AllThingsD » digital rights management

FTC Gives Ed Felten Freedom to Tinker

John Paczkowski — Thu, 04 Nov 2010 18:55:20 +0000

Looks like the Federal Trade Commission got its first choice of Chief Technologist, because it’s hard to think of anyone better to serve in that capacity than Princeton computer science professor Ed Felten, a guy whose CV makes everyone from Microsoft to Diebold shudder in embarrassment. A renowned computer researcher, Felten has over the years led charges against some of technology’s most ill-starred concepts, chronicling them in his widely read Freedom to Tinker blog.

In 2000, his team dropped the hammer on the Hack SDMI challenge by demonstrating how easy it was to crack the decidedly mediocre Secure Digital Music Initiative.

Dragged into the Sony BMG CD copy-protection scandal in 2005, he discovered that Sony’s “fix” for the Digital Rights Management rootkit it used to protect some new music CDs furthered inflamed an already bad situation.

And then, of course, there were Felten’s various investigations into electronic voting machines, the most notorious being the one that revealed Diebold’s machines could be opened with a standard office furniture key. “The access panel door on a Diebold AccuVote-TS voting machine–the door that protects the memory card that stores the votes, and is the main barrier to the injection of a virus–can be opened with a standard key that is widely available on the Internet,” Felten wrote at the time. “The exact same key is used widely in office furniture, electronic equipment, jukeboxes, and hotel minibars.”

Thank God for Felten, right?

And thank God the FTC has seen fit to hire him. There’s a lot of good he can do there. As Felten described it, “My main job will be to advise the FTC leadership on technology policy issues. My goals are use my technical expertise and knowledge of the tech world to help the FTC make the best decisions on tech topics, and to contribute to building up the agency’s technical capabilities.”

Said FTC Chairman Jon Leibowitz, “Ed is extraordinarily respected in the technology community, and his background and knowledge make him an outstanding choice to serve as the agency’s first Chief Technologist. He’s going to add unparalleled expertise on high-technology markets and computer security.”

"UltraViolet" Is Short for "Giant Media DRM Cloud Coalition Featuring Everyone Except Apple and Disney"

Peter Kafka — Tue, 20 Jul 2010 10:49:54 +0000

Small steps! The Digital Entertainment Content Ecosystem, a coalition of tech and entertainment companies that’s supposed to create a seamless, cloud-based, consumer-friendly media network, now has a brand name: “UltraViolet.” And a logo, too.

Next step is getting the thing up and running. But the DECE, which has nearly 60 companies signed on and has been working on this stuff for a couple years, says it’s getting closer.

By the end of this year, it promises to have tech specs and licensing details ready to go. So perhaps you’ll have a piece of equipment with this icon in your living room in 2011:

Then there’s the real question: Will you have any interest in this stuff?

The DECE is either wildly ambitious or unwieldy and destined to fail, depending on your perspective. And it’s also a little nebulous and hard to explain.

But the gist is that it creates a system that allows you to consume movies, TV shows, etc., on a variety of devices. And it’s supposed to manage the confusing world of digital rights management–the media companies’ lock-and-key system–via a Web-based account, so that you don’t have to think about it.

That’s not a terrible pitch, right? But this supposes that a group featuring everyone from Microsoft (MSFT) to Intel (INTC) to Sony (SNE) to Time Warner’s (TWX) Warner Bros. can work together to produce a decent consumer experience. If you’re skeptical about this, you’re not alone.

And DECE’s other big problem is the absence of two companies: Apple (AAPL) and Disney (DIS). The latter is creating Keychest, its own, equally confusing cloud-based DRM management scheme. And the former is, well, Apple.

Steve Jobs’s go-it-alone approach to software and media standards has worked out pretty well for him so far. Hard to see that changing. And hard to see an industry standard that doesn’t work with Apple getting much traction. See: Windows Media Audio.

Apple CEO Steve Jobs Live at D8: All We Want to Do is Make Better Products

John Paczkowski — Wed, 02 Jun 2010 00:45:49 +0000

Much has happened since Apple CEO Steve Jobs last appeared on the D stage. At that time, in May 2007, the iPhone had not yet arrived at market, the app ecosystem it would usher in was still gestating and the iPad was simply a long-running rumor.

So the conversation onstage focused largely on the iPod, iTunes and Apple’s (AAPL) relationship with the music industry, and the forthcoming launch of the iPhone. A few months earlier, Jobs had penned a widely read open letter, “Thoughts on Music,” calling on the “big four” music companies to sell their music without digital rights management. iTunes was already the world’s largest online music distribution system, so his thoughts generated quite a bit of discussion–and a fair bit of controversy.

Today, the iPhone is nearly three years old. It has sold 50 million units worldwide, and the multitouch interface and app ecosystem it pioneered have arguably revolutionized the smartphone industry.

Today, the iPad is no longer a rumor. Launched just two months ago, it has already sold two million units and seems poised to revolutionize an industry or two of its own.

And today, Jobs is once again shaking up an industry with another open letter, “Thoughts on Flash,” a withering rumination on Adobe’s (ADBE) Flash platform and the future of online video.

Much has changed in three years. But one thing has remained constant: Apple, under Jobs, continues to drive innovation in every industry it touches.

Liveblog

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

5:54 pm: In a few moments, Steve Jobs will once again take the D stage for the opening session of D8.

6:21 pm: Following a welcome from News Corp. (NWS) CEO Rupert Murdoch and a few introductory remarks from Walt and Kara, the pair welcome Jobs to the stage.

6:22 pm: The first question is about Apple surpassing Microsoft in market valuation. Jobs says “It’s surreal, but it doesn’t really mean anything.”

6:23 pm Walt references Jobs’s recent “Thoughts on Flash” essay. Even if everything you say is true, is it really fair to consumers to be so abrupt and cut them off, he asks? Jobs doesn’t seem to think it’s unfair. “Apple is a company that doesn’t have the most resources in the world, and they way we’ve succeeded is to bet the right technological horse, to look at technologies that have a future. We try to pick things that are in their springs. And if you choose wisely, you can be quite successful.”

Apple has a history of doing that, Jobs says, noting that Apple was the first company to dump the floppy and later, to adopt USB. “Sometimes when we get rid of things, people call us crazy….But sometimes you just have to pick the things that are going to be the right horse to ride forward….And Flash has had it’s day…but HTML5 is starting emerge….The video looks better and it works better and you don’t need a plug-in to run it. And while 75 percent of the video on the Web may be available in Flash, a lot of it is available in HTML5 as well.”

6:29 pm: What about developers, asks Walt. How are they impacted? Jobs draws a quick parallel to Apple’s HyperCard. “HyperCard was huge in its day,” he says, going on to note that the thousands of apps on the iPhone OS platform are testament to developer involvement.

6:31 pm: Jobs: “We didn’t set out to have a war over Flash. We made a technical decision. And it wasn’t until the iPad that Adobe raised a stink. They came after us….That’s why I wrote “Thoughts on Flash.”…We were getting tired of being trashed by Adobe in the press.”

6:32 pm: Walt: What if people demand Flash. What if they say the iPad is crippled without Flash. “We’re just trying to make great products,” says Jobs again. “We don’t think Flash makes a great product, so we’re leaving it out. Instead, we’re going to focus on technologies that are in ascendancy. If we succeed, people will buy them and if we don’t they won’t….And, so far, I have to say, people seem to be liking the iPad. We are selling an iPad every 3 seconds.”

6:35 pm: Ah! The inevitable lost-iPhone question. Walt quickly recounts the history of the discovery of the iPhone prototype, its revelation on Gizmodo and the subsequent police investigation that involved the seizure of a blogger’s computers. Where do you come down on this, asks Walt. “To make a wireless product work well, you have to test it. And one of our employees was carrying one and there’s a debate about whether it was left in a bar or stolen….And the person who found it decided to sell it…and it turned out this person plugged it into his roommate’s computer and that roommate called the police.”

6:40 pm: Jobs continues, “And the police showed up and took this guy’s computers…and the DA is investigating it…and I don’t know where it will end up.” In other words, it’s a police matter. That said, Jobs is very clearly irked by the whole debacle.

6:40 pm: Any comments on the Foxconn suicides which we’ve been hearing so much about, asks Kara. Apple is extraordinarily diligent and rigorous about vetting its manufacturing partners, Jobs answers. “Foxconn is not a sweatshop,” he adds. “They’ve got restaurants and swimming pools….For a factory, it’s a pretty nice factory.”

6:42 pm: Jobs notes that the recent suicides at Foxconn, which number 13 at last count, I think, are still below the national average in the U.S. “But this is very troubling to us,” he says. “So we send over our own people and some outside folks as well, to look into the issue.”

6:44 pm: Walt: You spent a significant portion of your career involved in a platform war with Microsoft (MSFT). And you lost. But now there are new platforms out there and you’re doing quite well on them, as are others–Google (GOOG) and Facebook. So there’s a new platform war going on. Do you see it like that?

No, we don’t see ourselves in a platform war says Jobs. “We never saw ourselves in a platform war with Microsoft, either…Maybe that’s why we lost. … But we never thought of ourselves in a platform war; we just wanted to make good products.”

And what about Google, asks Walt. The relationship has clearly changed there, hasn’t it? “Well, they’re competing with us,” says Jobs, referring to the mobile space. “We didn’t go into search.”

6:47 pm: Kara: How do you look at Google as a competitor? Eric [Schmidt, Google CEO] was on your board.

Jobs: “They decided to compete with us and got more and more serious.”

Walt circles back, asking if Jobs doesn’t feel betrayed by Google. Jobs, clearly not buying in to this line of questioning, parries: “My sex life is great, how’s yours” he says trying to end it.

6:50 pm: Kara asks if Apple might remove Google from the iPhone and iPad. Jobs says no. Again, he notes that Apple is simply trying to make the best products it can and that the market will decide whose is better. “Right now, we have the better product.”

6:52 pm: Walt wonders why Apple bought Siri, a search company. “I don’t know if I would describe Siri as a search company,” Jobs says. “They’re not in the search area…they’re in the AI area.” Then he adds, a bit vehemently: “We’re not going into search.”

6:53 pm: Walt asks about AT&T (T), whose network continues to face criticism. Jobs: They’re doing pretty good in some ways and in others they could do better. We meet with them once a quarter. Remember, they deal with way more data traffic than anyone else. And they’re having trouble. But they have the fastest 3G network and they’re improving. I wish they were improving faster….I’m convinced that any other network, had you put the iPhone on it, would have had the same problems.

6:56 pm: Jobs continues: We found a way to sell the phone that we wanted to sell and to define it the way we wanted to define it. We were able to change the rules of the game, and that’s what got us excited about the phone business….AT&T took a big leap on us and decided they were going to trust us to do the right thing with the phone. And that’s worked out quite well for both of us.

6:59 pm: The conversation moves to talk of tablets. Walt asks if Apple knew it would build a tablet before it built the iPhone.

Jobs: “I’ll tell you a secret. It began with the tablet. I had this idea about having a glass display, a multitouch display you could type on with your fingers. I asked our people about it. And six months later, they came back with this amazing display. And I gave it to one of our really brilliant UI guys. He got [rubber band] scrolling working and some other things, and I thought, ‘my God, we can build a phone with this!’ So we put the tablet aside, and we went to work on the iPhone.”

7:01 pm: What does the iPad mean for the publishing industry, Kara asks. Is it the savior that some are touting it as?

“One of my beliefs very strongly is that any democracy depends on a free, healthy press, and so when I think of the most important journalistic endeavors in this country, I think of things like the Washington Post, the New York Times, The Wall Street Journal and publications like that,” Jobs replies. “And we all know what’s happened to the economics of those businesses. I don’t want to see us descend into a nation of bloggers. Anything that we can do to help the news-gathering organizations find new ways of expression so that they can afford to keep their news-gathering and editorial operations intact, I’m all for.”

7:03 pm: Jobs adds that he believes people are willing to pay for content and that content providers are not pricing their offerings as aggressively as they should.

7:05 pm: When you did your presentation on the iPad, you described it as a new category of device, says Walt. But in order for it to succeed, people have to feel that it’s worth carrying around. Do you think the tablet will succeed the laptop, he asks.

Jobs: “When we were an agrarian nation, all cars were trucks, because that’s what you needed on the farm. But as vehicles started to be used in the urban centers, cars got more popular. Innovations like automatic transmission and power steering and things that you didn’t care about in a truck as much started to become paramount in cars. … PCs are going to be like trucks. They’re still going to be around, they’re still going to have a lot of value, but they’re going to be used by one out of X people. … I think that we’re embarked on that. Is the next step the iPad? Who knows? Will it happen next year or five years from now or seven years from now? Who knows? But I think we’re headed in that direction.”

7:10 pm: What are your thoughts on content creation on the iPad, Walt asks, noting that some people believe tablets aren’t good devices for content creation.

“Well, why wouldn’t they be good for content creation,” asks Jobs. “It can’t be that the software isn’t powerful enough, because the software is improving….These devices over time are going to grow to do new things. … You know, people laugh at me because I use the phrase “magical” to describe the iPad. But it’s what I really think. You have a much more direct and intimate relationship with the Internet and media, your apps, your content. It’s like some intermediate thing has been removed and stripped away. …. I think we’re just scratching the surface on the kind of apps we can build for it. I think one can create a lot of content on the tablet.”

What sorts of apps, asks Kara.

Productivity apps…video-editing software, says Jobs.

7:12 pm: Now a question about App Store rejections: Isn’t there a downside to Apple’s efforts to protect its customers from porn, malware, etc.

In reply, Jobs first notes that Apple, by supporting HTML5, supports a completely open platform. But it also supports a curated platform–iPhone OS. And that platform has rules. “We approve 95 percent of the apps that are submitted to the App Store every week and we approve them within in seven days.”

So what happened with that political-cartoon app you declined to approve a few weeks ago, asks Walt.

“We have a rule that says you can’t defame people,” says Jobs, noting that political cartoonists by virtue of their profession sometimes defame people. The cartoon app was rejected on those grounds, he adds. “Then we changed the rules…and in the meantime, the cartoonist won a Pulitzer….But he never resubmitted his app. And then someone asked him, ‘Hey why don’t you have an iPhone app?’ He says we rejected it and suddenly, it’s a story in the press….Bottom line is, yes, we sometimes make mistakes…but we correct them….We are doing the best we can, changing the rules when it makes sense. What happens sometimes is that some people lie, we find it, and reject it, and they run to the press, and get their 15 minutes of fame and hope it will get us to change our minds. We take it on the chin, and we move on.”

7:20 pm: Kara: “What do you do all day?”

Jobs: “I have one of the best jobs in the world. I get to hang out with some of the most talented, committed people around and together we get to play in this sandbox and build these cool products….Apple is an incredibly collaborative company. You know how many committees we have at Apple? Zero. We’re structured like a start-up. We’re the biggest start-up on the planet. And we all meet once a week to discuss our business…and there’s tremendous teamwork at the top and that filters down to the other employees…and so what I do all day is meet with teams of people and work on ideas and new problems to come up with new products.”

7:24 pm: Are people willing to tell you that you’re wrong, asks Walt.

Of course, Jobs answers. The best ideas have to win, no matter who has them.

7:25 pm: What do you imagine the next 10 years of your life is going to be about?

Oddly Jobs replies with a comment about Gizmodo and the lost iPhone prototype. “When this whole thing with Gizmodo happened, I got a lot of advice from people who said you’ve got to just let it slide…you shouldn’t go after a journalist because they bought stolen property and tried to extort you….And I thought about that and I decided that Apple can’t afford to change its core values and simply let it slide….We have the same core values as when we started, and we come into work wanting to do the same thing today that we wanted to do five years ago.”

7:27 pm: But you are going into new businesses, says Walt, trying to redirect Jobs back to the question at hand or at least get him to comment on any new markets that the company is eyeing. Advertising, for example, with its new iAds initiative.

Jobs concedes that Apple is pursuing new businesses like iAds. But he suggests the main reason it’s doing that is to make its developers more money. “We want to help our developers make some money so that they can keep providing free or really low-cost apps to customers,” he says. “That’s why we’re doing it. We’re not going to make much money in the ad business.”

7:29 pm: Jobs continues on the mobile advertising theme. “Something really interesting is happening on mobile phones,” he says. “They’re not mirroring desktops or laptop PCs. If people want to find out what restaurant to go to, they’re not going to their search engine typing in “Japanese” and “Palo Alto,” they’re going to Yelp or whatever app they want. Ads in mobile apps today, you touch them, and what is the first thing they do? They rip you out of your app, send you to the browser and then you’ve got to figure out a way back to your app. So, wouldn’t it be great if mobile ads didn’t take you out of the app, but rather took over the screen, gave you this great experience of an interactive ad, but anytime you wanted you could hit a little button that takes you right back to where you left off in your app? We figured out we could build something like this into the operating system so the apps don’t have to do it. We can make it so that an app developer can add these interactive ads in their apps with 30 minutes’ worth of work versus working with every advertiser to do some custom thing in their app, which is crazy.”

7:31 pm: A question about privacy. Is privacy looked at differently in Silicon Valley than in the rest of the world?

“We’ve always had a very different view of privacy than some of our colleagues in the Valley,” Jobs says. “We take privacy extremely seriously. That’s one of the reasons we have the curated apps store. We have rejected a lot of apps that want to take a lot of your personal data and suck it up into the cloud. Privacy means people know what they’re signing up for. In plain English, and repeatedly, that’s what it means. Ask them. Ask them every time. Make them tell you to stop asking if they get tired of your asking them. Let them know precisely what you’re going to do with their data.”

Q&A

Q: Given the events of the past few years, what would you add to the Stanford graduation speech you gave a few years ago?

A: I’ve no idea. I’d probably just turn up the volume a little bit because the past few years have reminded me how precious life is.

Q: I’d like you to put your Disney hat on for a moment….How do you preserve the value of content?

A: The way that we market movies is undergoing a radical shift. It used to be that you spent a fortune on advertising on TV running your trailers. But now you can advertise on the Web….When we went to the music companies, we said “who is your customer?” And they said, “Best Buy, Tower”…their distribution partners. But that wasn’t their customer. They needed to recognize who their true customer was….So what changed in the music business was not the back end, but the front end. The way that you market to the consumer….The film industry needs to embrace that. And it needs to let people watch the content they want to watch, when they want to watch it and where they want to watch it.”

Q: A complaint about dropped calls on AT&T’s networks. Is someone from Apple working on that?

A: You can bet we’re doing everything we can do….I can tell you what I’m told by reliable people: To make things better, people reallocate spectrum and they do things like increasing backhaul and they put in more robust switches…and things in general, when they start to fix them, get worse before they get better…and if you believe that, things should be getting a lot better real soon.

Q: How is HDCP helping the antipiracy effort?

A: We didn’t invent the stuff. The problem is that Hollywood doesn’t want what happened to the music industry to happen to them. You can’t blame them. But content protection isn’t their business and they’re grasping at straws here. But we’ve got to deal with their restrictions….I feel your pain.

Q: What’s your vision of social gaming?

A: Clearly, iPhone and iPod touch have created a new class of gaming and it’s a subset of casual gaming, but it’s surprising how good the games are. Typical console games cost $40, but on the iPhone, they cost somewhere between free and $10, and gaming on the platform is taking off. We’re trying to do the right things to enable more gaming and social gaming.

Q: Is it time to throw out the interface for TV? Does television need a new human interface.

A: The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us… ask Google in a few months. The television industry fundamentally has a subsidized business model that gives everyone a set-top box, and that pretty much undermines innovation in the sector. The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it. But right now, there’s no way to do that….The TV is going to lose until there’s a viable go-to-market strategy. That’s the fundamental problem with the industry. It’s not a problem with the technology, it’s a problem with the go-to-market strategy….I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby.

More Coverage on the Steve Jobs D8 Speaker Page »

The Chapter And Verse on E-Bookstores

Geoffrey A. Fowler — Thu, 27 May 2010 01:14:49 +0000

As books go digital, much of the focus has been on which gadgets offer the best approximation of old-fashioned paper and ink on a screen. But there’s another choice that’s just as important for readers to weigh before they make the leap to e-books: which e-bookstore to frequent.

Reading devices like the iPad, Kindle and Nook will come and go, but you’ll likely want your e-book collection to stick around. Yet unlike music, commercial e-books from the leading online stores come with restrictions that complicate your ability to move your collection from one device to the next. It’s as if old-fashioned books were designed to fit on one particular style of bookshelves. What happens when you remodel?

[ See post to watch video ]

Much of this problem stems from the publishing industry, which has demanded that e-bookstores embed digital rights management software in most best sellers to keep them from being stolen and swapped, free, online. The music labels once asked the same from digital-music retailers, but eventually agreed to open up.

The e-bookstores share in the blame. Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Barnes & Noble Inc. (BKS) and Sony Corp. (SNE) all want you to buy their own gadgets and to continue buying e-books from their stores. For example, purchases from Apple’s new iBooks store can be read only on Apple’s own iPad (and soon the iPhone). Even though Apple said it would support an industry standard format called ePub for iBooks, in practice your iBooks purchases remain locked on Apple’s virtual bookshelf. (So I hope iBooks customers like Apple’s light-brown wood paneling.)

Browsing Amazon.com on the Kindle

Many of the biggest e-book providers fall short of putting readers fully in charge of their own digital-book collections, but they have begun to unveil their own solutions for moving your e-books around.

Amazon, which jump-started the shift to e-books with its Kindle, lets customers read its e-books through apps on at least six kinds of devices. Amazon custom-built the free apps for gadgets that include the iPhone, iPad, BlackBerry, PC, Mac and (later this summer) devices running Google’s (GOOG) Android software. If a device has an Internet connection, the apps automatically load Amazon e-book purchases from the company’s website, saving you the fuss of keeping track of files and transferring them between gadgets with cables. In many ways, this is more convenient than the way we manage our digital-music collections by manually adding and deleting files from iPods through a computer.

Amazon’s apps are slick and work on many of the most popular devices today, but Amazon buyers should know that they’re likely stuck using the retailer’s software forever. While Amazon says it plans to keep making apps for more devices, the list of potential devices for reading grows longer every day. Moreover, Amazon sells its e-books in a proprietary format, so there’s no way to open those files on another device without an Amazon app or without resorting to cumbersome (and potentially illegal) third-party conversion software.

The Nook with Barnes & Noble store

Barnes & Noble, too, adopted an Internet-connected app approach, providing a seamless way to shift its e-books between the Nook, PC, Mac, BlackBerry, iPhone, WindowsMobile for the HTC HD2 and soon iPad. Barnes & Noble has been integrating its e-bookstore into niche e-reading devices, like those by Plastic Logic, Irex and Pandigital. It also, uniquely, offers you the chance to “loan” some e-book purchases to a friend for 14 days. But its bookstore requires a somewhat annoying step: Each time you download a book to a new device, you must enter your name and the credit-card number that was used to buy the book in order to unfasten the digital lock on the book.

Beyond the apps, Sony, Barnes & Noble and Apple and a few smaller e-bookstores all promised they’d put their weight behind the industry standard format ePub, which is the e-book version of music’s Mp3 and can be read by almost every reading device (except the Kindle). That sounds great in theory, but in practice, the ePub files either can’t be transferred or doing so is cumbersome.

The problem is each company adds digital rights management software to an ePub book. A copy of “Moby Dick” I bought from iBooks delivered just blank pages when I opened it on the Nook. A Barnes & Noble e-book produced an error message in Sony’s PC ePub reading software. Barnes & Noble says its books will be compatible with devices like the Sony Reader after a software upgrade.

An iPad showing Apple’s iBooks store.

There were two notable exceptions: Purchases from Sony’s e-bookstore and a Borders Group (BGP)-backed store called Kobo could open on the Nook and other ePub-reading devices if I used a free program from Adobe (ADBE) called Digital Editions to transfer it. That’s a nice insurance policy but the process is far more complicated than it should be.

There may yet be a third way. Google, which plans to launch an e-bookstore later this year, says customers will be able to access its books through apps on popular devices and through a Web browser on any device—including a phone or computer. Google’s argument is that we shouldn’t lock ourselves into one bookstore if it is going to offer titles that are dependent on special apps or devices. Google’s existing free out-of-copyright books service works under this same general premise, but it isn’t yet ready for prime time. It requires you to always be online to read a book and its pages aren’t well formatted for reading on small screens or mobile devices. Google executives say they will fix both issues when the commercial service launches.

For now, the e-bookstore choice comes down to which compromises readers are willing to accept. Anybody who just wants a simple way to carry digital books around might be happy with an app-based approach. But readers intent on building an e-library may want to either invest in an ePub-based collection, or hold off until the industry figures out a better solution.

Walter S. Mossberg will return June 10.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com

Don't Blame Apple for Its Music Monopoly. Blame the Big Labels.

Peter Kafka — Wed, 26 May 2010 10:30:02 +0000

Federal regulators are looking at Apple yet again: This time it’s members of the Department of Justice’s antitrust staff, poking around the company’s longstanding dominance of digital music.

The New York Times, which first reported the inquiries, thinks they’re aimed at Apple’s muscle-flexing this spring, when it reportedly convinced the big music labels to stop giving Amazon exclusives for big releases. People I’ve talked to in the industry aren’t convinced that’s the case, and tell me the chats they’re aware of have been wide-ranging talks about digital music sales in general.

But regardless of what the Feds are looking for, it won’t take much digging for them to figure out that Apple (AAPL) runs the digital music market. If you want to sell songs on the Web and you’re not on iTunes, you’re going to have a very difficult time.

So that answers the first part of the “Does Apple have a problem?” test that antitrust expert Harry First set up for my colleague, John Paczkowski this month: Yes, Apple has a monopoly, or close to it. And the company has had it since 2003, when iTunes started selling music.

Next question: Does Apple maintain its power by stifling competitors?

Tricky. Because the people most responsible for Apple’s market power are the ones who gripe about it most often: The big music labels.

They’re the ones who insisted on locking their songs up with digital rights management technology. Which meant that anyone who bought digital music was forced to choose between Apple’s iTunes/iPod platform or the lousy one promoted by Microsoft (MSFT) and others, which you can’t even recall anymore. Not really a choice at all.

The labels eventually wised up and started selling their stuff as unencrypted MP3s, meaning anyone could sell music that plays on Apple’s devices. But that was years too late. Even Amazon (AMZN), with all of its marketing savvy and clout, has managed to claw out only eight percent of the market in the last three years. Apple still commands 69 percent. UPDATE: New data show Amazon’s share moving up, though not at Apple’s expense.

But here’s the thing: If the labels really want to break Apple’s grip on their business, they could.

All they need to do is license their stuff at dirt-cheap rates to all-you-can-eat subscription services like Spotify and MOG. Sell that stuff at the right price–a buck a month? two bucks?–and everyone buys in, and no one ever thinks about buying songs from iTunes again. Poof!

The labels won’t do that. At least not now. We’re a decade past Napster, but they still prefer to sell compact discs, and failing that, individual songs. And they prefer to put up with Apple’s dominance than risk those sales.

But sales continue to shrink anyway. Even digital downloads seem to have petered out, at least in the U.S. And there’s nothing an antitrust regulator can do about that.

Windows Phone 7 Series Even More Impressive Than Previously Thought

John Paczkowski — Mon, 15 Mar 2010 17:55:34 +0000

Microsoft added a bit more to its Windows Phone 7 Series story at its MIX10 event this morning, revealing some of the mobile operating system’s features and detailing how developers can write software for it. While it’s obviously far too early to make any big declarations about it, the OS certainly seems competitive–and compelling. Consider this feature list:

accelerometer support
a Microsoft Location Service for the phones
Microsoft Notification Service, known to other smartphone users as push notifications
hardware-accelerated video playback with digital rights management
internet information services smooth streaming for live video
multitouch support
camera and microphone support

Table stakes at this point, I suppose, but a robust feature list just the same. Announced along with it: A free suite of application development tools and a solid list of launch partners that includes the Associated Press, EA Mobile, Namco, Pandora and Sling Media, among others. One of the OS’s showcase apps: Netflix with “Watch It Now” 3G video streaming.

Impressive, no? Could this be the beginning of another application development gold rush? Microsoft (MSFT) clearly hopes so.

“More than half a million Silverlight and tens of thousands of XNA Framework developers are now Windows Phone developers,” Windows Phone 7 boss Charlie Kindel wrote in a post to The Windows Phone Developers Blog.

“Developers and designers can now build their code once and optimize it to take advantage of the unique capabilities of the phone, Web, PC or Xbox 360,” Kindel added. “Due to common shared libraries, controls and runtimes across these many screens and the cloud, developers now have the opportunity to reach over 1 billion customers.”

Still, it’s far too early to say what’s to come. It seems clear, however, that with Windows Phone 7, Microsoft could make the jump from mobile OS also-ran to contender fairly quickly–assuming the market’s willing, of course.

Netflix: There's a Movie Waiting on Your iPhone

John Paczkowski — Tue, 04 Aug 2009 15:26:14 +0000

Among the 1,000-plus new features included in Apple’s iPhone 3.0 is a new open standard for live video streaming over HTTP, and soon, Netflix will make use of it. Well, that’s the rumor anyway.

An industry executive said to be familiar with the company’s plans tells Multichannel News that Netflix plans to extend its Watch Instantly video-streaming service to the Nintendo Wii and to the iPhone and iPod touch as well.

It’s not entirely clear how the company plans to bring Watch Instantly to the iPhone. Presumably, it will use a native iPhone app, since the device doesn’t support Silverlight, Microsoft’s (MSFT) Flash-esque also-ran.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Another issue likely to prove problematic: Bandwidth. Watch Instantly streaming typically requires a fair bit of bandwidth and might prove problematic over 3G connections. AT&T (T), which hobbled SlingPlayer Mobile for iPhone over bandwidth concerns, will probably see things that way. Which means Netflix’s app, if it is indeed in development, will be limited to Wi-Fi like the SlingPlayer.

Beyond that and the DRM issue, there’s not much more I can think of to prevent such an app from being brought to the iPhone. There’s not much overlapping content between Watch Instantly and Apple’s iTunes service. And even if there was, there’s no real rivalry here that might inspire Apple to block Netflix’s (NFLX) service. iTunes is run pretty much at break-even to support sales of Apple (AAPL) devices. And a Netflix app for iPhone would arguably help Apple do that as well.

Netflix: There's a Movie Waiting on Your iPhone

John Paczkowski — Tue, 04 Aug 2009 15:26:14 +0000

Among the 1,000-plus new features included in Apple’s iPhone 3.0 is a new open standard for live video streaming over HTTP, and soon, Netflix will make use of it. Well, that’s the rumor anyway.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Is the AP Adding DRM to the News? Not Yet.

Peter Kafka — Thu, 23 Jul 2009 20:03:15 +0000

Here’s the next step in the Associated Press’s attempt to adapt to the reality of the Web: It’s going to try to keep tabs on its stories, photos and videos via a “news registry that will tag and track all AP content online to assure compliance with terms of use.”

At first blush, the AP’s description of the program, found in this press release and this FAQ, sounds a lot like an attempt to implement digital rights management–a lock-and-key system–for the news. But at least in this iteration, that’s not the case. The AP is really talking about adding a layer of metadata to its copy, so it can see who’s using it, and where.

“Any time you talk about a tracking system, the thrust of [the commentary] is about enforcing copyright,” Jim Kennedy, the AP’s VP of strategic planning, told me this afternoon. “But what we hope is the outcome out of this is the ability to enable more licensed uses of content. We want to keep the content open, we don’t want to keep it behind firewalls.”

If you want to see a benign description of the technology the AP intends to use, head to this site, developed by its U.K.-based partner Media Standards Trust. If you don’t have time for that, just imagine Wal-Mart (WMT) adding RFID chips to track its pallets as they move around the country.

Jim Kennedy tells me that the AP will have tests for the new system up and running by mid-November, and hopes to have it in place for all the copy it produces by the end of the year. And in 2010, it will make it available to the cooperative’s members, i.e., other news organizations.

You’ll hear griping about this from some corners, but all of it sounds fine to me–I don’t care how the AP tracks its product. But note that this tracking system only works when its used by someone who already has a business relationship with the AP.

Which means it doesn’t solve the two problems the AP started complaining about this spring: The fact that bloggers and other nogoodniks are using AP copy without paying for it and the fact that Google (GOOG) isn’t paying the AP enough for the copy it does use.

On those fronts, the AP’s contract with Google expires at the end of this year, and my understanding is that renewal negotiations are moving slowly, at best. And the AP will continue to use Attributor’s tracking service to find unauthorized uses of its stuff on the Web.

And if the AP ever does try to shove its copy behind a firewall, then a tracking system would come in handy. But we’re not there yet.

Think You Own the Book You Bought for Your Kindle? You Don't, Says Amazon.

Peter Kafka — Fri, 17 Jul 2009 19:50:33 +0000

Buy an e-book for Amazon’s Kindle recently? You might want to check to see if it’s still on your device. Kindle users are complaining that the e-commerce giant has removed titles from their machines this week and given them refunds in their place.

What happened? The details are fuzzy, but apparently, a publisher that supplied Amazon (AMZN) with two George Orwell titles has decided that it doesn’t want to sell them via Amazon anymore. So away they went.

Readers described their experiences at this Amazon forum, and one of them included this note she said she received from Amazon customer service explaining what happened:

The Kindle edition books Animal Farm by George Orwell. Published by MobileReference (mobi) & Nineteen Eighty-Four (1984) by George Orwell. Published by MobileReference (mobi) were removed from the Kindle store and are no longer available for purchase. When this occured, your purchases were automatically refunded. You can still locate the books in the Kindle store, but each has a status of not yet available. Although a rarity, publishers can decide to pull their content from the Kindle store.

Normally, I’m pretty cavalier about the complaints that people make about the evils of digital rights management–the locks and restrictions distributors often attach to digital media like music, movies and books–but this is the sort of incident that gives those gripes some gravitas. If you’re buying bits, you ought to own those bits, just as you would when you plunk down dollars for a CD, a book or any other physical item.

Doubly confusing: As far as I can tell, Amazon’s license terms don’t have any loophole that allows for this. The section on “digital content” explains that I don’t have the right to “sell, rent, lease, distribute,” etc., the stuff I buy from Amazon. But it sure looks like stuff I buy, I keep:

Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

So, what am I missing here? I’ve asked Amazon for comment, but if anyone has any bright ideas, sound off in comments below.

UPDATE: Amazon says the copies it sold were “illegal”, because the publisher never had the rights to them. But it says that going forward, it won’t be removing books from customer’s Kindles “in these circumstances”.

Kindle Hikes Book Prices and Adds to My Ambivalence

Dan Gillmor — Mon, 11 May 2009 15:49:46 +0000

Just when I was coming to terms with my ambivalence toward my Kindle e-book reader, Amazon and the publishers have gotten greedy.

I’ve had a love-hate relationship with the device since I bought my first one about 9 months ago. As a frequent traveler and voracious reader, I’ve found the Kindle to be nearly ideal. I never have fewer than a dozen books in its memory, and they’re always things I want to read.

As someone who believes we should often interact with media instead of passively consuming it, however, I don’t think much of the Kindle for any purpose other than reading a narrative. And given what a disaster “digital rights management” (DRM) is becoming for scholarship, culture and ultimately freedom, the device’s restrictions on how I can use what I’ve purchased are deeply troubling.

Still, I’ve been using it with some degree of satisfaction (as have enough other people to have helped boost Amazon’s stock price, so as the holder of several hundred shares I’m slightly better off in that way, too). The second-generation model improved nicely on the first–among other things, fixing some user-interface quirks, letting me charge it via a USB cable, and boosting the battery life.

The books I load onto the device fall generally under the casual entertainment category. I buy a Kindle book the way I buy a movie ticket (or did before going to theaters became such a crappy experience).

These are books, like most movies, that I’ll read or watch once and forget about. A physical book is more like a DVD–something I want to own and enjoy again and again.

So the kinds of books I tend to buy for the Kindle are the sort I’d often pick up at an airport newsstand, namely mysteries, thrillers and semi-trashy novels that I’d sometimes leave in hotels or airplane seat-back pockets once I’d finished them. (I also subscribe to several magazines, and consider it a favor not to see the advertising.)

Once I got accustomed to reading e-books, I started doing something that had been out of character in the analog era: buying new books that, in print, were available in hardcover only. Why? The price, typically $10 (okay, one penny less), was right. In fact, my new-book purchases soared.

But not for long. In recent weeks, Amazon (AMZN) or the publishers (or both) have done their best to deter me from buying the latest releases. Prices have gone up, way up.

Now, I often find books for which I’d have gladly paid $10 listed at $14 or $15. I save these to a list I keep on the Amazon website, called “Too expensive for Kindle,” and periodically check to see if the price has dropped. So far, not yet on any of these.

Hiking prices this way creates a bad deal for the customer. Amazon’s price for a new hardcover is typically just a couple of dollars higher. This means I could buy the hardcover, read it and donate it to my local library, and–after the tax deduction–come out ahead. I’d do even better taking the book to my local used-book store and getting cash.

But I almost never buy new hardcovers of books I don’t expect to reread or use as a reference, because a) I’m kind of cheap; and b) I can stand waiting for the paperback. So if prices stay high, I stay away.

Now, sellers have every right to charge more for popular books, especially when they’re new. This is basic supply and demand. But when the price only makes sense for people who consider the ultra-portability of an e-book paramount, that’s a turnoff for other potential buyers.

As a customer I also understand supply and demand. My demand is extremely elastic, and in this case it’s snapped.

Last week’s introduction of the Kindle DX was framed in many ways by different constituencies, but I was taken aback by the praise heaped on the device by several newspaper people, including the CEO of the New York Times Co. (NYT) (in which I also own a small amount of stock). Newspapers aren’t going to fix their considerable woes with Kindles, and anyone who thinks so lives in a fantasy world.

The DX, with its bigger screen, strikes me as potentially useful in several ways, possibly including the textbook function that Amazon hopes to jumpstart with the help of several universities (including the one that employs me). But if textbook publishers don’t radically cut prices on the outrageously expensive books they sell, they will find themselves creating a strong incentive for precisely what they don’t want: unauthorized copying.

I suspect the DX will prove most useful in more prosaic ways. For example, it could be a nearly ideal container and viewer for technical documentation–thick manuals that need periodic updating, where the cost of printing is prohibitive and the bulk of the books is daunting for the user.

Will all of this be made moot by the widely anticipated Apple (AAPL) “NetPad” or whatever it’s going to be called? I refer to a device that looks like a larger version of the iPod Touch, which would be a wonderful mobile multimedia player, among other likely capabilities.

I doubt it. If you enjoy severe eye strain, reading books on a back-lit, glossy display is just the ticket. The passive displays on Kindles, the Sony (SNE) e-reader and other such devices are much better for this kind of reading.

One size does not fit all in the emerging world of devices. Then again, one carry-on bag doesn’t hold all devices. For now, however, the Kindle has a place in mine.

Consumers Want to Rip, Burn DVDs

Marisa Taylor — Fri, 17 Apr 2009 15:22:11 +0000

Apple’s (AAPL) iTunes makes saving music from CDs onto one’s personal computer a simple process, but doing the same with a DVD is much more complicated endeavor. Most DVDs are encoded with digital rights management technology to prevent copying.

Most DVD viewers think that’s hypocrisy. A study of 1,000 consumers conducted by the National Consumers League found that 90 percent think that they should have ability to back up DVDs on their personal computers in the same way they are able to do with music from a CD.

Read the rest of this post on the original site

Sue. Rent. Rip. Return.

John Paczkowski — Tue, 30 Sep 2008 17:01:55 +0000

Turns out RealNetworks Inc.’s new DVD ripper, RealDVD, is as legal as its creator is litigious. RealNetworks (RNWK) debuted RealDVD this morning and along with it, a preemptive lawsuit against the Hollywood interests that will inevitably attempt to litigate it into oblivion. Brought against the DVD Copy Control Association and a who’s-who of major studios, the suit asks the court to rule that RealDVD complies with the DVD Copy Control Association’s license agreement not only by retaining the “content scramble system” used to protect DVDs, but by enhancing it with an additional layer of digital rights management protection.

“RealNetworks took this legal action to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs,” the company said in a statement. “We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases. For nearly 15 years RealNetworks has created innovative products that are fully legal, great for consumers, and respectful of the legitimate interests of content creators and rights holders. RealDVD follows in that tradition. We expect to successfully defend our right to make RealDVD available to consumers and consumers’ rights to use it.”

We’ll see, I guess. Clearly the silly little “RealDVD is for saving a DVD you own” disclaimer attached to the software isn’t going to cut it with Hollywood. I imagine we’ll be hearing from the Motion Picture Association of America before the day is out.

Grave New World

John Paczkowski — Mon, 22 Sep 2008 19:00:12 +0000

[ See post to watch video ]

One–Make That Two–Words: Plastic Logic

John Paczkowski — Mon, 08 Sep 2008 18:00:07 +0000

[ See post to watch video ]

Rent. Rip. Return.

John Paczkowski — Mon, 08 Sep 2008 14:19:24 +0000

RealNetworks Inc. (RNWK) CEO Rob Glaser calls RealDVD, the company’s new “legal” DVD ripper, “a compelling and very responsible product that gives consumers a way to do something they have always wanted to do.” But really, what it’s giving them is a more cumbersome way of doing something that they’ve already been doing for years now with DVD Decrypter, AnyDVD, Handbrake, MacTheRipper, RipIt and the like.

Like other DVD rippers, the $30 software program easily copies entire DVDs–right down to the menus, bonus features and cover art. But unlike those rippers, RealDVD does so in an ostensibly legal way. It copies them without breaking their digital rights management schemes by installing a second layer of DRM on the ripped files that prevents users from sharing the DVDs online.

What it doesn’t do, though, is prohibit users from ripping DVDs that they rent. Effectively, users are on the honor system. And last I checked, the honor system isn’t a Hollywood-approved DRM scheme.

The Entire D6 Interview With Amazon.com's Jeff Bezos (4 of 4)

Kara Swisher — Thu, 14 Aug 2008 07:02:30 +0000

We’re posting all the interviews from the sixth D: All Things Digital conference that took place in late May.

Unfortunately, due to issues too complicated to go into, we have to post all the D6 interviews in several 15-minute parts (I know, I know).

But–as many readers have requested–they will all be available in their entirety in this column.

Here’s Part 4 of 4 of an interview Walt Mossberg did with Amazon’s President, CEO, Chairman and, oh yes, Founder, Jeff Bezos. (I posted one video part of the discussion with Bezos every day this week, starting Monday and concluding today.)

The e-commerce giant seems to be firing on all cylinders of late, along with making some innovative moves, such as the recent introduction of its e-book reader, the Kindle.

In this video, Bezos takes questions from the audience about digital rights management and other issues about the Kindle, and about streaming videos.

[ See post to watch video ]

Napster Sad

John Paczkowski — Tue, 20 May 2008 11:00:03 +0000

It took nearly a decade, but Napster’s finally managed to license music from all the major labels.

This morning the company, which once terrorized the music industry with free peer-to-peer file sharing, launched what it claims is the world’s largest MP3 store. An OS-agnostic shop, Napster’s new storefront offers more than 6 million tracks encoded at 256Kbps and priced at 99 cents apiece. The tracks are free of digital rights management protections and playable on virtually any device–including the iPhone and iPod.

With 6 million songs, Napster (NAPS) has the largest DRM-free catalog of any online retailer. Its selection is about three times the size of Amazon’s (AMZN), and while Apple’s (AAPL) iTunes also boasts a catalog of over 6 million songs, only a fraction of those are offered free of copy restrictions.

But really, does that even matter? Because as compelling as Napster’s new MP3 store might be, it doesn’t have nearly the reach or mindshare of iTunes–which, at last check, was among the most ubiquitous pieces of software around. And how do you compete with ubiquity? Certainly not by failing to support Apple’s Safari browser, that’s for sure.

"Comes With Music," DRM & Sony BMG

John Paczkowski — Tue, 22 Apr 2008 11:28:48 +0000

Sony BMG (SNE) has signed on to Nokia’s (NOK) new “Comes With Music” program and really, who better than the pioneer of the rootkit digital-rights management scheme to endorse Nokia’s DRM-hobbled prebundled music initiative?

This morning, Sony BMG became the second record label to jump on board the Finnish phone giant’s Comes With Music offering, which–when it launches in the second half of 2008, will package mobile phones with a year of unlimited access to music. There are, however, certain caveats to that value proposition, as I pointed out last December:

Though Comes With Music does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s (MSFT) ironically named ‘Plays for Sure’ digital-rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the music catalog requires the purchase of a brand new phone.”

Clearly, Sony, like Universal (VIV.PA) before it, doesn’t see these issues as off-putting to consumers. “When you give consumers the key to the candy store without any limitations, there’s a lot more opportunity for discovering music that you might not have found before,” said Thomas Hesse, president of global digital business and U.S. sales for Sony BMG Music Entertainment. “We think this will energize the discovery of music.”

It might energize Sony BMG’s bottom line a bit as well. When Universal first signed up for Comes with Music, sources close to the company said that Nokia would pay the label up to $35 for every phone that offers access to its library. Nokia subsequently denied it was paying that amount, but it’s definitely paying something–to Universal, Sony and whatever other labels it manages to line up for the service.

"Comes With Music," DRM & Sony BMG

John Paczkowski — Tue, 22 Apr 2008 11:28:48 +0000

Though Comes With Music does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s (MSFT) ironically named ‘Plays for Sure’ digital-rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the music catalog requires the purchase of a brand new phone.”

Intel's Antitrust Pig Pile

John Paczkowski — Fri, 11 Jan 2008 19:00:51 +0000

[ See post to watch video ]

Intel's Antitrust Pig Pile

John Paczkowski — Fri, 11 Jan 2008 19:00:51 +0000

[ See post to watch video ]

Nokia 'Comes With Music' Service Also 'Comes With DRM'

John Paczkowski — Wed, 05 Dec 2007 19:00:15 +0000

[ See post to watch video ]

Nokia 'Comes With Music' Service Also 'Comes With DRM'

John Paczkowski — Wed, 05 Dec 2007 19:00:15 +0000

[ See post to watch video ]

'Comes With Music': Free, as in Pay Us Per-Song Usage Rights

John Paczkowski — Wed, 05 Dec 2007 08:01:40 +0000

If terms of Nokia’s new “Comes with Music” program appear impossibly generous to the consumer, who will pay no monthly fees for Universal Music Group’s entire catalog, it’s because they are.

Though “Comes with Music” does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s ironically named “Plays for Sure” digital rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the UMG catalog requires the purchase of a brand new phone.

All of which makes perfect business sense–after all, Nokia’s not in the business of giving away music–though it certainly would like to be perceived that way from the looks of the company’s press release. “This is how the consumers will consume music going forward. This is a step toward where this business we believe will be moving to in two to three years time,” Rob Wells, Universal’s SVP of digital, told Reuters. “Consumers will have access to all the recorded music available through the price of the device, or the price of service, or the price of broadband.”

And they’ll pay an additional price to use it as they see fit.