Weekly News Roundup (23 September 2012)

I know I ranted a bit about iPhone 5 last week, but I probably should have divulged the fact that I did have one on pre-order (for my mum). Having got it on launch day and helping mum to set it up, my only thought about it so far is that, well, it’s very much an iPhone. I guess that’s a compliment of sorts, but there’s nothing really terribly exciting about it really (other than mountains that appears to be “alive” on the new Map app – check out Tahiti, for example). There are also some concerns about build quality and durability, two things that Apple usually gets spot on – there was already a chip on the black iPhone out of the box (apparently common with the white version too), and there have also been reports of the black paint being scuffed off (check out #scuffgate on Twitter). A bit of a poor show from Apple really, as design problems can happen any time you add something new, but build quality issues shouldn’t exist really.

Hey, I guess that turned into another rant of sort. To be fair, Apple is an easy target, and it’s not as if other companies don’t have the same or worse problems with their new devices. But expectations have been raised by Apple themselves, and so they can’t expect consumers to shrug and not care when a problem does arise.

Onto the news roundup then …


With US ISPs gearing up to be at the frontlines of the war against net piracy, a new report questions the fairness and transparency of the “six-strikes” system that will be used.

The MPAA/RIAA (and Obama administration) sponsored deal with ISPs will see users notified of up to 6 times for their alleged copyright offences, after which time a temporary disconnection may be issued. But University of Idaho Law Professor Annemarie Bridy says in a new report that the system is flawed because it the lacks the presumption of innocence, has an reverse burden of proof, lacks verification of the evidence being used, and is inadequate in terms of transparency in the design and implementation of the system.

In other words, alleged offenders are assumed to be guilty using evidence that hasn’t been independently verified or legally tested, evidence they have little recourse to argue against made worse by the fact that the burden of proof is on the accused, all the while happening in a system that was designed in secret and will be operated in secret.

At least there will be an appeals process, Professor Bridy says as she looks for the slim slim sliver of silver lining in the big grey anti-piracy cloud. The fact that permanent internet disconnection is so far not an option, unlike the similar French Hadopi system, is also a positive.

The MPAA/RIAA will probably argue that the scale of the problem requires expediency, something  that can only be achieved by ignoring due process. And the need for expediency is as debatable as the potential damage resulting from web piracy – does piracy really cost the industry a lot of money? The French experience so far has not resulted in any noticeable improvement in things like revenue, even though piracy rates have dropped significantly, so you have to question the effectiveness of these schemes when judged by real outcomes such as revenue.

A set of unfair laws is bad enough, but when they’re not even effective, then that makes them worse. But when lobbyists like the MPAA or RIAA are tasked with writing these laws, then this kind of thing will always happen. And with the MPAA/RIAA basing their entire strategy on an irrational fear of the Internet, it’s no wonder that what they come up with will also be irrational.

And what makes the argument in Washington seem even more one sided is the fact that there aren’t that many lobby groups that are making counter-arguments to those being made by the MPAA/RIAA. Groups like the EFF, Public Knowledge and even the ACLU do have a say, but without special access to politicians that experienced lobbyists have, they’re often not even invited to the conversation, let alone allowed to have any meaningful contribution. Case in point, the “six-strikes” deal mentioned above.

Internet Association Logo

The Internet Association will lobby for the interests of Internet companies, some of which will align with consumer interests

But that may be about to change. Some of the world’s largest Internet companies including Amazon, Facebook and Google have now teamed up to form their own lobbying group dubbed the Internet Association. The group, whose membership also includes the likes of LinkedIn and Yahoo, will be tasked with the role of protecting the interests of these companies, including the issue of Internet censorship and freedom.

It’s still sad that lobbying is still so effective in US politics, and that it seems that monied interests always seem to win out. But at this stage, it’s more a case of “if you can’t beat them, join them”, and while principles are one things, getting the crap beaten out of your industry is the more pressing concern.

And there’s also the concern that the Internet Association’s backers are all corporations with interests that may not always align perfectly with that of the average consumer. But for now, they mostly do, and there are different enough companies as part of the group to hopefully ensure it won’t be just a mouthpiece for the big boys (like the MPAA and RIAA are).

High Definition

But there are signs that maybe Hollywood has realised that they won’t have to destroy the Internet in order to protect its own business interests. Predictably, t’s the $$$ that’s showing them the way.

The tremendous growth in subscription streaming, and the increasing competition that’s occurring in the sector, is set to give Hollywood a mini-boom in revenue. With more players on the market than simply Netflix, the content holders are finally in a good position to negotiate ever better deals, taking advantage of the desperation of the new players to be able to compete with a behemoth like Netflix.

Either Netflix ends up paying more for exclusivity deals – the company is already paying more than $2 billion a year to license their existing content – or studios are able to negotiate non-exclusive deals with a wide range of distributors including Amazon, and an upcoming streaming venture between Verizon and Redbox. Epix, the company co-owned by Paramount, MGM and Lions Gate, recently managed to get $80 million more per year from their deals with these new companies than compared to their previous exclusive deal with Netflix, for example.

The industry is apparently keen to avoid the mistakes of the music industry by not locking themselves into one major players. For the RIAA companies, it is the dominance of Apple devices and iTunes that is putting them at a severe disadvantage when it comes to negotiating licensing deals. The only solution is to make extremely favourable deals with the likes of Amazon and Google in the hope of breaking up the Apple iTunes monopoly, but this may or may not work, and revenue takes a knock as a result. Book publishers are similarly hampered by the virtual monopoly Amazon’s Kindle enjoys.

But with the movie industry the last to fully embrace the Internet, they may yet learn from the mistakes of other industries. For now, it seems that some good has come out of the Internet after all, and that all it took was some innovation. And a new business model, and not more DRM and draconian laws to protect the old one.

The Hunger Games

The streaming availability of The Hunger Games in the US will be delayed by 90 days compared to Canada, something the Netflix says could encourage piracy

But it’s also hard to break old habits, as the issue of release windows has been raised again, this time for the streaming market. Netflix’s chief content officer Ted Sarandos warns that Hollywood’s insistence on having geographical based release windows for streaming content may end up encouraging piracy. Referencing Epix’s The Hunger Games, where Canadian subscription subscribers can watch it 90 days before their US counterparts, Sarandos says that this is an entirely counter-productive way to do business in the online age. Studios are still desperately protecting their sell-through income, and they think that the best strategy to achieve this is to prolong the sell-through period as long as possible. But, ironically, they fail to take into account piracy. Whether they like it or not, piracy competes with both sell-throughs and subscription streaming, and so by limiting people’s legal choices, all you end up is pushing them towards the illegal ones.

But when a single sell-through copy can make $15 for the studio, which is almost double the entire monthly price of a Netflix subscription (which will then be split among many different content holders), you can see why studios are a bit hesitant. But then again, piracy makes $0 for them, so negating the need for piracy will mean additional income. Less money per person, from more people, may be the name of the game, and this can only happen if  Hollywood stops looking for the big profits, and start looking at the small.


With most of the recent attention being on Nintendo’s Wii U, Sony obviously felt a little bit left out and, to everyone’s surprise, they’ve introduced a brand new PS3 console. It’s a bit hard to to convey irony on the interwebs, so that bit about “surprise”, as with almost all new product launches these days, was not quite true.

It looked like the earlier leaked pictures were indeed accurate, albeit in poor quality. And the rumour about a low storage capacity version of the PS3 to compete with the Xbox 360 4GB was also true, except the 16GB slower style flash memory version actually turns out to be a 12GB SSD version, and that this budget version will only be available in Europe (and a few other countries, including Australia).

Other than that, the slimmer, lighter PS3 also now uses a top loader for the disc drive, and comes in 250GB and 500GB versions, replacing the 160GB and 320GB found on the not-as-slim-but-still-quite-slim PS3s at the same price points.

"Super Slim" PS3

The new “super slim” PS3 will be available soon, but without a price cut, analysts are wondering “why bother”.

A bit surprising that North America doesn’t get the budget version, as that’s the marketplace that really could benefit from having a cheaper PS3 to compete with the Xbox 360. But maybe Sony are just testing the waters to see if there’s demand for such a console in the first place.

The lack of a price drop has analysts questioning the point of having a new PS3 console out, and they have a good point. But if both Sony and Microsoft want to prolong the life of their respective consoles, then there’s only so much price cutting one can do before they start losing money on the hardware again (having taken so long to finally start making money on them). And if longevity is not important because a new console will be out next year (seems unlikely now, at least for Sony, given the timing of this new PS3 refresh), then a price cut won’t help much in between now and then.

Okey-dokey, that’s that for the week. Have a good one.


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