Merc News Archive

Published: Wednesday, November 29, 2006

Me? I'm between jobs until the Zune incentive program rolls out

By JOHN PACZKOWSKI
When Zune, Microsoft's shameless imitation of the iPod, arrived at market a fortnight ago, it was as notable for the features it lacked, as it was for those it offered. Absent from the device was a promised DJ setting, which would have allowed Zune owners to wirelessly DJ music to up to four other Zunes. Also missing was support for wireless syncing with Wi-Fi-equipped PCs and wireless access to the Zune Marketplace. Finally, Zune's "vertically integrated music ecosystem" lacked its rumored incentive-based super distribution system -- a program that would have compensated people for Zune-to-Zune sharing. The absence of this system from Zune was particularly notable, since it seemed the only breakaway feature the device had over the iPod. So it was interesting to hear Microsoft's J Allard discussing it in public recently. Appearing at the Music Tech Summit in Seattle, Allard talked up the idea of encouraging Zune owners to share music by offering them a sales commission in Zune Marketplace Points. The super distribution system he described was remarkably similar to the one used by Weedshare. Which makes perfect sense, really, because Microsoft has applied for the patent that describes it.

Patent No. 10/326678: "Redistribution of Rights-Managed Content and Technique for Encouraging Same" -- which, incidentally, figures prominently in a Microsoft Research whitepaper on digital media sharing commissions -- describes a system that adds tracking data to DRM-protected media files when they are purchased and uses that data to assign incentives, such as commission payments, when the files are shared with and re-purchased by others. It was originally developed by John Beezer, president of Shared Media Licensing, Weedshare's parent company. But Beezer later assigned his rights to it to Microsoft, which has since applied for its own patent on it.

Now here's where things get interesting. A source with direct knowledge of the transaction tells me that Microsoft signed a patent non-assertion agreement that grants Shared Media Licensing the rights to exploit its patent and any patents related to it without fear of legal repercussions. So if Microsoft should roll out a Zune compensated sharing program based on it, Shared Media Licensing and Weedshare already are in a unique position to leverage it for their own benefit.

Bryan Lee, Corporate Vice President, of Microsoft's entertainment business and Allard did not respond to my requests for comment on incentive-based sharing and Microsoft's patent non-assertion agreement with Shared Media Licensing, and the Microsoft spokesperson I did chat with was ... uniquely unhelpful. So I have nothing official from Microsoft on this other than Allard's comments at the Music Tech Summit. That said, there seems to be plenty of evidence to suggest that compensated sharing will be part of the core Zune product strategy and that it will likely be very similar to the system we see today in Weedshare, but perhaps a bit broader. Think super distribution. Think games. Software. Video.

And where does this leave Shared Media Licensing and Weedshare? In a very interesting position, should all this actually come to pass. Certainly, there are worse places to be than holding the rights to exploit the intellectual property on which a core feature of a major Microsoft product is based.
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Q  U  O  T  E D "If you make a film and you're having a hard time getting people to see it, break it into six chapters and throw it up on YouTube. There's a good chance somebody will see it." -- Director Kevin Smith sketches out his comeback plan after the unnecessary sequel to his 1994 hit "Clerks." Comment on this post

So where'd you find this copy of napsterbizplan.torrent anyway? Sticking feathers up your butt does not make you a chicken. And, as Napster knows, wrapping good intentions around software widely used to distribute pirated digital media does not make you a successful legitimate business. Which is something to keep in mind today in light of the latest announcements around BitTorrent's "legitimate" media store. This morning the company behind the Web's most popular peer-to-peer application, announced a number of new content deals that will add programming from Fox, Paramount, Kadokawa Pictures USA, Lions Gate Entertainment and Starz Media to its library of licensed digital content. When BitTorrent's new service debuts in February, it will allow users to download film titles likes "X-Men: The Last Stand" and "Mission: Impossible III," as well as popular TV shows like "Prison Break," "South Park" and "SpongeBob SquarePants." Quite the coup for a company which was once an entertainment industry pariah. "This demonstrates that we're being very successful in bringing on partners to use BitTorrent for reaching our audience with their content," said Ashwin Navin, president and co-founder of BitTorrent. "I think our users will be very excited by the nature of the content we're acquiring. It's relevant to our audience and will be programmed for their benefit."

BitTorrent hopes these new content deals will help it convert pirate downloaders into paying customers. And it's convinced that even a small conversion rate -- say 10% -- will ensure the success of its new venture. But can it really transition from unlicensed free-for-all to paid service? Research from Parks Associates suggests it can be done. In a poll late last year, 13 percent of Internet users currently downloading movies using peer-to- peer services said they would pay $20 per film to do it legally; 18 percent of those downloading TV shows would pay $5. And 38 percent of people currently using peer-to-peer services would pay $5 for a movie. Compelling metrics, certainly, but the market is still gray. "It's going to confuse consumers that BitTorrent is this free, no-holds- barred, we-don't-care-if-it's-copyrighted place to share, then there's this paid, copy-protected area," Forrester Research analyst Josh Bernoff told the L.A. Times. "The problem is consumers are not convinced that paying for and downloading video is worth it. The other problem is it doesn't end up on the TV set. The mechanisms that do get it to the TV, like DVD burning, are not quite what they need to be."

Previously:

• Bram finally came around to our way of thinking after I threatened to eat his soul
• You're partnering with BitTorrent? Are you sure you're really a cable company?
• BitTorrent? That's the new Pan-Asian place on Hollywood, right?
• On the plus side, you won't waste eight hours unwittingly downloading the Swedish version of "Chronicles of Narnia"

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Google Answers: Blowin' in the wind:

Question: What has happened to Answers?

Answer: There is no answer at this time.

-- A question posed by a Google Answers researcher in late October.

Since its launch in 2005, Google Answers has provided responses to innumerable questions of import -- "How is synthetic urine manufactured?", "Can a liver move in the fridge? " "Give me one good reason not to drink water emitted by my air conditioner" -- but in the end it was unable to answer the toughest question of all: Why isn't our Q&A service as popular as Yahoo Answers? And so this morning the company said it plans to scuttle the social search service, which allowed people to submit questions that researchers answer for a fee. "Google is a company fueled by innovation, which to us means trying lots of new things all the time -- and sometimes it means reconsidering our goals for a product," the developers responsible for the service wrote in a post to the company blog. "Later this week, we will stop accepting new questions in Google Answers." Google didn't really say why it decided to drop the hammer on Answers, but the reason is obvious. It simply hadn't caught on. According to Comscore stats, the service is far less popular than Yahoo Answers, which has surpassed it to become the second most popular Internet reference site after Wikipedia. In June, Yahoo Answers attracted 12.3 million unique visitors. During the same period, Google Answers attracted only 947,000. That's a quite a difference and one that surely played a role in its sudden retirement. But it can't be the only approach in the hopper. Google isn't a company that easily admits failure, and social search is far too important to its core mission for it to abandon. It's undoubtedly got a follow-up to Answers in development, one that will be far more useful, far more efficient than its predecessor.
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And just when the Great Leader needed to replace that plasma screen he ruined with "Missile Command" burn-in: Well, if North Korea's Kim Jong Il didn't think we were serious about curtailing all that atomic stuff, he certainly knows the score now -- we're cutting off his toys. In what are apparently the first U.S. trade sanctions ever custom tailored to annoy a specific foreign leader, the U.S. will ban shipments of all the accessories of the high life. According to our best intelligence, Kim likes gadgets, so no more iPods, plasma TVs or Segways. He likes basketball and music, so no more sports equipment or instruments. He likes a lifestyle that's just a notch above his citizens, so no more cognac, Rolexes, cigarettes, artwork, Cadillacs, Harleys or Jet Skis. All of which makes for good copy and accomplishes virtually nothing, except maybe put a slight crimp in the supply chain of fancy gifts that Kim likes to bestow upon the faithful. "It's a new concept; it's kind of creative," said William Reinsch, a former senior Commerce Department official who oversaw trade restrictions with North Korea during Bill Clinton's presidency. "The problem is there has always been and will always be this group of people who work at getting these goods illegally." And you have to believe if Kim's cadres can get him a nuclear weapon, they can darn sure round up a few iPods.
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Off topic: Manchester Bollards. In Manchester (UK), the local city council installed moving bollards to prevent commuters in cars from using bus lanes with catastrophic results. (Thanks, Random)

Send $2310 Stokke Gravity Chairs to Jpaczkowski@mercurynews.com.

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