Copyright Files: Apple, HDCP and Consumer Confusion

hdcp copyright apple smallIf you want to irritate consumers, one way is to try and interfere heavy handedly with how they can use the product’s they’ve purchased.  An even more surefire way to rankle them and draw their wrath is to fail to disclose your  practices or cover them up.   

Sony BMG found this out the hard way with their now infamous “root kit”  music DRM fiasco in 2005. That violation of consumer trust brought them a tremendous amount of bad PR and plenty of time in front of a judge before the lawsuits were settled.  Electronic Arts currently, though to a lesser degree, is dealing with a similar parade of customer backlash thanks to their own poor disclosure over DRM. EA’s facing down a handful of class action lawsuits.

Now, it seems, Apple and other PC vendors could, if they’re not careful, get a foot partially snagged in a similar but far less toothy version of the same kind of bear trap too.

According to reports from Wired and Ars Technica, new Macbook computers have quietly been gifted a restrictive anti piracy technology called High Bandwidth Digital Content Protection (HDCP) (or a related system called Display Port Content Protection (DPCP)). These technologies are DRM systems that add a layer of encryption to the distribution of some content between its source (your computer) and certain peripherals and displays (your external monitor).

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Sonic Salvages CinemaNow

sonic cinema now qflixChalk up another Web 1.0 movie delivery service to the fire-sale files.  Last year, it was Blockbuster stepping in to salvage Movielink for pennies on the dollar, $6.6m  to be precise.  This year it’s Sonic Solutions sweeping up CinemaNow for even less.

Announced Thursday, the media authoring software company known as a leading maker of DVD and Blu Ray encoding tools is buying the assets and assuming the liabilities of the movie download service for a reported $3m.

Cinema Now was founded in 1999 to offer online movie rentals.  As studios became more accepting of Internet delivery mechanisms, downloadable sales were added to the mix.    CinemaNow was the first website to offer pay-per-view movies from major studios. They were also the first broadband distributor of HD content.

Investors including Menlo Ventures, Cisco, Transcosmos and Lions Gate fueled the company with more than $40m in funding.  A fifth round totaling more than $20m was closed in 2006. 

The investors money helped build both the delivery mechanism and a catalog of TV and film titles more than 6,000 strong but it wasn’t enough to buy a sizable audience.  Consumers never really embraced the service.  Click to Read More

Netflix and Tivo Hook Up

tivo-netflix.jpgIn relationships, timing is everything.  No matter how appropriate a pairing, both parties need to be ready. The stars need to align.    Four years ago, Tivo and Netflix ambitiously tried to hook up to deliver an internet video distribution service.   Unfortunately, the companies weren’t mature enough. Moreover, the marketplace (e.g. movie rightsholders) were not comfortable endorsing such a forward looking union with a license.   Today, things are different.

Rekindling the old flame, Netlfix and Tivo announced Thursday that the’ve joined in partnership. Click to Read More

EA at the Movies

army-of-two-pstr-sm.jpgUbisoft CEO  Yves Guillemot said in July that he thought “the future of [the gaming] industry depends on [studios] ability to create brands that captivate audiences and to extend those brands to other forms of entertainment.”  He’s not alone in that view.  With common visual techniques, shared audience demographics and similar story telling narratives the convergence of gaming and movie making is an increasingly common theme.  That’s especially apparent at Electronic Arts.

In July, to hasten development of Hollywood relationships, EA signed a deal with talent agency United Artists.  At the end of September, EA signed a game development deal with the 300’s director,  Zack Snyder.  Now, EA is moving ahead with a film deal built around their mercenary themed title, Army of Two.

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Whale Watching: Icahn Picks up More Lions Gate

whale-watching-sm.jpgWhale watching isn’t just a pastime in coastal towns.  In financial circles, the biggest of the big, the heaviest of the heavy hitters, aka the “whales,” often draw a crowd too.  Investors flock to see where the Buffet’s, the Soros’ and the Icahn’s of the world are deploying their capital.  It’s a chance to learn, or maybe even ride the coattails of an expert’s insight to a nice return.

For Carl Icahn watchers, the latest company to watch is Lions Gate.  As of June 30th, 2008, filings show Icahn had 3.65%  of the “mini-major” production company, or 4,289,508 shares.  This month he doubled down.

SEC filings reveal Icahn acquired more than four million additional shares in October.    The individual buys, as listed in the filings, are detailed in the table at the end of this article.

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Netflix Q3 Earnings Recap

Two weeks ago, Netflix provided a window into upcoming earnings with a pre-announcement to reset expectations for the reality of the current economy.  Today, the official results debuted.  New subscriber additions, as the company warned, were weak but net income was up thirty percent.

Reported net income was $20.4m or 33 cents a share for the third quarter, up from 15.7m (23c/share) for the same period last year. Revenues were in at $341m.

Analysts polled by Thomson Reuters had a consensus estimate of 31cents a share from revenue of $343m. 

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RealDVD Temporarily Restrained…Indefinitely

real dvd blockedNow you see it, now you don’t.  Real Network’s newly launched DVD copying software platform, RealDVD, has gone from controversial to contained in the blink of an eye. You could say the software has been sequestered.

Friday, days following the program’s launch, with litigation already pending from both sides,  U.S. District Judge Marilyn Patel issued a temporary restraining order blocking all sales of the program pending a broader review of the software’s legality.

Tuesday, the TRO was extended.  The exact terms haven’t been made public but it appears the judge wants time to gain a more detailed understanding of how the software works and also, to allow the competing sides to prepare expert testimony.

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