Archive - Jul 26, 2005 | Digital Media Wire

House Votes for FTC Probe Into "Grand Theft Auto" Sex Flap

Authored by Mark Hefflinger on July 26, 2005 - 8:12am.

Washington -- The U.S. House of Representatives voted 355 to 21 on Monday to launch a Federal Trade Commission (FTC) investigation into whether video game publisher Take-Two Interactive intentionally deceived the video game ratings board to avoid an "Adults Only" 18+ rating for its "Grand Theft Auto: San Andreas." The company ceased production of the game after lawmakers including Sen. Hillary Clinton complained that a sexually explicit mini-game dormant in the game's source code could be unlocked by downloading a modification from the Internet called "Hot Coffee". Last week, the Entertainment Software Ratings Board (ESRB) withdrew the game's "M" (Mature) rating after determining the content resided on retail copies of the game, and changed it to "AO" (Adults Only) -- a rating many key retailers refuse to stock. The FTC will now look into the matter, which could possibly lead to a recall of the game and fines for publisher Take-Two Interactive and the title's developer, Rockstar Games.

Indie Record Labels Win iTunes Payment Parity With Majors

Authored by Mark Hefflinger on July 26, 2005 - 8:10am.

San Francisco -- Independent record labels will soon make the same profit off of sales of digital song downloads as their major label counterparts, CNET News.com reported. The American Association of Independent Music (A2IM), a newly formed collective of independent record labels, said that Apple will soon pay indie labels 70 cents per song -- up from 65 cents. "Not to take any specific credit, but I think this does demonstrate the power of a collective approach," Rykodisc founder and A2IM president Don Rose told News.com. Microsoft has also provided assurances to bring digital song compensation for indies as close as possible to what it pays the majors. "We're working with A2IM to resolve delivery and administrative issues in order to level the playing field for indies in relation to the larger music companies," MSN Music general manager Mike Conte told News.com. A2IM said that indie labels collectively account for about 28% of all music sold.

tags: iTunes | Indie Record Labels | Payment Parity | Majors |

Dutch Court Orders Halt to Sale of DVD Copying Software

Authored by Mark Hefflinger on July 26, 2005 - 8:08am.

London -- A controversial software program that can make back-up copies of DVD movies and was banned in the U.S. -- 321 Studios' DVD X Copy -- has now also been outlawed in the Netherlands, The Register reported. The Dutch anti-piracy organization BREIN sued distributor Teledirekt to halt sales of the program; Teledirekt has now been ordered to hand over remaining copies to BRIEN, as well as provide a list of purchasers of DVD X Copy. The program was prohibited from sale in the U.S. following two federal court injunctions, which sent St. Louis-based 321 Studios into bankruptcy. Meanwhile, a number of websites are still claiming to offer the last remaining copies of DVD X Copy for sale in the U.S. "This is the Pre-Ban software that was released before the injunction against DVD X Copy. This version does include the ripper which has been banned by the US Courts," reads a notice on 321StudioCloseouts.com.

tags: Law | Halt | Dutch Court | DVD Copying Software |

Netflix Sees Q2 Profit, Raises 2005 Earnings Guidance

Authored by Mark Hefflinger on July 26, 2005 - 8:06am.

Los Gatos, Calif. -- Online DVD rental service Netflix announced that it returned to profitability during its fiscal second quarter, more than doubling its earnings as revenue climbed 37%, to $164.5 million. The company ended the quarter with 3.2 million subscribers, a 53% increase over its subscriber count a year earlier, adding that it now expects to end the year with between 3.85 million and 4.05 million subscribers. Netflix also raised its earnings guidance for the full year, from previous projections of a small loss, to expected earnings of between $2.4 million and $11.9 million. "Looking at the second half of 2005, we're confident of hitting four million subscribers by year's end and expect to reach that milestone profitably and as the clear-cut market leader," said Netflix co-founder and CEO Reed Hastings.

tags: VC | Netflix | Q2 Profit | Earnings Guidance |

Macrovision Buys PC Game Distributor Trymedia for $34 Million

Authored by Mark Hefflinger on July 26, 2005 - 8:04am.

Santa Clara, Calif. -- Macrovision, a developer of copy-protection technologies for DVD, VHS, CD and other media, announced on Tuesday that it will acquire Trymedia Systems, a provider of secure downloadable PC games, for $34 million in cash. In conjunction with the acquisition, Macrovision said it will incorporate San Francisco-based Trymedia into a new business unit that will provide video game publishers with tools to secure, distribute, promote and continuously renew their game titles. Santa Clara, Calif.-based Macrovision said the deal will add secure game distribution to the DVD and VHS movie protection it provides to Hollywood studios, and the CD copy-protection technology it offers major record labels.

Motorola Introduces Music, Sunglasses Phones, But No iTunes Handset

Authored by Mark Hefflinger on July 26, 2005 - 8:02am.

New York -- Motorola has introduced a number of new phone models that include several music-focused handsets, but a long-awaited iTunes phone was not part of the offering. The company's new ROKR music phones will offer dedicated music keys, an optimized music player interface, and extensive internal or removable memory. Motorola also unveiled the Razrwire, a collaboration with Oakley that attaches a Bluetooth headset to a pair of sunglasses, and the Ojo, which is optimized for delivery of synchronized, high-quality audio and video. "We're not going to launch the iTunes phone today. Steve Jobs is not going to jump out of a cake...(but) it's real, and it is happening," said Motorola CEO Ed Zander. Speculation for the delay includes Apple's and Motorola's exclusion of the wireless network operators, which are currently working on their own mobile music download services; the iTunes phone would bypass the networks, and instead download songs directly from a PC or other device via a Bluetooth wireless connection.

Report Predicts Global Boom in Mobile Video Game Sales

Authored by Mark Hefflinger on July 26, 2005 - 8:01am.

London -- A new report by market analysis firm Informa Telecoms & Media is predicting a global boom in mobile video-game sales over the next five years. The report claims that mobile games will be the fastest-growing segment of the mobile entertainment market, which, overall, will generate more than $44 billion by the year 2010. Informa predicts that the mobile-games market will grow from $2.6 billion this year to approximately $11.1 billion 2010 -- generating more in sales than music or pornography. "The Asia-Pacific and Europe will continue to dominate the global mobile gaming market in terms of revenues and users," said report co-author Pamela Clark-Dickson. "However, the U.S. is set to become the second-largest individual market by revenues and users, behind Japan and China, respectively, by 2010." Mobile phone gambling is also predicted to increase rapidly -- from $1.2 billion to $7.6 billion -- with Europe expected to remain the largest market.

tags: Reports | Sales | Global Boom | Mobile Video Game |

World Poker Tour Wins Copyright, Trademark Infringement Claims

Authored by Mark Hefflinger on July 26, 2005 - 7:58am.

Los Angeles -- WPT Enterprises, producers of the "World Poker Tour" TV series, announced on Tuesday that it has won copyright and trademark infringement claims against a number of television and Internet properties. "WPTE has taken action in these cases and secured agreeable settlements and/or court-ordered injunctive relief in order to avoid confusion among poker players, to prevent the proliferation of unauthorized 'knock-off' merchandise, and to protect against the dilution of and harm to its valuable copyrighted material, trademarks and strong brand," said Robert S. Gerber, attorney for WPTE. The actions were taken against defendants including the "Ultimate Poker Challenge" TV show; World Poker Productions instructional videos; a website offering WPT episodes for download on the BitTorrent peer-to-peer network; several domain name infringers; and a number of companies offering tournaments falsely billed as WPT satellite events. WPT's flagship "World Poker Tour" TV series airs in the U.S. on the Travel Channel, and is syndicated in over 100 other global markets.

Video Compression Developer Inlet Raises $5 Million

Authored by Mark Hefflinger on July 26, 2005 - 7:56am.

Raleigh, N.C. -- Inlet Technologies, a provider of media encoding technology for postproduction and broadcast customers, announced on Tuesday that it has raised $5 million in its second round of venture capital financing. Investors included Technology Venture Partners, the Telecommunications Development Fund and Capitol Broadcasting Company. North Carolina-based Inlet develops compression formats used by broadcasters and others to shrink high-quality video files down to more easily transferable sizes. The company will use the funds to extend the market reach and penetration of its technology beyond the postproduction market and into the broadcast and cable markets.

tags: VC | Video Compression Developer | Inlet |