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Sony's Chief Exec Realizes (A Bit Late) There's Danger In The Digital World
May 20, 2011
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"It's the beginning, unfortunately, or the shape of things to come. It's not a brave new world; it's a bad new world."
-- Sony Corp. Chief Executive Howard Stringer, saying he can't guarantee the security of the company's videogame network or any other Web system in the "bad new world" of cybercrime. (From the Wall Street Journal article 'CEO Warns of 'Bad New World', read it here: http://tiny.cc/fd8na )If you haven' heard about it elsewhere, Sony's PlayStation network was hacked when a breach compromised the personal information of more than 100 million account holders.
From the Wall Street Journal article "While Sony has restored part of the PlayStation Network -- an online game system for its PlayStation 3 videogame console -- in the U.S. and Europe and bolstered security measures, Mr. Stringer, 69 years old, said maintaining the service's security is a "never-ending process" and he doesn't know if anyone is "100% secure."
I have no idea why it took Mr. Stringer this long to figure that out.
Back in 1997 former Intel Chairman Andy Grove said "Leaders have to act more quickly today. Because the pressure comes much faster ... a fundamental rule in technology is that whatever can be done will be done."
Mr. Grove was referring, of course, to the fact that basically almost nothing is secure in the digital world because it changes by the nanosecond and it's not that hard to unlock the lines and lines of code(s) programmers create for security reasons.
In the past decade-and-a-half, everything has been hacked. The iTunes store has been hacked. Microsoft's best software has been hacked despite the millions it spends on security. Amazon.com has been hacked. Music and movies have been replicated and duplicated millions of times from a variety of online sources. Government websites have been hacked. American Express, Visa, MasterCard and the Discover card have been victims of online security breaches. The list goes on and on.
Back in 2001, I was interviewed by a company in Silicon Valley to possibly head up their digital music marketing strategy. They had technology they thought music companies would want to employ so they could deliver music digitally to their consumers. This was pre-iTunes, and while talking with the chief tech officer at the company, I asked him, 'Is here anyway to ever stop people from downloading music illegally?" He shook his head and replied, "Not really. All we can do is put up the best digital roadblocks so it makes it harder for people to hack and break codes. But, the simple and ugly truth is, nothing is really all that safe for a long period of time. Any tech person knows this."
I don't know where Mr. Stringer's tech people were the last decade, but if they indeed knew that, I guess they didn't relay the info up the corporate ladder.
Yes indeed, as I've said countless times here in the newsletter, it's rough sailing on the digital seas out there.
Mr. Stringer might have just hit his first digital "storm," but it won't be the last.
Welcome to the jungle, Mr. Stringer.
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THE 'A-SIDE' - TRACK 2
SUE ME, SUE YOU BLUES #891654
Back in the April 22nd issue of the newsletter, I told you about the Winklevoss twins appealing their lawsuit with this: "If you've seen 'The Social Network' or read about the founding of Facebook, you already know who the Winklevoss twins are. Cameron and Tyler Winklevoss allege that their former Harvard University schoolmate Mark Zuckerberg stole their idea for the social networking site, sued and then settled their differences with the Facebook chief executive three years ago for $65 million in cash and stock. Now they are appealing the settlement because they say their lawyers hid instant messages from them during litigation. Their request was the second effort to overturn the original settlement and allow them to proceed to trial on their theft claims."
Oh, the irony. Now a Boston software developer is reportedly getting his day in court to argue for a cut of the Winklevoss twins' $65-million settlement with Facebook. In a lawsuit, the developer contends that he and his former company were blocked from receiving any money in the Winklevoss twins' 2008 settlement with Facebook through actions taken by Cameron and Tyler Winklevoss, their company ConnectU, and their law firm.
Read the L.A.Times story here: http://tiny.cc/d1erj
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THE 'A-SIDE' - TRACK 3
THE BUZZ ON 'AMERICAN IDOL' IS GONE
Yeah, the ratings are still good, but I haven't heard a word from anyone about "American Idol" this year. Nobody talks about it.
At one point, "Idol" was the real "water cooler" topic everywhere. I work with a big office staff and not one person is talking about it anymore. At one point "Idol" was the real "water cooler" topic. Maybe it's because the judges love everybody. Maybe it's because it's been no contest for weeks and Scotty McCreery is the runaway winner. Anybody who thought otherwise doesn't take the pulse of Middle America. Scotty will sell a load of records if he gets the right song.
Rolling Stone, in their review of the Top 3 sing-off, said "It's Haley's To Lose." They obviously have no clue what America likes. Haley went home and was never a front-runner. Neither were the judges' favorites James Durbin and Casey Abrams.
Quick. Name the winner last year? Name the runner-up? Neither had success at retail. (Winner was Lee Dewyze and the runner-up was Crystal Bowersox)
But back to the show itself: In my opinion the only bright spot on the show this season is Jimmy Iovine and his comments and dialogue with artists. He's a real record man and he tells it like it is.
But the show has lacked real dynamics this year. Without Simon, the judges hold a love fest each week. The contestants? This was "the most talented top-10 ever" they said. Really?
With all the hoopla about J-Lo in the media, her album sold just over 30,000 this week. Steven Tyler's song has yet to impact at radio or anywhere. It has over half-a-million views online, but Rebecca Blacks' "Friday" had millions without her being a legendary music icon or even a name.
What I have heard from co-workers and from several readers who have e-mailed me, is they seem to like "The Voice." Most find it more entertaining than "Idol." The ratings aren't anywhere near "Idol," but it's new and different.
And this fall, Simon comes back with the "X Factor" and a $5 million grand prize. If nothing else, this will all make it all the more interesting as we watch and see where it all goes.
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THE 'A-SIDE' - TRACK 4
APPLE'S CLOUD GETTING READY TO ROLL
While Google races to the clouds as well (see news story below), Apple has signed a licensing deal with major record label EMI for its forthcoming cloud-based music service, and is close to deals with Universal Music and Sony Music, CNET News.com reported.
Read the rest here: http://tiny.cc/j190n
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THE 'A-SIDE' - TRACK 5
TABLETS VS. E-READERS
Tablets own the living room, e-readers rule the bedroom. That's the upshot of new research released today by Nielsen. Seven out of 10 of tablet owners and 68% of smartphone owners said they use their devices while watching television, compared to only 35% of e-reader owners.
Read more here: http://tiny.cc/hunjx
And Now For Some News ...
More On Google's Cloud Effort
MEDIA POST/HOLLYWOOD REPORTERLike Amazon before it, Google just debuted a cloud-based music player without support from the music industry. The search giant still hopes to bring top labels on board, but judging by the sentiment at an industry conference last week, it's got some serious fence-mending ahead. "People are pissed," a major record label source tells The Hollywood Reporter.
Indeed, "The reaction from the more veteran music industry attendees is simply anger," The Hollywood Reporter writes. "And the tone of Google's comments -- essentially blaming the labels for not being able to reach a deal -- didn't help."
Jamie Rosenberg, director for digital content for Android, told The New York Times: "A couple of major labels were not as collaborative and frankly were demanding a set of business terms that were unreasonable and did not allow us to build a product or a business on a sustainable business."
Read more about it by clicking here.
More On The Increase Of Digital Music Sales
MEDIAPOSTLast week I reported on the slight increase in music sales in the U.S.
Read more about it by clicking here.
Netflix Traffic Now Bigger Than BitTorrent
GIGAOMThe amount of Netflix data passed over ISP networks continues to grow, with its streaming service now making up more North American Internet traffic than even BitTorrent file sharing. While that might seem like a win for Hollywood studios that have spent the last several years fighting piracy, the traffic growth also comes at a time when ISPs are introducing bandwidth caps that could constrain Netflix.
Read more about it by clicking here.
RIAA: No Warrant Needed To Search & Seize Optical Disc Plants
WIRED.COMMore ways the RIAA spends money. Of course, stopping piracy is a good thing, but since everybody will be getting their music and movies online in a minute, maybe efforts should be shifted elsewhere.
Apparently the U.S. Constitution no longer applies when it comes to battling music and movie piracy.
Consider California legislation already passed by two state Senate committees. It allows law enforcement to enter optical-disc plants and seize disc-stamping equipment, and pirated movie and music discs without a court warrant.
Read more about it by clicking here.
Lady GaGa Keeps Going And Going And Going
NEW YORK TIMES"No one works like this girl," said Jimmy Iovine, the chairman of Interscope Geffen A&M Records, her label. "This is the first artist I've ever asked to stop. You really beg her to stop ... and she doesn't stop. She just goes."
The New York Times profiles Ms. GaGa on the eve of her new album's release.
Read more about it by clicking here.
Some Thoughts From Keith Richards
USA TODAYKeith Richards longs for days before iPods. Read what he thinks about Hip-hop, modern music, playing guitar, and more.
Read more about it by clicking here.
GORDY TO BROADWAY:
Motown Records founder Berry Gordy Jr. is developing a Broadway musical based on his life to set the record straight on the birth of the iconic Detroit label.
BONAROO A SELL-OUT:
The 2011 edition of Bonnaroo, slated for Manchester, TN, on June 9th-12th, is completely sold out. The 10th year of the festival features Eminem, Arcade Fire, Buffalo Springfield, My Morning Jacket, Lil Wayne, Robert Plant & Band of Joy, Mumford & Sons, The Strokes and The Decemberists, among others.
10 MILLION FOR GAGA:
Lady Gaga became the first person to have 10 million Twitter followers last weekend. The pop star became the first person to pass 9 million followers on Twitter in March, overtaking Britney Spears last August.
FOSTER FETED:
David Foster took home the BMI Icon award at the 59th annual Pop Music Awards this week.
TOWNSEND BIO COMING:
Harper Collins has acquired legendary Who guitarist Pete Townshend's memoir, "Pete Townshend: Who He?," for publication in fall 2012.
E-MUSIC GETS ALL 4:
Digital music service eMusic has signed a deal with major record label EMI to add over 15,000 albums to its service, which will be available to U.S. subscribers. With the addition of EMI, eMusic now offers music from all four major music companies.
AUSTIN CITY LIMITS LINEUP:
Stevie Wonder, Arcade Fire, Kanye West, Coldplay, My Morning Jacket, Fleet Foxes and Alison Krauss & Union Station are among the top acts booked for the 2011 Austin City Limits Music Festival, set for the city's Zilker Park from Sept. 16th-18th. The 10th annual fest
CD BABY SEZ SCREW TUNECORE:
Following a major price hike last week from $19 to $49 per year, Tunecore is now finding its artists being poached by companies like CD Baby, which is offering half-price submission fees to any artist switching from any other service.
DIGITAL BUNNIES ON DEMAND:
Every Playboy issue from its 57 years (and counting) of publication is now available in a Web-based subscription service (and iPad app) for $8 a month or $60 a year.
FACEBOOK ADS YOU NEVER SAW BEFORE NOW COMING:
Don't be surprised to see more marketing efforts tied to cigarettes and booze on Facebook. That's because the company has lifted prior restrictions on promotions involving tobacco, dairy, gambling, firearms, prescription drugs, and gasoline, according to a post on the site Tuesday.
CLIVE HONORED:
Legendary music exec Clive Davis will received an honorary doctorate in Fine Arts from NYU this Wednesday (5/18) at the university's official commencement ceremony at Yankee Stadium along with President Bill Clinton.
DISH NEXT WITH PREMIUM VOD:
Satellite provider Dish Network could be joining competitor DirecTV in offering a premium VOD service releasing movies eight weeks after theatrical release, thus pissing off movie theaters. Dish is currently talking to Hollywood studios about such a program where videos would be priced at about $30 apiece. Cable provider Comcast is also at the table with negotiations for a similar deal.
NETFLIX RULES:
Netflix's streaming video service is now the largest source of peak downstream traffic in North America, accounting for 29.7% of all traffic -- up from 21% in the fall of 2010, according to a report from Sandvine.
DAR-FM:
DAR.fm, a free Web service from MP3.com founder Michael Robertson that lets users record radio shows and stations for later playback, said on Thursday that it has signed a deal to include the DAR.fm service on wireless Internet radios.
SIGN OF THE TIMES:
Amazon.com said Thursday that the company is now selling more Kindle e-books than hardcover and paperback books combined. Amazon began selling print books in 1995, and 12 years later launched the Kindle, in November 2007.
AND AMAZON NOW DOES TRADE-INS:
Amazon.com has launched the Electronics Trade-In Store, which will offer Amazon.com Gift Cards to consumers who trade in used electronics such as tablets, cell phones, MP3 players, cameras and GPS devices.
HOP FARM LINEUP:
Prince will play his first concert in the U.K. since 2007 at the Hop Farm Festival on July 3rd in Kent, England. The singer will headline the third day of the event, which will also feature headlining performances by the Eagles and Morrissey, as well as sets by Bryan Ferry, Iggy and the Stooges, Lou Reed, Brandon Flowers, 10cc and Death Cab For Cutie.
BLONDIE:
Blondie have announced that Panic of Girls, their ninth studio album, will hit stores sometime in September.
DROID SOARS:
During the first quarter of the year, smartphones running Android OS secured 36% of the global market, with more than 36.2 million units sold, according to new data from Gartner Research.
PASSING:
Marty Lewis, a veteran record producer and engineer best known for collaborating with Jimmy Buffett on hits such as "Margaritaville" and "Cheeseburger in Paradise," has died at the age of 60.
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
Read more about it by clicking here.
Quotes of the week
"Everyone's being shortchanged. Digital sound is not as good as vinyl. The quality is nowhere near as good as it was with analog. You feel like you're fighting a losing battle against iPods. People now make drumbeats with fingers. I like to see a guy sweat. Music is physical, not mental."
-- Keith Richards"I'm considering it. I just don't know if I want to be around those guys, you know? They're zany guys. They're crazy."
-- Brian Wilson, saying nothing is holding him back aside from a reluctance to reconnect with his old Beach Boy partners."I can't believe I am saying this - I have missed her a lot."
-- Simon Cowell, who's hooking back up with his former American Idol colleague Paula Abdul for the U.S. version of Britain's X Factor"I probably shouldn't say this, but he was kind of a brat."
-- CSI's Marg Helgenberger, dishing on former guest costar Justin Bieber, on the French radio show Le Grand Direct des Medias"I really don't like gifts from rappers in general, since I'm not a hooker."
-- Chelsea Handler, who says she received extravagant gifts from former flame 50 Cent, on Piers Morgan Tonight
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
HP Unveils Non-Computer For Those Who Don't Need A Computer
PALO ALTO, CA-Hewlett-Packard announced Friday the release of the first-ever non-computer, a fully unusable device specially designed to address the demands of individuals who have absolutely no need to own a computer.
CEO Léo Apotheker told reporters the non-computer was a long-overdue innovation that would finally allow consumers with zero interest in computers to enjoy all the benefits of not having one.
"For too long, manufacturers have catered exclusively to people expressing at least minimal interest in what a computer has to offer," Apotheker said during a press conference. "Meanwhile, there's an untapped group of consumers out there who've been telling us for years, 'Hey, no thanks. Computers aren't really for me.' Well, as of today, someone's finally listening."
Read the rest here and laugh: Click Here.
The Blogs
Check out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.comWebsite
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
Smart Marketing Consulting Services
Smart Marketing Consulting Services has been in business sixteen years, and consults clients in the music, entertainment, attraction, media, and technology industry on branding, marketing, online exploitation, maximizing new media, and more.
"And the beat goes on, the beat goes on ... drums keep poundin' rhythm to the brain."
"Work is life, you know, and without it, there's nothing but fear and insecurity." -- John Lennon
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