DVD profit margins double that of VHS

Found on Ars Technica on Friday, 01 April 2005
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Between 2002 and 2003, MGM saw a 40% boost in DVD shipments in North America, and 53% increase worldwide. One slide shows just how quickly DVD has caught on: it took only five years for 30 million DVD players to be sold, compared to circa 8 years for CD players, and 10 years for PCs to reach that volume. All of this translates into a booming market, which helps explains the considerable profit margins attached to DVDs. This slide indicates that net profit margins on DVD sales are 50-60%, while the lingering VHS business sees 20-30% net profit. To put this into plain English, your average $20 DVD apparent costs around $9 to produce, advertise, distribute, etc., leaving about $11 on top as pure profit. For an industry supposedly under dire threat from piracy, things look pretty rosy.

One thing is certain: these DVD numbers clearly show that people want to pay for compelling content. DVDs are superior to VHS in every way (save their oppressive encryption), they're roughly the same cost to produce as VHS is these days, but many people are willing to pay more.

So much for all statements claiming that P2P hurts their sales and drives them into bankruptcy. More than 50% profit per DVD isn't bad; probably even more, because if a DVD costs $9, how can some shops sell DVDs cheaper than that? Or even give them away for free in magazines?

Lethal computer virus spreads in humans

Found on SC Magazine on Thursday, 31 March 2005
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The first computer virus that passes from PCs to humans has been discovered in the wild. Leading anti-virus firms are putting users on high alert after Malwarlaria.B was spammed worldwide in the early hours of Friday morning.

"We've had proof-of-concept examples of this for some months now," said Avril Poisson, principal analyst at industry watchers Willwisp. "But disinfection is hard to achieve because the virus mutates so quickly. This is truly a significant and worrying development."

Another version of the virus, Malwarlaria.C is prevalent in rodents and can infect users through the mouse. As yet it had not been found in the wild, but users are advised to switch to touch-pads.

"Anti-virus vendors have been caught on the hop here," said SC technology editor Jon Tullett. "I've seen many viruses in my time, but truly, this one is different gravy."

That's got to be one of the most obvious jokes. Yet, quite a bunch of people will fall for it.

Secret Services Cracks Encrypted Evidence

Found on Slashdot on Monday, 28 March 2005
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The Washington Post offers this writeup about how the U.S. Secret Service uses a Distributed Network Attack program to crack encryption on computers and drives seized as evidence. How can brute force still succeed with 256-bit encryption, you ask? Customized password dictionaries from the seized computer's email files and browser cache: People still use non-random passwords.

Good to know. And hooray for passphrases with more than 30 characters (which aren't only alphanumeric of course) and Blowfish-448. The weakest point is always the user; eliminate the user, eliminate the weakness.

Oh, and on a side note: I was planning to link directly to the Washington Post, but getting bombed with cookies and a forced registration doesn't win my sympathies. So this link goes to Slashdot instead.

SCO Uses Legal Documents from Groklaw

Found on Groklaw on Saturday, 26 March 2005
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Well, well, what have we here? SCO has put up its own legal documents page after all. Evidently the generic brand anti-Groklaw websites that coincidentally sprang up just when theirs didn't were not a huge success.

All they have there so far are some of the legal documents in all their cases. But Frank Sorenson noticed one little thing: it appears the defenders of their most holy IP grabbed the PDFs from Groklaw and Frank's tuxrocks.com site, without giving us credit for doing the work of obtaining the documents from the court and scanning them to create the PDFs. Oops.

You can check Groklaw's IBM-156 and Declaration of Ira Kistenberg as well. Now, Frank and I have spent good money obtaining those documents, money that SCO didn't have to spend, because they get all the documents for free. And Frank and I both go to a lot of trouble to make these available to you. SCO, instead of scanning them in themselves, evidently grabbed Frank's work that he did for Groklaw and his own site.

"Do as we say, don't do as we do"? Quite a shining example... Anyway, who cares about the claims SCO makes and yet doesn't want to prove? Not me.

Orrin Hatch In Charge Of Writing Copyright Laws

Found on Techdirt on Saturday, 19 March 2005
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You may remember Orrin Hatch from such backwards thinking proposals as destroying computers of any copyright violator or telling the FBI they should work on civil copyright cases or (most recently) his plan to make the iPod illegal with his INDUCE Act (though, he eventually agreed to exceptions for the iPods, plenty of other technologies would become illegal overnight). He's also the guy who tried to defend the INDUCE Act by admitting it might not be a good idea, but he that's fine as long as he does something. Yes, he believes in legislating for the sake of legislating even when it might make things worse. Well, it now turns out that good old Senator Hatch has been put in charge of the Senate panel that writes copyright laws. In other words, we should have another couple years of silliness in copyright laws coming out of the Senate.

Oh joy... Be ready for some amazingly stupid ideas.

Hobbit Movie in Four Years?

Found on Slashdot on Friday, 11 March 2005
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At the Powerhouse Museum LOTR Exhibition in Sydney, Peter Jackson has said a film version of The Hobbit is three years away at least. Reasons for the delay include the sale of MGM, which part-owns the movie rights to The Hobbit, and Jackson's recently filed suit against New Line Cinema, the other part-owner. Jackson is currently filming King Kong at his new facility in Wellington, NZ. Slashdot readers will also be interested in the high security planned for King Kong's pre-release screenings.

And when is the Silmarillion planned to be turned into a movie?

Protection management, copy control

Found on The Inquirer on Friday, 04 March 2005
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This week, in Dublin, the Digital Video Broadcasting Project held its annual meeting to discuss progress on its latest set of specifications for digital television. Much of its work has to do with technical details such as codecs and data formats, but a key section called Content Protection/Copy Management (CPCM) is about controlling how high-definition digital broadcasts may be recorded, copied, or redistributed.

It was a week of culture clashes. My favorite was when one of the Disney people asked two Flemish public TV broadcasters whether having their content redistributed online wasn't a problem for them. Most surreal was the man from the MPAA talking about "social justice" with respect to pay TV subscriptions.

CPCM is intended to create a trusted system analogous to Microsoft's trusted computing platform – now known as Next Generation Secure Computing Base. Commercial content is acquired from a broadcast, data stream, or shrink-wrapped medium. It comes wrapped in metadata known as USI (for Usage State Information) that specifies how the content may be used: for example, how many times it might be viewed, how long it can be kept available, whether it can be copied, how it may be output, and so on.

So, because the entertainment industry doesn't want to accept media sharing (it's not like they don't make money anyway), the end user has to suffer. It is perfectly legal to record TV/radio shows for personal use. But with CPCM, people get restricted. Broadcasters might decide that you can watch your recorded show just 3 times. This will of course lead to the development of workarounds.

Music download prices to rise

Found on The Register on Monday, 28 February 2005
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The market for downloaded music is strong enough to take a price rise, according to the major music labels.

Several big labels are in talks with online music retailers to get them to increase prices,according to the FT. The labels are looking to increase the wholesale prices shops pay for tracks. Sites in the US typically sell tracks for 99 cents each. The wholesale price is currently 65 cents per track, according to the FT.

Universal and Sony BMG are less keen to put prices up. EMI and Time Warner refused to comment on the FT story. Some observers are concerned that increasing prices would push people back to peer-to-peer networks and dodgy copies of songs.

Granted, I'm not a certified salesman and business strategist, but this idea doesn't seem to be powered by intelligence. If people can get something for free, it might be unwise to make the commercial alternative even more expensive. Maybe they mixed up "price rise" with "price drop". I can already see the next news: "The music industry complains that after a remarkable price increase for crippled DRM music, people switch back to download free MP3s from P2P networks".

Adware maker gets job with Homeland Security

Found on The Inquirer on Thursday, 24 February 2005
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Purveyor of adware, Claria is going to give advice to the Department of Homeland Security on privacy matters.

According to CNET, Claria, formally called Gator, is to sit on a 20 person committee which will look at how Homeland Security does its job while protecting the privacy of US citizens.

The company knows a lot about privacy. Users branded it parasitical because its pop-up ad software was installed without adequate permission and hard to delete.

Catalogue retailer L.L. Bean sued Gator for alleged trademark infringement. In February 2003, Gator settled a case brought against it by The Washington Post, The New York Times, Dow Jones and other media companies. It was also at the centre of several German court injunctions.

Now that's an oxymoron if I ever saw one.

L33tsp34k for the luddite classes

Found on The Register on Thursday, 17 February 2005
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Microsoft has published a parent's guide to online slang, and we were unable to resist it. It aims to educate confused parents about the wacky online world their kids inhabit, so that mums and dads across America don't freak out when they spy on their offsprings' email, and can't understand a word of it.

The guide begins: "While it's important to respect your children's privacy, understanding what your teenager's online slang means and how to decipher it is important as you help guide their online experience."

The intention behind it may be good, and who can blame parents for wanting to make sure their kids are safe online? But the whole thing conjures up images of middle class parents trying to converse with their children in "leetspeak" over breakfast.

This must be the funniest article MS ever wrote. Imagine a bunch of parents with a 1337-english/english-1337 dictionary, trying to impress their kids...