Silicon Valley (Version 2.0)

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A surprising article in the Times yesterday: Silicon Valley, despite the overall surge in the economy, has not had as much in the way of a revivial as might be expected. While, the macro situation has certainly improved, we are still no where near the pre-Bear market levels on most measures: Office vacancies, VC investments, job creations. I guess technology is just as cyclical and economically sensitive as most other sectors.

NYT:

“Silicon Valley is back” is on the lips of eager entrepreneurs and venture capitalists, who are rejoicing over the success of Google and pointing to the modest comeback in computer sales. The three-year-long depression, they say, is over.

But other signs tell a different story. The famed traffic jams of Silicon Valley’s boom times are still uncommon. A last-minute reservation at some of the area’s hot restaurants, like Tamarine or Spago Palo Alto, can still be had. And a suite in a gleaming office park that would have cost nearly $10 a square foot in monthly rent in 1999 can now be had for less than $3.

Big portions of sprawling projects built on optimism in the mid-1990′s, like the Midpoint Technology Park in Redwood City, sit dark and unoccupied. On Mission College Boulevard in Santa Clara, 750,000 square feet of office space is still available in an archipelago of office parks built during the boom.

The optimists tend to compare today’s prospects with that of the mid-1990′s, when Netscape Communications’ initial public offering in August 1995 touched off the greatest boom the area has ever witnessed. They believe that a new era, which some are calling Web 2.0, is here.”

click for larger chart
22VALLEY.chart
Source: NYT (Note darker bars reflect 2004 data)

Interesting stuff.

Source:
Silicon Valley (Version 2.0) Has Hopes Up
By GARY RIVLIN
NY Times: June 22, 2004

http://www.nytimes.com/2004/06/22/technology/22VALL.html

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Music Industry Spinning DRM Tales

Brace yourself for a DRM lie of biblical proportions:

Velvet Revolver, a supergroup formed from members of the bands Stone Temple Pilots and Guns N’ Roses, released Contraband, their first CD. It shot straight to no. 1 on the charts, selling 256,000 copies in the U.S.,  according to Nielsen SoundScan.

Expect the Music Industry/RIAA flacks to start spinning dross into gold, claiming the reason for the CD’s success was the DRM from Suncomm Technologies (remember them?). This is the company’s 12th copyprotected CD, and Bertelsmann Music Group’s fourteenth CD to feature the customer-unfriendly measure.

Not surprisingly, none of the prior CDs were breakout smash hits, or even decent big sellers; Certainly, none opened at no. 1 with a bullet.

In fact, there have not many CDs of recent years reaching anywhere near the success of Velvet Revolver (I guess Norah Jones or Eminem were the most similar in initial disc sales).

That’s not at all surprising:  Contraband has been one of the most awaitied and heavily promoted albums of the year. Take the alumni of Stone Temple Pilots and Guns N’ Roses — two monster bands in and of themselves, neither of which have released a CD of new material in a long time — and you have a pre-made audience, loaded with pent up demand for any new product from the group. 

Of course, the CD’s success had nothing whatsoever to do with the copy protection. It was the music and the band’s built in fan base which should get the credit.

You may recall Suncomm Technologies as a DRM laughingstock: In 2003, a Princeton University graduate student revealed that the company’s vaunted digital rights management system could be defeated by simply holding down the shift key when loading a music CD (see "Revolutionary copy protection technology features no copy protection whatsoever").

Indeed, many Amazon reviewers (see a round up of Amazon comments here) have noted that the DRM can be easily defeated.

It took me all of 5 minutes to track down this info on Amazon. Is it lazy reporting, or simply effective spin? The entertainment media’s coverage of the ironically named disc overemphasizes the import of DRM to Contraband’s success. Consider C/Net ("Copy-blocked CD tops U.S. charts") the Register ("Lock-down CD scores No.1 hit"), and even the usually snarky and skeptical Good Morning Silicon Valley implied the CD scored big in part due to the DRM (Suits at Suncomm are a bit redeemed today . . .").

The Contraband CD comes with MediaMax copy protection (ala SunComm). It prevents Windows PCs owners from exercising their coyright fair usage of their purchase, converting their CDs to MP3s foir use with poperable palyers. The dics does include DRM-enabled Windows Media Player versions of the files. This will not allow Macintosh users to use their CD with their iTunes or iPod. Andrew Orlowski notes "we’re yet to find a copy protected CD that the Mac can’t unbork." Indeed, one commentator on Amazon stated: "iTunes on a G5 running mac OS 10.3.4 ripped the MP3s no problem."

For now, most iPod-owning Velvet Revolver fans can use their CDs only if they violate DMCA and hack open their legal CDs. That’s right — if a consumer wants to use their legally purchased CDs on their legal MP3 player, they must become felons. Something is very wrong with this picture.

This raises yet another issue: Shouldn’t a copy protected CD be released with MP3 versions that will work with the most popular MP3 player? Nothing for Apple’s iPod or AAC format, yet it comes with Windows media versions of the songs on the CD? That’s something which should make Steve Jobs furious. This raises the question: Is there an antitrust issue here?

Beyond the Amazon reviewers, Some musicians and fans have been unhappy with the DRM system. "A vocal segment of the online population has been intensely critical of the copy protection plans, leading record label executives to worry about potential consumer reaction. Some artists, such as Virgin Records singer Ben Harper, have been bitterly angry at their labels’ decision to include the technology without their approval" noted C/Net’s John Borland.

Despite this, watch for future industry press releases claiming credit for Contraband’s sales.

The reality is the success of the disc has nothing whatsoever to do with copy protection. It’s as if the manufacturers of tube sox took credit for the U.S. military’s defeating Saddam Hussein’s army. The world’s most powerful armed forces — the most technologically advanced, best trained and equipped military defeats an unmotivated, undermanned, decaying regional force . . . Why? Because they had sweat sox which wicked sweat away from the infantryman’s feet.

UPDATE June 22, 2004  11.34pm

Macfixit notes that Velvet Revolver songs purchased from the iTunes Music Store will play on an iPod — its only the CD owners who cannot transfer songs to their pods.

My apologies for passing along bad information  . . .

.
UPDATE December 18, 2004  7.14am

Another way to avoid non-permissioned vendors from adding softare or altering your PC is to turn off the CD-ROM auto run — that defeats nearly all of these silly systems which do not allow you the fair use of a CD you legitimately purchased to be played on your PC or iPod.

See this link:   Turn Off the CD-ROM Autorun
http://www.annoyances.org/exec/show/article03-018


.
Sources:

Lock-down CD scores No.1 hit
By Andrew Orlowski in San Francisco
The Register, 18th June 2004 08:56 GMT

http://www.theregister.co.uk/2004/06/18/copy_protected_cd_smash/

Copy-blocked CD tops U.S. charts
By John Borland
CNET News.com, June 17, 2004, 3:48 PM PT
http://zdnet.com.com/2100-1104-5238208.html

Velvet Revolver Shoots Straight To No. 1
Margo Whitmire, L.A. (Edited By Jonathan Cohen)
Billboard, June 16, 2004, 10:30 AM ET

http://209.11.49.183/bb/daily/article_display.jsp?vnu_content_id=1000532533

Turn Off the CD-ROM Autorun   
Annoyances.org, Friday, December 14, 2001
http://www.annoyances.org/exec/show/article03-018


 

For a round up of all of the Amazon DRM discussions, click "Continue reading" below.

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