Apple hopes for toned-down French download law

Fri Jun 23, 11:06 AM ET

PARIS (Reuters) - Apple Computer Inc. said on Friday it was awaiting final approval of a French bill aimed at opening online media stores to rivals, which it hoped would leave the market to decide which systems prevailed.

"We are awaiting the final result of France's legislative process," Apple spokesman Alan Hely said in an emailed statement. "(We) hope they let the .... marketplace ... decide which music players and online music stores are offered to consumers."

A committee of both houses of the French parliament on Thursday approved a compromise proposal that would set limits on an original draft bill to open up online content businesses.

Apple had called that draft "state sponsored piracy" and there were even suggestions it might pull its market-leading iTunes operation out of France if the bill was passed.

The original bill would have obliged online music stores to open their digital rights management (DRM) systems, so that consumers can play the songs purchased in one on-line music store on portable MP3 devices and computers that are designed to work with another music store.

At present, DRM means a song bought on iTunes can only be played directly on Apple technology like the iPod, although it can also be burned on to compact discs.

The new proposal, based on amendments proposed in the Senate last month, is expected to be voted on in parliament on June 30, before becoming law but will not be subject to a second reading that could introduce major changes.

Following amendments passed in the Senate last month, the principle of so-called "interoperability" between different music stores and music playing devices will still apply.

But the previous blanket requirement for Internet media stores to lower the technical barriers around content sold on their sites will be subject to various limits, notably allowing them to argue that restrictions were set at the request of copyright holders.

It would also give media stores a greater margin of maneuver by granting the power to settle disputes and oversee copyright control to an outside regulatory authority, instead of facing a flat interoperability requirement.

Apple's iTunes service is currently the biggest online content store after the runaway success of the iPod player but it faces competition from several rivals including Sony Corp (NYSE:SNE - news), Dell Inc. and Microsoft.

Consumer groups have criticized the amendments and the opposition Socialists denounced the compromise as a "facade" which amounted to a "capitulation" to Apple and Microsoft.

Vivendi allows World of Warcraft guide sales to resume

By Amanda Beck Fri Jun 9, 8:21 PM ET

WASHINGTON (Reuters) - A Florida video game enthusiast will soon be able to resume selling on eBay his home-made guide on how to succeed in "World of Warcraft," a hit online video game owned by Vivendi.

Vivendi's Blizzard Entertainment, Inc., agreed on Friday to settle a lawsuit with Brian Kopp, author of a 300-page guide that explains how to accumulate game points.

Kopp's guide did not include copyrighted text or story line. It stated that Kopp was not affiliated with Blizzard and that the guide was not official, his lawyer said.

Nevertheless, Blizzard Entertainment and the Entertainment Software Association filed several complaints of copyright violation with eBay, which shut down Kopp's account advertising the product in November. Kopp responded by filing a lawsuit in a federal court in California.

The software companies agreed on Friday to withdraw their complaints within five days, said Greg Beck, an attorney with the consumer advocacy group Public Citizen, which represented Kopp.

In April, Vivendi reported a strong rise in first-quarter sales, boosted in part by the World of Warcraft, ranked as one of the world's most popular online role-playing games.

More than 600 customers have paid $14.49 for access to Kopp's guide since last August, when he began distributing it as a series of online files.

"It's good income for just playing a game," said Kopp, 24, who plays video games for five or six hours daily.

The Florida resident is now working on a supplementary "World of Warcraft" guide and plans to study computer engineering.

Watch for 16GB USB Flash Drives this Year

Dan Nystedt, IDG News Service Fri Jun 9, 9:00 AM ET

TAIPEI-- Users looking for pocket-sized storage devices for digital photos, files, songs, and other data should see 16GB USB flash drives out by the end of the year.

M-Systems Flash Disk Pioneers is already showing off scores of 8GB DiskOnKey USB drives at its booth at the Computex IT show here. And the company said doubling the amount of storage on those devices by the end of the year shouldn't be a problem thanks to speedy work by chip makers.

Companies that produce flash memory chips, such as Toshiba and Samsung Electronics, will likely have chips out at the right size to create smaller DiskOnKey devices for M-Systems. But if users need even more storage, there are a growing number of devices the size of a business card or passport that can hold far more data than a DiskOnKey.

Skinny Hard Drives

Taiwan's Transcend Information is showing off its latest Storejet products, which contain mini-hard disk drives. The Storejet 2.5-inch portable hard drive, roughly the size of a thin paperback book, comes in storage capacities from 80GB to 120GB, while a 200GB version should be out by the end of the third quarter.

The company's Storejet 1.8-inch HDD device is even smaller, about as big as a passport, and can hold up to 60GB of data. It will hold 80GB in a few months.

The company was also showing off 8GB USB flash drives, and said the leap to 16GB won't be easy.

"It's not easy to develop. You need four controllers in a 16GB flash drive," said Joseph Chu, an account manager at Transcend. The 8GB drives require just two controller chips, he said.

Other companies showing 8GB USB flash drives included A-Data Technology and TwinMOS Technologies.

Power Quotient International showed a pocket-sized USB flash drive the size and shape of a business card. It's designed to fit in a wallet and has a small USB plug that extends from the back to be plugged into a PC or laptop. It holds 8GB of data, but will expand to 16GB by the end of the year, the company said.

Microsoft to issue 12 patches for security flaws

Fri Jun 9, 3:12 PM ET

SAN FRANCISCO (Reuters) - Microsoft Corp. plans to issue a dozen security alerts on Tuesday -- some carrying the highest risk rating of critical -- as part of a monthly security update to fix flaws in its software.

Nine of the patches relate to its Windows operating system, two address problems in its Microsoft Office productivity software and the other is for the company's Exchange e-mail server software, Microsoft said on its Web site.

Microsoft, which makes the Windows operating system that runs on 90 percent of the world's computers, will issue patches to fix the problems as part of its monthly security bulletin.

The world's biggest software maker defines a flaw as "critical" when the vulnerability could allow a damaging Internet worm to replicate without the user doing anything to the machine.

Microsoft's Exchange software allows users to send and receive e-mail along with other forms of communication through computer networks.

The company has been working for more than three years to improve the security and reliability of its software as more and more malicious software targets weaknesses in Windows and other Microsoft software programs.

Microsoft makes the patches available for download at www.microsoft.com/security.

DVD buzz: Embrace change

By Stephanie Prange Fri Jun 2, 8:28 AM ET

LOS ANGELES (Hollywood Reporter) - The reports of DVD's death are exaggerated, but the business is entering a period of transition as two high-definition formats hit the market and digital downloading makes strides.

Change was the keyword at the fifth annual Home Entertainment Summit: DVD's Nine Lives, produced by Home Media Retailing, a sister publication of the Hollywood Reporter.

"We must not fear change," said Craig Kornblau, president of Universal Studios Home Entertainment. "We must seek it and embrace it."

The DVD business is entering a period that will test the mettle of marketers, noted Mike Dunn, worldwide president of 20th Century Fox Home Entertainment.

With DVD, competing high-defintion formats Blu-ray Disc and HD DVD, and different digital delivery options, the future will be a "real integrated world that the marketing guy is going to control," Dunn said.

The job of the home entertainment executive is more complex, noted speakers on one panel.

"We've become bipolar," said Bob Chapek, president of Disney's Buena Vista Home Entertainment, noting home entertainment executives must be fluent in technology as well as the traditional packaged media business.

Executives said they now devote between 20% and 50% of their time to new delivery options.

"The job seems to change every week you come in," Chapek said.

"We are now in the mode of trying to anticipate consumer behavior," said David Bishop, North American president of Sony Pictures Home Entertainment. "There's a lot of R&D going on."

Much of the anticipation of consumer habits involves the digital download world, where studios have been offering more and more movies in the same window as DVD.

"Unlike the music business executives, who wanted it to go away, we knew it wasn't going to go away," Bishop said.

Executives on a digital downloading panel said studios this year had become more open to video-on-demand delivery because they were confident of the copy protection and because they wanted to provide a legitimate product to head off illegal downloading. Also, the services appeal to the young demographic.

Downloadable hit movies that can be burned on a DVD playable in any DVD player are in the near future, they said.

Still, they agreed digital downloading won't have much of an impact on packaged media for at least a decade.

"The DVD business is a multibillion dollar business," said Bruce Eisen, president of movie download store CinemaNow. "The VOD business is not quite that."

"Digital possibilities are just going to grow the pie," said Ron Sanders, president of Warner Home Video. Retailers who embrace the digital future will win, he said.

"Get an online site up immediately," was the advice to retailers of Universal's Kornblau. He also urged them to work with studios to enter the digital download world in some fashion.

Still, packaged media could be more resilient than some think, Fox's Dunn said. The packaged media business could develop a "killer ap" in the new high-definition formats, in which interactivity, ease of use and quality could make the disc the premiere storage device for content.

All the executives said the adoption of HDTV - projected to be in 25 million households by the end of the year -- makes high-definition discs a necessity for studios. Consumers will find high-definition content elsewhere if they don't have a packaged media option.

Managing the transition from DVD to high-def disc will be tough, executives said.

DVD is by no means a dying format. Executives expect anywhere from flat to single-digit growth in the business this year, after a tough period last summer.

The sell-through DVD business grew 6.5% from 2004 to 2005, from to $15.1 billion, noted Peter Staddon, executive vice-president marketing at 20th Century Fox Home Entertainment. Still, the falloff in the VHS and rental market revenue resulted in an overall flat business that clocked in at $23.2 billion in both years.

While the price of DVDs and rental transactions (mainly through subscription services such as Netflix) is dropping, the business produces a "huge amount of volume" and is still strong, Staddon said.

Executives must be careful not to confuse the consumer with the new high-def formats, he said. "A confused consumer doesn't buy a lot of product."

Reuters/Hollywood Reporter