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  Is Steve Jobs The Second Coming? Messianic Visions from a Fever-Induced Haze August 30th, 2010 Colleen Quinn
  

  Is the CTO Hollywood’s New Box Office Star? August 26th, 2010 Devendra Mishra
  

  The Truth About Security Audits August 26th, 2010 Marty Porter
  

  Watershed Moments In Internet History: Mark Your Calendars. Google Won. June 28th, 2010 Colleen Quinn

MeadWestvaco to Sell AGI Packaging Business for $68 Million

Packaging giant MeadWestvaco Corp. announced late last week that it has signed a definitive agreement to sell its AGI media and entertainment packaging business to industrial holdings company Atlas Holdings, in a $68 million cash transaction.

The sale includes business units AGI Media, AGI Amaray and AGI Polymatrix, which design packaging for CDs, DVDs, Blu-ray discs and videogames, among other media products. AGI packages include the board-based Digipak and the plastic Amaray case, long employed by movie studios as standard DVD packaging.

The several AGI units employ some 1,450 employees with operations in the U.S., the UK, Austria, France, Ireland, Germany, Poland, the Netherlands and Australia.

MeadWestvaco acquired AGI in 2000 as part of its $500 million purchase of the privately held IMPAC Group. The sale to Atlas Holdings — which is expected to close Sept. 30, 2010 — will result in a pre-tax loss for the company of about $125 million. MeadWestvaco expects to report the results of the global media and entertainment business in the third quarter of 2010 as a discontinued operation.

“We are confident that under Atlas’ ownership, the media and entertainment business will continue to have a market-leading position in this sector,” said John Luke, MeadWestvaco CEO.

Atlas Holdings’ investments span consumer packaging as well as pulp and paper, steel, and building materials. Timothy Fazio, the company’s managing partner said that the AGI acquisition “is very consistent with our investment strategy – the packaging market is a sector we have operated in for more than a decade, AGI is critical to the markets it serves and we have experience transitioning divisions of large companies into viable stand-alone companies.”

Luxury Watch Case On Supreme Court Docket May Have ‘First Sale’ Implications

In its upcoming term this fall, the U.S. Supreme Court will hear a case that could bring changes to the entertainment industry’s longstanding “first sale” precedents — even though neither party has much of a stake in the entertainment sector.

Petitioning the high court over a suit from Swiss watchmaker Omega, wholesale membership warehouse Costco says it should be able to resell Omega-brand watches that it purchased from a third party, since the watches’ first sale was to an authorized distributor. The problem, according to Omega, is that the first sale was abroad.

The watchmaker claims that Costco’s unauthorized importation and resale of the watches in California stores — for hundreds of dollars less than they ordinarily would sell for Stateside — effectively infringes on a U.S.-copyrighted logo that’s engraved on each timepiece.

Businesses from Blockbuster to Netflix are predicated on the “first sale” doctrine. But it’s unlikely that the facts of the Omega case would arise in the DVD arena. Consumer DVD pricing may vary around the world, but region-coding and differing video standards between countries effectively prevent U.S. consumers from being able to play discs that were first sold in foreign markets.

Universally-playable media such as audio CDs are potentially another story. However, ruling in favor of Omega in its 2008 appeal, the Ninth U.S. Circuit Court of Appeals held (.pdf) that resellers of foreign-made goods could claim protection under the Copyright Act’s first-sale provision only if an authorized first sale took place domestically. The court’s rule built upon a 1991 decision that disallowed first-sale protections to an importer of U.S.-copyrighted, foreign-manufactured sound recordings (BMG Music v. Perez).

Still, Costco’s appeal to the Supreme Court recently garnered friend-of-the-court support from the American Library Association, which along with other library groups contends that the Ninth Circuit’s rule “threatens the ability of libraries to continue to lend materials in their collections.” More on these implications at The Wall Street Journal — which also meditates on how U.S. copyright law has increasingly seen successful exploitation by consumer-goods brands and other corporations, even as it falls short for distributors of creative works in the digital age.

A retailer trade association whose members include Costco as well as Walmart, Target, Best Buy, and Apple has also submitted a friend-of-the-court brief to the Supreme Court. More on retailers’ angle at Lexology.

Samsung Working To Fix Blu-ray Players’ Firmware Glitch

Owners of Blu-ray Disc players that were marketed by Samsung Electronics last year are reporting playback problems with titles from two major studios, after installing a firmware update from the company earlier this month.

Reports from owners of Samsung’s BD-Px600 players first surfaced on CNET and AVSForum boards (via Engadget). According to the posts, the update caused Blu-ray discs from Warner Bros. and Universal Studios to freeze during playback.

Samsung confirmed the reports to M&E Daily today, and issued the following statement:

“Samsung is committed to delivering the best possible home entertainment experiences to its customers. We have been informed that some customers are experiencing issues viewing select Blu-ray titles following the installation of firmware v2.09 for the 2009 BD-Px600 Blu-ray players. We apologize for the inconvenience, and we are currently finalizing a new firmware upgrade to resolve this issue. We expect this new firmware to be released by early September.”

Following the consumer posts, the company removed the update in question from its support website. Some users say they restored their players’ functionality by re-installing the previous firmware; others, however, say they continue to experience problems.

The total number of players affected — as well as the specific number of Blu-ray titles rendered unplayable — remains unclear.

Blu-ray hardware brands often release firmware updates to maintain the integrity of disc copy protection — or as Samsung’s website puts it, to “improve a specific BD title’s playback capability.” The company’s forthcoming update will be the fifth such firmware release for its BD-P3600 player within a year.

Hackers Claim To Have Purloined Pre-Release Digital Copy of ‘Halo: Reach’

Microsoft’s decision to distribute review copies of its hotly anticipated “Halo: Reach” as secure downloads via the Xbox Live Marketplace appears to have had unintended consequences.

A hacking team claims that it was able to circumvent security on the Xbox Live servers to gain access to the videogame’s full download, according to game site Joystiq. The hackers have no plans to distribute the leaked copy to the public, according to the report. But other game sites have spotted BitTorrent versions of the game being shared on several P2P portals.

“Halo: Reach” is slated for official release Sept. 14. Microsoft posted the game to its Games on Demand service on Aug. 16, according to Joystiq, making “Reach” available in its entirety to select media reviewers who received a 25-character “pre-paid token” from the company.

A Microsoft spokesperson tells Joystiq that it is “aggressively investigating” the purported security breach.

As Joystiq and CNET point out, the incident would be the latest in a line of pre-release leaks surrounding the “Halo” franchise. Previous incidents include the theft of “Halo 2” codes from a disc manufacturing plant in 2004, and the early release of “Halo: ODST” by a retailer in 2009.

MESA Member Spotlight: Sterling Commerce

As part of M&E Daily’s new series of member profiles, we speak with John Konczal, Global Industry Executive, Communications, Media and Entertainment at Sterling Commerce, who shares details on the software company’s planned acquisition by IBM, and on its business integration solutions for media and entertainment firms.

What are the key opportunities and challenges facing the media and entertainment industries over the next 12-18 months? How is your company responding to these issues?

The most significant issue facing media and entertainment organizations over the next 12 to 18 months is for media and entertainment organizations to become expert sales organizations in order to build new revenue streams.  This means enabling the organization to maximize the value of its offerings.

On the agenda include key initiatives such as building a master product catalog to support customer transactions across any sales channel; rapidly enabling new direct and indirect sales channels globally; and enabling new business models, such as bundling of content and merchandise.

New solutions are available in the marketplace that are designed to complement a media and entertainment organization’s existing infrastructure, and optimize cataloging, selling, ordering, and delivery processes with a keen focus on new revenue generation.

What key products and/or services does your company provide? What is your company’s primary client base — and who are their primary customers?

Sterling Commerce is a multi-national software company that helps companies connect, communicate, and collaborate with their customers, partners and suppliers so they can increase revenues, reduce costs and protect their reputation.

Our business integration solutions enable our customers to connect people, processes and technologies, so they can have seamless and secure integration with any partner, any system, anywhere.

And, our collaborative applications streamline commerce to enhance the way our customers do business, so they can catalog, sell and fulfill any offer, across any sales channel.

At Sterling Commerce, we enable communications, media, and entertainment companies to build new business models and revenue streams white reducing operational costs with comprehensive solutions for B2B integration, partner community management, secure file transfers, product and offer catalog, selling, e-commerce, and order management.  To complement our software solutions, we offer comprehensive implementation services, education services and support offerings. Sterling Commerce solutions are available in a range of options from on-premise to fully-managed and as-a-Service.

More than 18,000 customers worldwide, including over 80 percent of the Fortune 500, use Sterling Commerce solutions. This includes leading communications, media, and entertainment companies such as AT&T, DirecTV, Random House, Pearson, and Sony and leading retailers such as Best Buy, Guthy Renker, and Borders.

Any recent news at your company?

On May 24, 2010 IBM entered into a definitive agreement to acquire Sterling Commerce from AT&T for approximately $1.4 billion in cash. The acquisition will expand IBM’s ability to help organizations create more intelligent and dynamic business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers both on-premise or through cloud computing delivery models.

Contact:

Sterling Commerce: http://www.sterlingcommerce.com/

DEG To Host Third Annual Blu-Con Event November 2

The Digital Entertainment Group will present its third annual conference focusing on the current and emerging technologies surrounding Blu-ray Disc on Tuesday, November 2 at The Beverly Hilton in Los Angeles.

The Blu-Con 2010 event is specifically designed to bring together a variety of creative, marketing and business experts from across the entertainment and electronics industries. The DEG expects the event to attract more than 400 attendees, with a program that will underscore the vital role that Blu-ray plays in today’s home entertainment environment as a key driver in the industry.

Blu-Con 2010 will kick off with an exclusive conversation between James Cameron and Jon Landau. The “Avatar” filmmakers will discuss their personal journey in creating the spectacular world of Pandora, the challenges of making “Avatar,” the freedom in working in 3D and how watching “Avatar” on Blu-ray is the only proper way to experience it in the home.

“James Cameron and Jon Landau redefined the theatrical movie experience, and are at the forefront of doing the same in the home with high definition Blu-ray,” said Mike Dunn, Worldwide President, Twentieth Century Fox Home Entertainment and Secretary, DEG: The Digital Entertainment Group. “AVATAR recently became the most successful Blu-ray disc since the format’s inception, and with influential voices like Landau and Cameron supporting it, we will see continued growth in record numbers. Their expertise and insight will be a welcome addition to this year’s Blu-Con.”

Special sessions will also be held on Blu-ray 3D, BD-Live and classic films on Blu-ray; along with the networked players and other emerging trends that are anticipated to drive Blu-ray sales in the fourth quarter.

Additionally, this year marks the first time that Blu-Con goes global. The day’s sessions will be streamed to the DEG’s sister organizations, the DEG Europe in London and DEG Japan in Tokyo.

To register for Blu-Con 2010, visit www.Blu-Con.com. For information on sponsorships, please contact Martin Porter at 516-767-6720 or at ideas@martinporter.com.

Google-Verizon: Proposal Critics Say Companies Want Loophole For ‘New Entertainment Options’

“We want the broadband infrastructure to be a platform for innovation,” the chief executives of Google and Verizon state in a joint proposal, announced yesterday, for how the U.S. government should regulate Internet services. To this end, the two companies press for broadband providers’ right to develop “new entertainment and gaming options,” among other new products, that are separate from traditional Internet access and hence not subject to the same government regulations.

Google and Verizon stress that under their proposal, the Federal Communications Commission (FCC) would monitor the development of these new online services, to ensure that “they don’t interfere with the continued development of Internet access.”

But the proposal has been met with outcry from media watchdog groups, along with a terse response from the FCC.

Andrew Jay Schwartzman, SVP and policy director at advocacy group Media Access Project, sees in the new-services proposal potential for a loophole that “may make some services unaffordable for consumers and access to those services unavailable to new start-ups” (in an interview with the New York Times).

The FCC, for its part, bridles at the corporations’ attempt to redefine the government’s role in net neutrality.

“Some will claim this announcement moves the discussion forward. That’s one of its many problems,” FCC Commissioner Michael Copps says in a statement (.pdf). “It is time to move a decision forward — a decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever.”

MESA Member Spotlight: ModusLink

As part of M&E Daily’s new series of member profiles, we speak with Glenn Grube, Global Director of Marketing Services for ModusLink Corp., on the ecommerce company’s services for the media and entertainment industry, including its development of “entitlement management” solutions for digital content distribution.

What key products and/or services does your company provide to the media & entertainment sector? What is your company’s primary client base — and who are their primary customers?

ModusLink is an ecommerce and supply chain business process outsourcing provider. Our solutions range from forward supply chain, to aftermarket services and a full portfolio of ecommerce solutions that includes entitlement.

Our primary market sectors have been: high technology hardware, software, consumer electronics, telecommunications, semiconductor and ODM/OEMs. ModusLink is expanding into other market segments. Within the software market, we have the ability to support software/video gaming publishers and distributors.

ModusLink Corporation and our parent ModusLink Global Solutions have existed for more than 25 years, serving the supply chain markets. Our heritage is rich in solving the challenges of conducting online business, as well as building effective and efficient solutions enabling companies to move their products to the point of consumption.

Our roster of clients contains the majority of the major companies that would be identified within each of the market segments we serve.

What are the key opportunities and challenges facing media and entertainment over the next 12-18 months? How is your company responding to these issues?

From our perspective we believe the major challenge is to strengthen how digital media content is protected and provisioned.

ModusLink has four solutions we call Entitlement Management Solutions. They provide a robust license activation code administration. Once content is locked, our solutions support creation of a subscription or registration which then provides the license activation code enabling the digital media content to be viewed.

These solutions provide the media and entertainment industries with the ability to monitor who has the right to view their content, manage provisioning of the unlocking key, and communicate with their customers. It can also be viewed as a benefit denial technology from the perspective that digital content is not active at the time of sale, but a process is in place to obtain a license activation code after authorized registration.

Any recent news at your company?

ModusLink launched its Entitlement Management Solutions for B2C digital content distributors in late July.

In June, ModusLink Global Solutions announced its participation in an International Organization for Standardization (ISO) committee to determine guidelines for sustainable packaging. The ISO Technical Committee (TC) 122 on “Packaging and Environment” works to create a single set of standards all companies can abide by to define, label and promote sustainable packaging. The committee recently met in Beijing to discuss standards in the packaging sector with regard to terminology, dimensions and performance requirements. This includes more reliable test methods and technical specifications, and will allow for expedient exchange of world commodities in the field of international trade and logistics.

For more information: www.moduslink.com

Blu-ray Producers Turn Out For ‘3D-Focus’

By Mel Lambert

Interest in creating Blu-ray 3D titles remains on the rise in Hollywood, with BluFocus’s invitation-only “3D-Focus” seminar, held Aug. 3 at the headquarters of audio company DTS in Calabasas, CA, attracting more than 100 content-production professionals.

BluFocus CEO Paulette Pantoja said that turnout for the event was more than double the quality assurance specialist’s initial expectations. “The quality and quantity of the turnout was remarkable,” Pantoja tells M&E Daily. “We were particularly encouraged that so many technical members of the West Coast 3D community came to the event.”

The afternoon seminar sponsored by MESA — a sequel to an online webinar that BluFocus held with MESA in March — addressed a number of critical issues facing the 3D Blu-ray production community.

Event Highlights

Following a welcoming address from Pantoja, Andy Parsons from Pioneer Electronics delivered a keynote address that stressed the need for powerful authoring tools.

“Blu-ray 3D adds emotional impact to the viewing experience,” Parsons stressed, “but it must be done consistently; the devil is in the details.”

Presentations during the course of the afternoon offered the latest technical and practical developments for each step of the Blu-ray 3D production process.

John Ying, engineering architect with Sony Pictures Entertainment, addressed 3D authoring and encoding, spotlighting developments in the firm’s new Dualstream 3D software. Terry Marshall, VP of Global Sales, Professional Products Group at Sonic Solutions, outlined the extra stages required for production of 3D media and the availability of 3DAccess, a toolset for preparing video content for distribution on both 3D Blu-ray and electronically via the internet. John Harrington, CEO and founder of Netblender, discussed other outlets for 3D content, including sales kiosks, museums and motion-picture dailies, using the firm’s DoStudio MVC encoding and authoring tools.

Jesse Torres, DTS director of business development content, covered 7.1-channel Surround Audio for 3D titles. DTS’s HD Master Audio lossless encoding is already utilized on 70% of Blu-ray titles, said Torres, who added his company’s expectation for 175 million 7.1-channel home systems to be installed by the end of 2012. Ronny Katz, the firm’s director of professional audio, outlined use of Neural UpMix, a plug-in for Avid Pro Tools workstations that produces a 7.1-channel soundtrack from stereo or 5.1-surround source material. V2.6 of DTS-HD Master Audio, available soon, will offer 48-times real-time soundtrack encoding, Katz said.

The availability of 3D playback tools was addressed by Alex Soohoo, a video architect with Nvidia’s technical marketing group, who provided an overview of the 120 Hz video displays, projectors, laptops and HDTV receivers capable of accepting 3D-format images using the firm’s 3DTV Play Software. Kam Shek, director of technical marketing with Arcsoft’s Video Home Entertainment Group, pointed out that YouTube is streaming 3D content and provided an overview of the firm’s TotalMedia Theater 3 playback software for all 3D formats. Underscoring the growing importance of 3D content, Shek reported that Apple has filed more than 20 3D patents during the past several months.

Following a breakout session of hands-on demonstrations of current authoring and encoding tools, Guy Finley, MESA’s Director of Membership Services introduced the final sessions beginning with Matt Kennedy, CEO/founder of 1K Studios, who gave a presentation on design and enhanced content in 3D. Kennedy discussed a number of user interface opportunities for menus and interactive content, raising various subjective issues that can degrade the 3D experience. Read more

Release Windows: What Are The First Four Weeks Worth?

How great a percentage of revenue do the first 28 days of a DVD or Blu-ray title’s release represent? That’s the key question facing studios as well as companies such as Netflix, Redbox, and Blockbuster, as the home entertainment industry struggles to rebalance its sell-through and rental revenue streams.

Ralph Schackart, an analyst at William Blair & Co., relies on a long-held estimate that more than 75% of a title’s earnings potential is generated within the first 28 days of its release (via Home Media Magazine). Going on that figure, Schackart says studios have little choice but to window all of their major new releases — which would negatively impact the likes of Redbox.

Yet for Blockbuster, which is playing up its 28-day advantage over Redbox and Netflix for certain films in its advertising, the window would seem to represent less of an opportunity. “According to Blockbuster’s own research, “approximately more than 60% of business for new releases is done in the first 30 days,” CEO Jim Keyes told FastCompany in June.

Sure, it’s a general rule of thumb, and individual titles may continue to vary against the average. But the disparity between the estimates — not to mention the precipitous decline in retail disc sales — points to the fact that formulas must be continually verified against market realities.

With studios continuing to hold divergent views on the effectiveness of exclusive release windows, the outcome of the issue is far from certain.

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