Video Downloads Future Threatens Internet and Hollywood

The technologies of television and the internet are converging. This trend has been obvious for ten years. The rapid adoption of HDTV is currently driving the growth. Most customers of a fine video system want to take advantage of the associated benefits, including high definition audio, and merging their computer systems with the theater.

The primary forces impacting this trend include internet capacity constraints caused by video download demand, property rights of the movie producers (and the technical solutions), and an analysis of the who is likely to reap the financial windfall from it all.

Do We have the Internet Bandwidth to Support Downloaded Movies?

According to Google, the popularity of video downloads, especially High-Def downloads, could overwhelm internet bandwidth capacity. Services such as YouTube (owned by Google) are problematic, and new developments could create even more problems.

Joshua Danovitz, general manager and vice-president international for TiVo, said the issue of download limits differs in each country. In the United States and Asia, where bandwidth capacity is still available, users have few constraints (though not truly unlimited), while other countries, including Canada, ISPs are restricting users to some degree. The problem will only get worse with the increased popularity of video downloads. Currently, more than half of internet bandwidth utilization in the United States is peer to peer, and most of that is video download.

Time Warner said that it was going to start testing a new rate plan in Beaumont (Texas) that would limit the amount of bandwidth each customer can use each month before additional charges applied. New plans would offer between 5 gigabytes and 40 gigabytes of download a month. The top plan would cost roughly the same as the company's highest-speed service ($50 and $60 a month).

Time Warner wants to test bandwidth limits to crack down on a minority of customers who are heavy downloaders. Only five percent of Time Warner's customers use over half of its total bandwidth.

Bell Canada has imposed bandwidth limits on its customers. Bell Canada charges as much as $7.50 for each gigabyte when customers exceed the 30-gigabyte limit on a plan that costs about $30 a month. Since the average high-definition movie is 4 gigabytes to 5 gigabytes, that would mean a charge of at least $30 a download for customers on a plan like that who were over their limit.

On more expensive plans, the over-limit charges at Bell Canada are as low as $1 a gigabyte. That would represent a $4 to $5 charge for an HD movie for people over their monthly limits. Standard-definition movies are typically 1 gigabyte to 2 gigabytes.

A lot of the movies are not downloaded from authorized vendors.

Property Control (reference: Downloaded Music)

One fifth of U.S. citizens have pirated a major film and two thirds of this group have downloaded a film at least monthly. 80% of overall movie downloaders use unauthorized services to get their movies for free, as opposed to using a legal solution. The RIAA and MPAA have already resorted to legal action against thousands of U.S. citizens.

If we assume a parrellel path with the audio recording industry, then the business implications are huge. MP3 players have now been around for about 10 years. Audio CD sales are down about 15% last year, 20% in 2006. The best estimate is that only about 42% of music acquisitions being paid. NPD (a retail tracking group) estimates that one million consumers "dropped out of the CD buyer market" in 2007, a trend led by teenagers, 48% of whom did not purchase a single CD in 2007.

Thomson is exploring methods for preventing bootlegging by the covert camcorder user. The company's technique involves inserting "artifacts" (extra frames, flashes of light, pixelated grid patterns, etc.) into the movie before it's shipped to theatres. The idea is to mark a camcorder recording without degrading the images moviegoers see.

The artifacts exploit the differences in the way a human brain and a camcorder receive images. In the technique that's furthest along, extra frames with the words like "Pirated Copy, You Are Scum" are inserted into the frame. These warning words appear at a frequency too fast for the human brain to process, but they will appear in a camcorder recording.

From a technical standpoint, it is probably impossible to completely prevent users from making copies of the media they purchase, as long as a "writer" is available that can write to blank media. The basic technical fact is that all types of media require a player. The player has to be able to read the media in order to display it to a human, then a player could be built that first reads the media, and then writes out an exact copy of what was read.

In practice, almost-perfect copies can typically be made by tapping into the analog output of a player (e.g. the speaker output or headphone jacks) and, once redigitized into an unprotected form, duplicated.

Since these basic technical facts exist, it follows that a determined individual will definitely succeed in copying any media, given enough time and resources. Media publishers understand this; copy protection is not intended to stop professional operations involved in the unauthorized mass duplication of media, but rather to stop "casual copying".

Copying of media which is downloaded (rather than being mass-duplicated as with physical media) can be inexpensively customized for each download, and thus restricted more effectively. They can be encrypted in a fashion which is unique for each user's computer, and the decryption system can be made tamper-resistant.

Publishers of music and movies have turned to encryption to make copying more difficult. CSS is a form of copy protection that uses 40-bit encryption. Copies will not be playable since they will be missing the key, which is not writable on DVD-R or DVD-RW discs. The work is encrypted using a key only included in the firmware of authorized players, which allow only legitimate uses of the work (usually restricted forms of playback, but no conversion or modification).

The Digital Millennium Copyright Act would make it illegal to distribute unauthorized players was supposed to eliminate the possibility of building a DVD copier. However, encryption schemes designed for mass-market standardized media such as DVD suffer from the fundamental weakness that once implemented, they can never be changed without breaking the standard. Manufacturers have been prevented from enhancing their DRM technology until recently, with the release of next-generation media such as HD DVD and Blu-ray Disc. This period represents more than enough time for the encryption scheme to be defeated by determined attackers. For example, the CSS encryption system used on DVD Video was broken within three years of its market release in November 1996 (see DeCSS), but has not been changed since, because doing so would immediately render all DVD players sold prior to the change incapable of reading new DVDs. This would not only provoke a furious backlash amongst consumers. More recent DVDs have attempted to augment CSS with additional protection schemes. Most modern schemes like ARccOS Protection use tricks of the DVD format in an attempt to trip up pirating programs, though it is noted that any scheme must stay within the bounds of the DVD Video format, limiting the possible avenues of protection and making it easier for hackers to learn the details of the scheme and find ways around it.

HD DVD and Blu-ray Disc, attempt to address this issue. Both formats employ the Advanced Access Content System (AACS), which provides for several hundred different encryption keys, each of which can be invalidated should one of the keys be compromised. Revoked keys simply will not appear on recorded discs, rendering the compromised players useless for future titles unless they are updated to fix the issue. For this reason, all HD-DVD players and some Blu-ray players include an ethernet port, so that they can download updates. Blu-ray Disc goes one step further with a separate technique called BD+, a virtual machine that can execute code included on discs to verify, authorize, revoke, and update players as the need arises. Since the protection program is on the disc rather than the player, this allows for updating protection programs within BD's working life by simply having updated programs included on newer discs.

The Rich Get Richer

Everyone from Apple and Microsoft, and smaller companies such as TiVo and Netflix, are marketing their version of the "digital living room". Since the software is the most challenging (read value add) component of these systems, the author believes companies with a track record of success in the software arena are likely to end up on top.

These home theater systems are basically PCs designed to be connected to home theater systems. One benefit is the ability to access and use all your home media files in the living room, on the big screen. These systems have been poular for dire hard enthusiasts, but are only now becoming mainstream.

Microsoft

Windows Media Center (included on premium editions of Windows Vista, Vista Home Premium and Vista Ultimate) is critical in Microsoft's vision of the digital lifestyle that the company aims to push as a standard of entertainment for consumers. This in the context of the intimate connection between the Windows client and Windows Media Center, but also because of Microsoft's strategy focused on connected entertainment.

With the addition of a TV tuner card, Media Center can play back and record TV shows from a High-definition TV, Digital Cable (1080i Premium HDTV), standard antenna, cable, or satellite signal.

Like TiVo, Windows Media Center allows fast-forwarding through commercials of recorded programs. Some users deliberately wait 10-15 minutes to start watching a program in the live buffer so they can fast-forward through the commercials and catch up to "live TV" by the end of the program.

Commercials can be skipped automatically (not supported by Microsoft) by installing external plug-ins like DVRMSToolbox or Lifextender.

The problems that Microsoft Vista has experienced are well documented, but buggy software has never prevented Microsoft from dominating other software applications.

Our Recomendation: use XP MCE until Vista gets the bugs worked out.

Apple

Owners of the Apple TV set-top box are able to rent movies directly from their living rooms and begin watching them within minutes. "It will do for movies what iTunes has done for music," said Michael Gartenberg (JupiterResearch).

Apple will offer about 1,000 movies, 100 of them in high-definition. The new service will also offer movies from all the major studios. That's a big step, Apple has also tried to make Apple TV easier to use.

Apple faces more competition than it did when it launched the iPod. There is Sony, with its PlayStation 3 and Blu-ray disc players, and Comcast, which plans to offer 6,000 movies on demand each month, including more than 3,000 in high-definition.

Even the local Blockbuster has a larger selection of videos for rent than Apple, said John Barrett, director of research at Parks Associates, a market research firm focused on emerging technologies. And instead of worrying about a movie expiring within a day of starting to watch it, as with iTunes, Netflix customers can hang on to movies rented from its service for practically as long as they like, Barret added.

Should Apple's product prove popular, cable providers are likely to start integrating similar features into their set-top boxes.

Summary

It is likely that at least 3 main players will emerge over the next 5 years. It's a good bet that Microsoft and Apple will be competitive.

Since the product life of this type of system is 5-8 years, if you are in the market now, you can judge the winners on your next purchase. There will always be rationales for waiting. If you are building a World Class Home Theater, procrastination is not an option.

About the Author: Brian Bradshaw is a Certified Technical Specialist (InfoComm CTS). Areas of expertise include Audio, Video, HDTV, Satellite Systems, Computation, and Communications. He has a communications technology business in Plano, Texas (Dallas). More information can be found at his Website.

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Music Licensing

Music licensing can be a very confusing subject. My intent with this article is to give you enough details on what music licensing is and what are your rights to use music in advertising and / or video productions.

A few months ago I was contacted by a company that was celebrating 20 years in business. They wanted to put together a radio commercial that highlighted their celebration. Their request was to use Kool and the Gangs song Celebration in their radio spot. I explained to them in order to do this they would have to obtain a licensing which would cost them quite a bit of money. This was not an option for them due to their limited budget and ultimately they told me that they went another direction with their advertising.

If I had agreed to use this song without obtaining a licensing I would have put both of our companies at risk. It was not worth the risk just to make a sale. Beware that there are unscrupulous production companies that will do this type of illegal activity so the best protection you have is knowledge.

The copyright law protects writers of music by giving them exclusive right to their music. Once a piece of music is under copyright protection it is illegal to use it without getting permission to the owner of the copyright.

There are actually two types of copyrights in the United States. One is the actual copyright which is denoted with the familiar C with a circle around it. This protection is for the actual melody, lyrics and arrangement of the music. The copyright is usually owned by the actual artist that wrote the piece or their publishing company.

The second form of copyright is the actual recording itself. This is denoted by a P with a circle around it. This protection covers the performance of the song caught on tape or digital media and released on CD or other media. Many times a record or production company will own this performance right.

If you want to use a song in a production, you need obtain a Master Use license from the owner of the copyright and a Synchronization license (often called a sync license) from the owner of the performance of the song.

The fees for synchronization licenses vary greatly. Low-end TV usage (music is playing from car radio in a scene) can cost up to $2,000. In a film, the fee may be as high as $10,000. A popular song is worth more, possibly $3,000 for TV and $25,000 for film. A song used as the theme song for a film might get $50,000 to $75,000. Commercials can get even more money. Fees for a popular song can range from $25,000 to $500,000 plus per year. The typical range for a well-known song is $75,000 to $200,000 for a one year national usage in the United States on television and radio.

I think you will agree with me that that is allot of money and usually way over budget for many video and radio productions.

To get around these outrageous fees, music production companies sell buyout music. When you purchase a buyout CD you do not need to obtain a licensing to use the music. You can use the music hassle free and at a much lower cost.

Buyout music or royalty-free, as it applies to my products, means that for your one-time purchase price, you can legally use the music in your productions for life of ownership. All copyrights of the music remain with Zebra Music LLC. My jingle licensing agreement allows a protected area of 200 miles. By doing this no other companies in a local market will have the same jingle.

Many other production companies offer a similar buy out music licensing. I would advise you to read the licensing agreements with other production companies and ask questions if you have concerns.

Network broadcast and international broadcast of buyout production music is cleared through a performance organization (like BMI or ASCAP). The revenue that these songs produce when they are aired is paid directly from broadcast station licensing, NOT from you as a producer. These performance organizations then in turn pay each artist based on the amount their song or songs were aired on the radio or TV.

I hope this article has cleared up any confusion or questions that you have had about copyright and music licensing.

***************************************

Steve Veloudos owns and operates Zebra Music LLC. Its a one stop shop for jingles, radio production, custom music, library music, and sound design. Visit Steves web site and get free monthly music that you can use for your productions.
http://www.zebramusic.com

zebra24@msn.com

480-540-7768

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Where Movies and Video Games Collide

Hollywood and the video game industry have never been more closely linked than they are now. In the multibillion dollar entertainment industry, the producers of both media are looking to each other to maximize the profit that can be realized from a single idea.

Research seems to indicate that Hollywood was the first to dip into this incestuous pool. Super Mario Bros, the first major commercial success for a home gaming console in the mainstream, exploded onto the scene when it was bundled with the original Nintendo Entertainment System. While there had been some direct to video or TV movies made from video game titles previously, Super Mario Bros was a major studio blockbuster. It was unsuccessful at the box office, as fans of the game found it to have been an unfaithful adaptation of the games' storylines and characters. The mid-90's also spawned movies based on the era's most popular fighting games, such as arcade favourites Double Dragon, Street Fighter and Mortal Kombat. None of these movies did particularly well, and it was 2001 before Hollywood had a bona fide success in the video games to movies gamble with Lara Croft: Tomb Raider. Lara Croft, a sort of sexy, young, female Indiana Jones type of character with a penchant for high-tech gadgets and short shorts came to fame in video games designed for the PC and the Sony Playstation. The Tomb Raider movie, produced by Paramount, is still the highest grossing movie based on a video game to date. The reason for the sudden success of a video game based movie seems clear: the Tomb Raider games had cinematic storylines and a leading lady that seemed made for the big screen. The filmmakers didn't have to force her into the format - video games had started to become more sophisticated. Lara Croft: Tomb Raider was followed by movie versions of major game franchises like Resident Evil, Alone In The Dark and Hitman, to name a few, and even more are currently in production.

As video games became cinematic in their own right, it seemed natural that the adaptation bandwagon should go both ways. Particularly now, with video game consoles that have graphics that rival the best digital effects found in Hollywood's bag of tricks, there doesn't seem to be a major blockbuster release without an accompanying video game. Action movies, specifically, seem to be tailor made for the format and if you check the shelves of your local video game shop, you'll find familiar titles like Spiderman, Pirates of the Caribbean, Harry Potter and Star Wars. In most cases, the game is an adaptation of the plot of the film, but some movie franchises have video game offshoots whose content is only based on an aspect of the films and includes elements or characters only alluded to in the original source medium. Some examples of this are games like Harry Potter: Quidditch World Cup, which is based on the flying broomstick sport from the popular series, and several Star Wars titles that expand the universe of the films, including Knights of the Old Republic and Battlefront.

While many video game purists decry these movie adaptations as rubbish, for the most part, they still sell very well and are popular among more casual gamers. As such, it looks like video games of movies are here to stay... just like movies of video games.

Dominick Dunne, an Exclusive Interview about His Remarkable Life

Noted novelist and Vanity Fair columnist, Dominick Dunne, has lived a life most people would find suitably fictitious, but hopelessly short on chance.

Its packed with a remarkable range of diversity, adversity and a Blackberry with an endless list of the names and phone numbers of everyone who is someone in the world of celebrity. Yet as glamorous as its been, it hasnt been all tinsel and glitter for Dominick Dunne. On the contrary, he has persevered through unimaginable suffering to emerge Phoenix-like to become one of todays true literary American icons.

He exclusively recounted his extraordinary life to me in a remarkably revealing interview.

For this indomitable soul, life has been like biking down a washboard dirt roadjarring, scary and impossibly thrilling. Hes seen the world from envied pinnacles, and valleys so low they blister the imagination.

Hes a straight-talking Nutmegger who suffers no charlatans and lays bare the wicked. The latter he does with abandon. He seeks justice incessantly, a wearisome passion spawned by cruel and wrenching personal tragedy.

His accounts of celebrity trials in novel form have been read by millions, and his many columns about the well known and well-to-do have been de rigueur for countless readers of Vanity Fairs cologned pages.

Nick's roots and family are classically New England. His well-heeled parentshis father a famous heart surgeon, and his mother a prized debutantewere both Connecticutters.

They were aristocratic, but lacked the necessary pedigree to be granted bona fides to be listed in the Social Register. As wealthy Irish Catholics, they found themselves ever on the cusp of a Hartford society whose true wink-and-nod acceptance they could never gain.

Anxious to leave Hartford after World War II, during which he won a bronze star for heroism, Nick was drawn first to New York's TV lights, and then to Hollywood's garish lights. There he carved out a niche among movie stars and heartily indulged his obsession: celebrity.

His fabled Hollywood life began as a fluke and mushroomed in stature to others biting envy. An invitation to one of Nick and wife, Lennys, parties was highly prized. But, as glorious as it was, it all ebbed badly, and the low tide that quickly followed reeked.

Hollywood was and is a social bonfire. Dominick Dunne played with it and suffered third-degree burns to 100% of his psyche.

It would become a large back-monkey; its addictiveness both potent and consuming. And addiction to that led to dependence on alcohol and cocaine. That volatile mix in turn put loud, scandalous wordswords derogatory, yet honest, about some well-known people--in Nicks mouth at well-attended cocktail parties. The Hollywood elite was not amused and it characteristically rejected him.

Bitter, depressed and blackballed, Nick slumped into an old Ford and headed due north to the Cascade Mountains for wound licking, respite and introspection. But a flat tire intervened, and for the ensuing six months he lived in an Oregon cabin with no phone and no TV. More importantly, there was no booze, no cocaine and no Hollywood.

During that half year, Nick reclaimed his life and essence, and re-sculpted his raison detre. He also vanquished the back-monkeys on his own with nothing to numb withdrawal's nagging sting.

Ready to fledge for a new life, instead of returning to Hollywood, he headed to New York and Connecticut, where destiny was pouring the foundation of his future.

Connecticut wasand still is todayDominick Dunne's home. He has a New York apartment, the necessary perch from which to spy the glitter, but it's in Connecticut that he prefers to write his novels, and it's easy to see why. There's distinct serenity at his cozy and inviting house; a Corinthian oasis filled with books of all manner and description.

Having endured what Nick has, a tailpipe hosing would seem the only painkiller to others more brittle. But not for him, not that he didnt mull it. His brothers suicide, however, stymied that notion. Instead, he broke through unthinkable gloom and despair to become one of America's most popular authors and columnists, and the reporter du jour on the Larry King Show during the O. J. Simpson trial.

The complete interview, conducted and written by James Hyde, author, award-winning writer and syndicated columnist is on http://www.NewEnglandTimes.Com, an ezine covering travel, tourism, real estate and famous New England lifestyles. The entire interview about which he writes here can be read at http://www.newenglandtimes.com/dominick_dunne/dd_index.shtml It recounts the rise, fall and rise again of a remarkable, persistent and funny man who has thrilled us for years with books about the crimes and punishment of the rich and famous.

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George Lucas' Success Story

"Everybody has talent. It's just a matter of moving around until youve discovered what it is."

Growing Up

Lucas was born on May 14, 1944 in Modesto, California. He did not excel in high school, but dreamed of being a race car driver. A serious car accident that collapsed his lungs and kept him in the hospital for three months changed his mind about his career choice. He decided then to stop living dangerously, work hard and try to make something of himself.

At Modesto Junior College, Lucas became enamoured with cinematography and settled on becoming a filmmaker. He was accepted to the University of Southern California and Lucas' life was suddenly immersed in film. While at school, he worked on documentaries and made abstract science fiction films (one of which, "THX-1138", would be remade with Warner Brothers backing and released in 1971). These early films were seen and praised by Francis Ford Coppola who in turn invited Lucas to sit in on the filming of "Finnian's Rainbow".

Starting The Business

Lucas' "THX-1138" did not perform exceedingly well at the box office and reviews were middling and the film earned him the reputation of being a technical director lacking in humour and emotion. However, his talent was recognized by the studio and he was given $780,000 to make "American Graffiti", the movie that would launch him into stardom. It was released in 1973 and would gross $120 million.

Lucas felt betrayed by some minor changes that the studio made to his final cut. He became determined to get himself to a place where he would own his own cameras and the film he shot on and so have final say on everything.

While negotiating the contract for "Star Wars" in 1975, Lucas cut his director's salary by $500,000 and traded it for ownership of merchandising and all sequel rights, things the studios thought worthless at the time. The move would give Lucas the control he hoped for. "Star Wars" broke all box office records and the tie-in merchandise has brought in more than $4.5 billion over the last twenty-five years. Lucas now could go and freely make the sequels on his own.

He financed "The Empire Strikes Back" himself, getting loans totaling $30 million to get the film made. If the film were to flop at the box office, Lucas would be bankrupt, but the success of the first film encouraged him, and "Empire" and the second sequel, "Return of the Jedi" were both huge hits.

After producing the three Indiana Jones films and made more than $100 million from them, Lucas stopped making films and turned all of his attention to experimenting with digital technology.

Building An Empire

In 1975, Industrial Light and Magic was started because there was no special effects company that could handle creating the effects for "Star Wars". The first ILM innovation, the motion-control camera, allowed Lucas to simulate flight. ILM began accepting requests to do the special effects for other films. This helped fund Lucas research to improve the techniques he'd pioneered and experiment with new effects. At the cost of around $25 million for a film, ILM was an immediate success. Lucas took some of the profits and created Skywalker Sound which focussed on a film's sound in the post-production phase. And from this the THX digital surround sound system for home and public movie theatres was introduced. Later, LucasArts Entertainment got Lucas involved with video-game production, releasing games like X-Wing and Rebel Assault.

As Lucas began work on Star Wars: Episode I, The Phantom Menace, he marketed wisely and created excitement around the new film by re-releasing a special-edition of the "Star Wars" trilogy. The films earned over $475 million at the box office and got a new generation enthused about the films. Lucas was also able to finance the production of the Phantom Menace (for $115 million). Once again, this financial control would let Lucas have the final say. Its release in May of 1999 broke all box office records, earning $42 million on the first day alone. Episodes II and III have, profit-wise, followed suit.

Lucas is responsible for age of the blockbuster, the introduction of technology in cinema that enabled us to realize visions of a hyper-reality, and the popularization of the highly lucrative area of merchandizing. As a hard working risk-taker, confident in the quality of his product, he has been able to set his own high standards and change the nature of how Hollywood makes movies.

Evan Carmichael is an entrepreneur and international speaker. His webpage is among the top 10 Internet sites globally for entrepreneurship and contains profiles of famous entrepreneurs, lessons learned from successful business owners, and expert opinions and analysis. He also runs Entrepreneur Mastermind Groups to give business owners important insights from their peers into managing and growing a small company. Learn more at http://www.evancarmichael.com.