All Things Digital

In the future, “heavy users” of Comcast’s broadband service may face not just a periodic slowing–sorry, deprioritizing–of their service, but a capping of that service as well. Broadband Reports brings word today that Comcast plans to implement a 250GB broadband cap come October. “The intent appears to be to go after the people who consistently download far more than the typical user, without hurting those who may have a really big month infrequently,” a source familiar with the plan told BroadBand Reports. Indeed it does. Certainly, 250GB is quite a bit higher than the 5-40 GB caps being considered by some other providers. Still, it’s not exactly the “unlimited” service Comcast has sometimes touted in its marketing materials.

So what happens should one hit Comcast’s cap or exceed it? Comcast (CMCSA) says first-time transgressions will be addressed with an “excessive use” call from Comcast’s Customer Security Assurance group. But hit the cap twice in six months and you’ll be looking for a new ISP. “If a customer surpasses 250 GBs and is one of the top users of the service for a second time within a six-month time frame, his or her service will be subject to termination for one year,” Comcast explains in its Excessive Use FAQ. “After the one-year period expires, the customer may resume service by subscribing to a service plan appropriate to his or her needs.”

Assuming he or she is still willing to give Comcast his or her business.

French cinephiles are illegally downloading from the Internet as many films as they pay to see in theaters. This according to a new study from the Association Against Audiovisual Piracy (ALPA) that was–My God, THE IRONY–itself leaked to the Internet without its creator’s knowledge or consent. One of the largest studies of its kind, the ALPA effort found that 13.5 million films were illegally downloaded in May, while box office ticket sales for that month were 12.2 million. On average, more than 10 million copies of films are illegally downloaded in France every month. Some 450,000 copies are downloaded daily. Incroyable, but true. “We are facing a major phenomenon that can endanger the film industry and (other) audiovisual industries,” ALPA director Frederic Delacroix told Agence France-Presse. “We did not expect such numbers.”

In a 2004 email to Steve Jobs, RealNetworks (RNWK) CEO Rob Glaser asked the Apple (AAPL) CEO to consider a “tactical alliance” with his company. License us your Fairplay digital-rights management system, allow our customers to play their digital music collections on the iPod, wrote Glaser, and we’ll make the iPod our primary device for the RealNetworks store and for RealPlayer software.

It was an astonishing offer at the time, especially coming from Glaser, who had been a vocal critic of Apple and its decision to make digital music sold through its iTunes store playable only on iPod (”I bought an iPod and can only shop at one store,” Glaser once said. “What is this? The Soviet Union?”)

But it was an offer that Jobs found unappealing. The Apple CEO rebuffed Glaser, declining even to meet with him over lunch to discuss it.

Glaser, of course, took it poorly and spent the next few years slagging Apple and Jobs for declining the partnership. “We think Apple Computer, and Steve personally, are making a mistake by making the software proprietary,” Glaser said at the Digital Living Conference in 2005. “There’s no reason we should penalize Apple customers for Steve’s pigheadeness.”

Course, in the end Real didn’t penalize Apple’s customers. Apple’s customers penalized Real. And today Apple’s iTunes is the largest music retailer in the states. And Real? Well, Real’s “embracing” the iPod.

Funny how that worked out.

This morning the company announced a new MP3 store whose unprotected music files can be played anywhere–even on an iPod. Like Apple’s iTunes, the Rhapsody MP3 Store offers music from all four major music labels at 99 cents per track, or $9.99 for an album. Over five million songs will be made available, at 256k-bit rates. Visitors can preview them in their entirety instead of the 30-second samples offered by iTunes and the like. And, if they’re Verizon (VZ) subscribers, they can download music directly to their phones with the company’s V CAST Music with Rhapsody service.

“We’re no longer competing with the iPod,” said Rhapsody Vice President Neil Smith. “We’re embracing it.”

Pigheadeness, be damned.

Telekinesis was a great little iPhone remote–while it lasted. But come July 11, its days may be numbered. Hidden away in the latest developer build of iTunes 7.7 is a new Apple-designed remote control application for iPhone and iPod Touch users that navigates tracks on Macs and Windows PCs from any of Apple’s current handhelds.

“Use iTunes 7.7 to sync music, video and more with iPhone 3G, and download applications from the iTunes Store exclusively designed for iPhone and iPod Touch with software version 2.0 or later,” the iTunes installer Read Me document explains. “Also use the new Remote application for iPhone or iPod Touch to control iTunes playback from anywhere in your home–a free download from the App Store.”

Sounds like a slick little application. Even slicker if Apple (AAPL) finally decides to add “multi-zone” support to AirTunes so we can stream different music to different speakers throughout our homes.

[Image Credit: InventorSpot]

“What has become of the Sony known for its technology,” Japanese Economy, Trade and Industry Minister and former Sony employee Akira Amari asked in October of 2006. “I hope it will solve its problems soon to quickly recover its brand image reputed for technological prowess.”

If Amari can recall when that was Sony’s image, he has a good memory. Because Sony (SNE) lost its dominant position in consumer electronics to rivals in Japan, South Korea and the U.S. long ago and has yet to regain it.

But it will soon, according to company CEO Howard Stringer, who announced today a new growth strategy designed to re-establish its global supremacy. Stringer’s plan: to peddle software and video-downloading services, not just hardware. And to bind them together over the Internet. “Our mission is simply to be the leading global provider of networked consumer electronics and entertainment,” Stringer said at a news conference.

To that end, Sony will soon announce a movie download service for its PlayStation 3 game console. And this fall it will begin broadcasting films and television shows directly to its Bravia TVs via the Internet. And if all goes according to plan, 90% of Sony’s devices will wirelessly connect to the Net by March 2011. Perhaps even Rolly, Sony’s dancing iPod killer …

Said Stringer, “This is not your father’s Sony.”

Hope not. Because my father’s Sony is Apple (AAPL).

Apple’s (AAPL) iTunes digital media store has now sold more than 5 billion songs since its 2001 debut. And with downloads of digital movies having reached 50,000 a day, Apple says the service has become the leading purveyor of online music and videos.

What’s more, it’s now the largest music retailer in the states. Which means it’s bested Wal-Mart (WMT) for the top music-retailer spot.

Apple offered up this news with a bit of a reality-distorted caveat, though. The latest NPD Group data on which its claims are based was culled from the research outfit’s MusicWatch survey, which counts one CD as representing 12 tracks.

As of this writing Wal-Mart’s list of 10 top-selling CDs includes many that feature more than 12 tracks–some with more than 20, and one that boasts more than 35.

Looks like Firefox Download Day will be one for the record books after all.

Though its servers were initially overwhelmed by the volume of download requests yesterday, Mozilla soon had the Firefox 3 download site humming along nicely. Yesterday afternoon, it was serving up 14,000 downloads a minute and 13 gigabits of data a second. And within 5 hours it had broken Firefox 2’s single-day record of 1.6 million downloads and by 5 a.m. PDT today–18 hours into its world record attempt–it had already blown the doors off the 5 million mark it had set for itself with 6,415,252 downloads. By 7 a.m. PDT it was closing in on 7 million.

“We’re incredibly happy to have released Firefox 3 and for nearly 7 million people so far to care enough to make a positive decision to download it and use it,” Mozilla CEO John Lilly told Digital Daily. “A few more hours left in download day and then we’ll shift away from thinking about download day and back to thinking about what’s next. How to make the browser even more useful on your desktop and in your pocket, and how to help more people understand that the browser is the lens that we often look at the world through today. But it’s been amazing to watch the map though the day as countries woke up and went to sleep–really gives you a sense of how global things are now.”

Global, indeed. Worldwide usage share of Firefox 3.0 has spiked since yesterday. According to independent data compiled live by analysis firm Net Applications, 4.23% of the world’s browsers are declaring themselves as Firefox 3 in HTTP requests.

UPDATE: Firefox 3 has broken the 7 million downloads barrier. As of 7:44 a.m. PDT, 7,067,347 copies of the browser had been downloaded.

(Image Credit: Al Billings)

Of the 1,770 songs stored in the average MP3 player of the average 14- to 24-year-old, nearly half are pirated. This according to a new study by the University of Hertfordshire, which found nearly two-thirds of that demographic willing to admit it downloads music illegally. Commissioned by the recording industry group, British Music Rights, the study also found that 58% had copied music from friends’ hard drives and 42% had shared their music over a peer-to-peer network. A full 95% said they’d copied music in some way or another at one time or another.

And 80% would pay for a legal subscription-based music service that would allow them to discover, swap and recommend music.

Which, if true, illustrates the great disparity between the consumer and industry views of digital music. Because according to the Hertfordshire study, consumers–at least those in this particular age group–view digital music on the Internet as a sort of giant mixed tape to be explored and shared. They don’t have much of an emotional connection with it: “Respondents seem to attach a hierarchy of value to different formats of music, with streaming-on-demand the least valuable (though still valued); ownership of digital files somewhere in the middle; and ownership of the original physical CD the most valuable.”

The recording industry, of course, has failed to recognize that hierarchy. When, and if, it does, the study notes, it may finally succeed in monetizing that mixed-tape ethos that’s befuddled it for so long. “Survey responses suggest that respondents would continue to purchase CDs and go to gigs, even if they subscribed to a legitimate peer-to-peer file-sharing service,” the survey adds. “Fans want to support or pay tribute to their favorite artists and ownership of a digital music file does not necessarily do justice to their sense of devotion.”

Apple’s much lauded iPhone captured 28% of the smart-phone market in the States by the fourth quarter of 2007–just six months into its launch. Today it holds something less than that–about 19.2%. But to look at the headlines, you’d think it controlled the market in its entirety. A quick search on Google returns 19,035 results for “iPhone”– from Jun. 2, 2008 to today. Why? Because in a few hours, Apple CEO Steve Jobs will address the company’s Worldwide Developers Conference in San Francisco, at which he is expected to unveil the next version of the company’s iPhone.

And for Apple’s (AAPL) sake, I hope he does. Because with expectations running this high, I’d hate to see what happens if he doesn’t. Although the new Apple Store housed in a life-size replica of the Golden Gate Bridge pictured in the invite would certainly take some of the heat off …

Anyway, I’ll be live-blogging from inside Moscone West in San Francisco starting at 10 a.m. PDT. Here’s something to read while you wait …

• From Moscone West: This is crazy. They just opened a single door to let cameras in and the media rushed the gate. Its like that 1979 Who concert in Cincinnati.



• The hall in Moscone West is filling quickly to the sounds of Jerry Lee Lewis. From the looks of it media and developers are here in equal numbers.
• Jobs takes the stage. I’m sitting about 20 rows back, but even I can see he’s looking pretty thin from here. He gets right into it, pulls up a slide of a stool and describes Apple as a three-legged company. Macs, music and the iPhone.
• Jobs will spend the morning talking about the iPhone. This afternoon Apple will discuss OS X “Snow Leopard.”

Read more »

Wow. Blockbuster is completely out of ideas, isn’t it? This morning the foundering movie rental chain went public with its bid to acquire ailing retail consumer-electronics chain Circuit City.

In a Feb. 17 letter to Circuit City CEO Philip Schoonover, Blockbuster (BBI) offered to pay more than $1 billion for the chain. But, to date, Circuit City (CC) hasn’t fulfilled a request for due diligence necessary to make the bid definitive.

Why? In a conference call today, Blockbuster chief exec Jim Keyes described the offer as “simply too attractive to ignore.” But it seems Circuit City also thinks the offer might be too attractive for Blockbuster to finance. “… To date Blockbuster has been unable to satisfy Circuit City and its advisers that Blockbuster’s proposal could be financed,” the electronics retailer said in a statement. “In particular, Blockbuster’s proposal appears to contemplate a rights offering of unprecedented size relative to the issuing company’s market capitalization and at a price that is at a significant premium to Blockbuster’s current market price.”

Well, yes, there is that. And, of course, there are other issues as well. Like what, exactly, are the synergies between a foundering movie rental chain and a foundering electronics retailer–aside from the fact that they’re both, you know, foundering? If it’s Blockbuster rental kiosks in Circuit City stores, the alliance would seem doomed to failure. Wait. It is Blockbuster rental kiosks in Circuit City stores?

To be fair, Keyes says digital content is important too, and he seems convinced that Circuit City will provide Blockbuster with the infrastructure it needs to distribute video to TVs and mobile devices. “What this combination provides is the ultimate distribution channel for [digital] content,” he said this morning. “It’s not necessarily downloading content to the PC that will ultimately capture the consumer’s imagination. It’s the opportunity to get that content on your TV and your mobile device that is a game-changing opportunity.”

A game-changing opportunity for Apple (AAPL), maybe. But for a foundering, outdated video-rental outfit?

As far as solutions for California’s $14 billion budget deficit go, taxing “digital property” is nearly as outlandish as Gov. Arnold Schwarzenegger’s proposed $4.8 billion cut in education spending.

Yet it’s being bandied about by Democratic State Assemblyman Charles Calderon, whose Assembly Bill 1956 would expand the state’s sales tax to digital goods–music downloads, e-books, pornography and what-not. “The notion of taxing tangible, physical property is really an industrial-era construct when we made widgets and sold widgets,” Calderon argues. “Now it’s not about widgets, it’s about information, and selling information and moving information.”

It certainly is, but is it really prudent to slap an iTax of 8.25% to 8.75% on such information? Especially when those who peddle it could pretty easily create a separate entity out-of-state and avoid it altogether? Driving away e-commerce certainly isn’t going to do California’s budget any good. “When you charge these taxes, all these e-commerce [companies] are going to move outside of California,” said Michelle Steel, a member of the California State Board of Equalization. “California is the high-tech state; why would you want to kick them out?”

Good question. Because if you do force them out, who’s going to provide the state with its massive tax windfalls? From an Associated Press report from January, 2007:

After cashing in more than 9 million shares valued at $3.7 billion last year, 16 Google insiders will owe the Golden State as much as $380 million in taxes–enough to cover the salaries of more than 3,000 state workers.”

Lest there be any doubt that DVR functionality was purposefully left out of Apple TV, consider this patent recently unearthed by AppleInsider. Filed in October of 2006, the patent describes not just a version of Apple TV capable of browsing and recording live TV programming, but a touch-based remote that could be preloaded with upcoming TV listings to facilitate it. From the patent:

For example, program data for upcoming programs, e.g., for the next month, can be downloaded and stored on the remote control device. Thereafter, a user of the remote control device can search programs that are to be broadcast and determine which programs to record. The recording settings can be programmed onto the remote control device, and then be provided to the video device when a data communication is established between the remote control device and the video device.”

Pretty slick, eh? Lots of additional possibilities here as well. One could easily imagine the iPod Touch and iPhone serving as the remote the patent describes. And if this next-generation Apple TV is capable of recording TV programming, why not make it the gateway through which such programming is delivered? How nice would it be to subscribe to HBO–and HBO alone–via iTunes? How nice would it be to subscribe to a season of “Weeds”? Or to a commercial-free season of “The Office” and skip everything else NBC has to offer? How nice would it be if the latest unwatched episode of “Weeds” on your Apple TV was automatically synced to your iPhone for later viewing? How nice would it be if new films opened on iTunes the same day they opened in theaters?

Pipe dream? Perhaps. Certainly, these scenarios would require Apple (AAPL) to ink some fantastical new licensing deals with Hollywood. And the two aren’t exactly seeing eye-to-eye all the time these days. Still, you never know. Stranger things have happened.