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SAN FRANCISCO (Reuters) ? The crackdown on file-sharing site Megaupload is expected to do little to reduce overall piracy of music, software and Hollywood movies, while potentially stifling emerging means of distributing content online.
In the wake of last week's surprising indictment of the digital storage company and seven executives, other companies have begun changing their policies even as Megaupload officers maintained their innocence in a first court appearance in New Zealand.
Filesonic.com stopped allowing people to download files that they had not uploaded themselves, while Uploaded.to blocked access from Internet locations in the United States.
However, just 3 percent of U.S. Internet users relied on digital lockers like Megaupload in the third quarter, according to NPD market research, compared with 9 percent who used peer-to-peer networks, which allow sharing of files among consumers' computers with little or no central organization.
Peer-to-peer systems, including BitTorrent and PirateBay, might gain more activity after the Megaupload charges, analysts said, while users may be afraid to upload content to lockers for fear they will lose access in a similar shutdown.
"I don't think you'll see more file sharers per se, but the amount downloaded over the torrents might rise," said NPD's Russ Crupnick.
But the Recording Industry Association of America and the Motion Picture Association of America said at least some users would balk at the higher complexity of peer-to-peer sites.
Lockers are "more user friendly. I doubt there will be a wholesale shift" to torrents, said MPAA Senior Vice President Kevin Suh.
PirateBay appeared to ignore the demise of Megaupload in its communications with users on Monday. In its blog, writers posted about how PirateBay saw the future of copying - evolving beyond digital format to physical objects it dubbed "physibles" - and
about what artists it might promote in coming months.
In a press release issued last week about proposed anti-piracy legislation in the U.S., PirateBay compared its role to the founding fathers of the U.S. and took the position that it fights for freedom of speech and the equality of all people.
SKIP HOLLYWOOD MIDDLEMEN
Though Megaupload has been around since 2005, lockers have only gone mainstream in the past year. Amazon.com Inc, Apple Inc and Google Inc all adopted some version of the technology that permits digital content to be uploaded for the purpose of backing up user data or making content available to multiple devices or outsiders.
For some content producers, the new avenues are a way to skip the middlemen in Hollywood and reach their fans directly.
Last month, the comedian Louis C.K., complaining of a lack of royalties from conventional DVD sales, offered downloads of a one-man show for $5 from his own website and sold more than $1 million worth.
Megaupload supporters in the past have included major recording artists, such as Macy Gray and Sean "Diddy" Combs, who lent their voices to a popular video touting Megaupload by name.
Rapper Busta Rhymes signaled his support on Twitter even after the arrests last week, tweeting that Megaupload "could create the most powerful way 4 artist 2 get 90% off of every dollar despite the music being downloaded 4 free."
Until the middle of last year, Megaupload offered "rewards" for those who uploaded the most popular content. The indictment said this induced piracy, because the most popular content was likely to infringe copyrights.
But Jennifer Granick, a longtime Internet attorney who is now general counsel for a site devoted to hip-hop, said the idea that only infringing material would be popular was "ridiculous".
"This is a way for artists of all kinds to get out of these record-label deals that can be really limited. These can be a really important way to try to make money and get their stuff out there."
Julie Samuels, an attorney for the civil liberties nonprofit Electronic Frontier Foundation, said it was unusual for the Justice Department to bring a criminal case for an alleged conspiracy over copyright violations, which are usually handled in civil court.
The EFF filed an amicus brief defending another locker service, MP3Tunes, against a record label that sued over a related issue, the "de-duplicating" that saves resources by preserving only one copy of a file that is uploaded by many.
The court ruled that MP3Tunes was in the clear as long as it abided by Digital Millennium Copyright Act requirements for responding to takedown requests, blocking repeat infringers and the like.
Samuels said she was not surprised that other file-storage services were dropping reward programs and in some cases limiting downloads to users' own files.
But she said that was bad for innovation and bad for users.
"The worst part here is that if the lockers are legally unstable then users will be hesitant," she said. "What's really been troubling is that the third parties who are using Megaupload for legitimate reasons no longer have access to their own content. In this case it's the government, but often it's traditional industries that are squelching innovation in what may be an expansion of ways for artists to get paid."
(Reporting by Joseph Menn and Sara McBride in San Francisco, Jeremy Pelofsky in Washington and Jim Finkle in Boston; Editing by Tiffany Wu, Bernard Orr)
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FedEx first announced its SenseAware service ? which provides corporate customers with near real-time tracking for shipments ? in 2009 for the healthcare and life science industries.
Now the company is opening the service to all comers, including the aerospace, finance and arts industries.
The point of the service is that it gives companies more visibility and monitoring capability into shipments. At the heart of the product is a multi-sensor device that travels with the package, sending data to the cloud, from which a company representative can monitor it using a web-based application.
The device itself is pretty neat, and goes far beyond simple GPS coordinates (although if you ever ?received? a package that never materialized, this in and of itself is a godsend): it takes readings for temperature, relative humidity and barometric pressure, can tell if and when the shipment was opened and, for film buffs out there, if the contents have been exposed to light.
Since the customers in question tend to ship highly sensitive or large packages (think pallets, not pouches), the device can also handle major shipments. And it doesn?t require a major infrastructure overhaul: drop in the device, and let the sensors do the rest.
It?s the future of shipping, really. Because with all of the connected technology at work around us, why should we resort to being left in the dark for shipments ? medicine, prototypes, encrypted hard drives ? that are critical?
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RIM's Jim Balsillie and Mike Lazaridis are out, new CEO Thorsten Heins may license BlackBerry 10 originally appeared on Engadget on Sun, 22 Jan 2012 21:28:00 EDT. Please see our terms for use of feeds.
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ROCHESTER, N.Y. ? Kodak's moment has come and gone.
The glory days, when Eastman Kodak Co. ruled the world of film photography, lasted for over a century. Then came a stunning reversal of fortune: cutthroat competition from Japanese firms in the 1980s and a seismic shift to the digital technology it pioneered but couldn't capitalize on. Now comes a wistful worry that this American business icon is edging toward extinction.
Kodak filed for Chapter 11 bankruptcy protection on Thursday, raising the specter that the 132-year-old trailblazer could become the most storied casualty of a digital age.
Already a shadow of its former self, cash-poor Kodak will reorganize in bankruptcy court, as it seeks to boost its cash position and stay in business. The Rochester, N.Y.-based company hopes to peddle a trove of photo patents and morph into a new-look powerhouse built around printers and ink. Even if it succeeds, it seems unlikely to ever resemble what its red-on-yellow K logo long stood for ? a brand synonymous in every corner of the planet with capturing, collecting and sharing images.
"Kodak played a role in pretty much everyone's life in the 20th century because it was the company we entrusted our most treasured possession to ? our memories," said Robert Burley, a photography professor at Ryerson University in Toronto.
Its yellow boxes of film, point-and-shoot Brownie and Instamatic cameras, and those hand-sized prints that made it possible for countless millions to freeze-frame their world "were the products used to remember ? and really define ? what that entire century looked like," Burley said.
"One of the interesting parts of this bankruptcy story is everyone's saddened by it," he continued. "There's a kind of emotional connection to Kodak for many people. You could find that name inside every American household and, in the last five years, it's disappeared."
Kodak has notched just one profitable year since 2004. At the end of a four-year digital makeover during which it dynamited aged factories, chopped and changed businesses and eliminated tens of thousands of jobs, it closed 2007 on a high note with net income of $676 million.
It soon ran smack into the recession ? and its momentum reversed.
Years of investor worries over whether Kodak might seek protection from its creditors intensified in September when it hired major restructuring law firm Jones Day as an adviser. Its stock, which topped $94 in 1997, slid below $1 a share for the first time and, by Jan. 6, hit an all-time closing low of 37 cents.
Three board members recently resigned, and last week, the company announced that it realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation.
The human toll reaches back to the 1980s, when Tokyo-based Fuji, an emerging archrival, began to eat into Kodak's fat profits with novel offerings like single-use film cameras. Beset by excessive caution and strategic stumbles, Kodak was finally forced to cut costs. Its long slide had begun.
Mass layoffs came every few years, unraveling a cozy relationship of company and community that was perhaps unequaled in the annals of American business. Kodak has sliced its global payroll to 18,800 from a peak of 145,300 in 1988, and its hometown rolls to 7,100 from 60,400 in 1982.
Veteran employees who dodged the well-worn ax are not alone in fearing what comes next. Some 25,000 Kodak retirees in this medium-sized city on Lake Ontario's southern shore worry that their diminished health coverage could be clawed back further, if not disappear, in bankruptcy court.
It's a far cry from George Eastman's paternalistic heyday.
Founded by Eastman in 1880, Kodak marketed the world's first flexible roll film in 1888 and turned photography into an overnight craze with a $1 Brownie camera in 1900. Innovation and mass production were about to put the world into cars and airplanes, the American Century was unfolding, and Kodak was ready to record it.
"It's one of the few companies that wiggled its way into the fabric of American life and the American family," said Bob Volpe, 69, a 32-year employee who retired in 1998. "As someone at Kodak once said, `We put chemicals in one end so our customers can get memories out the other.'"
Intent on keeping his work force happy ? they never organized a union ? Eastman helped pioneer profit-sharing and, in 1912, began dispensing a generous wage dividend. Going to work for Kodak ? "taking the life sentence," as it was called ? became a bountiful rite of passage for generations.
"Most of the people who worked at Kodak had a middle-class life without a college education," Volpe said. "Those jobs paid so well, they could buy a boat, two cars, a summer place, and send their kids to college."
Propelled by Eastman's marketing genius, the "Great Yellow Father" held a virtual monopoly of the U.S. photographic industry by 1927. But long after Eastman was stricken with a degenerative spinal disorder and took his own life in 1932, Kodak retained its mighty perch with a succession of innovations.
Foremost was Kodachrome, a slide and motion-picture film extolled for 74 years until its demise in 2009 for its sharpness, archival durability and vibrant hues. In the 1960s, easy-load Instamatic 126 became one of the most popular cameras ever, practically replacing old box cameras.
In 1975, using a new type of electronic sensor invented six years earlier at Bell Labs, engineer Steven Sasson created the first digital camera, a toaster-size prototype capturing black-and-white images at a resolution of 0.1 megapixels.
Through the 1990s, Kodak splurged $4 billion on developing the photo technology inside most of today's cellphones and digital devices. But a reluctance to ease its heavy reliance on film allowed rivals like Canon Inc. and Sony Corp. to rush largely unhindered into the fast-emerging digital arena. The immensely lucrative analog business Kodak worried about undermining too soon was virtually erased in a decade by the filmless photography it invented.
"If you're not willing to cannibalize yourself, others will do it for you," said Mark Zupan, dean of the University of Rochester's business school. "Technology is changing ever more rapidly, the world's becoming more globalized, so to stay at the top of your game is getting increasingly harder."
In November, Kodak warned it could run out of cash in a year if it didn't sell 1,100 digital-imaging patents it's been shopping around since July. Analysts estimate they could fetch at least $2 billion.
In the meantime, Kodak has focused its future on new lines of inkjet printers that it says are on the verge of turning a profit. It expects printers, software and packaging to produce more than twice as much revenue by 2013 and account by then for 25 percent of the company's total revenue, or nearly $2 billion.
CEO Antonio Perez said in a statement Thursday that the bankruptcy filing is "a necessary step and the right thing to do for the future of Kodak." The company has secured $950 million in financing from Citigroup Inc., and expects to be able to operate its business during bankruptcy reorganization and pay employees.
On its website, Kodak assured customers that the nearly $1 billion in debtor-in-possession financing would be sufficient to pay vendors, suppliers and other business partners in full for goods and services going forward. The bankruptcy filing in the Southern District of New York does not involve Kodak's international operations.
"To be able to hop from stone to stone across the stream takes great agility and foresight and passion for excellence, and Kodak is capable of that. They have some killer stuff in inkjet printing. It's becoming a profitable product line but what they need is the runway to allow it to take off," Zupan said. "As the saying goes, `the best way to anticipate the future is to invent it.'"
The company and its board are being advised by Lazard, FTI Consulting Inc. and Sullivan & Cromwell LLP. Dominic DiNapoli, vice chairman of FTI Consulting, will serve as chief restructuring officer. Kodak expects to complete its U.S.-based restructuring during 2013.
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