VODAFONE LAUNCHES GLOBAL MOBILE TV CHANNELS PAGE 10

DECEMBER 10-16, 2005 ISSUE NO. 472 Creative Has ‘Vision’ “The way that content is delivered to and played To Challenge iPod in the home is dramatically changing”

Consumer electronics maven Creative Technology has introduced a new handheld video player that poses a direct challenge to the new video iPod. Cisco Outlines The 30GB Zen Vision:M boasts a 2.5-inch, high-reso- lution, 262,144-color LCD screen on which to view digi- tal video and photos, full-color menus and album art. It Internet Video Strategy delivers four hours of video playback and supports a number of video formats including MPEG-2, MPEG-4 In the next decade, video will sition of Denmark’s Kiss Technology Simple Profile formats such as Xvid, WMV and MJPEG sharply increase the load on the routers as a sign of the company’s commit- for enjoyment of up to 120 hours of movies downloaded and switches that handle Internet traf- ment to the Internet video market. from the Internet. fic, says Cisco CEO John Chambers in Similar to Akimbo, Kiss gear con- One of the more intriguing features is the Zen the Wall Street Journal article “Cisco nects between the Internet and the TV Vision:M’s support for TiVoToGo, which lets TiVo sub- Girds to Handle Surge in Web Video.” set so users can play Internet-based scribers use the portable player to watch TV shows they Speaking in New York to investors, video, radio, weather reports, stock recorded with their TiVo. It also supports digitized home Chambers said the demands of video quotes – all on the TV. Such gear oper- movies transferred from the PC and video blogs from will transform the Internet over the ates on the “un-TV” network, the 200 companies such as RocketBoom. next decade. Network traffic should or so Internet sites, with more coming, increase four-fold to that offer video for six-fold annually, Our worker elves are entertainment, instead of the information and already plotting their year-end 100%-a-year gains education. They now seen in the US holiday ventures - the winter include such as and Europe. solstice season when we let CinemaNow, “Making video them out of their dens for frol- Starz, Movielink, work is really, real- ic, family, feasts and festivals. AOL, Disney’s ly, really difficult,” Here’s the schedule: ESPN plus many Chambers said. December 16- TOR issue 473 that are not so well Chambers made December 23 - off known. the same point December 30 - off Chambers said about the impor- January 6 - TOR issue 474 Cisco will acceler- Creative’s Zen Vision:M Plays Video, Music tance of video to the The office will be open, just no ate its entry into Net’s future (and the Internet video newsletter for two weeks. There’s even an optional composite video-out connec- vice versa, we market next year tor that lets users view Zen-stored content on any size TV might add) when by launching a Kiss screen. Cisco announced its intention to widget in the US that connects to a TV “When people see the Zen Vision:M, they tell us it’s acquire Scientific-Atlanta for $6.9 and has a built-in hard disk for storing incredibly cool,” said Sim Wong Hoo, chairman and CEO billion. Cisco’s lust is for the set-top- video downloaded from the Net and a of Creative. “We designed the Zen Vision:M with its mes- box business, especially those with DVD player. merizing 262,144 color screen to display four times the DVR functionality, of which “This will be a new expansion of color of the 30GB iPod that plays video, and to provide Scientific-Atlanta claims to be the our approach to networked entertain- twice the battery life for video playback. Plus, we offer world’s largest producer. ment,” said Chris Stevens, a VP at people the freedom to choose their video in a variety of Only 30% of spending on Internet- Cisco’s Linksys home-networking different formats, and to get subscription music or down- based television broadcasting gear division in a Wall Street Journal arti- load tracks from a number of different sites to their play- takes place in the US, Chambers said. cle. Cisco is reportedly creating a “net- er.” Cisco’s marketing and distribution worked entertainment business” unit Of course, as a member of Creative’s Zen family of prowess outside the US should benefit around Kiss gear, which will be for- Scientific-Atlanta’s business. continued on page two Chambers also cited Cisco’s acqui- continued on page two Q ©2005 MAY NOT BE COPIED OR FORWARDED BY E-MAIL, POSTED TO A PAGE 2 WEB SITE, FAXED OR COPIED IN WHOLE OR IN PART. DECEMBER 10-16, 2005

Internet except that it’s delivered over the The thought of an audience numbering in Cisco same broadband network that’s used to pro- the hundreds of billions is enough to make continued from page one vide broadband access. It’s a “walled gar- every video producer and would-be video mally announced next month. den” in the sense that the pay-TV compa- producer drool. Cisco says it expects the cable TV ser- nies control what’s offered and when. Perhaps Cisco can put the marketing vices to sell the Kiss boxes just as they sell muscle and credibility into an Internet-con- nected set-top video box that Akimbo has the Scientific-Atlanta gear. The cablecos the telcos are the prime been unable to do. We have contended that will have to think twice about that, once candidate for selling an the telcos are the prime candidate for selling they see that Internet-based video poses a “un-TV” box an “un-TV” box. It would give them a big direct threat to their pay-TV business. Cisco edge over the cablecos with a valuable ser- also expects to sell the Kiss gear in elec- Internet TV – Also referred to as vice the cablecos are unlikely to offer. The tronics retailers just as its Linksys PC net- Internet-based video and similar terms, it telcos, at least for the moment, seem deter- working operation does. turns consumers loose on the Net to find mined to emulate the cablecos, perhaps Most media reports blur the very real dis- and watch whatever interests them – from with a few more bells and whistles. A set- tinctions between IPTV and Internet TV: sports to university lectures, from music top box that gives subscribers access to both IPTV – It uses Internet technology to videos to 60-second comedies. Some are conventional pay-TV services and Internet- distribute movies, TV shows and other paid for, some are subscribed to with a based videos would be an attractive combi- video, but has nothing to do with the monthly or annual fee and some are free. nation, not to mention a real differentiator.

Zen Vision continued from page one Major Digital players, the Vision:M also stores and plays back music. The unit can store up to 15,000 songs and supports Microsoft PlaysForSure-compatible music services including Yahoo Music, Napster (and Media Napster To Go), Rhapsody (and Rhapsody To Go), AOL MusicNow and MSN Music. Tradeshows Zen Vision:M & iPod – a Side by Side Comparison

Zen Vision:M iPod Storage capacity 30GB 30GB/60GB 15,000 songs 7,500/15,000 songs January 5-8, 2006 120 hours of video Video storage dependent CES on format Las Vegas Screen size 2.5 inches 2.5 inches (262,144 colors) (65,000 colors) March 19-23, 2006 TelecomNEXT Windows Media Yes No (run by US Telecom) AAC (iTunes) No Yes Las Vegas MPEG-4 Yes Yes 703-907-7700 Battery life Video: 4 hours Video: 2 hours/3 hours April 9-11, 2006 Audio: 14 hours Audio: 14 hours/20 hours NCTA, The 2006 National Weight 5.75 ounces 4.8 ounces/5.5 ounces Show (163 grams) (136 grams/156 grams) Atlanta Price $329.99 $299/$399 202-775-3669 June 4-8, 2006 Additional features include 14 hours of music playback or four hours of video playback on a sin- GlobalComm 2006 gle battery charge; FM radio and recording with 32 preset options; password-protection for all con- (run by TIA) tent stored on the player; a built-in microphone; an organizer that syncs with Microsoft Outlook and Chicago an alarm clock. 703-907-7000 The $329.99 Zen Vision:M is available in high-gloss black, white, blue, green or pink.

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TW to Keep AOL; by searches conducted by its users using News Corp Seeks Google, under an agreement that reaped the Bigger Net Presence Gets Better Search company about $300 million in revenue last year. The deal expires in 2006, the newspaper News Corp is considering both teaming Terms from Microsoft reports. up with a search company and acquiring one Heard of being Microsofted? Ask the likes in order to expand its Internet reach, accord- of Netscape, WordPerfect, Lotus and ing to Ross Levinsohn, the company’s Novell. They'll tell you that it means a com- Internet chief, at a meeting with investors bination of Microsoft's deep pockets, persis- sponsored by UBS. He said the company was tence and numerically overwhelmingly engi- still reviewing proposals from several possi- neers has moved in and taken over your mar- Together, AOL and ket. ble partners including Quigo. Microsoft can match every Late to the Internet, News Corp acquired As we go to press on Thursday night, the the social networking site MySpace.com for Wall Street Journal says Microsoft appears to entry in Google and $580 this summer. Levinsohn said the com- be about to pull off phase one of taking the Yahoo's arsenal pany is carefully studying how to increase seemingly invincible Google down a few advertise on the site. notches by signing up AOL to use News Corp, which owns the Fox broadcast Microsoft's search engine. AOL is currently network, the 20th Century Fox studio, the Google's largest account, reportedly account- Fox News Channel and has a controlling ing for about $100 million a year in revenue. interest in DirecTV, has other plans to take Remember how Bill Gates turned Time Warner chairman Richard Parsons, advantage of the Net’s ability to deliver con- Microsoft around when the Internet threat- whose been under fire for the poor perfor- tent and services directly to hundreds of mil- ened to leave his company high and dry? mance of his company's share price, would lions of consumers, according to Levinsohn. Here's a reminder that Gates, perhaps this only say the company is in discussions with They include Web-only episodes next year of generation's most determined person, recent- "multiple parties" about partnerships with ly said that Microsoft will have a search the hit Fox show “Family Guy.” In addition AOL. engine next year that's demonstrably better to being available on the show’s Web site, As the value of the big-draw Internet por- than Google's, they’ll also be on IGN, a gaming site that tals such as Yahoo and Google increases, so An AOL-Microsoft axis would threaten News Corp acquired. News Corp may sell seemingly has Time Warner’s reluctance to ads on the Webisodes. the duo of Google and Yahoo. Together, AOL and Microsoft can match every entry in turn loose its AOL operation – or any part of Google and Yahoo's arsenal although perhaps it. After months of negotiations to sell some not yet in the quality of the offerings. or all of AOL, Time Warner looks set to hang The alliance would also be able to reach on to it, get either a better deal than its cur- “For today’s youth, this is more Internet users than Yahoo or Google. rent one with Google or jettison Google in where they hang out” The Journal uses stats from comScore order to make a search deal with Microsoft. Media Metrix, an online market research All this comes from a New York Times arti- firm, to show that an AOL-Microsoft alliance cle this week that quotes an executive would be able to reach as many as 140 mil- involved in the talks as saying Google’s lion Americans each month - about 80% of newly proposed terms would increase the MySpace recently launched a record label all US Internet users, compared with roughly 80% cut Google currently gives AOL and and signed its first band. Levinsohn said the 122 million recent monthly users of Yahoo increase the traffic that Google drives to the company considers music “absolutely criti- and 86 million for Google. AOL sites. No longer involved in the negoti- cal” to MySpace’s future success. MySpace In addition to switching to Microsoft's ations with Google are third parties such as now has some 40 million users. search engine, the Journal says AOL and Comcast, instant messaging or ad sales. Concerning News Corp’s attempts to add Microsoft's MSN would set up a joint venture The Microsoft negotiations, taking place more ads to MySpace, Levinsohn said, “It to sell ads on both AOL and MSN Web sites. simultaneously, include the possibility of a only becomes commercial if you inundate There's a deep pocket factor too. joint venture in ad sales, cooperation in them with advertising. I don’t think we’ll Microsoft, whose MSN appears to be mostly instant messaging and perhaps a minority ever get to a place where we could kill it. The a declining dial-up service, needs AOL more stake in AOL. minute we put something up people don’t than Google does now. Although Google is Reportedly, Time Warner valued the whole like, we hear about it.” said to be still in negotiations with Time of AOL at $20 billion, but both Google and “For today’s youth, this is where they hang Warner over a deal with AOL, it's reported- Microsoft thought that too pricey. out,” Levinsohn said of MySpace. News ly not willing to guarantee a minimum At the very least, AOL should get either a Corp doesn’t want to jeopardize losing the amount of revenue, which Microsoft had youthful MySpace audience. He said the agreed to do. bigger cut from Google’s ad revenues or a company will listen carefully to users’ The Journal reported that AOL currently better deal from the deep pockets of responses to any moves it makes. keeps about 80% of the ad revenue generated Microsoft.

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APPLES SLICES Apple Signs Up NBC lion videos since its iTunes started selling sales. He said that Apple’s adoption of Intel video in October. microprocessors for Macintosh computers Apple and NBC Entertainment have The Apple-Disney deal highlighted an could lead to the integration of Intel’s Viiv signed a deal that will make a plethora of avalanche of deals as the TV networks and technology into its entertainment PCs. NBC content available to iPod and PC users other video purveyors rush to market: Munster called Microsoft’s Media Center a via Apple’s iTunes. It’s a follow-on deal to EchoStar – Archos to copy content failure. He said that consumers’ positive the one Apple announced in October with recorded on an EchoStar DVR to an experiences with iTunes had caused them to Disney that offers five Disney and ABC Archos-made portable video player. be interested in playing around with and test- shows. The Disney deal was announced dur- ing Apple’s products but not Microsoft’s. ing the launch of the video iPod. CinemaNow – Archos to copy movies that have been downloaded to a PC to the Archos widget. iTunes Europe NBC Universal - DirecTV – a 99-cents- Hits 100m Downloads per-episode “video-on-demand” arrange- A lucky music lover in Belgium received a ment for selected TV shows – without 17-inch iMac G5, a 30GB iPod, a gift card more shows including commercials. sports, late night and for 10,000 iTunes song downloads and tick- CBS – Comcast - also a 99-cents-per- ets to a concert just for downloading an daytime fare episode video-on-demand without com- album of Mozart’s “The Magic Flute.” Well, mercials deal. Apple actually awarded the prizes because TiVo – will enable certain models to copy the Belgian gentleman’s music purchase was recorded movies and TV shows to Apple the 100 millionth download from iTunes iPods and Sony PSPs. Europe. NBC Universal TV Group president Jeff Zucker said the discussions between NBC No iPod Tax and Apple had started before those between “digital strategy is for our Apple and Disney. What is different about in Japan This Year the Apple-NBC deal, Zucker said, is its content to be available There’ll be no iPod tax in Japan this year. A scope – more shows including sports, late anywhere and everywhere” committee called the Cultural Agency reject- night and daytime fare – and more platforms ed a plan proposed by Japan’s recording – NBC, the USA Network and the Sci-Fi industry and the Japanese Society for Rights Channel. Zucker said NBC Entertainment’s “digital Canal+ - Archos – Archos portable video strategy is for our content to be available recorder/player with a seven-inch screen The next thing you know, anywhere and everywhere and so this is just can be used as DVR by attaching it direct- the next step in that strategy.” ly to the Canal+ STB, then used as software companies will The shows will go for $1.99 each, just like portable player. want a tax on every the Disney shows, and include: “Law & computer that’s sold to Order,” “The Office,” “Dragnet,” “Battlestar Analysts Rush to Upgrade Galactica,” “The Tonight Show with Jay compensate them for Leno,” “Late Night With Conan O’Brien” Apple’s Share Price software piracy. and older programs such as “Alfred Wall Street analysts seem to be falling over Hitchcock Presents,” “Dragnet” and “Knight themselves in their rush to upgrade the price Rider.” they think Apple shares will rise to. of Authors, Composers and Publishers (JAS- First-run prime-time programs will be Ben Reitzes of UBS Investment RAC). It would have added a 2% and 5% available after they run on the US West Research said on CNBC that the lack of surcharge to the price of portable MP3 play- Coast, said Apple and the General Electric- non-video iPods on retail shelves helps the ers such as the Apple iPod. The recording controlled NBC. stores to upsell iPod prospects to the pricier industry said the money was needed to com- Financial terms, including the deal’s video iPod. That, he said, will have a positive pensate songwriters and copyright holders length, were not disclosed, except for impact on Apple’s revenues. for digital music piracy losses. Reportedly Zucker’s statement that the deal is “definite- Piper Jaffray analyst Gene Munster said the committee was unable to reach a consen- ly not exclusive.” on CNBC that Apple’s newly announced sus. The next thing you know, software com- entertainment PC – the one that uses the panies will want a tax on every computer The Floodgates Have Opened Front Row software and the nifty remote that’s sold to compensate them for software Apple says it’s sold more than three mil- control – could add 20% to Apple’s PC unit piracy.

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BROADBAND BEAT BellSouth Testing But The Bells will have to run a fiber optic these comments.” New Orleans CTO Greg cable to the neighborhood, at the very least Meffert said, “It’s a once-in-a-century oppor- Unsure about Pay-TV and which AT&T has committed to, or all the tunity to truly show the entire world what BellSouth, the most conservative of the way to the home, which is Verizon’s can be, instead of just what is, and help write three big Baby Bells, says it’ll test its pay- promise. Either is an expensive proposition future history in the process. It’s a damn TV service next summer using Microsoft’s that will cost billions. shame BellSouth doesn’t see that.” IPTV technology and delivering the video On the other hand, what choices do the tel- The network, other than in emergencies, over a fiber optic network, according to cos have? Their consumer bundle includes would run at little more than double the BellSouth president and COO Mark Feidler, broadband that’s considerably slower than speed of dial-up. The network’s speed is so speaking at an investor conference in New what the cablecos offer and mobile phone slow that seemingly only those who cannot York this week. service from their partially owned mobile afford broadband would be interested in The test will take place in about 1,000 phone companies. using it. homes in Atlanta, BellSouth’s hometown. The cablecos counter with broadband Currently BellSouth is testing the service in that’s four or more times faster, an estab- What’s Wrong With This a few employees’ homes, using the lished pay-TV service with lots of bells and Picture? Microsoft software. whistles and less expensive VoIP phone ser- Service Speed in Mbps Feidler said the company has not made a vice. Please note that not all cableco phone Cox ...... 4.0 decision about a company-wide rollout, say- service is VoIP, however. Cox, for example, ing, “We still have questions about the eco- sells a phone service that uses traditional BellSouth...... 1.5 nomics.” Pay-TV will require the telcos to phone technology except that it’s delivered New Orleans network rollout an expensive fiber optic network. over Cox’ cable. during emergency ...... 0.15 The cable TV operators have signed up about 4.5 million telephone subscribers so New Orleans when “We still have questions far. not at emergency ...... 0.128 about the economics.” Dial-up ...... 0.056

Both AT&T and Verizon have announced what choices do the ambitious plans for pay-TV in order to com- telcos have? Law enforcement and other city agencies pete with the cable companies who, having will also use the network. The city says it taken the telcos’ broadband market, are now eventually intends to outsource operation of carving out a piece of the telcos’ traditional the network’s business and consumer ser- local phone business, especially the con- Four of the major cablecos have recently vices to a private firm. sumer sector. announced a deal with Sprint Nextel that BellSouth CTO William Smith last week AT&T says it’ll have a “controlled” will enable them to offer their own brand of threatened to impose a toll on Internet com- launch of its Lightspeed pay-TV service mobile phone service. panies that want to get their content deliv- early next year using the Microsoft technol- ered faster than others. ogy. It has tested the service in employee BellSouth Upset with New Orleans Mayor Ray Nagin ran the homes in its San Antonio hometown. New Orleans operation of the Cox cable TV Rumors continue to say that there are prob- New Orleans Wi-Fi Plans company immediately prior to being elected. lems with the AT&T pay-TV test, particular- BellSouth appears not to be happy with the ly Microsoft’s IPTV software but AT&T city of New Orleans’ decision to build a free Deutsche Telekom executives say the software is meeting all of citywide Wi-Fi network. BellSouth’s Bill its targets. Oliver, who runs the company’s Louisiana Rolling Out VDSL Verizon, which does not use the Microsoft operations, was so angered by the city’s The German government has agreed not to IPTV software, has already launched its announcement that he took back an offer to force Deutsche Telekom (DT) to open its FiOS pay-TV service in Keller, Texas and donate one of the company’s damaged build- VDSL broadband network to third parties Herndon, Virginia and is currently rolling it ings for use as police headquarters, accord- after DT threatened to drop the project and out in the Tampa, Florida area. Rather than ing to the Washington Post. cut 5,000 jobs, according to the DSL Prime the Microsoft software, Verizon is using the BellSouth spokesman Jeff Battcher had newsletter. Reportedly the DT ploy was a same technology that the cablecos do for his own spin: “Our willingness to work with bluff, as it needed VDSL technology for its video delivery. the mayor and the city is still on the table. planned video. DT is also said to be losing Qwest, the fourth of the remaining Baby We’ve been working for over two months on Bells, has been silent on the topic. this building. We are a little surprised by Rolling Out DSL: continued on page SEVEN

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BROADBAND BEAT

VoIP service called TotalTalk that allows would be two-10 times faster than Verizon’s Rolling Out DSL: continued from page SIX users to make Internet telephone calls BPON and comparable to the GPON coming phones lines by the millions to third-party using a broadband telephone adapter that in 2007. local phone services and to VoIP services. they can connect to their home phone. DSL Prime says DT plans to connect some Then eBay bought VoIP market leader three million homes immediately with Worldwide Broadband Skype for $2.5 billion in September. It says VDSL technology on its way to nationwide Satellite Service Launches it intends to integrate Internet telephony into deployment. Speeds will be 100 Mbps down It’s not priced to attract the average con- its online auction service so buyers and sell- and 100 Mbps up in apartment buildings and sumer, but satellite-accessible broadband ers can better communicate with each other. 50 Mbps down and 10 Mbps up in low-rise will soon be available worldwide. Inmarsat, It’s going to get interesting in the con- districts. The topology is more like the fiber- after six years of development, this week sumer phone service business – worldwide. to-the-curb in the US, not the much cheaper launched the Broadband Global Area fiber-to-the-node, according to the newslet- Network (BGAN), which will let its clients ter. Serving Customers make voice calls and receive data in remote Well Can Be a areas. Yahoo IM Users Get VoIP Although we don’t generally cover VoIP, the Great Business Strategy following is too important to miss. Yahoo “Free wireless in New Orleans and San will let its 21 million Yahoo Messenger users Francisco should inspire other cities to get in the States make domestic and internation- everyone connected. If necessary, municipal- “BGAN enables anyone to ities should pay for it out of the public safe- al phone calls for a minimal per-minute fee, set up a broadband mobile perhaps as low as one cent per minute, from ty budget. ‘The debate over whether to add a anywhere to the US. Wi-Fi/WiMax network should be over,’ I office in minutes” Yahoo Messenger is the third most popu- wrote two months ago. Whether built by the lar instant messenger service after AOL city, the cable guy, the telco or a new entrant, Instant Messenger and MSN Messenger. the redundant network will save lives when emergencies hit. A portable terminal makes the satellite connection and is connected to a PC or phone via a USB wire, Wi-Fi or Bluetooth too important to miss municipalities should pay technology. The service will offer simultane- for it out of the public ous voice and data at rates up to 492 Kbps safety budget (0.49 Mbps). A guaranteed transmission speed up to 256 Kbps (0.256 Mbps) is optional. Yahoo competitors AOL, Google and Inmarsat COO Michael Butler said, Microsoft are preparing similar VoIP ser- “BGAN enables anyone to set up a broad- vices. Once that’s done, assuming they use “Around the world, telcos are fighting this band mobile office in minutes and remain their instant messaging service as the vehi- competition the wrong way, with political fully productive - wherever they are on the cle, Internet telephony will be available to power. A far better answer is to deliver first- planet.” the three hundred million people around the class service yourself, like Verizon’s FiOS. The service is limited to the footprint of world, including 80 million Americans, that The Bells have an RFP out for GPON fiber, the first of Inmarsat’s satellites, launched in send 12 billion instant messages a day, four-10 times faster than Verizon’s BPON. March, and which covers Europe, the Middle according to comScore Media Metrix and Serving customers well can be a great busi- East, Asia and Africa. A second satellite in IDC. ness strategy.” – Dave Burstein in the DSL Prime newsletter. the middle of next year will cover North and Yahoo, Microsoft, AOL and Google have South America. The two will cover about telegraphed their VoIP intentions to the 85% of the globe’s land area. A third satellite world: Cox Could will extend the service to the global maritime - Yahoo bought Internet telephony com- Become Fastest Network and aeronautical communications sector. pany Dialpad Communications in June. The planned EON Network from Cox may Terminals will be available from Nera - Microsoft, which has 22 million instant be able to support 100 Mbps up and down, Satcom, Thrane & Thrane, Hughes messaging users in the US, bought VoIP plus 200 or more HDTV channels, according Network Systems and Addvalue firm Teleo in August. to DSL Prime. It would make the Cox the Communications. Reportedly they already - AOL, with 53 million IM users, offers a fastest cable TV network in America and have 15,000 orders.

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LEGAL MATTERS Sharman Blocks use the filter, he said, “I can’t help feeling country an Internet user is located in and can that if you could wipe out the 3,000 most prevent the person from accessing specified Australian Users, popular tunes which would no doubt include sites. The BBC uses geo-targeting software Fails to Install Filters the current pop favorites and you could to prevent non-BBC residents from access- The Australian record labels, through the update that, I think on a fortnightly basis, I ing its online TV and music programs. Australian Recording Industry think that is reasonable for a limited period. Association (ARIA), intend to ask You are going to significantly affect the Two Views On the Australia’s Federal Court to shutter the amount of damage that has occurred.” Sharman Networks Kazaa file sharing net- Sharman evidently understood or pretend- Telcos’ Lobbying Power work, ARIA CEO Stephen Peach said this ed to misunderstood Wilcox’ order different- “You have to take a threat from the Baby week. ly than the labels did. A December 7 press Bells seriously. Their lobbying power – Peach said the Federal Court had given release from Sharman made it seem like it’s especially in Washington but also at the state Sharman until December 5 to include a business as usual: “Yesterday, Sharman level as well – is phenomenal. They were 3,000-word filter in its Kazaa file-sharing Networks announced that it had complied held somewhat at bay by the FCC under the software in order to block the downloading with Wilcox’ Order 4 of the 5 September chairmanships of Reed Hundt, Bill Kennard of copyrighted music tracks. Judgment by ceasing distribution of the and Michael Powell. They appear to be fully Instead, Sharman, by its own admission, Kazaa application in Australia before mid- in the driver’s seat under current chairman blocked Australian users’ access to the night on 5 December 2005, and using proven Kevin Martin; lately the FCC has been act- Kazaa site and warned Kazaa users in “geotargetting” technology and warnings ing as if its sole role is to protect incumbents Australia to uninstall the software. prohibiting existing users from using the regardless of the cost to the public of that However, Australians who had already application. For Sharman Networks, it other- protection.” - Tom Evslin in an Always downloaded and installed the Kazaa soft- wise remains business as usual.” On.com article called “Don’t Buy DSL From ware can continue to use the file-swapping This Man ... If You Can Help It” about the service without restriction – as can Kazaa clearly breached an statements made by AT&T (nee SBC) chair- man and CEO Ed Whitacre that he intends to users worldwide. The only thing Sharman’s existing court order move does is to make it impossible for charge Vonage, Yahoo and Google for using Australians to download the Kazaa software. his company’s “pipes.” They can still install it if someone e-mails it Sharman added, “The judgment pertained “I believe the number one core competen- to them, sends it by instant messenger or to authorization of copyright in Australia. cy of the telcos is lobbying. No joke. They posts it on another P2P service for down- All activity that could be deemed as autho- are great at it. Their lobbying competency loading. rizing has stopped so as to comply with the makes the waiting, stalling, delaying game “From our point of view they have clearly court orders, pending the imminent appeal in all the more powerful, cuz during the delay breached an existing court order. They have February.” the lobbyists can work magic.” – Pip Coburn failed to implement the keyword filters that Not mentioned in the Sharman press of Coburn Ventures in the AlwaysOn.com the court ordered on the last occasion,” release is the subject of filtering, which the article “They’re Not Stupid, They Were Peach said. “Unfortunately we’ll be back to Federal Court of Australia ordered Sharman ‘Freed’” about how the “free” mentality of court. It’ll be sooner rather than later.” to implement as an interim step. The 3,000- the Internet has impacted the telcos and the The notice on the Kazaa Web site said, word filter, which the labels submit to recording companies. “Attention users in Australia. To comply Sharman and update every two weeks, is with the Federal Court of Australia, pending designed to prevent the more popular songs MPAA, RIAA an appeal in the February 2006, use of the from being illegally downloaded. Kazaa Media Desktop is not permitted by After finding Sharman guilty of copyright Warning Omits Rootkit persons in Australia. If you are in Australia infringement on a massive scale, the judge The MPAA and RIAA sent out notices this you must not download or use the Kazaa ordered the implementation of a keyword fil- week that tell consumers how to avoid buy- Media Desktop.” ter as a condition of a stay on the copyright ing counterfeit and pirated works. They “Sharman has thumbed its nose at the judgment. Without the filter, the Kazaa site include warnings such as “Remember the court,” said Peach. “They were given a is to be shut down. Adage ‘You Get What You Pay For,’” chance to do the right thing and they’ve The 3,000-keyword filter is to apply to all “Watch for Titles that are ‘Too New to be ruined it. They again have shown they intend users, not just those in Australia. Initially the True’” and “Look for Suspicious to do nothing about the illegal activities record labels wanted Kazaa to filter 10,000 words. Packaging.” They do not, however, include occurring on a massive scale on their sys- “It’s now time for Sharman to match their warnings about how to spot CDs and DVDs tem.” words with action,” Peach said. whose DRM software leaves the consumer’s When Justice Wilcox ordered Sharman to Geo-targeting software identifies which PC open to hacking and viruses. Ouch!

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HOME NETWORKING Entropic Ships the first implementation of its Lightspeed nology. DirecTV says the NDS boxes with network, but it’s requested HPNA capability MPEG-4 technology will be available in 100,000th MoCA Chip if the field trials pan out. mid-2006. Expect Entropic to announce it’s shipped Reportedly, the initial HPNA tests at DirecTV’s HD DVR customers will thus 100,000 MoCA chips. They’ll show up in AT&T did not go well due to limited perfor- be faced with a “Hobson’s choice”: a DVR- various devices such as set-top boxes, DVRs, mance in both throughput and outlet cover- less HD set-top box that receives the MPEG- PCs and other gear that will be connected to age. Lots of the copper wiring in homes and 4 transmissions from the new birds or DVRs a very high-speed, highly secure network in apartments is pretty old. However, work is that receive the MPEG-4 high-definition sig- the home – one that’s capable of carrying still being done on improvements. nal but that don’t record in high-definition. multiple streams of high-fidelity video with a Coppergate is the only HPNA 3.0 chip To record but only in standard definition or security that the Hollywood studios can vendor we could find. not to record and see HD, that is the question accept. The Entropic chips, not yet fully It’s certainly understandable that the DirecTV subscribers will be asking them- MoCA-certified, are labeled as pre-certified. industry wants a back door in the Alamo selves until the company can get its transi- Final certification is expected shortly. (that’s an Americanism for second source) in tion in synch. Cable TV subscribers won’t, of Companies receiving the MoCA chips case MoCA falters. Unless HPNA can get course, have to make that choice. include the likes of: quickly up to speed and robustness on a coax A further complication is that DVR users TwoWire, which is supplying the hybrid network, it’ll find MoCA with too much now save recordings long term – not just last EchoStar AT&T/broadband modem to momentum to stop in the coax world. night’s football game but, say, lots of AT&T. episodes of “Friends” or “Cheers.” How will Motorola, which makes DVRs and set- DirecTV HDTV, HD DVR those be copied to the new DVR that’s need- top boxes. It’s one of two DVR suppliers Schedules Out of Synch ed for receiving HD signals from the MPEG- to AT&T for use in an IPTV network. 4 birds? DirecTV seems to be a bit out of synch in its Panasonic, which makes lots of con- DirecTV says, unfortunately, there will rollout of local HD programming and new sumer electronics products. not be any way to transfer the recordings HD-enabled DVRs that are based on NDS from an existing DirecTV TiVo HD-DVR to Actiontel, which has a digital media designs. Because there are so many local adapter that wirelessly connects a PC to the new MPEG-4 compatible HD-DVR. channels, DirecTV needs to use its new satel- At this point DirecTV has not announced TVs and stereos and also makes fax lites that transmit HD signals only in MPEG- modems, and networking gear. a policy for: 4, but won’t have MPEG-4 enabled DVRs to - The cost for a subscriber to “down- Westell, which makes lots of networking receive the signals until perhaps a year from grade” from an existing MPEG-2 compat- gear for the telcos. now. ible HD DVR to a DVR that receives the Currently DirecTV is dependent on over- MPEG-4 signal but won’t record in high HPNA: The Fly in the-air broadcasts for its subscribers to definition. receive local stations in HD. The HD anten- - How a subscriber’s stored content will MoCA’s Ointment nas it’s selling aren’t reliable for many sub- be copied to the MPEG-4 compatible Remember HPNA – the Home Phoneline scriber locations unless they are placed on a DVRs when they come to market. Networking Alliance – that was working to very high pole, which most customers object develop technology standards so the home’s to for aesthetic reasons. DirecTV says it has already begun rolling copper telephone wires could be used for DirecTV’s solution is the four new out local programming transmitted by the networking? Well, it’s been abandoned by MPEG-4 equipped satellites – “birds” in new birds in HD. It’s not giving out exact most, but Israeli chipmaker Coppergate has satellite lingo – that will be able to transmit dates. It hopes to add more cities by year-end kept an assemblage that includes names such upwards of 1,500 channels, plus about 150 and intends to add more “gradually expand- as AT&T (nee SBC), Scientific-Atlanta, reserved for national HD programming. All ing coverage over the next two years” as it Motorola, Samsung and others. the DVR and non-DVR set-top boxes that deploys the new satellites that use MPEG-4 In addition to working over copper wiring, DirecTV currently has installed will only technology. HPNA is also said to work over coax as well. receive MPEG-2 signals, not MPEG-4. The local channels transmitted over the It seems SBC Labs, er, uh, that’s probably DirecTV says it expects there’ll be an bird will carry a mix of digital standard-def- AT&T Labs now, is still involved because of explosion in available HD content by 2007. inition and HD programming. its concern that some homes don’t have coax In any event, it’ll be prepared to deliver it. Concerning the need to change the boxes cable installed and that AT&T might not The complication is that DirecTV’s newly in the customers’ homes, DirecTV says, have access to the coax network in many launched NDS-designed DVR does not “Customers who have DirecTV HD equip- apartment buildings. It wants a copper wire record in high-definition. Current DirecTV ment and want to receive local HD program- solution for those situations. subscribers who want to record HD pro- ming from DirecTV will be eligible for an AT&T’s plan of record calls for MoCA on grams use a DVR that’s based on TiVo tech- Out of Synch: continued on page ELEVEN

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LIES, DAMN LIES & STATISTICS Monthly Entertainment- price by about $15. It seems Verizon is tak- tracks was lowered in from 99 cents to 79 ing action to prevent more losses of its land- cents and the level of price sensitivity cus- Media Budget Grows line consumer services, especially consider- tomers in this market have; if customers are The monthly entertainment media budget for ing that during the last two quarters it has willing to pay $10 for an album in iTunes, most folks keeps going up. The details listed lost over two million residential phone cus- why wouldn’t they spend $10 a month on here are an attempt to show a typical list of tomers. Rhapsody and have unlimited access to a items. DirecTV’s price might seem significantly library of music with over 1.3 million songs? It seems everyone is getting a DVR and an higher compared to the July price, but the There is another online service that is HDTV so we upped the pay-TV package to base price for the Total Choice Plus package shuffling the deck. CinemaNow, the leader include those services. is unchanged. Added are a few features that in digital video distribution with over 7,500 Noteworthy is that Verizon dropped its are quickly becoming a standard in the aver- titles, now only offers only one subscription local phone rates in New York by $15, an age middle-income home: an additional plan, the Platinum Club. It has two options: indication of where the pricing in that market receiver and a DVR receiver with HD for the - For about $30 per month, subscribers get is going. unlimited movies, concerts and news plus Monthly Basics 360 minutes of adult content. December 2005 July 2005 - For $100 per year, one-quarter of the Comcast – Broadband (PA) $42.95 + $42.95 + price of the total month-by-month deal, subscribers get unlimited adult content. DirecTV $72.96 ++ $45.99 * A CinemaNow representative said that the (includes DVR and HD) company is “currently in the process of Cingular Wireless (Atlanta) $39.99 +++ $39.99 revising its subscription offerings” and that Verizon – Local phone service (NY) $22.61 ++++ $37.95 information will be available in the near Monthly outlay for basics $178.50 $167 future with no specific date given.

Monthly Entertainment Services On the Dangers of Accepting Survey and Rhapsody – Streaming music $9.99 ** $8.33 ** CinemaNow – Movies on-demand $29.95 *** $9.99 Focus Group Findings iTunes – Downloaded songs $9.99/album $9.99/album Mark Cuban sold Broadcast.com in 1999 to Akimbo – Set-top box download $9.99 $9.99 Yahoo for $5.7 billion. He currently owns Monthly outlay for extras $60 $38 the Dallas Mavericks professional basketball team. He and a partner own 2929 Grand Total $238.50 $205 Entertainment, which produces movies and TV shows, and he owns Landmark Theatre + 4 Mbps down/384 Kbps up Corporation, a chain of 185 art house movie ++ Total Choice Plus Package ($45.99) + HD Package ($11.99) + 1 DVR (9.99) + 1 addi- theaters. Through 2929 Entertainment, tional receiver ($4.99) Cuban also purchased HDNet, the first high- +++ 450 daytime minutes w/ 5,000 night and weekend, unlimited mobile to mobile w/ definition satellite television network. rollover Here are some of his thoughts on con- ++++ Verizon Local Package (flat rate) sumer surveys and focus groups from an * Total Choice Plus package 155 channels interview at the Alwayson.com Innovation ** Rhapsody Unlimited Summit at Stanford University: *** Platinum Club = unlimited subscription to access thousands of video, including adult “I’ve been selling technology since the video, also available for $99.95/year, currently the only subscription plan offered at this time early 80s, and every step of the way the tech- **** Gold Club = access to subscription movies (does not include major studio movies) nology is always too slow, too expensive and too hard to use. And then all of a sudden the price points get to the point where as long as wide-screen high-def TVs so many con- it does one thing and you know how to do It’s been five months since the last sumers seem to be buying. that one thing, then it doesn’t matter. Entertainment Price Comparison. The results “It used to be analog phones, and then were not as shocking as anticipated, but there RealNetworks’ Rhapsody online music what about digital? There were discussions have been a few interesting developments. service had an increase of $1.66 for a month- when you were purchasing a phone about the The most significant price change is the ly subscription. This is probably due to the decrease in the local residential phone lines fact that the cost of downloading a burning Findings: continued on page TEN

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LIES, DAMN LIES & STATISTICS

Findings: continued from page NINE Geeks on Holiday online digital media - video/audio streams/downloads - in a month; nearly different types of networks and the different Here’s one that slipped through our net (net, 60% of the US online population. transports. And all of that disappeared. It’s a not Net). free phone if you sign up for the service. It A survey of 1,000 Brits, commissioned - Almost two-thirds of users streaming used to be we looked at someone with a cell by Intel last summer, showed what geeks audio or video this past August went phone and said, ‘That’s so gauche to have a we’ve become, even when we’re away on through a portal; almost 50% did so from cell phone walking down the street talking. holiday. It found that: an entertainment site. Can you believe that person?’ And then it - One in eight vacationers take along - More than 17% streamed content from was, ‘I’m never going to use e-mail. I want their laptops to watch DVDs, listen to a music site. people just to be able to call me for the per- music, surf the Web and e-mail their - Consumers between the ages of 35 and sonal part.’ friends. 54 years old – the so-called “mature - 34% use e-mail and instant messaging audience” - accounted for more than instead of postcards. 45% of all online video watched in The carry-along computer isn’t a com- August. plete solution because one out of every 10 - The “mature audience” was 20% more Surveys are always Brits said they end up having a major row likely to watch online video than the misleading. Focus groups with their travel partner during the trip. average Internet user. The 25-to-34-year- old set is 12% more likely to watch than are always misleading It turns out the average British vacationer has 32 hours of bad holiday weather during the average viewer. which: - Video consumption crosses all times -A third (32%) watch local TV in a lan- and demographics. guage they don’t understand. -56% re-read old magazines for the sec- “That is just the way we look at new tech- Internet Use ond or third time. nology. When you survey somebody, it’s Increases 17% in Europe not the job of the consumer to think about -38% call or text friends to find out about the weather at home. The average Internet user in Europe spends what the best solutions are to their potential 10 hours and 15 minutes a week online, a Chris Hogg, Intel’s UK marketing man- needs in the future. 17% increase over a year ago, according to ager said, “New technology means more “I want to know if my Corn Flakes are the European Interactive Advertising going to stay crispy, not what’s the best and more people are opting to stay switched Association. During the same time, breakfast solution. I don’t spend any time on even when they’re ‘turning off’ and Europeans increased their use of television thinking about that. And people don’t spend relaxing.” 6% and newspapers by 13%. The report also time thinking about alternate technology Folks want to access their music, watch found that 13% of European Internet users solutions. movie DVDs, instant message and e-mail regularly contribute to blogs, 12% down- “Consumers follow the path of least friends and family plus use a Wi-Fi hotspot load podcasts at least once a month and resistance. The path of least resistance to to access the Net. 10% of them already are using the Internet talk to your kids or talk to coworkers when to make telephone calls. you’re mobile is a cell phone, and it Internet Streaming becomes cheap enough to do it. The path of least resistance is potentially becoming a Becoming Popular Internet Cutting PVR, and it’s becoming cheap enough or Nearly 60% of online US households into TV Ad Budgets stream media at least once a month (call me it’s becoming packaged in with existing The TV networks are going to feel the products. So you use it. when it becomes daily), according to impact on their ad revenues in the second “You don’t have to know all the features, comScore Networks and Streaming half of 2006, a so-called “tripping point,” and it doesn’t really matter how complicat- Media.com in the report “State of the according to Piper Jaffray analyst Safa ed the overall use is, as long as it can do the Consumer Streaming Market.” It’s based on Rashtchy in a new report. He says that sev- one thing you want to do. a cross-section of the more than 1.5 million eral trends, including online ad spending “So surveys are always misleading. US Internet users who have given the com- increases, the speed of technology growth, Focus groups are always misleading pany permission to monitor all of their and the way online benefits offline cam- because you’re asking people to think about online browsing. paigns, are converging, with the result that things they really have never given any seri- Other findings: ous thought to.” - 100 million-plus US users access Ad Budgets: continued on page ELEVEN

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LIES, DAMN LIES & MOBILE MEDIA STATISTICS CBS Goes network is currently the largest high-speed Ad Budgets: continued from page TEN wireless broadband network in the US, and on online ad spending will increase from a Wireless on V CAST is available in more than 170 major metro- 5% market share this year to a 10% share CBS has finally joined all the other major politan markets. much faster than originally thought. television networks and made some of its The second half of next year will see content available on mobile phones. some major marketers rapidly accelerate The most watched broadcast network has Vodafone their online ad spend, Rashtchy says, with inked a deal with Verizon Wireless to make Launches Global the total “conservatively” exceeding $55 clips from a number of prime time, late Mobile TV Channels billion by 2010. Where else can be found night and syndicated shows available on the European mobile phone customers now so many consumers that are actively look- wireless operator’s V CAST multimedia have access to a wide variety of both ing for ads? service. American and European television content The beneficiaries will be the big while commuting to work, waiting at the Internet portals such as Google and airport or wherever else they happen to be Yahoo. Also benefiting will be ad net- “At the intersection of the thanks to a new service from Vodafone. works such as ValueClick and 24/7 Real The mobile operator has launched a num- Media and large interactive agencies like mobile phone and the ber of global Mobile TV channels ranging Quantive and Digitas, he said. television” from pan-European sports coverage to HBO series and special “mobisodes” of the hit drama “24.” The globally sourced content HOME NETWORKING V CAST subscribers will be able to see works on any Vodafone live-enabled 3G video news segments from “CBS Evening handset and complements the company’s existing domestic mobile TV offerings in Out of Synch: continued from page EIGHT News,” “The Early Show” and “Entertainment Tonight” that are produced Germany, Greece, Italy, Netherlands, New MPEG-4-capable receiver replacement specifically for mobile phones. These clips Zealand, Portugal, Spain, the UK, Belgium, after we launch local HD programming in will include both breaking news and feature France, Switzerland and Austria. your city. If you want to replace your HD stories. DVR, you will need to wait a bit longer. Content from prime time includes pre- Our new MPEG-4-capable DirecTV HD view clips from forensic dramas “CSI,” DVR is expected to be available sometime “dipping in and out of “CSI: Miami” and “CSI:NY,” reality shows in 2006, after we roll out our local HD television” “Survivor” and “The Amazing Race” and programming to our first group of cities.” sitcom “The King of Queens.” Fans of late The current MPEG-2-equipped NDS night TV programming can enjoy clips from DVRs were originally promised over a “Late Show with David Letterman,” includ- Findings from research conducted by year ago. DirecTV was anxious to get ing clips from Letterman’s monologue and Vodafone show that watching mobile TV them so it could stop buying TiVo- Top 10 list, and highlights from “The Late while on the go complements at-home TV designed boxes. Here’s hoping the MPEG- Late Show with Craig Ferguson.” viewing habits, indicating likely high con- 4-equipped NDS boxes aren’t as late. “At the intersection of the mobile phone sumer demand for this product. According and the television lies tremendous program- to Vodafone, consumers want access to ming, promotion and brand extension poten- well-known TV brands and channels and AVOID PERDITION tial,” said CBS Digital Media VP of wireless they enjoy “dipping in and out of television “If we reject the truth, we seal Cyriac Roeding. “This deal with Verizon as it is an enjoyable way of filling free our own perdition.” – JM Mason. Wireless represents a major step for us into time.” mobile entertainment and another point of The launch of these global Mobile TV Avoid damnation. Get the truth about the contact with the consumer to promote our channels, as well as their availability, pack- digital media industry every week in great content brands.” aging and programming, will vary accord- The Verizon Wireless V CAST broadband ing to market. The global channels include: The Online Reporter. multimedia service offers a wide range of *HBO will offer full-length program- Subscribe Now video programming such as news, sports ming such as “Sex and the City,” “Curb Your Enthusiasm” and “Six Feet Under.” Write [email protected] and entertainment on-demand. The compa- or call 225-769-7130 ny’s Evolution-Data Optimized (EV-DO) Vodafone: continued on page TWELVE

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MOBILE MEDIA

Vodafone: continued from page ELEVEN *Fashion TV provides coverage of the MediaFLO expects to begin commercial Programming will be adapted for various best shows from fashion weeks around operation of the new network in next year. Vodafone markets and scheduled in 90- the world as well as exclusive access to The plan is to eventually expand the minute loops, 24 hours a day. the popular models and designers. MediaFLO network into other markets in *Through its Fox Mobile Entertainment “With a wide range of ‘good for TV’ hand- Verizon Wireless’ V CAST and unit, 20th Century Fox Television offers sets, an intuitive, easy to use service and a BroadbandAccess service areas. mobile content from existing and original portfolio of instantly recognizable television made-for-mobile brands. Seasons one brands and programming, the launch of Jamster Chooses Melodeo through four of “24” have been specially global Mobile TV is a compelling proposi- for Mobile Music Service tion for our customers,” said Vodafone chief edited for mobile and these edits will be VeriSign’s Jamster unit, which operates a marketing officer Peter Bamford “Attracting available as on-demand clips and as loops portal offering a wide variety of mobile con- world-class content providers such as 20th of the entire edited seasons. tent, has hooked up with Melodeo to devel- Century Fox Television and HBO ensures *Eurosport will provide an extensive op a platform for delivering full-track music the premium quality of this product and portfolio of major live sporting events, downloads to mobile phones. underpins our confidence in its widespread which are broadcast across Europe in 19 Melodeo has developed a turnkey mobile adoption.” languages, giving viewers all the excite- music solution that enables wireless opera- The new global mobile TV channels will ment that live sport can generate. tors around the world to offer legal full-track launch in most Vodafone markets starting *The UEFA Champions League channel music downloads to their customers. this month. offers content from the world’s premier Considering that VeriSign is best known club football competition. The channel for Internet security, it should come as no consists of two-minute highlights and Verizon Wireless, surprise that one of the main reasons Jamster previews per match, the top five goals of Qualcomm Planning decided to work with Melodeo is because of the week and pick of the week, all updat- Mobile TV Service its MobilDRM. Melodeo’s digital rights management technology protects mobile ed after each match and available in Verizon Wireless is working with music that is sold either on a per-download English, French, Spanish and German. Qualcomm and its MediaFLO USA sub- or subscription basis and has been approved *The Discovery Mobile service encom- sidiary to deliver real-time mobile video by all four major labels for its ability to pre- passes all of Discovery’s global networks over the MediaFLO multicasting network. vent theft of downloadable music. including the company’s flagship brand, The deal will make Verizon Wireless the Discovery Channel, Animal Planet and first US wireless service provider to offer Discovery Science. Discovery Mobile MediaFLO once the network becomes com- “We chose to work with consists of a two-hour block of short mercially available. The companies expect to Melodeo because music labels video segments that are refreshed on a launch mobile TV services over the have endorsed their technology weekly basis. MediaFLO network in roughly half the mar- *MTV will offer up to two channels in kets currently served by the Verizon Wireless and because of the need in the most of Vodafone’s markets in Europe. CDMA2000 EV-DO broadband network mobile marketplace for digital One channel will feature MTV favorites (the one that runs its V CAST service). rights protection” such as “Pimp My Ride” customized for Use of the MediaFLO network will enable the mobile viewing experience, along Verizon Wireless to offer “real-time mobile “We chose to work with Melodeo because with original made-for-mobile program- TV services of unprecedented quality to its music labels have endorsed their technology ming including the new eight-episode subscribers,” the companies claim. Verizon and because of the need in the mobile mar- series “Head and Body.” Details of the Wireless will offer the mobile TV service to ketplace for digital rights protection,” said second channel will be announced in the its subscribers through MediaFLO-enabled Mahi de Silva, senior VP of VeriSign coming weeks. EV-DO handsets. Communications Services. “We are excited *Chilli TV is the largest archive of In partnership with wireless operators, to work with Melodeo on developing mobile extreme sports footage in the world. Set MediaFLO offers consumers interactive DRM solutions that protect music subscrip- to music, Chilli mixes action sports with wireless multimedia services. The nation- tions, which are growing in popularity.” travel, street art and urban culture. The wide network, based on Qualcomm’s FLO The Melodeo Mobile Music Solution channel consists of continuous two- technology and using the MediaFLO Media powers the music services for Rogers minute micro-programs interspersed with Distribution System, will deliver multimedia Wireless in Canada and Telefonica Moviles a unique program guide, which means content to mobile devices in the 700MHz in Spain. The Seattle-based company has viewers are never more than two minutes spectrum for which Qualcomm holds licens- licensing agreements to offer music from away from their next mobile adventure. es with a nationwide footprint. Warner Music and EMI.

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ONLINE MUSIC SERVICES Real Brings ric of the Internet with our Rhapsody Web Real is planning a number of additional Services initiative. components for the Rhapsody Web Services Rhapsody to the Web . Initial Web services available for third initiative that will become available over RealNetworks this week unveiled a new parties include: the next several months. It also intends to version of its Rhapsody digital music ser- - Tools for Web sites to create links, incorporate feedback from the Internet vice that, for the first time, opens it to Mac called “Rhaplinks,” to individual music community to enhance the initiative. and Linux users. tracks, full albums and radio stations that Consumers who want to sample the free Now in beta, the new offering is a Web- can be integrated into their Web sites and 25-streams-a-month service at based service, which means that consumers enable immediate playback from Rhapsody.com can do so without providing don’t have to download the PC jukebox Rhapsody.com. credit card information. Folks who want application to access Rhapsody. Since the - XML feeds, including RSS, of more can sign up for Rhapsody Unlimited PC-based app is no longer required, the Rhapsody editorial information about for $9.99 a month or Rhapsody To Go, Web-based Rhapsody isn’t limited to music, such as new releases, top 10 which lets them copy the music onto Windows users, but can now be used by any tracks and top 10 albums, which third- portable players, for $14.99 per month. computer with Internet access. It works not party Web sites can integrate directly only with the Internet Explorer Web brows- into their sites. Warner Music er but also with Mozilla Firefox or Safari. - A blog for third-party developers to Rhapsody.com will be the first of the Reports Increased participate in the future roadmap and major digital music services in the US to development of the Rhapsody Web Sales of Digital Music challenge Apple’s iTunes for the Mac mar- Services initiative. Can sales of digital music – online streams, ket, if there are actually any Mac users left Initial companies supporting downloads, ringtones and the like – ever that don’t already use iTunes. The new replace the revenue loss due to piracy? AOL MusicNow service is Web-based and Rhapsody.com and the Rhapsody Web Perhaps. can be accessed from anywhere, but only on Services initiative include Comcast High- Warner Music Group (WMG) chair- a Windows PC. Speed Internet, RollingStone.com and Microsoft. man and CEO Edgar Bronfman said digital Comcast, which has partnered with music was a driving force in the company’s we’re bringing the Rhapsody for several years, is the first ISP most recent financial reports. “Not only did jukebox-in-the-sky to every to launch a Web-based Rhapsody radio ser- annual digital revenue rise more than four- Internet user vice. The Comcast Rhapsody Web Radio fold year-over-year to represent 6% of our service, which provides 50 commercial-free fourth-quarter revenue, but we are also proud to report that for our 2005 fiscal year As with the standard Rhapsody service, genre-based stations, is available to the absolute growth in digital revenue out- Rhapsody.com allows any consumer to Comcast’s 8.1 million broadband cus- stream up to 25 on-demand songs per tomers. Comcast’s online music offerings paced the absolute decline in physical rev- month for free. Rhapsody subscribers can already include Rhapsody Radio Plus, enue for our US Recorded Music business,” stream all the music they want from the ser- Rhapsody Unlimited and Rhapsody To Go. said Bronfman. vice’s library of more than 1.4 million RollingStone.com, the official online WMG revenues from digital music tracks via the Web site. The Web site also presence for Rolling Stone magazine, has totaled $53 million in the quarter, up 20% provides free, unlimited access to 25 com- integrated Rhapsody Web services technol- percent sequentially. mercial-free radio stations. ogy throughout its site to allow visitors to The record label group reported a net loss Opening Rhapsody to an even greater sample full-length free tracks in Rhapsody of $30 million for the quarter ending number of users, Real also launched a and view music videos along with the mag- September 30, compared to the loss of $137 Rhapsody Web Services initiative, which azine’s archive of music news coverage, million in the same quarter last year. The gives third-party sites access to Rhapsody feature articles, interviews, photos, quarter’s revenue increased 13% to $905 via the Web. This means that portals, com- movie/album reviews and in-depth political million. In its first full fiscal year as a pub- munity sites and other music-oriented sites reporting. lic company, WMG lost $169 million com- can integrate such Rhapsody services as Within the next few weeks, Real’s new pared to $1.4 billion for its 2004 fiscal year. song playback and editorial content. pal Microsoft will make Rhapsody.com “The results reinforce our view that “With Rhapsody.com, we’re bringing the available within Windows Media Player 10. Warner Music can drive sustainable growth jukebox-in-the-sky to every Internet user in In the coming months MSN will use by leveraging the digital transformation and America,” bragged RealNetworks chairman Rhapsody Web Services to integrate more efficiently running the music busi- and CEO Rob Glaser. “We’re also laying Rhapsody into its MSN Search, MSN ness,” said Goldman Sachs analyst the foundation to weave music into the fab- Messenger and MSN Music services. Anthony Noto.

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ONLINE MUSIC SERVICES MP3tunes free version does not allow for synching. Oboe components include: plug-in is installed, any Web site with Oboe Stores Music Online *Oboe Sync: The Oboe Sync software music links ending in .mp3, .wma, .ogg or One of the biggest problems consumers face will search an entire computer for music .acc triggers a small musical icon to with digital music is how to get all the music files and then load them into the designat- appear after that link. Clicking on the link from different sources and in different for- ed online locker. This creates a backup of will copy the track directly into the con- mats together into a single collection. And, an entire music collection securely online, figured locker. once it’s all there, how to listen to it from safeguarded from hardware malfunctions, “Five years from now, lugging around somewhere other than the PC on which it’s viruses or theft. your entire music collection and plugging it stored. Once a music locker is loaded with music, in everywhere will seem as outdated as car- MP3tunes, a company launched by serial the Oboe Sync software can be used to rying around a pocketful of nickels,” said entrepreneur Michael Robertson (of move the music to multiple locations. It Robertson. “It makes more sense to safely MP3.com and Linspire fame) in February, analyzes the PC and online locker, mak- store your music online and sync it or stream has just come out with a $40-a-year solution. ing sure each location has the same music. it to all the places you listen to music, which The Web site offers more than 300,000 Each time Oboe Sync runs, any new is exactly what Oboe makes possible.” tracks for download for 88 cents each. music files detected on the PC will be Unlike most other legit music services, as the moved to the locker and any new files DEMO Awards name suggests, all the tunes available are in loaded to the locker will be moved to the unprotected MP3 format. PC. This ensures a music listener will Internet Music Sales Since its inception, MP3tunes has provid- have access to their entire song library It took a while, but the official music charts ed its customers with a free “Music Locker” wherever they listen to music. in the US and the UK, the ones that deter- that holds a copy of all the songs a user has *Oboe Locker: Each Oboe account mine the top 100 songs and albums, both purchased from the site. In addition to pro- comes with a Web page where users can include tracks downloaded over the Internet viding a backup copy in case of a hard-disk access their entire music collection from in their counts. There’s even a chart that crash, the Music Locker also allows users to any device with an Internet connection. A counts ringtone downloads. access all their MP3tunes music from a Web user-friendly interface displays artists, The problem with these, however, is that browser on any computer – Windows, Mac albums, tracks and playlists, which can be they are limited to single countries and indi- or Linux. streamed for online listening at 192 Kbps. vidual formats – either full tracks or ring- This week the company broadened the A sophisticated music manager built tones, which doesn’t show just how much a concept of the online storage locker with the using Ajax technologies makes it possible particular song or artist benefits from the launch of Oboe, a music locker that stores an to pause, skip, repeat tracks, create global nature of the Internet. entire personal music library, not only the playlists, label music and control volume With the growing popularity and aware- songs purchased from MP3tunes. Folks who all directly within the Web page without ness of real-music ringtones, music down- sign up for an Oboe account can stream their requiring any additional software to be load services, sites such as CD Baby that music from any Internet-connected device as installed. make it easy for independent musicians to well as sync the library to each computer and *Oboe for iTunes: An iTunes plug-in self-publish a CD, there’s no denying that the device they own. There’s even an iTunes Internet is responsible for a growing percent- makes it possible to access Oboe directly plug-in for synching and streaming inside age of music sales. from within iTunes software on either Apple’s digital music management software. DEMO (Digital & Electronic Music Macintosh or Windows PCs. An “Oboe” Unlike the original Music Locker, howev- Organization) awards certifications for entry is added to the shared music area. er, Oboe is $39.95 a year, but an account sales of music enabled by the Internet. The Once clicked, users enter their account comes with unlimited storage and no extra company was founded in 1999 with the information and their iTunes music and bandwidth charges. Oboe can store an entire intent of creating a global de facto standard playlists are synched to their online lock- music library of files in MP3, WMA, AAC for online music sales. DEMO certifications and OGG formats. Registered users get a er. Using the same plug-in, an iTunes user are not limited by geographical boundaries personal account and the Oboe Software can view the entire contents of their or the way the music is purchased – as long Suite, which installs tools to easily load online library from within iTunes as well as the sale involved the Internet. online music lockers using Macintosh OS X, as stream it. Any recording that has had sales of at least Windows or Linux computers. *Oboe for Firefox: A Mozilla Firefox 500,000 units “caused” by the Internet is eli- The company does offer a free version of plug-in is included with the Oboe gible for certification by DEMO. Sales Oboe, but with limited functionality. The Software Suite so music available on the caused by the Internet include downloaded, paid version streams music at 192 Kbps; the Internet with its own link can be copied free version is limited to 56 Kbps. Also, the directly into the Oboe Locker. Once the DEMO: continued on page FIFTEEN

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DEMO: continued from page FOURTEEN than all other digital music stores com- Consequently, the prices for digital radios mail order from a Web site, click-through bined. there have dropped. advertisements, digital kiosks, ringtones, *Sir Mix-A-Lot was honored with Flash Sirius and XM, the two US satellite radio full-track mobile music downloads, PDAs, Gold Certification for selling 500,000 services, have a considerable lead on HD legitimate P2P sales and any other future downloaded ringtones of a remix of his Radio. Many cars already come equipped with a satellite radio receiver. They offer enabling technologies. classic hit “Pick up the Phone (Baby Got hundreds of music and information channels, This month DEMO handed out 10 certifi- Back).” including brand names such as the NFL and cations to both top artists and Web sites that *50 Cent was awarded the Liquid Crystal soon Howard Stern. And, their channels can have achieved significant milestones. Certification Award for selling a million be heard throughout the US. *Gwen Stefani was honored with Liquid ringtone downloads of the album “Get There’s no monthly subscription fee for Crystal Certification for being the first Rich or Die Tryin’” and Flash Gold over-the-air digital radio as there is for satel- artist in music business history to achieve Certification for selling 500,000 ringtone lite radio. digital music sales of 1,000,000+ for a downloads of the album “The Massacre.” iBiquity, which makes the gear the radio single, “Hollaback Girl.” *The Game was presented with a Flash stations need to broadcast digitally, lists these *Prince was honored with the Liquid Gold Certification Award for selling advantages for over-the-air digital: Crystal Certification Award for achieving 500,000 ringtone downloads of the album - Its FM broadcasts have CD-quality sound. album sales of 1,000,000+ for his four-CD “The Documentary.” - Its AM broadcasts sound as good as set “Crystal Ball,” the very first album to *Snoop Dogg, the legendary rapper, was today’s analog FM stereo. achieve such a monumental sales plateau honored with a Flash Gold Certification - Static-free without pops, hiss and fades. via the Internet. The four-disc set, origi- Award for selling 500,000 ringtone down- nally released in 1997, has sold more than loads of his album “Snoop Dogg R&G: - New data services, such as scrolling text displayed on a radio screen with song 250,000 units, with each CD counting as a Rhythm & Gangsta the Masterpiece.” single unit. “This is the album that sent the titles, artist names, traffic updates, weath- first clear signal to the so-called major er forecasts, sports scores and more. labels that musicians do not need them in US Radio Stations - Advanced data and audio services: sur- order to become successful in the music Step Up HD Adoption round sound; multiple audio sources at the business,” said DEMO founder and CEO There’s nothing like competition to stimulate same dial position; on-demand audio ser- Andre Gray. “History will remember this a company to improve its products and ser- vices, store-and-replay (to record, à la a album as the Plymouth Rock of the digital vices – such as satellite radio has done to the DVR; a radio program when it airs for music frontier.” staid US radio stations. later replay); displaying real-time traffic Several top US radio companies this week information on a navigational map to help find the quickest route; a “buy” button for “This is the album that said they’d work together to accelerate the music, sports and concert tickets plus sent the first clear signal to rollout of HD digital radio by forming the stock quotes and the like. the so-called major labels HD Digital Radio Alliance. Members include the largest owners of radio stations Of course, radio stations and the satellite that musicians do not need such as Clear Channel, Infinity, Emmis radio services face competition from the them in order to become and Entercom. In addition to jointly promot- Internet and its offspring such as the seem- successful in the music ing HD digital radio to consumers, they will ingly ubiquitous iPod. business” work to make digital car radios cheaper. Developed by iBiquity Digital, HD Radio no monthly subscription fee lets stations transmit a digital signal along- *CD Baby was honored with Flaming Star side their traditional analog broadcasts. The seven member companies say they’ll 2 Certification for selling a cumulative of However, consumers will have to buy new spend a combined $200 million in 2006 pro- 10,000,000 units of all independents radios that are capable of receiving the HD moting HD Radio on their own stations, and through the Internet. CD Baby has Radio signal. Such radios are currently avail- will jointly coordinate the launch of “HD2” enabled more than 100,000 musicians to able from Kenwood, Panasonic and JVC, multicast channels, which will enable multi- sell their music over the Internet. with others sure to launch products. ple radio formats to be transmitted simulta- *Apple was honored with a Titanium + Nearly 600 US radio stations are broad- neously from a single station. Certification Award for selling a mind- casting an over-the-air HD Radio signal. Peter Ferrara, previously a senior VP at boggling 500 million downloads overall However, HD Radio units are pricey and few Clear Channel and a board member of the and Flaming Star 10 Certification for sell- consumers are aware of them. Although a National Association of Broadcasters, will ing more than 50 million downloads in different technology is used in Europe, digi- serve as CEO of the HD Digital Radio Europe. These sales figures are greater tal radio has proven popular there. Alliance.

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PRODUCT WATCH DirecTV’s director of strategy and alliances, Panasonic ers, that it will be Blu-ray’s incorporation in Hollywood Lab. the upcoming PlayStation 3 game consoles NDS Boxes Are Here that will drive its success, Figures from the The new NDS-based DVRs from DirecTV Philips to Bring Fuji report forecast that consumer take up of became available in retail stores in the States Blu-ray will be quite slow. It says that out of on December 1. That’s two-and-a-half Third Dimension to TV the eight million next generation players sold months later than DirecTV most recently The superior experience in a movie theater is by 2010, 4.5 million will use the Blu-ray for- promised. The NDS gear does not record due to the sound as well as the video. Philips mat. high-definition TV, which the DirecTV plans to go the theaters one better with its TiVos do. Some features in the NDS box that “amBX” technology, which creates a “senso- Podscope Adds Alerts TiVo users will like are: ry surround experience” for TV and video Podscope, which uses spoken-word search - The ability to back up 90 minutes, not games with added light, color, sound, heat engine technology to search through pod- merely the 30 minutes the TiVo box does. and air. It’ll add a third dimension to movies, casts, has added a new alert function to let TV shows, music and games. - It’ll show how much unused disk space interested folks know when new audio and The technology, due out in May 2006, remains. video files are posted to the Internet. uses LED color-controlled lights, active fur- - A new “active channel” with multiple Podscope crawls the Web looking for pod- niture, fans, heaters, audio and video output screens lets users watch/preview several casts and creates an index against every devices strategically placed in the living shows simultaneously. word, thereby making the contents search- room. Philips said that it is in talks with The new DVRs use software from NDS able. Users search on a term, generate a game developers and peripheral manufactur- Group, which is owned by News Corp, results list ranked by a variety of methods ers, and expects amBX-enabled games and which has the 34% controlling interest in and click to play or download the desired peripherals to begin shipping in the fourth DirecTV. podcasts. quarter of 2006. Panasonic to Ship Dual- Layer 50GB Blu-ray Discs Panasonic will immediately be able to make “Search alerts convert 50GB dual-layer Blu-ray discs, called BD- ROMs, by modifying its existing pilot pro- our unique Spoken Word duction line for single-layer discs. The oper- Search engine into an ations are in a facility of the Panasonic Disc audio/video sentry, always Manufacturing Corporation of America located Torrance, California. watching out for relevant content for our users” Philips amBX Experience in Prototype Media Capacity in GB Philips says the amBX experience “comes DVDs ...... 8.5 alive” through the incorporation of a script- ing language, software engine and hardware Single-layer Blu-ray discs ...... 25 architecture. It says its used amBX to forge Dual-layer Blu-ray discs ...... 50 “a common language for the creation, distri- RSS integration to MyYahoo, Google and bution and sharing of totally new experi- NewsGator means that consumers no longer ences within an ‘Ambient Intelligent have to go to the Podscope site again and Environment.’” Sounds exciting. One can again to search for new mentions of a specif- Single-layer BD-ROM discs are currently almost feel the icy blast of air when the sep- ic term. Instead, whenever Podcast finds a being produced on the pilot line with more ulcher opens and the lights blink. new mention in its database of podcasts from than 80% yield rates. Panasonic expects to more than 4,800 sources, it alerts the user. provide sample dual-layer BD-ROM discs to Report: Blu-ray to There’s no limit to the number of Podscope the industry for testing by the end of this RSS alerts a user can create. month. Outsell Rival HD DVD “Search alerts convert our unique Spoken “Working closely with the movie studios The Blu-ray next-generation DVD format Word Search engine into an audio/video sen- and our replication partners, Panasonic was will outsell its rival HD DVD by 2010, try, always watching out for relevant content able to foresee the need for greater disc according to a report by Japanese analysts for our users,” said David Ives, president and capacity to give consumers a much richer Fuji Economics in an article at CEO of TVEyes, the company behind user experience,” said Eisuke Tsuyuzaki, Cdfreaks.com. Fuji believes, as do many oth- Podscope.

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SHOW TIME CNN Delivers screen. BT promises that it will be the first in the A subscription to CNN Pipeline is $2.95 a world to offer a combination of over-the-air ‘Live’ Streaming News month or $24.95 per year. The company (terrestrial) channels, a large VoD library CNN.com, which was one of the first news also offers one-day passes for 99 cents each. and interactive services – all without the sites to offer video clips, has launched a For their money, subscribers get the down- consumer having to commit to a monthly new service that, instead of delivering snip- loadable player and access to video content subscription fee. pets from the network’s TV channel, deliv- from the entire CNN News Group as well as “Our customers will be able to enjoy ers a live stream of video produced exclu- access to free video features on CNN.com enhanced TV services and easy access to a sively for the Web. such as an on-demand “Video” section that wealth of interactive content and new ser- The new on-demand broadband video ser- showcases the best and most popular con- vices straight to their TV,” said BT Retail vice, dubbed CNN Pipeline, also marks the tent, a “Browse Video” tool and “Now in CEO Ian Livingston. “Whether you are a Web site’s return to charging for content. To the News,” an hourly Web-exclusive news music fan, love films or hooked on drama be more competitive with the growing num- update. you will get the best in entertainment when ber of news sites providing video content “CNN Pipeline provides the ultimate you want it. BT is defining next generation for free, CNN.com in June got rid of the fee news experience for all types of con- TV.” it charged for accessing video on the site. sumers,” said David Payne, senior VP of Most of the pay-TV services offer multi- While the free content will remain that way, CNN News Services and general manager ple channels of music. BT intends to do the there will be a fee for accessing the CNN of CNN.com. “Designed for people to same. “Industry leading agreements and Pipeline service. ‘watch and work,’ CNN Pipeline gives con- unique partnerships like the one we Designed to “revolutionize the way peo- sumers commercial-free choices and con- announce today are an important component ple view news online,” CNN Pipeline fea- trol. Easy to use and elegant in design, CNN of Warner Music’s global strategy to tures multiple live video streams as well as Pipeline is to online news what the iPod is become a multifaceted, music content com- access to CNN’s video archives and on- to digital music.” pany,” said Nick Phillips, chairman of demand news clips from CNN’s worldwide The success of CNN Pipeline will be a Warner Music UK. newsgathering operation. true test of whether or not consumers are The Paramount deal will give BT current willing to pay a monthly fee for video over films in the pay-per-view window, plus the Internet. Although the new service is older and classic films from the Paramount different than anything else CNN has archives, all on-demand. offered in the past – and from what anyone BT has a deal with Philips to supply the “revolutionize the way else is currently offering – the proof will be set-top box, which will deliver the high def- people view news online,” in the subscriber numbers. Payne told the inition service. Its deal with Microsoft will Journal-Constitution that it will take “sever- get it Microsoft TV IPTV Edition as the al hundred thousand” subscribers to recover software platform. the costs for the service. Separately, BT Group this week said it expects its retail division will generate high- Initially available in 25 countries, CNN BT ‘Defining er earnings in its current fiscal year, and that Pipeline uses a downloadable video player it is targeting further cost savings over the to deliver its commercial-free news. Next-Generation TV’ next three years. According to the company’s hometown BT’s pay-TV groundwork efforts are show- ing results. It’s signed up newspaper the Atlanta Journal-Constitution, BT’s broadband count as of September 30: BBC Worldwide, the new service “has its own staff, studio Total Net adds % Change Viacom’s Paramount and and news anchors at CNN Center in 000 000 Qtr-Qtr Atlanta.” Unlike many other news channels, Warner Music Group, CNN Pipeline will focus more on showing three of the world’s biggest BT Retail 2,111. 171 qtr 8.81% the news stories without much commentary producers of movies. TV BT Wholesale 4,089. 429 qtr 11.72% from talking heads. shows and music. The com- BT Group – TOTAL 6,200 600 qtr 10.71% According to the paper, CNN hopes that pany says it will launch its news junkies will keep the Pipeline player TV-over-broadband service on their desktops all day at work, especially in the autumn of 2006. if they work in an environment without In addition to the usual TV and music In addition to launching new products, access to a TV set. To make this easier and fare, BT will also offer video-on-demand BT Retail is aiming for cost savings of £400 more appealing, the player can be shrunk and interactive and communication services million ($695 million or €592.2 million) to down to a “small TV-like box” that can sit via the TV set. It has said it’ll use unobtrusively in the corner of a computer Microsoft’s IPTV technology. BT: continued on page EIGHTEEN

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BT: continued from page SEVENTEEN programming and Internet Protocol technol- said CinemaNow CEO Curt Marvis, who ogy for on-demand viewing and the interac- also serves as chairman of CinemaNow £500 million over three years by making tive programming guide. Japan. “It marks another major step forward more effective use of online sales, service The service, which is also available in in CinemaNow’s mission to build a truly and billing. Keller, Texas and Herndon, Virginia, cur- global distribution network that reaches BT, like telcos worldwide, faces competi- rently has more than 330 channels, includ- localized markets.” tion in the residential phone market from ing 180 digital video and music channels Warner movies available to CinemaNow the VoIP crowd such as Vonage and eBay’s and more than 20 high-definition channels. Japan customers include recent hits such as Skype. AOL, Yahoo, Google, Microsoft It also offers some 1,640 video-on-demand “Ocean’s Twelve” and “Constantine,” as and others are inching their way into the titles, a number that the company says will well as library titles ranging from “Rebel Internet telephony market. Consequently, pass 1,800 by year-end. Without a Cause” to the original “Batman” BT has cut the price of its Broadband Talk Additionally, FiOS TV has an available movie. service by up to 50%. BT’s Broadband dual-tuner DVR that lets users watch one CinemaNow Japan charges 1,480 yen Talk, unlike other Internet telephony ser- show while recording another. ($12) per month for a subscription, which vices, allows users to make calls over the In addition to Temple Terrace, Verizon allows users to download an unlimited num- Internet using a normal phone, rather than a has plans to launch FiOS TV in other ber of films and watch them as often as they computer. BT said its VoIP offering will be Florida communities including parts of like for as long as they maintain a subscrip- available globally starting next spring with unincorporated Manatee County. It is cur- tion. All movies in the library are also avail- enhanced sound quality. rently in negotiations with Hillsborough able for à la carte downloads, starting at BT has done well in the broadband busi- County, the city of Tampa, Pasco County, 250 yen ($2) per film for a 48-hour viewing ness and has 6.2 million broadband cus- Sarasota County, the city of Sarasota and period. tomers, counting both wholesale and retail. the city of Venice. Once it receives fran- chise approval in all of these areas, it will Disney Brings Florida City be able to make FiOS TV available to some Getting FiOS TV 360,000 households in the Tampa Bay area. ‘Narnia’ To the Web Anticipating audience excitement around Verizon has chosen Temple Terrace, Florida Verizon offers three set-top boxes: stan- the release of “The Chronicles of Narnia: as the third locale in which to rollout its dard definition for $3.95 per month; high The Lion, the Witch and the Wardrobe” this new FiOS TV service. definition, which includes HD channels, for week, Disney’s Buena Vista Pictures Residents of the city, which is northeast $9.95 per month; and a DVR set-top with Marketing unit has launched “The Narnia of Tampa, can order the service now and HD channels for $12.95 per month. Full-Screen Experience,” an Internet chan- Verizon will start deploying FiOS TV in its Monthly service fees start at $12.95 for nel chock full of movie-related content. service in January. “basic” and $39.95 for “expanded basic,” The Narnia Full-Screen Experience, “This is not cable TV. This is not satel- plus additional charges for premium chan- accessible via the film’s official Web site at lite. This is FiOS TV,” said Bob Ingalls, nel packages. www.narnia.com, is built on the broadband president of Verizon’s Retail Markets CinemaNow Japan video software platform from Maven Group. “Customers who liked what FiOS Networks. Broadband users can visit the did for their Internet connection will love Adds Warner Bros Movies channel to get trailers, clips, behind-the- what it does for their TV. We’ve harnessed CinemaNow Japan has inked a licensing scenes segments, interviews and other film the speed and capacity of broadband with deal with Warner Bros International content delivered to their PCs in full-screen, the power of broadcast to create a revolu- Television making it the first online service theatrical-quality video. Additionally, fans tionary, new entertainment experience.” to offer movies from a major Hollywood who prefer to take their content on the go FiOS TV is delivered over Verizon’s studio to the Japanese market via an online can choose to the video download and syn- fiber-to-the-premises network, which is sup- subscription service. chronized directly to their video iPods. posed to deliver “amazingly sharp pictures A joint venture of CinemaNow, Tokyo- Once installed, the Narnia channel auto- and sound, and has the capacity to transmit based Transcosmos and Microsoft, matically checks for content updates. It also a wide array of high-definition program- CinemaNow Japan (www.cinemanow.jp), offers a range of interactive options, includ- ming that is so clear and intense it seems to offers movies for download over a broad- ing the ability to send to a friend, check for leap from the TV screen. Fiber also delivers band connection on both a pay-per-view movie times and purchase tickets. Internet download speeds of up to 30 Mbps and a subscription basis. The move makes Disney the first film and upload speeds of up to 5 Mbps. “This groundbreaking agreement is a studio to publish promotional campaigns to What makes FiOS TV truly different than great accomplishment for CinemaNow video-enabled iPods. Maven’s software cable or satellite TV is that it uses both Japan and will deliver a first-of-its-kind ser- broadcast technology to deliver scheduled vice to the burgeoning Japanese market,” Narnia: continued on page NINETEEN

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Narnia: continued from page EIGHTEEN for men’s fashions and concierge.com for of HD DVD is the better technology. optimizes the video content for a number of travelers. However, the matter does not seem to have platforms, encoding and formatting it for come to the consumer’s attention yet. With iPod, PC and TV viewing. The company Internet to Trump DVDs, Blu-ray appearing to have all but won, seem- claims to provide the only video solution Blu-ray or Not ingly at least, the issue may be resolved that works on multiple devices without before it reaches consumers. The Net, we have contended for several “The migration to next-generation high- requiring content owners to pre-select for- years, is the most efficient means for distrib- mats or download content independently definition optical disc formats is not going uting content – particularly movies, TV smoothly,” Kaufhold said. and multiple times. shows, music and other video – that has ever “The Narnia Full-Screen Experience ush- Sony leads the Blu-ray camp with most of been devised. The distribution of content on the studios’ support. Toshiba leads the HD ers in an exciting, cutting-edge way of physical media – whether DVDs or CDs – delivering movie materials to audiences,” DVD alliance, with Microsoft and Intel as will soon look as antiquated as black-and- recent converts. said Dennis Rice, senior VP of publicity for white TV shows or radios that operate on Buena Vista Pictures Marketing. “The If the studios trusted the Net, trusted that vacuum tubes. their goodies wouldn’t get ripped off, there Maven application allows movie fans at As nature abhors a vacuum, so does the home to see trailers and clips the way they would be no disputing that the Net will in Net abhor inefficiencies; so it becomes the short order be the most popular way for buy- should be seen, in the highest theatrical least expensive, most direct way to deliver quality possible.” ing/renting/viewing/downloading video con- content. That’s why we’ve questioned the tent - from movies to lectures, from TV long term need for the so-called next genera- shows to travelogues. But they don’t. Google Video: Paid, More tion Blu-ray optical disk technology that Physical media still appears to the studios to Variety than iTunes promises to pack more high fidelity video in be the best method for secure video delivery. Jennifer Feikin, who runs Google Video, the same physical space. There’s nothing like a physical media that told the Digital Living Room conference the Now comes a report from In-Stat, which can be seen, touched and counted to provide service won’t be free, according to Scott predicts that movie DVD sales are nearing a secure feeling. Kirsner at fastcompany.com. their peak and will soon begin plummeting as With or without the Hollywood studios, “The next step - in the near-term - is to consumers start downloading video off the the Internet, and its physical attachments have a service where users can pay to down- Net. Not only movies, the report says, TV including Web-compatible mobile phones load content,” she said. “Content owners shows as well. It would seem that the video and other portable devices, will become a can set the price for their content. That will iPod, or iPod with video as Apple prefers to major video distribution network, perhaps bring on a whole category of content owners say, tapped the underlying awareness that “the” major one. The worldwide Web has who want to be paid for their content.” The downloading videos makes sense. several major advantages that nothing, not report says Google will test different price The report points out that video-on- any pay-TV operator, not even all the pay- points. demand from the pay-TV services and the TV operators, can match: When asked about the use of advertising, online movie services is also replacing movie - An audience that will shortly number in Feikin replied, “It’s definitely something DVD sales. the hundreds of millions, equaling the we’re looking into. Anything we do with “The PC industry is champing at the bit to number of homes with a PC, perhaps even advertising will be about pleasing the user. provide downloaded movies that might com- the number of homes with TVs. pete with DVD sales, and pay-TV services It’ll be simple, like our homepage.” - Direct distribution with no middle man, want to add movies to their video-on-demand Regarding the type of content Google will no wholesaler, no theaters to deal with. offer, Kirsner reports that Feikin said services, to their new disk-drive-equipped set-top boxes, and to their emerging high- - A worldwide audience that includes Google Video is intentionally different from every country. Apple’s iTunes. “It’s not just about the pop- definition TV services,” said Gerry - Instant distribution. A single click can ular entertainment content. We want the Kaufhold, an In-Stat analyst and author of the make any video instantly available. MIT Open Courseware lectures - also the report. travelogues and the surgeries.” An MSNBC article cites a study about slowing DVD sales growth from Adams CBS to Offer Live Media Research. It forecast DVD sales of Conde Nast Adding about $17.3 billion this year, up 12% over ‘March Madness’ for Free Three Video-laden Sites 2004 followed by a 9% increase in 2006 to CBS Sports will offer exclusive live online Conde Nast intends to launch three new $18.9 billion video coverage of the 2006 NCAA Division video-laden Web sites by mid-2006. The Kaufhold maintains that consumers will be 1 men’s college basketball tournament for company currently operates three sites: confused by the scuffling between the two free. Called “NCAA March Madness on style.com for women’s fashion, men.style next-generation camps over whether Blu-ray March Madness: continued on page TWENTY-ONE

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APPLE SLICES SONY SCENE Apple, Sony, Archos Radio CEO John Hogan, also appearing at Sony: Security the Reuters “do,” said his company expects Vie for Portable to close distribution deals with Yahoo or Trumps Speed Video Player Market Apple’s iTunes music and video online Three weeks and counting. That’s how Three handheld video players seem to get store as early as 2006. Disney’s ESPN long purchasers of some Sony BMG all the press these days, those from Apple, sports operation is considering distributing music CDs have been waiting for an unin- Sony and Archos. All three play video, but some of its TV programming on the iTunes stall program that will remove software service, ESPN and ABC Sports president each comes from a different upbringing. the CDs installed that make PCs vulnera- George Bodenheimer said. ble to viruses and hackers. Three Handheld Video Players Vie for Dominance Regarding the so-called fix, Sony BMG told USA Today that “security is more Model Screen (inches) Storage (GB) Retail ($) important than speed.” Video iPod with 2.5 30 300 “I have the best security experts triple- 2.5 60 400 checking it,” said Thomas Hesse, presi- dent of the global digital business division Sony PSP 4.3 1.8 on UMD, playback only 250 at Sony. Sony owns half of Sony BMG, 2 on Memory Stick in various sizes) but has received the majority of the bad headlines about the fiasco, whose seed is Canal+ Archos AV700 7.0 100 650 the company’s desire to put DRM soft- ware called XCP on CDs to reduce the Archos AV700 7.0 100 800 likelihood of music being copied illegally. 40 600 Sony BMG said it would recall all the Archos AV500 4.0 100 700 five million or so malfunctioning CDs and 30 500 replace them with DRM-less ones. However, attorneys general in New York Apple’s entrée is as a music player that and Massachusetts have found that all the happens to show videos. Clear Channel misbehaving CDs have not been removed Sony’s bid is as a portable videogame Sees Video iPod Future from stores in their states. console that also plays purchased movies Clear Channel, the world’s largest owner only on Universal Media Disks or home- of radio stations with 1,200, plans to offer New Flaw Found in recorded videos on Memory Sticks that store 60-second video clips of radio personality Sony BMG’s DRM up to 2GB. Rush Limbaugh’s radio talk show that can Good grief, is there no end to this? If Archos sets bigger goals by doing deals be played on Apple’s iPod digital music and with French cable TV outfit Canal+, US video player. someone asked if they could use your PC satellite TV company EchoStar and online to play a Sony BMG music CD, what movie service CinemaNow. Its intent is to would you say? make it easy for consumers to record, legal- iPod Phenomenon A new security problem has been found ly, movies and TV shows off the TV set for Strikes Dictionaries in the DRM scheme that Sony BMG used on certain music CDs it shipped in the US later playback on-the-go. The digital media business is showing its and Canada. The bug could allow unau- TiVo, the company that started the DVR influence by its contributions to the lan- thorized users to use the Net to take full industry, says it intends to make it possible guage. Editors of the New Oxford American control of any computer that had attempt- for its users to copy movies and TV shows Dictionary selected “podcast” as the “Word ed to play the flawed CDs. from a TiVo to either the video version of of the Year for 2005.” They defined it as “a the iPod or to a Sony PSP. digital recording of a radio broadcast or The Electronic Frontier Foundation similar program, made available on the (EFF) hired security firm Information Fox Films, Clear Channel, Internet for downloading to a personal audio Security Partners to analyze the ESPN Want in on player.” Runners-up included “rootkit” from SunnComm-developed MediaMax DRM. the ongoing DRM fiasco at Sony BMG, the It found the DRM software “could allow Stampede to iTunes widely covered “bird flu,” “persistent vege- malicious third parties ... to gain control Fox Filmed Entertainment co-chairman tative state” from a controversial US court over a consumer’s computer running the James Gianopulos said his company is open case over when death has arrived, “IED” for Windows operating system.” to a deal with iTunes for video distribution, the improvised explosive devices widely The patch that Sony BMG issued could according to reports from the Reuters Media used in Iraq and the new “reggaeton” music and Advertising Summit. Clear Channel genre. New Flaw: continued on page TWENTY-ONE

Q ©2005 MAY NOT BE COPIED OR FORWARDED BY E-MAIL, POSTED TO A DECEMBER 10-16, 2005 WEB SITE, FAXED OR COPIED IN WHOLE OR IN PART. PAGE 21

ENABLING TECHNOLOGY SONY SCENE

CableCARD: technology forward to bring it to the masses.’” New Flaw: continued from page TWENTY TiVo’s Great Escape? Here is the excerpt from an article in reportedly cause the security problem it January 8, 2005 issue of The Online was supposed to block. TiVo has been making lots of promising Reporter. “I think there are problems with com- product enhancements in recent weeks. “TiVo plans to introduce a high-definition pact disc copy protection that can’t be Nowhere to be found, however, was an DVR that receives and records content resolved,” said Edward Felten, professor update on its CableCARD initiatives the delivered over the Internet as well as from of computer science and public affairs at company announced at January’s CES over-the-air broadcasts and from cable TV Princeton. He recommends that con- show. CableCARD was supposed to give services. The unit, to be launched in early sumers not use the patch, not use the unin- the DVR pioneer an equal footing in its bat- 2006, will have its own cable TV tuner staller and not put any CD that has the tles against the cable and satellite TV oper- based on the CableCARD initiative. It can MediaMax software into a PC. ators. be connected to a cable TV service without the need for a separate cable set-top box. It can also receive over-the-air HD broadcasts. TiVo’s biggest hurdles As part of the company’s ‘Tahiti’ strategy, the new DVR will allow consumers to SHOW TIME access, download and manage broadband content. March Madness: CableCARD requires a card issued by the continued from page NINETEEN cable company be inserted in the box, Demand,” it’ll be ad-supported. Games, whether TV set or DVR. It allows the TV to interviews and pre- and post-game press receive premium channels and HDTV pro- CableCARD technology “is conferences will be available on demand. gramming without the need for a cable box. “This is the perfect example of maximiz- Reportedly, the TiVo implementation was to an essential development ing both the CBS NCAA bundled rights be a single-tuner one, which is a major dis- and the full range of assets of the new CBS advantage in a world of two-tuner DVRs Corporation,” said CBS Sports and News (watch one channel while recording anoth- president Sean McManus. CBS recently er). By definition, CableCARDs don’t “Ramsay didn’t mention whether the box acquired CSTV, which produces more record native HD but downconvert HD sig- would work with DirecTV or EchoStar but than 250 official college athletics Web nals for recording at standard definition. that’s unlikely given that they have their sites. Viacom owns CBS. TiVo’s biggest hurdles are: a) it does not own tuner technology. That does make one control any of the TiVos that DirecTV sold, wonder why DirecTV and EchoStar have far and away the majority of the TiVo been exempted from government regula- installed base, and b) the pay-TV operators tions such as those that mandated the will dominate the DVR market going for- CableCARD and taxation and regulation by Time Starts Now ward and TiVo doesn’t have deals with any local governments.” “Time starts now.” – Steve McQueen to of them to sell its boxes. The initial implementations of Jacqueline Bisset in the 1968 movie Less than a year ago, Mike Ramsay, TiVo CableCARDs will have some limitations on “Bullitt,” whose car chase is generally co-founder and the then chairman and CEO, a TiVo box. Users won’t be able to control regarded as one of the best ever. said the deployment of CableCARD tech- VoD in the same way they can pause, nology “is an essential development for the rewind and store. Pay-per-view can only be The time to catch up on the week’s hap- future of digital television’ and that TiVo ordered by phone. Interactive TV features penings in digital media starts every Friday intended to ‘play a key role in driving this will not be available. with The Online Reporter.

LEGAL MATTERS Start your subscription now. Call 225-769-7130 or e-mail Analog TV Goes Dark in 2012 in EU [email protected] The European Union ministers of telecommunications have decided to support a deadline of 2012 for switching off all analog television transmissions. Ten member states expect to com- Introductory and group rates available. plete the transition to digital television by 2010 and five have not said if they can meet the 2012 deadline.

Q the mainstream consumer is going to get it. One ‘Simultaneous Release enues. It blamed declining circulation, rising step is having a technology company like Intel pull Is Already Here’ costs and the unsure advertising picture. The Times is fighting back by bulking up its Web those pieces together.” - Kevin Corbett, general On his intent to release the upcoming film pages and adding blogs, but the revenue from manager of Intel’s Content Services Group, on the “Bubble” simultaneously in theaters, on those has not nearly equaled what’s been lost deals with content producers and distributors that DVD and on an HDTV cable service, direc- on the print side. Intel announced last week in conjunction with its tor Steven Soderbergh told Wired: new Viiv technology that’ll be used in specially Simultaneous release is already here. It’s Will DirecTV Show Link for designed entertainment PCs. called piracy. We’re just trying to gain con- Portable Video Players at CES? trol over it. I wish we could come up with a Reportedly DirecTV will introduce new ‘The New Face of Philips’ system that allowed someone to do a “Grey enhancements at CES in January that will “In consumer electronics, as in the PC industry, a Album” without having to pay millions of allow recorded movies and TV shows to be number of processes had become so standardized dollars for music rights. A system in which copied and then viewed on portable video that people who focus on these processes gain rights holders share profits of a new piece of players. EchoStar and French pay-TV service economies of scale. For all the others, there is no work and people can access it without break- Canal+ recently announced deals with differentiating.” – Philips president and CEO ing the law.” Archos to do the same on an Archos portable. Gerard Kleisterlee in a BusinessWeek article “The TiVo recently said it would make available an New Face of Philips.” Disney Embraces Change enhancement next year that allows TiVo users “The beauty of our company is that we love (except those who have a DirecTV TiVo) to chaos. We embrace change as a part of life.” copy recorded content from a TiVo to Apple’s TiVo Goes Viiv - Anne Sweeney, president of Disney-ABC video iPod or to Sony’s PlayStation Portable “This new [Intel Viiv] application will allow our Television Group in her speech at the (PSP). users to control their favorite TiVo recordings even Digital Entertainment and Media Expo con- more easily so they can watch what they want, ference. Sweeney is credited with helping to 400,000 Xboxes Fly Off Shelves in US where they want.” - Jim Denney, TiVo’s VP of product marketing on what the deal to use Intel’s do the Disney-Apple deal that brought ABC More than 400,000 Xbox 360 game consoles TV shows such as “Desperate Housewives” Viiv technology means to TiVo. TiVo has been have been sold in the US since its launch on dead-ended by the cable and satellite TV services and “Lost” to the “small screen.” The deal November 22, according to certainly opened the floodgates to making that want to sell their own DVRs. TiVo appears to GamesIndustrybiz. Analysts at American be attempting to maximize its box’s capability, such video entertainment available any time any- Technology Research estimate that if more where. as using Viiv technology to make it easier to copy boxes had been available, sales would have recorded TV shows to Viiv PCs where they could been three times as high. Separately, in an be broadcast to TVs and other devices throughout AIM Leader Goes VC interview with Dengeki Xbox 360 Magazine, the house. Xbox Japan business manager Yoshihiro Chamath Palihapitiya, who reportedly revi- Maruyama said that Microsoft aims to sell talized AOL’s Instant Messenger operation, over one million consoles in Japan by sum- Entertainment PC’s Weak Link has resigned to join the VC outfit Mayfield. mer 2006. Microsoft’s original Xbox did not “Is this [Intel’s Viiv technology] going to push the PC into the living room? No, because a consumer- Internet Impact Clouds sell 500,000 units in Japan in its entire lifes- programmable device, which a Windows PC is, is New York Times Future pan. To help achieve the goal, Microsoft is not stable enough to be a television platform. The It’s general knowledge that the Net has selling the Xbox 360 in Japan for less than it does in the US. It’ll launch in Japan on ability to tinker with PCs can result in not getting impacted the newspaper business as people access to your TV because a buddy brought over a increasingly get their news online and search December 10 and the rest of Asia by March 2006. CD with a game on it and then suddenly your TV the Web for products and services. The job doesn’t work.” - Van Baker of Gartner Group in a search site “Craigslist” now has eight million Los Angeles Times article “Intel Moves to Give visitors a month. So bad has the Net hit that Intel as Puzzle Solver Itself a Key Home Entertainment Role.” Baker’s the venerable New York Times this week said “These kinds of content experiences are going comments add ammunition to our contention that it’s refusing to provide a 2006 forecast for its to explode, the way the Internet exploded 10 DVRs currently have the edge over PCs in the race business. That includes earnings and rev- years ago. But it’s got to be done in a way that to become the digital home’s media hub.

The Online REPORTER is published weekly by: Rider Research; 13188 Perkins Road, Baton Rouge, LA 70810 USA; 225-769-7130; FAX 225-769-7166 www.riderresearch.com Senior Editor: Susan Schrank ([email protected]) 703-803-1023; Senior Analyst: Charles Hall ([email protected]) Baton Rouge, LA 225-769-7130 North America Sales: ([email protected]), 225-769-7130; Production: Heather Gray, ([email protected]), 225-769-7130; European Subscriptions: Simon Thompson ([email protected]) Buckingham, UK +44 (0) 1 280 820 560 Subscription price: $595 / €645 e-mail single reader. Available at quantity discounts to groups, departments and companies. ©Copyright 2005, Rider Research Inc. It is illegal to reproduce, copy, photocopy, forward, e-mail, publish, broadcast, post on an Internet/Intranet site, rewrite, store in a retrieval system or otherwise distribute this publication or any article in whole or in part by any means, mechanical, photocopying, recording or otherwise without the prior written permission of Rider Research. ©2005 May not be copied or forwarded by e-mail, posted to a web site, faxed or copied in whole or in part. Source: Rider Research and company reports Broadband Scorecard - US & Canada - Q3 2005 Listed By Greatest Net Additions from Q2 to Q3

Net Adds Q3 % Change Company Total (000) As Of (000) Q2-Q3 Cable TV Companies Comcast 8,142.0 437.0 5.67% 09/30/05 Time Warner Cable 4,557.0 234.0 5.41% 09/30/05 Cable One 2,975.00 128.6 4.52% 09/30/05 Cox Cable * 2,975.00 128.6 4.52% 09/30/05 Charter 2,120.0 97.8 4.84% 09/30/05 Cablevision 1,600.4 80.6 5.30% 09/30/05 Rogers (Canada) 1,083.0 61.3 6.00% 09/30/05 Insight 439.2 47.9 12.24% 09/30/05 Shaw (Canada) 1,168.0 40.0 3.55% 09/30/05 Vidéotron (Canada) 588.0 40.0 7.30% 09/30/05 Bright House * 815.0 30.0 3.82% 09/30/05 MediaCom 453.0 27.0 6.34% 09/30/05 RCN ** 238.0 9.0 3.93% 09/30/05 Cogeco (Canada) 277.6 2.8 1.01% 08/31/05 US SUBTOTAL 22,383.1 1,105.7 5.20% Canada SUBTOTAL 4,004.8 194.7 5.11% Cable SUBTOTAL 27,431.3 1,364.5 5.23%

Telephone Companies SBC 6,496.0 528.0 8.85% 09/30/05 Verizon 4,531.0 389.0 9.39% 09/30/05 BellSouth 2,678.0 205.0 8.29% 09/30/05 Qwest 1,340.0 150.0 12.61% 09/30/05 Bell Canada 2,134.0 106.0 5.23% 09/30/05 EarthLink 1,544.0 49.0 3.28% 09/30/05 Sprint 638.0 48.0 8.14% 09/30/05 Alltel 360.0 40.7 12.73% 09/30/05 Century Tel 220.0 25.0 12.82% 09/30/05 Covad 578.4 24.4 4.40% 09/30/05 Aliant (Canada) 196.0 18.4 10.38% 09/30/05 Cincinnati Bell 154.0 9.0 6.21% 09/30/05 Telus (Canada) 736.0 7.1 0.97% 09/30/05 MTS (Canada) 120.5 6.5 5.74% 09/30/05 US SUBTOTAL 18,539.4 1,468.1 8.60% Canada SUBTOTAL 3,186.5 138.1 4.53% Telephone SUBTOTAL 21,725.9 1,606.1 7.98% US TOTAL 40,922.5 2,573.8 6.71% Canada TOTAL 7,191.4 332.8 4.85%

TOTAL 49,157.2 2,971 6.43%

Market Share: Cablecos 55.8% US & Canada Telcos 44.2% Cablecos 54.7% US Telcos 45.3% Cablecos 55.7% Canada Telcos 44.3%

* © Copyright 2005. Leichtman Research Group ** RGUs

© Rider Research Publishers of The Online Reporter

Updated December 7, 2005 Source: Rider Research and company reports

Broadband Scorecard - Worldwide - Quarter ended September 30, 2005 (excluding US & Canada) Listed Alphabetically by Company

Net Adds Net Adds % Change Report Company Total (000) Total (000) (000) Total (000) Qtr-Qtr Date BT Retail 2,111.0 171.0 qtr 8.81% 09/30/05 BT Wholesale 4,089.0 429.0 qtr11.72% 09/30/05 BT Group - TOTAL 6,200.0 600.0 qtr 10.71% 09/30/05 China Telecom 19,170.0 1,800.0 qtr 10.36% 09/30/05 Deutsche Telekom 7,700.0 600.0 qtr 8.45% 09/30/05 eAccess (Japan) 1,870.0 3.0 qtr 0.16% 09/30/05 Eircom 164.0 23.0 qtr 16.31% 09/30/05 Elisa (Finland) 345.9 37.7 qtr 12.24% 09/30/05 Fastweb (Italy) 644.0 46.0 qtr 7.69% 09/30/05 France Telecom - Retail 3,661.0 297.0 qtr 8.83% 09/30/05 France Telecom - Wholesale 1,812.0 25.0 qtr 1.40% 09/30/05 France Telecom - Netherlands 489.0 7.0 qtr 1.45% 09/30/05 France Telecom - Poland 1,012.0 40.0 qtr 4.12% 09/30/05 France Telecom - Spain 528.0 2.0 qtr 0.38% 09/30/05 France Telecom - UK 826.0 57.0 qtr 7.41% 09/30/05 France Telecom - TOTAL 8,328.0 428.0 qtr 5.42% 09/30/05 Iliad - Free (France) 1,446.0 130.0 qtr 9.88% 09/30/05 Korean Telecom 6,241.2 68.7 qtr 1.11% 09/30/05 KPN (Netherlands) 1,623.0 56.0 qtr 3.57% 09/30/05 Liberty Global 2,606.8 155.0 qtr 6.32% 09/30/05 NextGenTel (Norway) 129.6 8.8 qtr 7.28% 09/30/05 NTL (UK) 1,720.6 165.6 qtr 10.65% 09/30/05 NTT (Japan) 5,576.0 368.0 qtr 7.07% 09/30/05 SingTel - Australia - Optus 458.0 52.0 qtr 12.81% 09/30/05 SingTel -Singapore 323.0 12.0 qtr3.86% 09/30/05 SingTel - TOTAL 781.0 64.0 qtr 8.93% 09/30/05 Swisscom 1,010.0 62.0 qtr 6.54% 09/30/05 TDC Denmark 818.0 48.0 qtr 6.23% 09/30/05 Telecom Italia - Italy 5,210.0 595.0 qtr12.89% 09/30/05 Telecom Italia -Rest of Europe 1,151.0 198.0 qtr20.78% 09/30/05 Telecom Italia - TOTAL 6,361.0 793.0 qtr 14.24% 09/30/05 Telecom New Zealand - Business 57.7 4.2 qtr7.76% 09/30/05 Telecom New Zealand - Residential 244.1 38.2 qtr18.53% 09/30/05 Telecom New Zealand - TOTAL 301.8 42.3 qtr 16.31% 09/30/05 Telefónica - España 3,124.9 158.5 qtr 5.34% 09/30/05 Telefónica - Czech Republic - Cesky Telecom 221.0 58.0 qtr35.58% 09/30/05 Telefónica - Latin America - Telefonica CTC Chile 268.3 20.7 qtr8.36% 09/30/05 Telefónica - Latin America - Telefonica de Argentina 278.1 39.6 qtr16.60% 09/30/05 Telefónica - Latin America - Telefonica del Peru 310.5 35.3 qtr12.83% 09/30/05 Telefónica - Latin America - Telesp 1,084.4 108.4 qtr11.11% 09/30/05 Telefónica Deutschland - Germany 510.0 5.0 qtr0.99% 09/30/05 Telefónica Group - TOTAL 5,797.2 425.5 qtr 7.92% 09/30/05 Telekom Austria - Retail 424.1 27.0 qtr6.80% 09/30/05 Telekom Austria - Wholesale 101.7 3.1 qtr3.14% 09/30/05 Telekom Austria - TOTAL 525.8 30.1 qtr 6.07% 09/30/05 Telenor (Norway) 444.0 29.0 qtr 6.99% 09/30/05 Telewest (UK) 920.2 67.3 qtr 7.90% 09/30/05 TeliaSonera - Baltic 239.0 36.0 qtr17.73% 09/30/05 TeliaSonera - Denmark 145.0 6.0 qtr4.32% 09/30/05 TeliaSonera - Finland 321.0 19.0 qtr6.29% 09/30/05 TeliaSonera - Sweden 633.0 34.0 qtr5.68% 09/30/05 TeliaSonera - TOTAL 1,338.0 95.0 qtr 7.64% 09/30/05 Tiscali 1,480.0 160.0 qtr 12.12% 09/30/05 Yahoo BB (Japan) 4,972.0 83.0 qtr 1.70% 09/30/05

TOTAL 88,514.1 6,389.1 7.78%

©Rider Research Publishers of The Online Reporter Updated December 7, 2005