News written by James Delahunty (June, 2006)

The owner of ShareConnector, a popular ed2k link indexing site that was shut down in late 2004, is to appear in court charged with "professionally (complicity) copyright violation and participation in a criminal organization." The eDonkey2000 network, which relies on a number of ed2k servers, remains very popular to this day even facing rivals such as BitTorrent.

ShareConnector was not an eD2K server, nor did it offer any files either legitimate or otherwise. It offered a simple service to its users; sharing and indexing of "eD2K links" which basically point an eD2K client like eMule to a particular file on the network. Just like clicking a hyperlink to go to another website, a simple click on a link would fire up your eD2K client, which would then use the data to search for the particular file on the network.

Dutch anti-piracy foundation BREIN was behind action taken against ShareConnector in 2004. Now, finally this case will go ahead and the legality of eD2K links can be determined. The administrator and owner of ShareConnector is to appear in a Rotterdam court this Friday. The defense will tackle some major holes in the prosecution's case.

Sources within the film industry have said that a version of Apple Computer Inc.'s iTunes store that will sell full length feature films should debut by the end of the year at the latest. Not a lot of new information has been made available on Apple's push to start selling major Hollywood movies, but it is believed that the company is still locked in a debate over pricing.

It was reported that Apple CEO Steve Jobs approached the studios with an offer to sell movies for a flat $9.99 each. As expected, this proposal was trashed immediately by the movie studios. "We can't be put in a position where we lose the ability to price our most popular content higher than less popular stuff," said a studio exec close to the negotiations to Variety.

Apple currently sells music downloads for 99c each, and has argued with music labels that propose a variable pricing system instead. Additionally the company also sells TV shows for $1.99 each. It is expected that Apple will be forced to price movies between $9.99 and $19.99, where more popular material will cost more of course.

"Every studio wants to have broad distribution in digital, and we all know that having Apple as part of that is very, very important," a studio exec said. The price of a movie download and what exactly you can do with them (like whether or not they can be transfered to a DVD and played on all DVD-Video players) will determine the level of success iTunes can hope for. Once again, the entertainment industry will be selling content on the Internet where it is also available for free through other means. Overpricing won't convince people to use a legal alternative.

According to a Reuters report on Friday, Microsoft is indeed developing a music and video device to compete with Apple's iPod as well as creating a music store to rival iTunes. The report cites information from sources familiar with the plans. According to these sources, Microsoft has held licensing discussions with major record labels and is already demonstrating the entertainment device.

Robbie Bach who headed development of the Xbox is apparently overseeing the project. Last December, Bach was promoted to president of Microsoft's entertainment and devices division. At that time he passed an e-mail to co-workers saying: "While I will continue to play an important role in the games area, I will spend more time thinking about our broader challenges and opportunities across the division."

Microsoft's content protection software is already in use on several music download sites and it is the key to offering subscription based music services. iTunes had stayed on top however, despite giants such as Yahoo backing the monthly subscription fee option. The failure so far of subscription services can be credited to consumers' reluctance to "rent" music.

The Federation Against Software Theft (FAST) is working to identify companies that are illegally sharing software on the Internet through P2P services. The organisations' "Operation Tracker" has just produced its results for its second phase which was launched in April. It has identified 25 companies where software is being illegally shared on the Internet.

FAST is tackling companies as it is aware that many employees make use of available high speed connections to share copyright material. SMEs (stands for small to medium-sized enterprises) are the worst offenders for such activity. FAST refers to its system as the CCTV of the Internet. Operation Tracker searches for software sharers and builds a library of what they have make available.

FAST said that this is a warning to directors who prevail over an environment where employees break the law. After the first phase of Operation Tracker, FAST recovered several thousand pounds and 18 identified individuals signing binding undertakings.

"Tracker works, and if corporates and their management teams think they can either hide from or ignore their liabilities they are going to have to think again. Misuse of software is something directors cannot plead ignorance to. If their staff are using the corporate network for illegal activity, those in charge may be liable. Theft is theft and will be treated accordingly." commented John Lovelock, director general of FAST.

Apple Computer Inc. has released a statement promising to investigate claims made by a British newspaper about working conditions at an iPod-producing factory in China. According to the Mail on Sunday, the factory employs some 200,000 workers who are pushed to 15 hour work days for about $50 per month. The workers live in dormitories where visitors are not permitted.

After the report was published and Apple fan sites started buzzing over it, the company released a statement. "Apple is committed to ensuring that working conditions in our supply chain are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible," the statement said.

The company is "investigating the allegations regarding working conditions in the iPod manufacturing plant in China." It added, "We do not tolerate any violations of our supplier code of conduct." iPod factory workers are employed by Taiwanese contract manufacturer Hon Hai Precision Industry Co., also known as Foxconn Electronics Inc.

While the working conditions at the factory might seem shocking to some, they are not unusual or uncommon according to Karin Mak, a project coordinator at a nonprofit watchdog organization called Sweatshop Watch. "It's very common," she said. "These types of conditions are very typical, unfortunately."

A task force led by the Federal Bureau of Investigation (FBI) has seized more than 20,000 CyberHome-brand DVD Recorders alleging that they use Philips' patented technology without a license. The task force (known as REACT) obtained a search warrant for the warehouse after being tipped off by Philips. CyberHome markets DVD players and recorders and also portable devices that can be found in some of the biggest chains in the U.S., including Best Buy, Circuit City, Fry's, Target and Wal-Mart.

The task force said that the raid was "part of an ongoing investigation into the illegal manufacture and sale of products bearing counterfeit trademark." Under California laws, punishments for the manufacture, possession, or sale of more than 1,000 items bearing a counterfeit mark include up to three years imprisonment or fines up to $500,000.

The recorders were brought away in eight loads with an estimated retail value of more than $2 million. "CyberHome has been using Philips DVD technology in its DVD players and recorders for a very long time now without paying royalties," said a spokesman for Philips Electronics North America.

"Their debts currently are a multimillion amount of dollars. At this moment, CyberHome is not licensed at all, so they infringe upon our patents. This is illegal, and it also creates unfair competition in the market, as many other companies are licensed. We always want to find solutions in a peaceful way, but if companies do not respect our IP, we are forced to take legal steps." the spokesman added.

The Motion Picture Association of America (MPAA) has enlisted football legend Pelé to encourage fans to "score a goal against piracy". The footballer and trade group made a Public Service Announcement that will be displayed by networks during the 2006 World Cup. The networks that will show the PSA include ESPNEWS, ESPN Classics, FOX Sports and HBO Ole. The MPAA says Pelé "embodies the notion of fair play and love of the game".

Pelé's own 2004 film, Pelé Forever, was widely pirated and available on the streets of Latin America. The MPAA chose Pelé because the typical pirate is apparently male and aged between 16 and 24 years old. The MPAA says that Pelé has broad support from individuals in that age group in countries across the world.

"We are honored to have a distinguished teammate in Pelé in our fight against film copyright theft," said Chairman and CEO of the MPAA Dan Glickman. "Pelé has a reputation for fair play and in this public service announcement, he carries that message to people - urging them to do the right thing by renting, buying or downloading movies legally."

Microsoft has altered how the Windows Genuine Advantage software behaves after accusations that the program was "phoning home" very frequently turned out to be true. At a system boot, the WGA software would exchange data with Microsoft's servers, even if the installation of Windows XP had been confirmed as legitimate by the software at an earlier date.

Lauren Weinstein, co founder of People for Internet Responsibility, posted his findings on a blog and compared the tool's activity to that of spyware. "I fail to see where Microsoft has a 'need to know' for this data after a system's validity has already been established," Weinstein wrote. "I'll leave it to the spyware experts to make a formal determination as to whether this behavior actually qualifies the tool as spyware."

Windows Genuine Advantage has two main tasks, the first of which is "validation". The tool will check your XP installation and determine whether it is legitimate or pirated. If it is legit, then the second task will not go ahead. If the installation is pirated, then the second task, which is "notifications", will begin. Users running a pirate XP with WGA installed will start to receive messages with links to Microsoft's site to see the benefits of using legit software.

CBS has added some of its primetime TV shows to the iTunes store. The new shows include Survivor, Numb3rs, NCIS, CSI: Crime Scene Investigation, CSI: NY and CSI: Miami. As usual with iTunes, shows will be available the day after they air for $1.99. The last seasons are also available. The entire season of survivor can be bought for $25.87, Numb3rs for $39.99 and CSI and CSI: NY for $44.99.

These latest additions bring the total number of TV series being offered by iTunes over the 100 mark. "iTunes has proven that people enjoy viewing shows on their computer or iPod, which provides an opportunity to reach new audiences with our hit shows and gives our existing viewers a chance to catch up on missed episodes," Larry Kramer, president of CBS Digital Media, said in a statement.

Back in February, CBS added content from its Showtime channel to iTunes. This content included the first seasons of three TV series; Weeds, Sleeper Cell and Fat Actress. Later in March, Apple struck a deal with CBS Sports to offer NCAA basketball coverage through the iTunes.

The British Phonographic Industry (BPI) has called upon Apple Computer Inc. to take steps toward interoperability by licensing its FairPlay DRM technology to other manufacturers.

FairPlay is the name given to the Digital Rights Management (DRM) protection that controls how a user can listen to and make copies of tracks purchased from the iTunes music store. You can transfer a song from iTunes to an iPod and listen to it, but you cannot do the same with a Creative Zen for example.

"We would advocate that Apple opts for interoperability," BPI chairman Peter Jamieson told the House of Commons Select Committee for Culture, Media & Sport inquiry into New Media and the Creative Industries. The tie between iPod and iTunes is gold for Apple as each plays a major part in the success of the other. iTunes and iPod hold over three quarters of their respective markets. Such a large share in the market is making the record companies uneasy.

According to predictions made by Merrill Lynch, one of the most recognizable names in financial services, Apple Inc. will ship four million iPhones in 2007, followed by 12 million in 2008. The report indicated that monthly shipments will initially linger around 200,000-300,000 units, eventually reaching one million by the end of the year. The iPhone is expected to begin shipping before the end of June.

Merrill Lynch warns that component suppliers for the iPhone are unlikely to see a boost in their revenues in the short-term, but in the long-term, the iPhone may help drive demand for higher-end handsets which should help suppliers. Mobile phone companies including Nokia and Sony Ericsson are also waiting to see what the iPhone does to sales of high-end feature-rich models.

Nokia CFO Rick Simonson recently stated that iPhone presents an opportunity for Nokia and that the world's largest handset maker would respond quickly to any competitive threat in the market with added-value functions and new handset models.

Source:
DigiTimes