Thoughts from the Shelf

Today a new report has been released that cites there are now more reasons to justify buying a PlayStation 3 than there are to buy rival gaming console the Xbox360.

In 2007 the Sony console lost out to its rival in terms of sales, however 2008 sales statistics show that the PS3 is gaining significantly on Microsoft’s offering. In the first five months of the year Sony have put the increased sales down to new games released exclusive to its platform, such as that of the popular title ‘Metal Gear Solid 4’.

The Sony console has also seen a rise in sales thanks to the victory of Blu-ray as a dominant high definition DVD format after Toshiba’s HD-DVD was dropped by a series of Hollywood studios early this year to be replaced by its Sony rival. (The Blu-ray vs HD DVD Format War)

“For the first time since the console launched, I really think there’s more reason to buy a PS3 than the 360” - Todd Greenwald, Signal Hill Capital Group analyst.

The rivalry between the two console formats will be sure to heat up later this week as console makers and game publishers meet for the E3 Business and Media Summit in LA. At the conference Sony plans to demonstrate the DVD capability of the PS3, as well demonstrating ‘Little Big Planet’, a social-networking game that can be played online through the two-year-old console.

In an effort to increase the appeal of its console Microsoft plans to triple the storage capacity of the Xbox360, selling 60 GB consoles in August, whilst keeping the starting price the same at $349.

Being introduced a year prior to the PS3 and Wii in 2005 gave the Xbox a 12 month head start, however it is the case that over the last 15 months, 14 of them have seen more Wii consoles shifted than Xbox 360’s or PS3’s.

With each console sold also comes hundreds of extra dollars in revenue of boxed games, downloads, and royalties from third party game developers.

“This battle (between the PS3 and Xbox360) for second place is quite relevant, they lose revenue stream for years ahead based on what people buy.” - Wedbush Morgan Securities analyst Michael Pachter

In the first five months of 2008 Nintendo sold 2.8 million units compared to 1.2 million PS3 unit and 1.12 million Xbox360 units.

That said Sony doesn’t see Nintendo as a competitor as the console doesn’t offer the broad range of services its console does, such as the ability to watch movies and access the internet.

“I don’t see it as a competitor. It’s more of an expensive niche game device. We’re selling a lot of PlayStation 3s now and it’s still the best way to buy a Blu-ray player.” - Sony Chief Executive Officer Howard Stringer

Fans of the iPhone were queuing up this morning to get their hands on the latest version of the iPhone , the second generation 3G equipped handset from Apple.

Customers had been advised earlier this week to pre-order their handset resulting in mobile phone operator O2 selling out four days prior to launch. This request resulted in the online O2 shop crashing with the operator having to suspend service.

Even with the site crash the operator still managed to sell out of handset, meaning late visitors were greeted with the following message:

“Due to huge demand for iPhone 3G, we’re currently out of stock online. Come back on July 10 for more information”.

O2 had said that more phones would be available from today but with demand so high shoppers had been advised to get to stores early.

Announced last month by Apple the new iPhone aims to combine a mobile phone with an iPod and an internet browser. Operating on the high speed 3G network, users can surf the internet much faster that they could with the previous iPhone.

Additionally the new 3G equipped iPhone has GPS build in, as well as push email meaning near instantaneous email is a facility it can boast. As a result this phone can handle Microsoft Exchange Email client, and calendars and address books can synchronise instantly with the handset putting the new iPhone in direct competition with PDA’s such as Palm Treos, BlackBerries and Window Mobile devices. This alone suggests that the corporate market is a clear target for Apple.

The development of 3G in the iPhone alone required a complete overhaul of the software that powers the iPhone, and Apple have stated that it will also be available for free to all existing owners of the first-generation iPhone, and to owners of the iPod touch for a small, as yet unknown, fee.

It is hoped that with the speedy 3G upgrade the second generation handset will help the iPhone shake of its luxury gadget statue and instead move into the mainstream.

The handset is also released with a much lower price tag then its predecessor, available for free on some contracts and £100 with others. The first iPhone cost £269 at launch.

The phone was not made available from July 11th on a Pay-As-You-Go tariff, estimated to be released later this year.

To date the biggest problem surrounding the development of hydrogen cars is the lack of hydrogen refuelling stations, making it impossible for willing adopters of the technology to make a seamless transition from petrol to hydrogen powered cars.

With only three hydrogen refuelling stations in Britain, the cost of equipping the country with an adequate hydrogen refuelling infrastructure would be billions of pounds.

Traditionally hydrogen has also been ineffective to produce, as well as expensive to transport and produce meaning sceptics have frequently doubted the fuels commercial potential.

ITM Power has attempted to bridge this gap with the development of what it calls the ‘Green Box’, a device the size of a fridge which can installed in a home garage and produce an independent supply of hydrogen.

Where by conventional hydrogen generating machines use expensive materials like platinum to turn water into hydrogen, making the idea of such a device impossible, the ‘Green Box’ has replaced this with a plastic membrane that does the same job at a fraction of the price.

The system works via an electrolyser which produces the gas from water and electricity. An internal combustion generator converts the gas back into electricity to provide power for the home.

It is thought that the device will be able to produce enough hydrogen overnight to provide fuel for 25 miles, and with higher pressure refuelling units in more public places enough hydrogen could be produce for journeys of up to 100 miles.

Although these higher pressure public units are expected to cost up to £20,000, the smaller home unit could cost as little as £2,000, making hydrogen powered car an economically viable option for most.

“Given the pressing need to reduce our dependence on fossil fuels, especially oil, and to cut CO2 emissions, the future for hydrogen as an alternative means of storing and utilising energy cost-effectively has never been brighter,” - Jim Heathcote, chief executive of ITM.

For existing petrol cars this new hydrogen powered system is also an option, with the addition of three pieces of technology costing around £3,000. These include a hydrogen tank at a cost of around £3000, four hydrogen injectors at £100 each, and a chip to allow the conversion.

Users of photo sharing site Flickr will now be able to make money from pictures posted online after a deal was made with Getty Images the world leading photo library.

As part of the deal Getty Images will invite Flickr users to join a social group on their website that will be co-branded with Flickr. The handpicked photos will then be sold by Getty Images with photographers earning a commission on each sale.

The deal marks the first commercial licensing deal made through the Getty Images site.

The service will remain strictly invite only, with each member having an opt in/ out clause.

The deal is said to be part of Getty Images objective to increase its level of regionally relevant content.
“Flickr’s philosophy of personal sharing and immediacy has already impacted commercial photography,” said Getty’s Andy Saunders.

He went on to add that “The new Flickr collection will expand the definition of stock photography by making it even easier for our customers to find and license imagery that works in the full range of traditional and digital media.”

Owned by Yahoo, Flickr has a customer base of around 54 million users each month hosting 2 billion pictures. In the hour of this post being written alone, over 4,000 file uploads were made, and this deal with Getty Images is seen as an way of bringing licensing expertise to customers who want to bring their images to a global customer base.

Getty Images itself is only ten years old, but has aggressively bought a range of online and offline rivals in that time, until private equity firm Hellman & Friedman for $2.4bn in February this year, bought with the intention of turning Getty Images into a global digital media operation.

Talking to the New York Times about the deal with Flickr, Getty Images said it expects that rights-managed images should earn the photographer around £75-£121, whilst non-exclusive image should earn them around £25.

I thought I would take the opportunity to post abut UK broadband speeds after I saw a an article last week that detailed how Virgin Media were forced to pull a press campaign for television and radio after a complaint by a competitor that quoted speeds were in fact inaccurate.

The ‘Hate to Wait’ campaign featured information on download times for TV shows and music tracks in relation to which broadband package users had. It was this information that was said to be misleading, because the traffic management policy implemented by Virgin Media capped downloading speeds at peak times.

It has long been a key marketing factor that Virgin Media provide broadband via a cable network offering superior broadband speeds to rivals, but with the traffic management system in place it seems this in not the case.

In a statement Virgin stated that their traffic management policy “only focused on the heaviest downloaders and uploaders”

The story pushed me to investigate further and in a recent survey of 20,000 lines to find the fastest broadband speeds in the UK by moneysupermarket.com, it was 02 that came out on top, with TalkTalk broadband and Sky broadband making up the top three.

The survey also highlighted concerns raised in the Virgin Media case that customers are not always getting the speeds which are advertised.

In response to the issue of broadband speeds, Ofcom is in the process of putting together a voluntary code of conduct, which will ask ISPs to explain to customers that the further they are from the telephone exchange, the slower their speeds so hopefully we will get some clarity from credible broadband providers in the not to distant future.

It has been announced that internet search giant Google has been ordered by a US court to turn over data on users of its social video site YouTube. The ruling comes as part of Google’s legal battle with Viacom, over allegations that the search giant knowing permitted content to be uploaded across the site that infringed on copyright laws.

The data that will be handed across to Viacom will contain the log in ID’s of users, IP addresses and details of any video clips ever watched.

Digital rights group the Electronic Frontier Foundation called the ruling a “set-back to privacy rights”, whilst others speculated that the ruling was potentially unlawful being that the data contained personally identifiable data.

The Case Details
The billion dollar legal case between Viacom and Google is the biggest case of its kind in history, but is only the latest instance of a company targeting user generated content sites, stating that they are responsible for the content hosted on the site, and subsequent infringement of copyright laws.

Google had consistently denied the allegations that YouTube infringes copyright, saying that it takes down protected videos from the site when asked by content owners, as required by United States law.

Recently EMI also filed a suit against VideoEgg stating similar copyright infringement practices, making the case of Google vs Viacom a landmark ruling, and one that could well have a bearing on how similar disputes are settled in the future.

As part of the legal action Viacom brought against Google, it requested much more than the awarded data on YouTube account holders. For that reason the provision of user data, estimated to total over 12 terabytes, is very much a glass half full/ half empty scenario, with Google scoring a key legal victory keeping all of its trade secrets in tact and Viacom being awarded access to user data.

From a business perspective Google has certainly come out ahead, with Viacom denied access to proprietary code that controls the search facility of both YouTube and Google.com. Viacom had requested access to the code stating it was the only way to truly see if and how Google encourages copyright infringement.

The court denied Viacom’s request for source code stating that the “program’s source code is the product of approximately 50,000 man hours of engineering time and millions of dollars of research and development costs, and maintaining its confidentiality is essential to prevent others from creating competing programs without any equivalent investment”

On the flip side users are the clear losers, with personally identifiable data being handed across to Viacom. This could however have been much worse with access being denied to private video content of YouTube users. This would have entitled Viacom access to videos that can only be viewed by authorised users, video uploaded for personal use, however it was deemed this would be a privacy violation under the Electronic Communications Privacy Act.

The courts did however award Viacom user data whilst forcing them to respect it, threatening to hold them in contempt of court if it uses that data for anything other than specifically proving the prevalence of piracy on YouTube.

As part of the legal action Viacom were also denied their request for Google to turn over databases with information about each video available on YouTube, including titles, keywords, comments and whether videos had been flagged or not. With this data Viacom wanted to demonstrate that defendants have an ability to control infringements, however their request was denied.

Viacom was also denied Google’s advertising and video content schemas with Google arguing their confidentiality. Viacom had intended to demonstrate how revenues were directly related to infringing content.

On reflection, it therefore seems that Google did in fact score a victory over Viacom, keeping propriety code and advertising schemas in tact, in a move that would certainly have dented their competitive edge. Users too can rest in the knowledge that data on private videos, deleted videos and clip data of each video uploaded to YouTube will remain confidential, and the user data that is to be handed over is bound by legal conditions.

After the ruling Google made a statement saying Viacom was “threatening the way millions of people legitimately exchange information, news, entertainment and political and artistic expression.”

News was released today the Sony Playstaion site has fallen victim to hackers who targeted the site in an attempt to engineer credit card number and other personal data from gamers.

The Playstaion site that was hit was in the US, and targeted pages promoting PlayStation games such as SingStar Pop and God of War. The malware attack worked by running a fake antivirus scan on users computers, later prompting them to purchase phoney antivirus software in order to solve the inevitable problem it detected.

Insecurity firm Sophos said that the criminals behind the scam had used an SQL injection vulnerability to add unauthorised code to pages.

Talking of the scope of the attack Graham Cluley, from Sophos stated that “There are millions of video game lovers around the world, many of whom will visit Sony’s PlayStation website regularly to find out more about the latest console games.”

He went on to say that “Most would never expect that surfing a website like this could potentially infect them with Malware…It is essential that all websites, especially high profile ones like this, have been properly hardened to prevent hackers from injecting malicious code into legitimate web pages.”