First of all, you’ve got to feel sorry for content “owners.” You know the guys that stand between the artist and the consumer. They’ve got a lot to protect…their jobs!

Life was simple before the world went digital and a bunch of scientists, engineers and educators decided they wanted to exchange information better and more easily so they invented something that has become the global Internet. They sat in their glorious offices, smoked their Cubans (smoking and Cuban cigars were legal then) and pretty much dictated who got what and who paid what.

Then the PC and CE industry mucked everything up!

Suddenly everyone had contact with everyone else. Everyone had the ability to reach out and grab content from deep, dark inner space…and share it.

It was all taking millions (according to “them”) from the MPAA, broadcasters and RIAA (Tellywood).

Of course they ignored the fact that fast-buck artists could get a copy before the content was released and knock out a few million copies to sell for pennies on the dollar. Instead it was easier to nail the little old guy and show people they were serious about protecting “their” property.

Since they couldn’t figure out how to live in the digital anywhere world it was easier to send out the legal hit squad, circle the wagons and figure out how to develop DRM (Digital Rights Management gotta love the feel of that name). The stuff had to be strong enough to let you look at and listen to the stuff you paid for without letting you touch it. And stuff that acne-faced 15-year-olds couldn’t crack in a few minutes.

That ain’t easy !!

Inventive World Unravels

Before Sir Howard Stringer was elevated to CEO and handle the thankless job of reinventing Sony by slashing jobs and products, he brought in Andy Lack to head up the record arm of the company and who know how to make a buck do serious tricks. First thing he did was buy Bertelsmann’s BMG record company and make Sony BMG huge in the music industry.

Lack wanted something that would appease the huddled masses who bought his discs but still let him keep the company’s content from flying around the Internet.

What should he do…what should he do?

Fortunately an innocent looking British firm called First 4 Internet knocked at the door with a solution that Lack found irresistible. It was as inventive as Sony. Simply add (at a cost) a little bit of First 4’s code and people could make up to 4 copies of the disc for their personal use and after that the disc was locked up.

That’s reasonable in our opinion since it meets the Supreme Court’s fair use decision and lets Sony BMG protect its content.

Everyone was happy. Consumers could make their few backup copies. Labels got their royalties. Dealers could sell their discs. Ordinary folks could enjoy their music.

But those First 4 code whisperers were a sneaky group and sometimes you’re sorry for what you wish for. They added this little guy called a rootkit that would crawl into the user’s computer and hide so you couldn’t find him without some serious technical sleuthing.

Well someone did. Mark Russinovich of SysInternals found the little bugger while nosing around in his PC (he’s never explained why he was playing CDs on his office system yet) and wrote up the alert in his blog. Then the fit hit the shan!

Turns out rootkits are a reason some people fear genome research. They aren’t your ordinary virus or Trojan malware. These babies sink themselves deeply into your OS and do an ingenious job of hiding and protecting themselves. If you find and try to remove them BAM !!! they take out your computer OS, drivers, hard drive, anything they can get their tentacles on.

Well folks love to rush and see a good accident and this sucker was a three-train pileup!

Some call it a PR fiasco.

But what PR person goes into his/her boss and says “hey we got a big problem and we want you to do the honorable Japanese thing…admit you sc***ed up, take one for the team and fall on the sword.” Oh sure James Burke, CEO of Johnson & Johnson did during the Tylenol scare but that took serious cajones.

Sir Howard looked down from his 52nd story office and probably said, “Are you out of your frickin mind? Those people down there have pitchforks and lawsuits. Besides, I’m British, not Japanese. Send out Mikey!”

The removal kits that Sony, SunnComm (another Sony “support” provider) and beleaguered First 4 didn’t work real well…ok so they failed miserably. It was so bad that McAfee, Trend and Microsoft had blasted the sneaky rotten trick and pitiful solutions that were offered. So Bill Gates Microsoft team offered a Spyware Removal Tool to help infected users.

The dazed and sleep deprived Sony BMG folks did swing into action offering to replace the “bad” CDs and swapped out discs around the globe with their dealers and distributors. They also hired a new receptionist for the front door to take the class action suits from New York state, Texas and the hundreds of other lawyers that filed for their shares of the righteous indignation action.

To Enjoy a Rainbow It Has to Rain

Ok! It was a dirty, rotten, sneaky thing to do. Get over it!

We actually think that in the long run it will be good that it was done…and discovered.

How many other Tellywood teams did the same thing and weren’t uncovered? How many of them saw the masses rise up and killed their own plans?

It even made Congress people the content folks take on lavish boondoggles think twice about ramming through legislation that would slam over consumer rights.

Apple’s Steve Jobs is standing huge right now because people are buying lots of music downloads. He’s running around saying look guys my iTunes music and video approach may be proprietary but you don’t see people flushing their iPods down the toilet. MS has a different (and they feel better, more universal) approach but then Bill and Steve never agree on much of anything.

In the meantime, the Tellywood guys stepped back into their boardrooms with their strategists and programmers to come up with a gentler, kinder DRM that will stand the light of day and that ordinary folks can live with. They are making certain their EULA (End User License Agreement) that no one reads covers their behinds.

While broadcasters like the idea of a Broadcast Flag that will keep you from copying digital broadcasting (audio and video) and reusing them. But no Congressperson is willing to stand up in front of the TV watching folks in his/her district to say they are pushing a bill that will block one of their rights.

They’ve slid the draft proposals back across the table and said, “come on guys, give me something that isn’t so heavy-handed, so cut and dried. Put some lipstick on this pig so we can sell her.”

The MPAA and RIAA have looked at the MS windows Media and Apple iTunes approaches (and watched the Sony uprising) and begrudgingly are agreeing with EFF’s (Electronic Freedom Foundation) approach that there has to be a gentler, kinder DRM that will make everyone but the died-in-the-wool thieves happy. In fact they should focus all of their sleuths and legal raiders to job of getting the big fish. Then they could make so much money they could forgive the aging grandfather and mother on welfare. Real content developers the indies and special interest groups could use good-enough DRM and make a living.

If they get the lawyers out of the discussion process and let regular people develop a DRM solution everyone could live with because intellectual property (IP) is valuable and within reason must be protected. Problem is, it isn’t an American issue. It’s a global issue because surprise folks…IP is developed and stolen everywhere on the planet!!!

If they don’t quickly develop a solution everyone can live with …it may not matter.

Real Content Development, Offerings

We just read a report that blew our mind.

For all of the noise about saving broadcasters as well as music and movie producers from a certain death because of digital content through the airwaves and thieves, they only account for 10% of the total content produced!

The other 90%? That is produced by independents, special interest groups, families.

Then you look at the future. According to Pew Internet Research more than 57% of the online teens (think tomorrow’s vide/audio mogels) create content on the net Sure a lot of it is webpages and blogs. But increasingly it includes music, photos, art, and videos.

It may not be Hollywood or Music City quality right now but give them a few years and they’ll hone their craft.

So what?

It’s a big deal because they are already well versed in the use of the next generation of audio and video delivery the Internet!

CBS, Times Warner and most of the biggies are looking long and hard at IPTV to see how they can take advantage of the Internet to deliver content directly to the consumer…and still make a buck.

Take a look at Live365 and you’ll find thousands of free and fee online radio stations. Google or Yahoo the words “internet music.” You’ll find thousands of fee and free online music sites like that was recently covered in Time magazine. Do global searches like IPTV, internet TV, internet movies and surprise there are 10s of thousands of sites already up beaming video content either on-demand or round-the-clock.

OK so let’s use Apple’s $2 download formula. It may not be the best measure but they did set the bar. A charge for storing the video on the IPTV web site. And they rack up 2-3,000 downloads a month.

May not keep one of Disney’s or Sony BMG’s executives in cigars and cognac but it could help a few million independent videographers, music composers, creative folks and even some special interest groups hone their craft and make a living.

Sony’s rootkit fiasco has Tellywood execs thinking twice about how intrusive them make their DRM. Maybe they should send their lawyers to the pirates’ lairs and focus on figuring out how to make a living in the always-on Internet.

Seems like time and money better spent!!!