MMW-09 -- Morpheus Update

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J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on the Week's Music Technology News
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Issue No. 9
Tuesday, March 13, 2002
Tokyo

CONTENTS

++ FEATURE: Morpheus Update

++ NOTEWORTHY NEWS:
- Avex to Copy-Protect CDs
- New Bluetooth Headphone System from Kenwood
- MP3 Players for Windows XP

++ FEATURE: Morpheus Update

Last week, we reported on the odd turn of events surrounding
StreamCast Networks and its file-sharing program, Morpheus. To recap:
On February 26, millions of Morpheus users suddenly found themselves
locked out of the network. This was followed by claims of an attack
on the service by StreamCast CEO Steve Griffin, and a hastily released
'upgrade' called Morpheus Preview Edition, which represented a switch
in network protocols from the proprietary FastTrack to the open
source Gnutella. At the time of last week's writing, we were left to
wonder about what exactly had transpired to cause the Morpheus lockout
and subsequent switch from FastTrack to Gnutella.

Shortly after last week's report went out, Kazaa B.V., the company
which licenses the FastTrack technology, issued a statement saying
that the blackout was a consequence of StreamCast not paying its
licensing bills. According to a statement published on CNET News,
Kazaa BV founder and FastTrack creator Niklas Zennstrom says,
"MusicCity (also known as StreamCast Networks) has failed to pay any
amounts due to Kazaa BV under the parties' license agreement. As a
result of MusicCity's breach, Kazaa BV did not provide version 1.5 to
MusicCity. Kazaa has also terminated MusicCity's license."

SteamCast, however, characterizes the shutdown as an 'attack,' and a
violation of its contract with Kazaa. The company posted a message on
its web site stating, "This week MusicCity and Morpheus users
suffered dual attacks. First, early this week MusicCity's servers were
hit by a massive Denial of Service attack. Soon thereafter, Morpheus
users found that a separate attack had been launched on their
computers and their Morpheus software programs... This unprovoked
attack is being carefully investigated, as it appears that federal
laws may have been violated."

Kazaa B.V., originally a Dutch company, was recently acquired by
Sydney-based Sharman Networks. According to the CNET report, Sharman
has hired not just a PR company, but also a Washington lobbyist.
However, there appears to be no contact information for the company
in Australia, and Australian copyright authorities who have
investigated the company say they have yet to find evidence of its
existence.

Meanwhile, the situation does not look good for Morpheus, and early
reviews of the new program are not particularly favorable. The
biggest problems apparently have to do with decreased speed and a
vastly reduced selection of files to choose from -- both a result of
the switch from the highly popular FastTrack protocol to the less-used
Gnutella.

So, while it appears that one question has been answered, several
others remain. In particular, one still has to wonder why Kazaa would
ever take such an extreme action as shutting down Morpheus. In doing
this, the company appears to have shot itself in both feet: not only
did they lose over half of their file base (57% of FastTrack client
downloads were for Morpheus), but they have also proven to the world
that their network is not decentralized and is indeed capable of
being shut down. Lawyers for the RIAA and MPAA, who are currently
suing Kazaa and FastTrack, must be grateful.

Stay tuned...

++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy and paste to your browser.)

** Avex to Copy-Protect CDs

On March 13, Avex will become the first Japanese record label to
release a CD which uses special technology to copy-protect some of
the tracks. Made by Israeli security company Midbar Tech, the
CD-protection technology, called 'Cactus Data Shield,' blocks users
from playing protected tracks on a computer. By using Midbar's
technology, Avex hopes to prevent the rampant copying and
distribution of CDs on the Internet.
From CNET News.com:
http://news.com.com/2100-1023-852540.html

** New Bluetooth Headphone System from Kenwood

Kenwood exhibited a prototype version of its new Bluetooth-enabled
headphone system at the recent 'Bluetooth and PAN' exhibition in
Tokyo. The company demonstrated how music data could be transferred
from PCs, PDAs and music servers to the headphone via Bluetooth.
Kenwood expects to officially release the product by the end of this
year. No price has been set yet.
From Nikkei Electronics Asia:
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/moren/172725

** MP3 Players for Windows XP

CNET Music Center published a review last week of new MP3 players for
Windows XP. Although most MP3 players currently available are
incompatibile with the new OS, this feature lays out the present set
of options for XP users. Includes reviews of players from Archos,
Sonicblue, and Creative Labs.
From CNET.com:
http://electronics.cnet.com/electronics/0-3219397-8-9008612-1.html?ta
g=st.mu.1565654.boxhl.3219397-8-9008612-1

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SUBSCRIBERS: 423 as of March 13, 2002

STAFF

Written by Steve Myers (steve.myers@l8tech.com)
Steve Myers heads the Theta Group at Layer-8 Technologies, which
specializes in the development of music-related software
applications.
Edited by J@pan Inc editors (editors@japaninc.com)

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