Main Stories
o Report: 2004 U.S. Video Game Software Sales Up 8% to Record $6.2 Billion
o Justice Dept. Records First Two Criminal Convictions for Illegal File-Sharing
o Report: Paid Digital Song Downloads Up Tenfold in 2004 to 200 Million
o Yahoo Profits, Revenue Eclipse Wall Street Estimates
o Electronics Makers Propose Universal Anti-Piracy Locks for Digital Content
o Calif. State Bill Would Target File-Sharing Software Providers
o Gracenote, ScanSoft Partner on Voice-Controlled Digital Entertainment Devices
o Microsoft to Sell Smithsonian Folkways Recordings on Digital Music Service
o Video Game Ad Network Massive Inc. Raises $10 Million in Third Round
o Finnish Game Developer Sulake Raises $23.4 Million
o Liberty Bid for United-GlobalCom Would Create Broadband Giant

o Briefly Noted: Major League Baseball Advanced Media - Players' Association, Macrovision - Universal Studios Home Entertainment, eMusic - new labels, GameFly - 2004 top game rentals, Hustler TV - gay VOD, Wicked Wireless - Jenna Jameson, HandHeld Entertainment, Mobliss, AOL Super Sunday Ad Poll, Tsunami benefit concert - Sony Connect downloads
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Port Washington, N.Y. -- Combined U.S. sales of video game consoles, games and accessories were flat during 2004, at $9.9 billion -- compared with 2003's $10 billion -- while total industry unit sales rose 4% for the year, according to a report from New York-based market research firm NPD Group. While no next-generation consoles were released by Sony, Microsoft or Nintendo in 2004, overall sales were buffered by an 8% increase in game software sales, which reached a record $6.2 billion for the year. While console sales dropped 27% in dollar volume and 16% in unit volume during 2004, portable game system hardware sales were up 10% to $828 million, spurred in part by the release of Nintendo's new DS handheld game. "The 2004 sales figures are impressive, especially as we enter the twilight of this hardware cycle," said Douglas Lowenstein, president of industry trade group the Entertainment Software Association. "No other entertainment industry has posted the sustained growth over the last decade generated by the video game sector." NPD also ranked Take-Two Interactive's "Grand Theft Auto: San Andreas" the 2004 top-selling game title, followed by Microsoft's "Halo 2," Electronic Arts' "Madden NFL 2005" and Take-Two's rival football game, "ESPN NFL 2K5."
http://www.npd.com/dynamic/releases/press_050119.html 
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o Justice Dept. Records First Two Criminal Convictions for Illegal File-Sharing

Washington -- The U.S. Department of Justice announced that the first two defendants charged with criminal copyright infringement on the Internet entered guilty pleas this week. The convictions of William Trowbridge, 50, of New York and Michael Chicoine, 47, of Texas resulted from Operation Digital Gridlock, a raid by government authorities on peer-to-peer file-swappers at the behest of the motion picture and recording industries. The two admitted to operating Direct Connect file-sharing servers on an online group of hubs known as "The Underground Network," which required that its users share large quantities of copyrighted files with one another. The two also admitted they operated their servers for commercial advantage, in that they used them to obtain valuable infringing works from others. Due to be sentenced on April 29, both Trowbridge and Chicoine now face up to five years in prison and $250,000 each in fines.
http://www.usdoj.gov/criminal/pressRelease/p2pPleaFinal011805.pdf
http://www.latimes.com/business/la-fi-piracy19jan19.story 
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o Report: Paid Digital Song Downloads Up Tenfold in 2004 to 200 Million

London -- The number of digital music tracks sold in the U.S. and Europe in 2004 hit 200 million, an increase of more than tenfold over the 20 million sold in 2003, according to a report released on Wednesday by the International Federation of the Phonographic Industry (IFPI). The IFPI also noted that the number of sites selling digital downloads, such as iTunes and Napster, grew in number from 50 in 2003 to over 230 in 2004. Analyst firm Jupiter Research estimates that the digital music market was worth $330 million in 2004, and expects it to double in value in 2005. The enforcement efforts of the recording industry against online piracy have had the effect of lowering slightly the total number of infringing files available on the Internet -- to 870 million in Jan. 2005 -- as well as increasing the ratio of consumers aware of the illegality of unauthorized file-sharing systems to 7 in 10. "The biggest challenge for the digital music business has always been to make music easier to buy than to steal. At the start of 2005, as the legitimate digital music business moves into the mainstream of consumer life, that ambition is turning into reality," said IFPI chairman and CEO John Kennedy. The IFPI said a total of more than 7,000 legal actions have been taken against illegal uploaders in eight countries, adding that some of those charged in Denmark, Germany and Austria have paid an average of several thousand euros each to settle the copyright infringement claims.
http://www.ifpi.org/site-content/press/20050119.html 
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o Yahoo Profits, Revenue Eclipse Wall Street Estimates

Sunnyvale, Calif. -- Buoyed by an upturn in the online advertising market, Yahoo on Tuesday reported quarterly earnings and revenue that topped consensus Wall Street estimates. The company reported a net profit of $187 million, or $0.13 a share, beating estimates of $0.11, according to a survey by Thomson First Call. Including a one-time gain, the profit was $373 million. Revenue increased 62% to $1.08 billion, topping estimates of $756 million. The company "benefited from the growing acceptance of online advertising with marketers" said Terry Semel, the chairman and CEO of Yahoo. Anticipation of the results helped push Yahoo's shares up 1.3% on the day.
http://biz.yahoo.com/bw/050118/186172_1.html 
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o Electronics Makers Propose Universal Anti-Piracy Locks for Digital Content

Sunnyvale, Calif. -- Consumer electronics firms Matsushita, Philips, Samsung and Sony announced on Wednesday that they have partnered with digital rights management developer InterTrust Technologies -- which is owned by Sony and Philips -- on a joint venture that aims to provide standard anti-piracy specifications for all consumer electronics. The Marlin Joint Development Association will develop a technology standard that makers of electronics for the Internet, broadcast and mobile markets can implement to allow users to access secure content on any device. Members of the Marlin group said their standards would also operate with those proposed by the Coral Consortium, a group that includes InterTrust, Sony, Philips and HP. The Marlin group plans to release version 1.0 of its specification in the summer of 2005. The group's standard will compete in the market with rival digital rights management schemes offered by Microsoft, Apple and others.
http://biz.yahoo.com/prnews/050119/nyw098_1.html
http://www.latimes.com/business/la-fi-drm19jan19.story 
http://www.coral-interop.org/main/news/index.html 
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o Calif. State Bill Would Target File-Sharing Software Providers

Sacramento, Calif. -- Providers of file-sharing software that fail to exercise "reasonable care" to prevent use of their software for copyright infringement could face a $2,500 fine and up to a year in jail, under newly proposed legislation in the California state legislature. State Sen. Kevin Murray, who introduced the bill, was also responsible for a bill last year that would have put file-swappers in jail who offer a copyrighted file to more than 10 people without including a valid e-mail address. Murray told CNET News.com the bill is intended to compel peer-to-peer companies to filter copyrighted works from their networks. "We're only asking for reasonable controls. We're not asking for people to create new technology or recreate the wheel," Murray told News.com. "State Sen. Murray did not choose to seek out the facts before introducing misguided legislation that effectively would make criminals out of many companies that bring jobs and economic growth to California," said Mike Weiss, CEO of file-sharing firm StreamCast Networks. "This bill is an attack on innovation itself and tax-paying California-based businesses like StreamCast depend on that freedom to innovate."
http://tinyurl.com/6bn2f 
http://tinyurl.com/7yrxm 
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o Gracenote, ScanSoft Partner on Voice-Controlled Digital Entertainment Devices

Emeryville, Calif. -- Gracenote, a provider of CD recognition technology and media information databases, announced that it has partnered with ScanSoft, a developer of speech and imaging software, to jointly develop voice command software for devices like portable music and video players. The system will enable users to play any song or movie stored on a device by saying its name, as well as create custom mixes and ask for "more like this" to access similar media files. "ScanSoft's technology, combined with our global music and video information database and media management solutions will make these devices even easier to use," said Gracenote vice president of business development, Ross Blanchard. "These applications will radically change the car entertainment experience, allowing drivers to enjoy their entire music collections without ever taking their eyes off the road." The companies estimated that integrated solutions for hardware and software platforms will be available in the fourth quarter of 2005.
http://biz.yahoo.com/iw/050118/079160.html 
http://www.scansoft.com 
http://www.gracenote.com 
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o Microsoft to Sell Smithsonian Folkways Recordings on Digital Music Service

Redmond, Wash. -- Microsoft announced on Wednesday that it has partnered with Smithsonian Folkways Recordings, a record label that releases historic recordings of folk, blues, jazz and world music, to offer a catalog of 35,000 tracks for sale in the U.S. through its MSN Music digital download service. In addition to tracks from Woody Guthrie, Pete Seeger, Bill Monroe, Leadbelly and Lightnin' Hopkins, Smithsonian Folkways recordings of speeches, poetry and natural sounds will be offered on MSN.
http://biz.yahoo.com/prnews/050119/sfw025_1.html 
http://www.folkways.si.edu 
http://music.msn.com/smithsonian 
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o Video Game Ad Network Massive Inc. Raises $10 Million in Third Round

New York -- Massive Inc., the developer of an online video game advertising network, announced on Wednesday that it has raised $10 million in its third round of venture capital financing. NeoCarta Ventures led the investment round; previous investors DFJ Gotham, DFJ New England, RRE Ventures, Tobat Capital and Newlight Associates also participated. New York-based Massive launched its in-game ad network in October 2004, which offers advertisers the ability to place updated ads within 40 titles from eight publishers including Ubisoft and Vivendi Universal. Last month, Massive partnered with Nielsen Interactive Entertainment to provide third-party measurement services for its ad network. "This recent round of funding will help us continue to expand our network, develop new and innovative advertising opportunities with our partners and customers, and bring Massive to a global audience," said Massive CEO Mitch Davis. The company also has plans to open a European office.
http://www.massiveincorporated.com 
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o Finnish Game Developer Sulake Raises $23.4 Million

Helsinki -- Sulake Corp., a Finland-based interactive entertainment company specializing in developing, publishing and distributing multiplayer online communities and games, announced on Wednesday that it has secured $23.4 million in venture capital financing. Benchmark Capital led the round, in which Sulake's current owners -- U.K.-based private equity firm 3i Group Plc and Finnish telecommunications company Elisa Group -- also participated. Sulake's top brand franchise, Habbo Hotel, is an online game environment that has become one of the most popular and fastest-growing teen websites in the world, boasting more than 3 million unique users each month. "During this year, we will focus in the further development of the Habbo Hotel concept and its launch in the promising markets in Asia, particularly China and Korea," said Sulake CEO Timo Soininen. "Habbo brand will also extend to include mobile games and content, animation series and merchandising products."
http://makeashorterlink.com/?Z2502464A 
http://www.habbohotel.co.uk/habbo/en 
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o Liberty Bid for United-GlobalCom Would Create Broadband Giant

Paris -- Liberty Media International, the U.S.-based cable group controlled by media mogul John Malone, has made a $3.5 billion cash and share bid to acquire the rest of European affiliate United-GlobalCom (UGC) that it does not already own. Liberty chairman, president and CEO Malone described the deal as a "merger of equals," which stands to create one of the largest broadband services companies outside the U.S. Industry experts say a successful bid would considerably strengthen Liberty's plans to expand its ownership of cable TV assets in Eastern Europe. UGC, already 53% owned by Liberty, is currently Europe's largest cable-TV operator, with more than 9 million customers in 15 countries. The deal, which Liberty expects to complete by this summer, must still be approved by shareholders.
http://biz.yahoo.com/prnews/050118/nytu174_1.html
http://go.theregister.com/news/2005/01/18/lmi_ugc_merger 

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>Billboard Music & Money Symposium - March 3, 2005

The 4th annual Music & Money Symposium will take place Thursday, March 3, at The St. Regis Hotel in the heart of midtown Manhattan. As in past years, The Symposium will attract thought leaders from the music, legal, management and Wall Street communities for a thorough examination of trends and opportunities in music and digital entertainment.

This year's Symposium will include a candid, one-on-one discussion between Loeb & Loeb co-chairman John Frankenheimer and Sony BMG Music Entertainment CEO Andrew Lack. These two giants of the biz will explore the challenge of merging Sony and BMG, while providing an aerial view of music's future. Additionally, the event will feature all-star panel discussions that will explore a host of crucial topics and networking opportunities such as a breakfast, lunch and cocktail hour.

For more information and to register online, please visit: www.billboardevents.com or contact Kelly at kpeppers@billboard.com or (646) 654-4643.

Attendees of the Digital Music Forum will receive 25% off the registration rate for the Billboard Music & Money Symposium.
 

(New York) Major League Baseball Advanced Media (MLBAM), the league's new media division, announced on Wednesday that it has signed a five-year, $50 million agreement with the Major League Baseball Players Association, giving it the exclusive rights to use and license baseball player group rights. The deal extends to the creation of online fantasy baseball and other interactive games, as well as wireless applications. MLBAM said as a result it will more extensively integrate such features on MLB.com and the thirty MLB team websites.
http://www.mlb.com 
http://www.mlbplayers.com

(Santa Clara, Calif.) Macrovision, a provider of copy-protection technology for CDs, DVDs and other media, announced on Wednesday that Universal Studios Home Entertainment has entered into a new multi-year agreement to use Macrovision copy-protection on its DVDs and select VHS titles worldwide. Macrovision's technology is designed to allow consumers to transparently view original programming on all types of TV sets, but prevents unauthorized copying on DVD recorders, hard drive recorders and VCRs.
http://biz.yahoo.com/bw/050119/195280_1.html 
http://www.macrovision.com

(New York) Digital music subscription service eMusic announced on Wednesday that it has recently signed licensing agreements with a number of new independent record labels, which will bring tracks to its service from artists including Bjork, Modest Mouse, Beck, Dead Milkmen, June Carter Cash and Frank Zappa. New York-based eMusic, a unit of Dimensional Associates, said it sold 4.75 million downloads during the fourth quarter of 2004 -- second only to iTunes in terms of holiday sales -- and currently sells nearly 2 million tracks each month.
http://www.emusic.com

(Los Angeles) Online video game rental service GameFly on Wednesday announced its top video game rentals for 2004. Tecmo's "Ninja Gaiden" was the most popular title, followed by Take Two Interactive's "Grand Theft Auto: San Andreas," and Microsoft's "Fable" and "Halo 2." Los Angeles-based GameFly offers a library of 2,000 game titles that are delivered to renters via the postal service for a subscription fee of $21.95 per month.
http://www.gamefly.com

(Los Angeles) Hustler magazine publisher Larry Flynt's LFP Broadcasting announced on Wednesday that it has signed an agreement with Conwest Resources Incorporated, parent company of Falcon Studios, to launch a gay adult video-on-demand service. Flynt's Hustler TV will offer Falcon titles as part of a separate, standalone video-on-demand service under the Falcon brand.
http://www.flyntdigital.com 
http://www.hustlertv.com

(New York) Wireless entertainment publisher Wicked Wireless said on Wednesday that it has partnered with adult entertainment star Jenna Jameson to create an adult wireless entertainment offering. New York-based Wicked Wireless said the Modeltel Mobile Storefront, featuring R-rated wallpaper, "moantones" and other content, will first launch for Telefonica subscribers in Central and South America before being offered in the U.S. on a limited basis in late 2005.
http://www.wickedwireless.com 
http://www.justjennajameson.com

(San Francisco) HandHeld Entertainment, a maker of handheld personal media players, announced on Wednesday that it will launch a digital content download system for users of its ZVUE players. The company said the service will offer movies, TV shows, cartoons, music and other content when it launches later in the first half of 2005. San Francisco-based HandHeld also recently signed a deal to offer ZVUE owners content from Like Television for $14.95 per month.
http://www.hheld.com 
http://www.zvue.com

(Park City, Utah) Wireless entertainment publisher Mobliss announced on Thursday that it plans to launch a new service called The Thumbdance Channel, which will feature content from IFilm, political parodists JibJab, action sports from Ally Distribution and short films culled from its Thumbdance Mobile Film Festival in Park City, Utah. Seattle-based Mobliss plans to launch the mobile entertainment channel in the spring of 2005.
http://www.mobliss.com 
http://www.thumbdance.com

(Dulles, Va.) America Online said on Wednesday that it will once again produce its AOL Super Sunday Ad Poll, a website where viewers may log on to stream TV commercials aired during the Super Bowl and vote for their favorites. The company said that last year, users streamed Super Bowl ads a total of 9.2 million times and cast more than 3.5 million votes.
http://www.aol.com

(Santa Monica, Calif.) Sony announced on Wednesday that live performances from the NBC Universal benefit concert, "Tsunami Aid: A Concert of Hope" will be made available for purchase exclusively through its Sony Connect online digital music store. Live tracks are available from artists including Nelly, Norah Jones, Maroon 5, Roger Waters with Eric Clapton, Elton John, Brian Wilson and Diana Ross. Sony said all proceeds from Tsunami Aid download sales will be donated to the American Red Cross International Response Fund, adding that the company will match the first $100,000 raised through domestic download sales.
http://www.connect.com 
 
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