Cambridge, Mass. - The market for paid video downloads is dead on arrival, with revenues expected to peak this year at $279 million before advertising-supported models come to dominate the space, according to a report from market research firm Forrester Research. [more..]

Denver - The U.S. Department of Defense is set to block popular websites including MySpace and YouTube on its worldwide networks, citing a need to protect information and lessen the strain on bandwidth, the Associated Press reported on Monday. [more..]

Raleigh, N.C. - Attorneys General in seven states have asked News Corp.'s MySpace to turn over the names of registered sex offenders who use the service, the Associated Press reported. [more..]

London - Spanish telecom Telefonica has sold its stake in the Dutch TV production company Endemol ("Big Brother," "Deal or No Deal") to a group led by former Italian prime minister Silvio Berlusconi's Mediaset, and Endemol founder John de Mol, in a deal valued at $4.6 billion, the Financial Times reported. [more..]

New York - Billboard reports that Paul McCartney, who is releasing his latest record to digital and mobile retailers, says that a deal to make the Beatles' lucrative catalog available for purchase from digital retailers is "virtually settled." [more..]

Bonita Springs, Fla. - Source Interlink, a provider of merchandising and fulfillment services for home entertainment products, announced on Monday that it will acquire publisher Primedia's Enthusiast Media division, comprising over 70 magazines and 90 websites, for $1.2 billion. [more..]

Minneapolis, Minn. - Navarre Corp., a publisher and distributor of physical and digital home entertainment products, announced on Monday that it has sold its independent music distribution business to KOCH Entertainment for $6.5 million in cash. [more..]

Seattle - Online retail giant Amazon.com announced on Monday that it has acquired Dpreview.com, a provider of online digital camera information and reviews. [more..]

Gothenburg, Sweden - Spurred by mobile music uptake, digital music sales are forecast to overtake physical sales in Western Europe by 2011, and will account for 10% of total music retail revenues this year, according to a report from Sweden-based market research firm Berg Insight. [more..]

Menlo Park, Calif. - Power Challenge, a developer and publisher of online sports games, announced on Monday that it has received an $8 million investment from venture capital firm Benchmark Capital. [more..]

Sheffield, England - Cometa Wireless Gaming Systems, a developer of mobile phone gambling technology, has raised $1.9 million in its first round of venture capital financing, led by fellow mobile phone gambling firm Mfusion. [more..]

New York - Viacom's mtvU campus network and partner Cisco Systems on Monday announced the five student group recipients of $30,000 grants in their "Digital Incubator" program, aimed at "pioneering the next generation of digital applications and content." The projects include elements of social networking, mobile games, online interactivity, affinity-based websites and short-form broadband programming. Now in its second year, the program this year will encourage grant recipients to submit a detailed business plan and pitch MTV and Cisco executives for a supplemental grant of up to $100,000. [more..]

Morristown, N.J. - Access Integrated Technologies, a provider of digital cinema delivery systems, announced on Monday that it has signed a deal with movie theater owner Marquee Cinemas, to convert 153 of its megaplex screens to digital cinema. New Jersey-based AccessIT said closing of the deal makes for a total of 3,455 screens committed to its plan to outfit a total of 4,000 screens. [more..]

Rochester, N.Y. - Online entertainment site eBaum's World announced on Monday that it has signed a deal to make hundreds of its viral videos available through a branded eBaum's World Channel on AOL Video. The site plans to provide new clips to AOL Video on a weekly basis. [more..]

Los Angeles - Japanese video game publisher Square Enix on Monday announced a slate of six upcoming titles, including a next-generation multiplatform roleplaying title called "The Last Remnant." Other games on deck from the publisher include "Star Ocean 1: First Departure"; "Star Ocean 2: Second Evolution"; "Star Ocean 4"; "Chocobo's Dungeon: Toki-Wasure no Meikyuu"; "Final Fantasy XII International Zodiac Job System"; and two new installments in the "Final Fantasy Chronicles" series. [more..]