of the new and gaseous gang of iPhone and iPod Touch “entertainment” apps - is pulling in around $10,000 per day.

The immediate reason for this surge in colonic purge is Apple’s recent relaxation of its previously more-stringent App Store standards - a move that immediately inspired a concomitant relaxation of cybersphincters among developers of mobile “crapware.”

Consider, if you will, the following representative digifarts now available for your edification and enjoyment (these links are to the iTunes App Store):

* iFart Mobile ($0.99): “Fart Machine for all Ages”
* Whoopie Cushion (free): “A knee jerk classic prank”
* Flatulence ($0.99): “Great for those quiet times in meetings”
* Mr. Poot! (free): “Shake Sensitive Fart Generator”
* uFart ($0.99): “You’ll be the life of the party”
* Pull My Finger ($0.99): “Why must I always carry a phone, iPod, AND electric fart machine?”

I wonder how the High Road is doing?

Linky.