So long Media Centre

September 2, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Only a few years ago Microsoft trumpeted the Media Centre PC as the must-have consumer entertainment device. The software giant predicted that content owners and hardware manufacturers alike would join the rush to link the TV with the PC in every home.

That failed to happen in anything like the predicted numbers and, today, the very survival of the mass-market personal computer is under threat. What began with hobbyists assembling a potpourri of standard parts to provide basic computing power threatens to return to its roots, taking with it some of the biggest names in the business. Who will need a power-hungry processor and massive disk drive when all the applications and storage they need are up in the Cloud?

Much bigger and more imposing than a mere set-top box, the Media Centre’s shiny black case was intended to sit on the floor alongside the equally imposing large-screen tube TV. Add a remote control and wireless keyboard beside you on the sofa and the world of computing takes its rightful place in the consumers’ living room.

The Media Centre design provided for all manner of goodies to be crammed inside the box, ready to calculate spreadsheets, edit audio and video, compose emails and build custom databases by the score. When mum and dad tired of that, the built-in DVD player, large hard drive (for the time) and integrated TV tuner could provide entertainment until they dropped off. Who wouldn’t want one, at least until static electricity attracted dust to the black plastic case and the noisy cooling fan sucked up all the fluff from the carpet? The answer is very few people considered them and even fewer bought one.

Home Cinema enthusiasts would point out that the inside of a PC is no place for high-quality sound and pictures. Computer geeks said that they preferred to sit 18 inches from a giant screen and play Activision’s latest “Call of Duty” on the most powerful, hand-crafted collection of parts they could afford.

Six years after the Media Centre’s birth, the idea that the living room needs a stand-alone computer seems laughable, even to the most dedicated enthusiast.

Connected TVs are essentially computers linked directly to a large flat screen. Instead of putting it beside the TV, the PC has been miniaturised, placed inside it, and stripped of non-essentials, such as the ability to run an Office suite or complex business software. The connected TV fulfils the task expected of it in all but one area. Either the hard drive is relegated to a network-attached storage device elsewhere in the house or, more likely, it is located somewhere up in the Cloud.

The Sky +HD box and Virgin’s TiVo box are clearly exceptions to this trend but as with the general-purpose computer, the need for a dedicated box beside the TV is on the wane. In fact, the only peripheral intelligent device that should be allowed anywhere near the living room these days is the Blu-ray player, which one industry pundit describes as, “The Trojan horse that will keep physical media relevant for the next decade.”

Today the Media Centre and the PC itself are some way down the slippery slope to irrelevance, as smart devices sweep all before them. Figures released by research organisation IDC in July revealed that three vendors control almost 60% of the US market for personal computers.

Hewlett Packard (HP) tops the table, with around 4.7 million desktop and portable PCs shipped in Q2, 2011, just over 26% of the total market and almost equal to the number shipped in the same quarter of 2010.

In second place was Dell, with 3.9 million units sold in the period, although a 10.2% drop on the year before, it still held a 22% market share.

Apple was in third place with 1.9 million units sold, excluding iPads and iPhones. Significantly, Apple was the only company to show significant growth in Q2, 14.7% up on 2010 and taking its market share from last year’s 9% to 10.7% in the current year.

The data, however, also provided a warning for these companies, as well as for Toshiba and Acer, the next two vendors in the table.

IDC claimed that total US sales of PCs dropped by 750,000 units in the quarter, a fall of 4.2% compared with 2010. Comparable research by Gartner revealed a 5.6% fall in what it said was a smaller total market. Following this trend means that things can only get worse for the PC suppliers over the rest of 2011.

In August, HP shocked the market when it announced it would pull out of personal computing systems to focus on enterprise and public sector companies. A second shock was to follow. The long-anticipated HP TouchPad tablet, launched in June 2011, vanished in a puff of smoke on Aug. 18. At least, everybody thought it did.

In what must be one of the most confused marketing strategies of all time, HP launched its iPad competitor at $499, then deep-discounted, discontinued and re-launched the device in the space of two months.

At the current selling price of $99 (£89 in the UK), the Wall Street Journal said the company is “losing $207 a pop”. Add to that the $1.2 billion that HP spent in July 2010 to acquire the Palm webOS smartphone operating system at the heart of the device and it is easy to see why shareholders are in for a rough ride.

It started so well. HP CEO Leo Apotheker called the TouchPad, “An unbelievably attractive and stunning technology” at its launch in June 2011, adding that would be followed by “wave after wave of technology for the webOS platform”.

Less than two months later, the TouchPad was available at fire-sale prices and only so long as stocks lasted. Samsung is said to be interested in picking up the webOS pieces and has already hired HP’s former VP Marketing Raymond Wah.

On the surface, another round went to Apple. The news from HP was a great boost for the future fortunes of new CEO Tim Cook, who can also rely on the iPad to retain its place in the tablet market, despite the rapid gains made by Android devices.

HP began life in the mid-1930s in a Palo Alto lockup garage and by the 1960s, the company was established as a founding member of the high-tech Silicon Valley community. Now HP is disposing of its PC assets, following the path previously taken by IBM, which sold its personal computing business to the Chinese multinational Lenovo in 2005.

Dell, once the darling of the high-tech sector, has struggled to launch a convincing tablet to compete with the iPad and declining sales of desktop and notebook computers will affect its business disproportionately.

Worst hit of all is Acer, which was renowned for its laptop computers but lost 25% of its US market share in 2011. It’s once-promising tablet has been plagued with problems and there are few signs that it will recover its market position.

With no Media Centre PCs to worry about and strong growth forecast for Connected TVs over the next four years, the home entertainment industry can afford to remain an onlooker. In some ways, the decline of the general-purpose computer could prove a boon to anyone worried about piracy. There are too many “holes” in a PC, through which pirated content can escape. The all-in-one connected TV, supplied with video entertainment from a digital locker in the Cloud or from terrestrial and satellite broadcasters, looks to be a much safer delivery mechanism.

Tablets and other “companion devices” will also have their place in delivering entertainment in the home and on the move. The Media Centre PC, however, such as the one from HP that was used to write this piece, may soon be nothing but a fond memory.

The world according to Akamai

August 19, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Almost unknown outside the online industry, Akamai operates in 72 countries around the world and delivers up to 30% of global web traffic. The company’s quarterly report on “The state of the internet”, released this month, is the definitive guide to the growth of online connections, the expansion of mobile broadband and the sources of many of the malicious threats to the network.

When Tim Berners-Lee mapped out the future of the World Wide Web at Massachusetts Institute of Technology (MIT) in 1995, he challenged his colleagues to come up with a solution to the problems of network congestion — the World Wide Wait — that threatened to bring the internet to a standstill.

A team led by MIT Professor of Applied Mathematics Tom Leighton devised a system of “distributed servers”. Each one held identical content with the ability to deliver data to the individual user via the least congested route. The insight earned the group’s business plan a place in the final of the MIT Entrepreneurship Competition” in 1998 and from that sprang Akamai.

Today and every day, the company services 1 trillion requests for web content and delivers data on behalf of its customers at a speed of 5 Terabits per second (a terabit is 1,000 Megabits). Its universal coverage offers an ideal perspective on the users and abusers of the internet.

The authors of the latest quarterly report looked at the broadband definitions laid down in different parts of the world starting with the US Federal Communications Commission, which sets the threshold at a 4 Mbps minimum. Canada’s regulator targets 5 Mbps while the European Commission claims that its citizens are entitled to download speeds of up to 30 Mbps.

In Britain, the Universal Service Commitment is for a 2 Mbps service by 2012 and it is this lower figure that Akamai uses for the moment as its threshold definition of broadband.

The report says, “A connection speed of 2 Mbps is arguably sufficient for standard-definition TV-quality content and 5 Mbps for standard-definition DVD quality video content. As the quantity of HD-quality media increases over time and consumption of that media increases, end users are likely to require ever-increasing amounts of bandwidth.”

No doubt when that time comes Akamai will be ready to provide it. The company’s first State of the Internet survey appeared in May 2008. South Korea topped the list of countries with a high-speed internet connection and almost four years on, that nation remains in pole position with an average connection speed of 14.4 Mbps, up 20% on the previous year. Hong Kong (9.2 Mbps), Japan (8.1 Mbps) and the Netherlands (7.5 Mbps) are next on the list. The US comes in at 14th place at 5.3 Mbps with connections 14% faster than in Q1 2010. In the UK, the average speed is 4.6 Mbps – some way below the figure of 6.8 Mbps that Ofcom claims in the recent Communications Market Report.

A list of the world’s Top 100 cities ranked by average connection speed includes three in Romania but none from the UK. Residents of Lyse, Norway, enjoy the fastest average connection speed in Europe at 8.1 Mbps.

Akamai measures connection speed to their servers and removes academic and mobile networks so the average speed is inevitably at variance with the Ofcom figure. Which figure is most representative is hard to determine although Akamai does draw a distinction between average speed over time and the peak connection speed that users can attain.

For those who wish to compare broadband performance in different countries, Akamai provides a useful Data Visualisation chart into which users may type country names and get an instant graph of online speeds from Q1 2008 to Q1 this year. Belgium and Ireland provide a revealing comparison with current UK performance.

Ericsson teamed up with Akamai to provide some interesting data on mobile networks for this 40-page report, which is free to download from the website. For once, the UK plays a starring role, thanks to the 3 network, which at 22.7 Mbps offers the highest peak connection speed of any mobile service provider in the world. Although the average data rate is a more conservative 4.2 Mbps, the network still ends up in a respectable third-place position.

Customers of 3 consumed a monthly average of 105 Mbytes during Q1 2011 in line with the trend for data to exceed the volume of voice traffic, which began in Q4 2009. The most recent figures reveal that data usage has more than doubled since then while voice traffic has remained almost the same.

Although it would be easy to believe that tablet and smartphone owners are the biggest users of mobile data, the laptop community makes the biggest demands on the network as each subscriber consumes as much as 7 Gbytes a month. Almost 40% of this data is online video received over long periods of intensive network activity while web browsing and social networks account for a further 25% or so of the total.

Tablet users consumed 250–800 Mbytes each month in Q1, according to the report, while smartphone owners averaged 80–600 Mbytes. Despite the lower appetite for data, usage patterns are remarkably similar to those of laptop owners. Consumption of online video, however, tends to take place in short bursts, which suggests video clips rather than long-form entertainment. The smaller screens of handheld devices might also inhibit owners from using them to watch feature films.

Despite the growing number of web-connected devices and the increase in mobile data usage, the growth in attacks on the internet continues. The Akamai report details the countries that are the main source of threats to the security of the network. In 2008, China and the US were in first and second place as sources of “attack traffic”, which came from 125 countries around the world. Half of all the attacks came from the top four nations on the list, which included Taiwan and Venezuela.

This year, among 199 countries that are the source of attack traffic, the US takes second place to Myanmar (Burma), which accounts for 13%. Taiwan appears in third place again and Russia, which didn’t feature at all in the 2008 list, places fourth. Although these attacks are not necessarily targeted at individual users, the Akamai analysis shows how important it is to maintain defences against the forces of darkness and malicious intent that lurk within every internet connection and threaten every web site.

Not all disruption to online activity is the result of deliberate action, though, as residents of Georgia and Armenia discovered when users in both countries were unable to connect to the internet for 12 hours in the middle of the day. It was revealed later that a 75-year-old woman in a search for scrap metal had cut through a fibre optic cable that belonged to Georgian Railway Telecom. When told of the consequences of her action, she reportedly told local authorities that she had no idea what the internet was and had wanted only to collect firewood.

Akamai’s charts for the day showed “an uncharacteristically large dip” in traffic delivered to the two countries at a time that coincided with the woman’s arrest. Although most of the world might not know of the firm, an attack on the internet from whatever source will surely come to be known as an Akamai.

Fire raises disaster planning

August 12, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Just after 11.45pm on Aug. 8, the Sony DADC warehouse in Enfield went up in flames, following an alleged arson attack by a small group of teenagers. The ensuing conflagration destroyed the 24,000 square metre distribution centre and consumed the entire inventory of packaged media held at the site, including PlayStation games and limited edition archive material on vinyl and CD. It also deprived more than 300 people of their jobs.

Sony’s response has been prompt and efficient. The company’s replication plants in Southwater in the UK and Salzburg in Austria have ramped up disc production of all formats to satisfy the immediate commitment to keep product on the shelves. Sony will remanufacture some 1.5 million discs over the next few days to ensure that top-selling titles will continue to reach the shelves. The wrecked facility was able to ship more than 10 million units a month and it will be a long time, if ever, before the company can replace all the stock that it once contained.

In nearby Waltham Abbey an unwanted side effect of the blaze came from the “thermal decomposition” of the plastics used in packaged media. The polycarbonate used to make CDs and DVD is a remarkably stable plastic. Above 380°C, however, it produces fumes that may be injurious to health. A supplier’s data sheet warns, “Smouldering and incomplete combustion may produce carbon monoxide and potentially dangerous hydrocarbons.”

The polystyrene used to make CD cases is more dangerous when incinerated in large quantities, releasing large quantities of black smoke and carbon monoxide, along with traces of other additives used for colouring and visual effect. In the limited numbers found in the average home, these plastics are extremely safe and pose little significant danger in a house fire.

At the DADC warehouse, the abundant cardboard packaging aided the initial spread of the fire and once the discs and cases started to burn there was little that the London Fire Brigade could do but dampen down the periphery. Eleven fire engines and more than 50 fire crew attended the blaze at its peak.

“Because of the nature of the collapse of the building there are deep seated pockets of fire remaining,” said a spokesman for the London Fire Brigade, “We are likely to be at the scene for some time to come. Our advice to residents in Waltham Abbey who are affected by the smoke is to stay inside and keep all doors and windows shut.”

For the local people who staffed the facility, the lingering smell of burning plastic will be a reminder of what has been lost for weeks to come.

In the industry, the hardest hit will be the specialist video publishers and music labels. Sony DADC at Enfield held almost the entire stock of CD, DVD and Blu-ray discs for many smaller companies, including Artificial Eye and the BFI, and some independents have little more than the promotional copies in their office. Others hold stock in other countries, which may find its way back to the UK in time. Replenishing the long tail of catalogue titles presents a greater challenge than finding somewhere to secure the fulfilment of new release orders and the situation will remain unchanged for some time to come.

The independent services company Play It Again Sam (PIAS) Entertainment Group distributes product for 208 indie labels in the UK, according to its recently updated website. Although some product remains elsewhere in the supply chain, the bulk of the company’s replicated stock sat on the shelves in Enfield, with Beggars Group alone losing 750,000 CDs in the fire.

Announcing a fund to support the most badly affected labels until remanufactured stock becomes available, PIAS Co-founder and CEO Kenny Gates said that the response so far demonstrates the strength and solidarity of the independent music community. “PIAS will carry on engaging, helping and supporting its labels and artists in every way possible. I am very confident that our combined efforts will result in the smallest interruption to our collective business. Again the compassion of our recording artists, our labels and the industry wide support is amazing.”

For the moment, the Cinram distribution centre 45 miles away in mid-Buckinghamshire provides temporary accommodation and ensures business continuity for the Sony DADC operation, another example of the way the industry has rallied round with condolences and offers of help.

“The images from the Enfield distribution centre have shocked us all, and our thoughts are with staff at Sony DADC as well as the labels affected by the fire,” said arvato Managing Director Supply Chain Solutions Markus Schmücker in a statement, “I'm confident the industry will pull together to limit the impact of the fire as we build towards Q4. Indeed, we have already offered our support to help get the supply chains back up and running.”

EDC Sales & Marketing Director Europe Paul Murphy said that practical support is available from all sides of the industry. “After our initial shock at the event, the only questions we need to ask are ‘How can we help, what do you want and when do you need it?’ We can work out the details later, the most important thing for the industry is keeping the shelves filled with product,” he said.

The impending prosecution of three teenagers may reveal exactly how the arsonists evaded the tight FACT-approved security at the Sony DADC site but, with hindsight, it may be time to reassess the wisdom of keeping so many eggs in one basket.

Disaster recovery (DR) and Business Continuity Planning (BCP) is never an exact science. At the time of the “Millennium bug” scare in 1999, the management team at a London authoring house had its initial DR plan rejected by their American bosses because it was “too cautious”. The board accepted the revised proposal, which predicted, “Riots in central London following a total power outage caused by multiple computer failures”. It was an idea that seemed so improbable that it was submitted more in jest than in the belief it could happen.

Sony has had more than its fair share of disruption so far this year. After surviving the onslaughts of earthquake, tsunami, hacking and riot, the company is in a better position than most to consider the improbable and unlikely threats to business continuity. As the investigators sift through the rubble of the Enfield facility, the company should consider the case for rehousing low-volume and back catalogue away from the main warehouse.

Planning for disaster is counterintuitive for many companies, not because of a belief that it may never happen but because management thinks only of the “known unknowns”. The degree of resilience required to ensure minimal interruption to a normal business can be disproportionately expensive, so executives focus on supply chain diversity, offsite data backup and continuity of essential operations. The threat of an almost total loss of stock in trade and access to premises is rarely on the agenda.

There has been a groundswell of public support for the affected labels too. Perversely, the destruction of a large part of the independent catalogue has led to an increased awareness of what might be lost if physical media were to disappear. PIAS and its labels have received offers of financial help from the some of the largest names in the business and from individuals wishing to support the “continued vibrancy and creativity associated with independent music”.

In a joint statement with the Association of Independent Music, PIAS said, “Labels and artists affected by the destruction of the Sony DADC warehouse are faced with incredible pressures on their businesses… Whilst it is expected that insurance will cover the lost stock, the reality for many labels is that they will not be compensated or insured for an interruption of trade or the additional capital to reproduce the stock that they have lost and the promotion in which they have invested.”

As the smoke and flames die down, the packaged media has an opportunity to reassess the security of the supply chain and the way in which physical media is stored and distributed. The value of a single disc is inconsequential; the cost of replacing an entire archive may be too much to pay.

If that proves to be the case, the entertainment industry will have lost a significant part of its heritage in the Enfield fire.

Addicts in the connected world

August 08, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Twenty years ago this month, British scientist Tim Berners-Lee worked at CERN in Switzerland on an internet system with a code that could link to “any information anywhere”. On Aug. 6 1991, he sent an email that read: “If you're interested in using the code, mail me ... We are very interested in spreading the web to other areas.”

Boy, were we interested. Two decades later, the World Wide Web connects 30% of the world’s population. The publication of the 2011 Ofcom market report this month is a less momentous event, but its 341 pages offer an interesting insight into the development of the digital age over the past decade. It is a comprehensive handbook of industry data that reveals just how much UK residents live their lives in the connected world.

Both in the home and on the mobile phone, the web has had made its mark on each individual. More than 75% of the population have internet access in their home while 10% also use a mobile “dongle” and 7% rely solely on a mobile broadband service to connect to the web. The days of a single connected PC housed in its own cupboard in the corner of the room have receded as quickly as the radiogram when faced with the transistor radio and the Walkman.

Ofcom reports that the internet in 2011 is at the heart of the way people communicate, find information and seek entertainment. In a poll of 2,073 adults, 37% said they were more or less “addicted” to their smartphones (defined as devices that can access emails, download files, view websites and surf the internet), and that increased to 60% in a survey of 521 teenagers.

Despite the growth in broadband penetration over the past 10 years, retail revenues from the provision of broadband fell to £3 billion in 2010, down from £3.4 billion the year before. Total communications industry revenue, however, has remained remarkably stable over the past decade. It fell slightly from an inflation-adjusted figure of £54.3 billion in 2000 to £53.4 billion last year.

For the first time, the amount spent on web advertising equalled the TV advertising spend in 2010, at £4.1billion or 26% of the total spend on all media. Online advertising grew by 16%, largely at the expense of newspapers and magazines, although all media benefited from the rise in total advertising expenditure over the previous year.

Mobile advertising was up by a remarkable 116% to £83 million although this was a mere 2% of all online expenditure in the UK. The entertainment and media sector spent £23.3 million on mobile advertising in 2009, 62% of the total. The category share fell to 33% in 2010 although this was up by £4 million in absolute terms.

Advertising of consumer goods on mobiles increased from 3% of the total in 2009 to 12% last year. Ofcom ascribes this diversification in spending to the increased use of mobiles in online shopping. It also reflects the changing user-profile, since what was once the preserve of early adopters has become a mass-market product.

“More and more devices are internet-enabled. As a result it is becoming increasingly difficult to separate the use of internet services from television, radio and voice communication services,” the report notes,

Just over a quarter of adults in the UK, an estimated 12 million, have a smartphone and 59% of owners say that they purchased their device within the past year. The top three functions that adults use regularly are email (46%), web surfing (41%) and social networking (40%). Almost half of the teenagers questioned say they own a smartphone (47%) and their favourite activities are social networking (62%), listening to music (62%) and playing games (50%).

The enhanced functionality of modern mobile devices affects many leisure activities. Both adults and teenagers claim to participate in fewer activities since they acquired a smartphone. Two-thirds of teenage smartphone users say that now they spend less time to play games on a console or computer, take photos with a camera, use a PC to access the internet, watch TV or read books.

The entertainment industry has been slow to react to this changed pattern of behaviour, which affects both young and adult audiences. The time spent on fixed-line internet by people aged 12 and over averages 53 hours a month with a peak at 65 hours among males aged between 25 and 34. Unlike mobile use, this time might be spent otherwise watching broadcast TV or DVD/Blu-ray content.

Watching television remains the dominant media activity, according to the Ofcom report. Viewers spent an average of four hours a day in front of the TV screen in 2010 and time-shifted content from a DVR accounted for 7% of all viewing time.

Ofcom reports that the main use for both fixed and mobile devices among all generations is to send emails and engage in social networking. These activities continue whenever the user has the opportunity at home or at work. The report notes also that the use of social networks could plateau. It grew just 1.3% in the year to April 2011 and only 3% of non-users say that they are interested in signing up.

Comprehensive as it is, the Ofcom report poses as many questions as it answers. Although trends over the past 10 years can be a useful guide to the future, the arrival of disruptive devices such as the Apple iPad can distort otherwise predictable trends. Although the authors do not say as much, it is clear that the future for the desktop PC in the home – and probably also for the laptop computer – is limited.

A smartphone or tablet device can provide most of the everyday functionality that Ofcom respondents demand from their dedicated computer. What remains is to provide video entertainment content in the home, for which a large-screen connected-TV set is suited ideally.

Ofcom defines connected TV rather dismissively as “a television that is broadband-enabled to allow viewers to access internet content”. This definition understates the computing power that is built-in to the modern TV set, which is smarter than most home PCs available in the previous century.

We have come a long way since then of course; all that computers had to deal with 20 years ago was the World Wide Web. And in those pioneering days, it was all text. 

Doctor? Doctor Who

August 1, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

The ability of the Tardis to dematerialise and transport its occupants to another galaxy has taken Doctor Who to some improbable places in the 48 years since the series began. Now BBC Worldwide and Softwind Studios have enabled nine incarnations of the Time Lord to materialise in cyberspace with the launch of a VOD application for Facebook.

Users may access the site from the “Doctor Who” Facebook page or go straight to the dedicated portal, where they will find all the Doctors from William Hartnell to David Tennant waiting to take them on a journey through time and space. “The Greatest Show in the Galaxy” with Sylvester McCoy as the Doctor is one of the featured titles and it might draw the crowds, since it is not available on DVD.

Unlike the BBC iPlayer, which is free for UK users, visitors to the Facebook VOD site must pay in advance for their entertainment. Softwind Studio Director Francis Rodino says that it is one of the first applications to use Facebook credits to monetise video content: “You go to the site and click to play the video. If you have no credits, you can purchase them right away in your own currency, using PayPal or a credit card. It’s accessible to anyone in Europe, North America, New Zealand and Australia.”

Rodino worked closely with BBC Worldwide to bring the site to the social network and overcame several hurdles along the way. He says, “When you work on a project of this kind, you know there are problems to be solved and not always technical. Simply registering the BBC as a Facebook provider took time but the rights issues were the main challenge we had to deal with. There were questions about the distribution of funds among the royalty holders and the legalities of distributing content online. The concerns were chiefly about copyright, it was an achievement to get all nine doctors represented.”

The nine online stories split into 29 parts cost users 15 Facebook credits for unlimited viewing over a period of 48 hours. To watch a single story costs less than £1, while £9.00 buys the 135 credits needed to rent all the episodes on offer in return for over 13 hours of entertainment.

Rodino tells Cue Supply Chain that a “Top Gear” VOD service will be available through Facebook from mid-August and will function in the same way as the “Doctor Who” page: “It will be another first, monetising whole episodes online, but we are encountering specific challenges with clearing rights to the audio and music. We don’t just sit around waiting for approvals though: we get on with getting the product out there and assume that the solutions will come eventually.”

Rodino notes that Facebook is little more than an enabler in the process since it is not about video but primarily about a network of friends. It is not necessarily the ideal mechanism for distributing VOD content, he says: “They provide the canvas and the paint but it is up to us to create the VOD service. Ultimately, we will discover whether Facebook is the right platform to consume video. You need to put the content out there and try these things. If you don’t try, you don’t know what is possible: it is an important question that the content owners themselves must resolve.”

Figures published on July 29 by internet research company ComScore show that Facebook accounted for more than 16% of all time spent online in the UK during June 2011, more than any other site. Given the popularity of “Doctor Who”, next month’s figures could be even higher.

The delivery of pre-paid video from within the relatively secure Facebook site is an attractive proposition for content owners who continue to feel threatened by what they perceive as a poorly regulated environment. Although many will welcome the victory of the MPA in the High Court, there are doubts about the viability of any action that BT might take to block the Newzbin2 web site.

If the High Court ruling is upheld, rights holders will have to obtain a court order against each infringing site and ensure that it applies to every ISP operating in the UK. While service providers will cooperate, however reluctantly, the sites themselves are unlikely to give up without a fight.

It took just three weeks for Newzbin2 to pop up when the original Newzbin shut down in May 2010. The MPA and others claim that such Usenet-related sites exist purely for the purposes of piracy although this was not always true in the past. They provide an index of the location of illegal files rather than a primary source of the data and for this reason closing them down will do little to eliminate the problem.

Newzbin3 or its equivalent will appear as surely as its predecessor did and will require court action for each clone of the original. As long as the demand exists, broadband users will seek out such sites whether through online search engines or via social networks. This is why the BBC Worldwide initiative points the way to a more effective approach to piracy and makes legal viewing online a simple and inexpensive matter.

BVA Director General Lavinia Carey says of the ruling, “The decision underscored the need to highlight all the legal ways that consumers may access digital video services. There are currently 44 in the UK from which audiences can access video content on many different devices, to flourish and grow. This way, everyone benefits from a healthy video entertainment market.”

Her comments are timely. In France, IP theft watchdog Hadopi launched a €3.2 million (£2.8 million) print, poster, radio and TV campaign to publicise the PUR (Promotion of Responsible Use) brand. The PUR certificate of approval, renewable each year, assures consumers that files downloaded from participating organisations are legal whether free or paid-for. The advertising has approached its target of 75% consumer penetration, according to Hadopi.

The industry-backed initiative began earlier this year and 33 companies have signed up with more applications in the pipeline. The list includes Amazon, entertainment store FNAC, Universal Music with its music video service Off TV and VOD channel Vidéo à Volonté.

PUR is the carrot planted alongside the stick of disconnection: the “three strikes and you’re out” rule that claimed its first 10 candidates in June, according to Paris Match. Hadopi has sent almost half a million warning letters to broadband users since the introduction of the law in October 2010 but the organisation presents itself in an educational role for the moment.

If the French trend towards persuasion rather than prosecution should prove successful, it could be a lesson for the industry in the UK. To help consumers identify legal content providers has to be better than threats of disconnection or blocked sites, which have the inevitable consequence of mistaken identification and malicious accusations.

Figures released at the end of July show that for the first time, streaming video from Netflix in the US exceeded internet traffic from peer-to-peer connections. As connected TV appears in more and more homes, to access content online will become commonplace. The legal video streaming habit will be encouraged by the easy accessibility of content such as “Doctor Who” while Facebook credits could become the micro-payment currency of the connected world that has been talked about often but rarely implemented.

The ease with which Doctor Who and his nemesis the Master can reappear elsewhere in the galaxy mirrors the activities of illegal sites. They come and go so quickly that they will always be a step ahead of legal action to block them. By selling his soul for 15 Facebook credits, 

The Doctor might have shown others a legal and effective way to combat the cyber criminals.

The magic of holographic discs

July 25, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

As “Harry Potter and the Deathly Hallows Part Two” continues its profitable run in cinemas around the world, the thoughts of the packaged media industry will turn to the many ways that the series on video will be diced, sliced and repackaged in the years to come. Boxed sets in the guise of standard, premium and collector’s editions are no doubt ready for the shelves and some say that Warner Bros. has planned the “Ultimate 3D Edition” for a year or two hence. The magic will continue.

As IHS Screen Digest Senior Film Entertainment Analyst Jan Saxton explained, “Once a kid is hooked on the first book and begins to beg his parents for the movie, Warner gets that sale—and almost inevitably, seven more soon thereafter.”

Young people who have grown up with Potter over the past ten years will understand that prediction as they follow Ron and Hermione into the realms of parenthood. But there are other words in the analysis that their offspring might find harder to understand: such as “book”, “DVD” and “Blu-ray”.

Potter’s children will have no need of such muggle-inspired ideas, (aka the thoughts of their ‘old fashioned’ parents and grandparents) since they will be able to download both book and film onto their “iPad 13” and watch it.

Usually, at this point a voice pops up to advise that we will all have high-speed connections sometime soon and that fibre optics will bring multiple movies in high-definition to our homes at little or no cost. Even if this proves to be true (and see previous editions of Eye on the Supply to learn just how likely that might be), to give a physical object is a great motivator to discover what lies within.

Although the future is another country to most of us, there are some certainties not least of which is that Harry and his chums will continue to appeal. It also is likely that the complete works of J. K. Rowling will become less physical and more digital in their consumption, for a while at least. Once-treasured first editions of her books might find a home in charity shops as the on-line generation turns to downloads for its entertainment. The parents who grew up with Harry Potter at their bedside, however, will find it hard not to pass-on the reading habit to their own children, if not their well-thumbed volumes.

As a present, a book token with a suggestion of what it might buy is not the same as the gift of the “real thing” with an enticing cover. Would a voucher to the value of a digital download of the “Goblet of Fire” on Kindle and Blu-ray receive quite the same attention as a gift-wrapped parcel? And while a book or a disc comes without any commitments, a pre-payment card for the online equivalent would not include the data costs involved in the download.

Excluding the final part of the epic, the series on Blu-ray occupies nine discs, which at a conservative estimate represents around 400 GB of data. Add the finale, a set of e-books and some bonus material and the total approaches 500 GB, a large amount of data by any standards. The fortunate few with a 50 Mbps connection could theoretically transfer the Potter oeuvre in a day. Households with the UK average broadband speed of 6.2 Mbps could retrieve it over a week of non-stop downloading.

This, of course, assumes that the ISP does not invoke its “fair use” policy and restrict data downloads beyond a defined limit. For example, one of the few ISPs to offer superfast broadband, Virgin Media, caps its heavy users at 10 GB, after which they cut the transfer speed by 75% for the following five hours. As each Blu-ray disc can hold up to 50 GB, the download could extend over a matter of weeks. The child who wakes up early on Christmas morning to discover that Santa has left a voucher for a Potter download will probably have lost interest by the time it completes on New Year’s Day.

GE Global Research has worked for the past six years on a format that could effectively bridge the gap between physical and digital media – a Blu-ray sized disc that holds up to 500 GB of data. It opens the door to the concept of a single disc that can store the equivalent of a box set with content that could be unlocked and copied directly to companion devices.

Traditional disc media, such as CD, DVD and Blu-ray, relies on reflective layers held by a protective coat of moulded polycarbonate. Although there have been successful attempts to add to the one or two layers in common use, none has found favour in the consumer market. Manufacturing costs increase, the yield falls as the reject rate rises, and the increase in capacity is marginal.

The solution is to use all the space between the two surfaces of the disc, so-called “volumetric storage”, in a holographic format. For years this has been an elusive dream pursued at great cost by several companies, most of which no longer exist. Now it seems that there is a commercial solution in the pipeline, although it remains some way from a marketable product.

GE scientists have devised what they call “bit-wise volume holography” – a technology that cries out for a catchy acronym – that can record data at the speed of Blu-ray. The analogy is no coincidence: the GE format is the same size as a BD and the long-term intention is to make consumer devices that will play both Blu-ray and holographic discs.

The immediate market for this technology is for data archive and retrieval systems where extended life of the storage medium is essential. If the discs can be replicated economically, they could eventually find a place in content distribution networks. Modern hard drives are cheap and reliable but they wear out and fail over time. Optical storage does not have the same problem; a beam of laser light does no harm to the disc as it scans the holographic information.

If GE can licence a consumer version of the product to a CE manufacturer, there could be a resurgence of physical media. Holographic storage would have to be part of a complete ecosystem, not just an alternative to the Blu-ray player in the living room, but the potential is immense.

Imagine a digital locker that lives in the home, a repository for existing DVD and Blu-ray collections as well as a physical distribution platform for 3DHD and beyond. If designed from the ground up, a holographic system could satisfy every bit of the data storage requirement in the home of the future. Content protection could be built-in by writing an invisible signature on every disc that would permanently identify its source.

The fastest way to get large amounts of data from one place to another has often been via “sneaker-net” – hand-carrying several Terabytes of data stored on portable hard drives. A dozen GE holographic discs would weigh much less and could do the same job, potentially at a lower cost.

Superfast broadband will undoubtedly encircle the globe at some point in the future. Until then, its primary use will be for the distribution of volatile and time-sensitive data. Enduring content is best stored on robust media in the hands of the person who owns it.

In the home, the 500 GB holographic disc would be magic. 

Just think of the smile on the face of the digitally savvy child who wakes up on Christmas morning to find the “Complete Harry Potter” beside the bed – everything from “The Philosopher's Stone” to “Tales of Beedle The Bard” and all of it ready to play, instantly and in perpetuity. 

Patriot Act eyes the small print

August 1, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Online retailer Gamestation revealed its “terms and conditions” shortly after the first day of the fourth month of 2010. Everyone who clicked “I accept” without reading the small print learned that they had assigned to Gamestation “a non-transferable option to claim, for now and forever more, your immortal soul.”

It was, of course, an April Fools’ Day spoof. The terms and conditions required by Google are not.

Millions of users have nodded through the boilerplate and signed up to “a perpetual, irrevocable, worldwide, royalty-free and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through the Services.”

It is no joke. Those are Google’s terms and conditions for anyone who accesses the company’s online sites, whether Gmail, Google Docs or YouTube.

Comparable conditions apply to Apple’s services where users grant the company a “ … worldwide, royalty-free, non-exclusive license to use, distribute, reproduce, modify, adapt, publish, translate, publicly perform and publicly display such Content on the Service.”

Caught between the requirements of customer confidentiality and the technical needs of the service, other cloud operators impose near-identical conditions. Of course, they are all reputable companies that would not dream of implementing such draconian terms or poking about in other people’s data so the courts will never test such legal jargon.

Or will they?

One of the primary reasons these terms and conditions are included is to accommodate the legal right of the US Department of Justice to require a cloud service provider to hand over data without the consent or the knowledge of the owner. Microsoft drew attention to the provisions of the US Patriot Act at the launch of its Office 365 cloud computing service last month when UK MD Gordon Frazer acknowledged that the American authorities could intercept and inspect any data on the system.

“Any US-headquartered company operating in Europe is subject to the same law,” said Frazer.

Criminologist Zack Whittaker, who is an authority on the Patriot Act and its implications for European businesses, says that any data held in the US, even for a brief moment, is vulnerable to US law although data stored locally and processed by a wholly owned UK company will remain under UK jurisdiction.

In a Q&A hosted by online technical news service ZD Net, he said, “The scope of the Patriot Act is widespread and could apply to entire companies. Patriot Act requests can be vague and lacking in description. Your data can be mined for information and your customers (if you have any) could have intelligence acquired on them. Ultimately, if something incriminates you or your clients and customers, they could face the US courts, even if they are outside US jurisdiction.”

This is significant because Microsoft, Google and Facebook occupy the first three places in the Top 10 online properties in the UK for the month of May, according to internet analyst comScore. Other major names included are Amazon, Glam Media and Apple. Just one organisation in the list – BBC.co.uk, which is in fifth place – is outside the tentacles of the Patriot Act although some parts of the BBC’s operation are vulnerable.

Whittaker says, “Even though the BBC in London is under UK law, its US-based offices will be subject to US law. However, there’s no reason why UK law enforcement cannot request data under the Regulation of Investigatory Powers Act and then hand this over to the US in an intelligence sharing agreement.”

The comScore data reveals that Microsoft and Google each had more than 38 million unique visitors from the UK in May. All of their data, from Gmails to Google Docs and Office 365 files, is subject to US law and must be disclosed by the operator on request. In the same month, just over 30 million people in the UK spent an average of seven hours each on Facebook. Here again, whatever the “privacy” settings on the Facebook account, the US Department of Justice can examine their information if it so wishes. US citizens might have some protection under the law but there appears to be little that British residents can do to prevent it.

The department is empowered to search for evidence of bribery and corruption, unfair business terms and practices and any other activity prejudicial to the perceived interests of the United States, including terrorism. According to a report earlier this year in Wired magazine, a Justice official told a Congressional committee that the “business records” provision of the Patriot Act covers “Driver’s licence records, hotel records, car-rental records, apartment-leasing records, credit card records and the like.”

Some US politicians have tried to draw attention to the catchall application of the Act. Oregon Democratic Senator Ron Whyden said, “The (US) government is relying on secret interpretations of what the law says without telling the public what those interpretations are, and reliance on secret interpretations of the law is growing.”

The comment by Microsoft’s UK MD took EU regulators by surprise. The European Data Protection Directive requires EU-based organisations to notify users whenever they disclose information to third parties, which is not the case with the Patriot Act. When data is exported, however briefly, it loses any protection afforded under European law and is open to examination by US investigators.

Dutch MEP Sophia in t’Veld was swift to point out that the Commission affirmed in a 2007 written reply that national data protection laws apply to services provided within the EU. In an official question last week, she asked, “Does the Commission consider that the US Patriot Act effectively overrules the EU Directive on Data Protection? What will the Commission do to remedy this situation and ensure that EU data protection rules can be effectively enforced and that third-country legislation does not take precedence over EU legislation?”

The official viewpoint is still that European subscribers benefit from the protection afforded by the EU data protection law but behind the scenes there is consternation. The Commission had already planned to come forward with specific proposals before the end of this year: the concern engendered by Frazer’s revelation may speed up the process.

A report published last month by the research organisation Eurobarometer revealed that three out of four Europeans accept that revealing personal data is inevitable. They worry, however, that the companies that operate search engines and social networking sites could misuse the information entered into them.

According to the report, 62% of respondents say they provide the minimum information required in order to protect their identity, while 75% want the ability to delete personal information: the “right to be forgotten”.

In response to the concerns voiced in the survey, EU Justice Commissioner Viviane Reding says, “When I modernise the data protection rules, I want to clarify explicitly that people shall have the right – not only the possibility – to withdraw their consent to data processing.”

European Commission Digital Agenda VP Neelie Kroes says, “Many people are reluctant to shop online because they are worried about privacy. This is holding back the development of Europe’s digital single market, and hampering our economic recovery.”

One of the goals of EU data protection reform is to ensure increased transparency about what data is collected and further processed, for what purposes and where and how it is stored. A key principle is that users must give consent before their data is used. Companies must not pass on information without the user’s approval and cannot use it for purposes other than those agreed.

The Eurobarometer survey shows that 58% of internet users read privacy statements online but not all understand them. In total, 62% of users do not understand, do not read, cannot find, or ignore such privacy statements.

At least Gamestation rewarded the folk who actually read the contract and clicked to opt out of the deal with devil. A £5.00 voucher went to the one-in-eight customers who claimed not to have an immortal soul or to have already assigned it to a third party.

Europeans who fall afoul of the Patriot Act simply because their Cloud happens to be hosted in North America could find that it is nothing to laugh about.