MaxxoMedia Digital Media and Entertainment Trends

An Open Letter to Steve Jobs and Mitch Bainwol prompted by their recent statements regarding the role of DRM.

Posted by Bennett Lincoff

Steve Jobs (CEO of Apple Inc.) says that Digital Rights Management (DRM) cannot effectively protect recorded music when it is transmitted digitally. He is right. The music industry’s many experiments with DRM have all met with effective technological countermeasures.   Moreover, news of each successful hack quickly found its way to everyone who cared. There is no reason to believe that the results will be different next time, or ever. For his part, Mitch Bainwol (Chairman and CEO of the Recording Industry Association of America – RIAA) insists that DRM is essential to the music industry’s survival in the digital age. The problem is that the Internet is fundamentally incompatible with the music industry’s traditional sales-based revenue model. Through the Internet, the market for sale of individual recordings can be saturated in a moment’s time and without payment of any royalties to songwriters, music publishers, recording artists or record labels. Neither law, nor technology, nor moral suasion will change this fact.

Mr. Jobs suggests, and I agree, that DRM should be abandoned as a tool for the protection of recorded music. However, before Mr. Jobs can implement his DRM-free utopia, the music industry must have a viable alternative business model by which it can continue to thrive. Mr. Jobs has not suggested one. Mr. Bainwol denies that one is needed; intending, instead, to continue efforts to preserve the industry’s sales-based revenue model. In any event, in the absence of an alternative business model suited for digital transmissions of recorded music, Mr. Bainwol cannot even begin to discuss the possible elimination of DRM.

Mine is a comprehensive approach to rights licensing and rights management that does not depend on the efficacy of exclusionary DRM technology for its success. A solution that simultaneously protects the integrity of copyright, promotes technological innovation, facilitates the growth of all manner of licensed digital audio services (including P2P), and meets consumer demand. In the aggregate, music industry rights holders would do no less well financially under my proposal than they do now under the system that my proposal would replace.

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Almost one in three of frequent YouTube users say they are watching less TV as a result of the time they spend there. However, 73% of frequent YouTube users say they would visit the site less if it started including short video ads before every clip. 42% of online U.S. adults say they have watched a video at YouTube, and 14% say they visit the site frequently, according to Harris Interactive.

Of all frequent YouTube users:

* 66% claim they are sacrificing other activities when on YouTube
* 36% say their visits to the site are most likely to have been at the expense of visiting other websites
* 32% say their time spent watching TV is next most likely to have taken a hit
* 20% think that YouTube also pre-empts email and other online social networking
* 19% defer work/homework
* 15% aren’t playing video games
* 12% are not watching DVD(s) and not spending time with friends and family in person

For all of the excitement over online video, the jubilation over the promise of mobile entertainment looms larger, but perhaps that is because few analysts or companies have managed to wrap their arms around the market. Like the Web before it, there are numerous challenges facing the marketplace, both in terms of consumer adoption and monetization.

Wireless Entertainment: Definition of Market

The market for wireless entertainment consists of content, services and applications. Wireless content may be anything from a ringtone, graphics or streaming video. Mobile content comes with many challenges, including billing and digital rights management. Wireless services tend to be educational or news oriented, but may also be entertaining. Social networking tools allow for more interactive services on handheld devices: be it sharing or blogging. Finally, wireless entertainment applications include dynamic games and search tools.

Via Reuters

It’s not all fun and violence in video games, according to makers of a new genre of games which claim to boost players’ mental health and self-esteem.

A group of developers inspired by the success of Nintendo Co. Ltd.’s “Brain Age” title that gets the gray matter working with math and word puzzles, hopes to harness the power and popularity of video games to boost psychological health.

Among them is Tokyo-based Dimple Entertainment, which in May will begin selling the unconventional title “DS Therapy” in Japan for Nintendo’s (7974.OS) hand-held DS player.

Microsoft Casual announced a plan to share a percentage of in-game advertising revenue from its MSN Games with casual game developers. The new Ad-Share Program is designed to spur innovation in the casual games space and provide an additional stream of revenue to developers. The company estimates developers of the top five games could share up to $250,000 annually, based on current in-game advertising revenue rates.

“Casual game developers traditionally operate on a limited revenue model, typically receiving a set fee from downloadable titles or a small royalty associated with game subscriptions,” said studio manager for Chris Early. “Now, by sharing in-game advertising revenue, we’re allowing a more diversified business model that gives our partners more resources to create new, innovative titles for the 13 million people we see every month on MSN Games.”

David Wesson is an Internet media-marketing consultant and has worked in the entertainment and advertising industries for the last 15 years in Europe and Australia.

(Article as published in march 2007 issue of Marketing Magazine )

The penetration of broadband and the sophistication of the end-user means that the Internet is no longer seen merely as an information gathering point and purchase space. Today it is as much an entertainment hub and is part of the digital revolution changing the face of entertainment. We look at current trends and initiatives in digital entertainment; how the lounge room/online entertainment space of tomorrow will look and impact on the future of digital entertainment. We also look at the culture of consumer behavior and how the industry will be able to deliver what the consumer wants now and in the future.

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Visits to MySpace accounted for nearly 12% of all time spent online by US Internet users, according to Compete Inc. The study shows traffic data put US Internet user time spent at MySpace over other sites including eBay, Google, AOL and YouTube. Yahoo! came in second, accounting for 8.5% of time spent online by US Internet users.

The amount of time spent at MySpace suggests that people are leaving the site open during the day to see when new instant messages or e-mails arrive from friends. The multitasking habit is especially strong with teen Internet users. Several of the sites could easily be used simultaneously: MySpace, Facebook, YouTube and AIM all appeal to the younger generation of Internet users, and this group is also most likely to multitask when online.

Cupertino, Calif. – Apple CEO Steve Jobs fired a direct shot at the record industry on Tuesday, in the form of an open letter posted to the company’s website that suggests that labels should abandon digital rights management (DRM) technology and release songs for sale in an unprotected format that can play on any device.

“Imagine a world where every online store sells DRM-free music encoded in open licensable formats,” Jobs wrote.

“In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.”

I’m pleased to announce my addition to the advisory board of UrbanWorld Wireless and excited to work with them as they expand their business from mobile to a full fledged digital media company.

Company Unveils Newly Inducted Advisory Board – A Who’s Who of Entertainment and Technology and New Digital Entertainment StrategyLOS ANGELES, Feb. 6 /PRNewswire/ — UrbanWorld Wireless announces today its transition from the wireless world into the digital arena. Additionally, the company unveils its “Fab Five” Advisory Board team that will work hand in hand with the company in executing the new shift in strategy. The newly appointed advisory board is comprised of:

* Mark Levy, CEO and founder, Maxxomedia, a digital media consultancy and licensing agency — over 20 years experience in the media, entertainment and technology industries.

* Keith Clinkscales, SVP/General Manager of ESPN Publishing — oversees all operations of the award winning magazine both domestically and internationally. Has successfully headed multiple magazines titles.

* LaSean Smith, senior product manager, Motorola — known as a digital music pioneer, credited with helping design and develop one of the first successful digital media distribution platforms.

* Daymond John, CEO and founder, FUBU — built the multimillion dollar international apparel brand from the ground up. His honors include “50 Most Influential Men” and “Top Forty Under Forty” and others.

* Jon Bukosky, Managing Partner, BFD/ventures — over 18 years experience in the mobile/digital media market and has served as a former senior executive of 4 mobile entertainment companies.

Dan’l Lewin, Corporate VP of Microsoft’s Emerging Business Team remarks on gaming trends on his blog:

Social and Connected Entertainment – Online and On-Demand

Got game? Millions do. Gaming is clearly one of the trend stories of the decade. It is making an impact on our lives no matter where we are — in our living rooms in front of the TV, on our cell phones, working at our PC, and coming to a portable media player near you. The next level of gaming is here, and it is being driven by three converging trends: high-definition gaming; on-demand, online gaming; and social entertainment. So hold on, and get ready for a screaming fast, gaming experience. One that dominates with breakneck performance, captivates with stunning visuals and heart-pounding, even breathtaking audio tracks, and goes deep into virtual worlds. And remember PacMan? It and other classic arcade games are making a big comeback. In fact, PacMan is a featured game on Xbox Live Arcade. So what’s up with gaming? What are the trends, and how do they benefit startups, and, most important, what are the must-have games for the holiday season? Sit back, sip some eggnog, invite a friend or two over, and let’s jump into gaming.

Ho Ho Ho. Microsoft Gets Social — Our Game Plan for a Connected Entertainment Experience

Party of one? Rarely happens. Entertainment is becoming a shared, connected experience. A social experience. In fact, we envision a time when all gaming and entertainment services will be connected. Imagine this scenario: A gamer starts a connected game on her Xbox at home, continues it on the cell phone in the cab on the way to the airport, and finishes it up on the plane by plugging into the armrest. It’s increasingly about a social experience — and it’s not just male-dominated anymore.

By Ward Triplett and David Frese
McClatchy Newspapers

Some day soon, the television and the personal computer will be nearly indistinguishable.

It’s happening before our eyes. We’re able to time-shift when we watch “Heroes” on our digital video recorders, and we’re sneaking peeks at snippets from last night’s “Colbert Report” on YouTube. To say nothing of downloads for our iPods.

Not one to overlook an audience (or a revenue source), the networks are taking their first steps in streaming video of old episodes of our favorite shows. We took a quick tour of the networks’ sites, and here’s what we found.

But first, a couple of notes: Some of this content is changing daily, so what’s here today may be gone later today. Plus you’ll need a broadband or high-speed connection. And sometimes even that’s not enough to watch the videos uninterrupted.

Sales of mobiles phones in China rose by 40%, to 120 million handsets reported the official Chinese news agency, Xinhua, citing the deputy chief of the China Mobile Communications Association Xie Linzhen.

Xie also stated that sales are expected to rise further this year, to 150 million handsets. China manufactured some 450 million handsets last year, with 350 million being exported.

According to the Ministry of Information, foreign handset vendors such as Nokia and Motorola hold the lion’s share of the market, while local mobile phone makers sold only 50 million handsets to domestic and overseas markets.