Music streaming app Spotify comes to the U.S. early next year

Perhaps the most-hyped music service coming out of Europe is making its way to American shores early next year.

Spotify's desktop software lets users stream from a massive catalog of music for free.

The ad-supported service is hugely popular in the six European countries it currently operates in. And for good reason.

The program is in many ways more sophisticated than similar services, like Napster and Rhapsody. The interface is simple and lets users arrange playlists that automatically sync between machines. And it's free -- supported by ads.

The premium version, which costs 10 euros per month in Europe (U.S. pricing hasn't been announced yet), lets users stream via mobile apps and store songs in playlists using digital rights management (DRM) on a computer or smart phone for offline listening. The application also sells many songs in its catalog.

We've been testing Spotify for the last few weeks, and it's absolutely blowing us away. Check out our impressions of the service on Pop & Hiss: Spotify plans to rock the U.S. digital music landscape early next year.

-- Mark Milian

European import 7digital takes on iTunes in the U.S.

7digital, an online music retailer formed five years ago in Europe, launched its U.S. outlet today -- the latest MP3 store to challenge Apple's iTunes juggernaut. The most obvious difference between the two stores, at least from a consumer's perspective, is 7digital's prices: single tracks for 77 cents, albums for $7.77. That's more than 20% less than Apple typically charges. The songs also are MP3s, unlike Apple's more idiosyncratic AAC format, and are encoded at 320 Kbps -- a higher rate than used by other MP3 stores, presumably delivering better sound quality. (I say "presumably" because the bit rate isn't the only factor influencing how a compressed music file sounds.)

But higher bit rates and lower prices haven't helped other stores break Apple's stranglehold over the market, and they're not likely to be the key to 7digital's success, either. Instead, the company is counting on partnerships with the likes of LastFM and Spotify, Songbird and WinAmp. Its store is also available as an application for certain BlackBerry smartphones, as well as supporting downloadable freebies for non-music brands (e.g., a promotion that Nestle has been doing in England that enables consumers to download one track for every bar of Kit Kat they buy). CEO Ben Drury says 7digital makes it easy for online music companies and software developers to integrate 7digital's store, giving users a click-to-buy option that doesn't shuttle them off to a different website. That's in sharp contrast ...

Netgear offers a networked hard drive for the masses, with a caveat

The tech industry is gradually persuading Americans to set up home networks, but it's had a tougher time selling consumers on the idea of storing all their data on a single device within their homes. The appeal of "network-attached storage" boxes and "home media servers" has largely been confined to the earliest of early adopters, even as the software to centralize and back up data has become increasingly user friendly. Today, Netgear makes a new bid to sell NAS to the masses, offering the $229 Stora. Its features and price are impressive, but I'm not sure Netgear has come up with a compelling new argument for consumers to go this route. That's because Hollywood isn't ready to play along.

The idea behind a NAS is that it makes all of your digital photos, music and documents available to any device in the home that's capable of displaying them. The emergence of networked TV sets and Blu-ray players means that a NAS can serve content into your home entertainment center, not just the computers scattered around your home. Granted, putting all of those files in one place could have disastrous consequences in the event of a disc failure, but it also makes it easier to back up all that data.

The Stora comes with a 1 terabyte drive ...

No, Blizzard's DRM doesn't require players to always be online

Chill out, folks. You will be able to fire up your laptops and play StarCraft II: Wings of Liberty on the plane.

Last week, when we wrote about the anti-piracy efforts Blizzard Entertainmentwould be taking next year with StarCraft II, fans fumed. (Many assumed, though Blizzard would not confirm, that the same anti-piracy mechanisms would also be used for Diablo III, which the Irvine game developer said would come out sometime after StarCraft II.)

The stipulation that players must verify their copies of the game over the Internet by phoning home to Blizzard wasn't sitting well.

The concept reminded users of the bad taste left by digital-rights management locks that plagued the early days of legitimate music downloads, with Apple's iTunes at the forefront.

To clarify, you will indeed need an Internet connection when you first install the game. You'll also need a connection to play with other people. (To the chagrin of many players, Blizzard won't include LAN support-- the ability to play with others on the same computer network, such as at a dorm -- without going online.)

But you can freely disconnect and play single-player or challenge modes, wrote Blizzard spokesman Shon Damron in an e-mail. Obviously, you won't get ...

Film Fresh to offer Hollywood movies in DivX

Online movie retailer Film Fresh announced today the availability of movies from four Hollywood studios in the DivX format, marking the latest step forward for the downloadable movie business. DivX had previously announced licensing agreements with Sony Pictures, Warner Bros., Paramount and Lionsgate; FilmFresh, which had already been offering some independent and foreign titles as downloadable DivX files, becomes the first U.S. retailer to take advantage of DivX's new relationship with Hollywood.

The main shortcoming for DivX is that DVD players and other devices require special software to decode and decrypt the format. But DivX compatibility has spread rapidly through the consumer electronics industry, most recently among TV makers and mobile phone manufacturers. Its main advantage over the formats used by other downloadable film outlets (e.g., Amazon and Apple) is that its domain-based DRM makes it far simpler for consumers to watch protected DivX movies away from their computers. DivX files can be stored on portable hard drives, USB drives and memory cards, enabling them to be moved easily and cheaply from screen to screen (assuming the device they plug into is DivX compatible). And any computer with a DVD recorder can burn a protected DivX download onto a standard disc. By contrast, creating a DVD with the CSS DRM that Hollywood studios favor requires a special burner and customized discs.

Rick Bolton, chief executive of Film Fresh, said his site would have about 600 Hollywood titles today, consisting of a mix of new and old releases. The addition of the major Hollywood studios signals a transformation of the online retailer...

Now it's Kaleidescape's turn to cry [UPDATED]

In back-to-back rulings this week, a federal judge in San Francisco and a California appeals court in San Jose have blocked or threatened two products that let movie buffs shift their collections from plastic discs to hard drives. The MPAA hailed the rulings against RealNetworks' RealDVD software and Kaleidescape's home movie servers as victories for the rule of law, but what was really at stake was the studios' influence over how their products are consumed. By defeating Real and Kaleidescape in court, the studios and the DVD Copy Control Assn. (the inter-industry group that sued Kaleidescape) have made it harder for companies to develop new ways for people to watch Hollywood fare at home. And in doing so, Hollywood is attacking the perceived value of its products and cutting off potential outlets for growth.

The concurring opinion by Judge P.J. Rushing in the Kaleidescape case outlined the pointlessness of the DVD CCA's insistence on enforcing the letter, rather than the spirit, of its contract with the company.

Another DVD copying program bites the (courtroom) dust

U.S. District Judge Marilyn Hall Patel handed another important legal victory to the entertainment industry today, issuing a pretrial injunction that bars RealNetworks from manufacturing or selling its RealDVD disc-copying program on the grounds that it violates federal and state laws. (You can download the decision here.) Patel -- the jurist who made the initial ruling against the Napster music-sharing networkin 2000 -- held that Real's license from the DVD Copy Control Assn. to make DVD-playing software did not authorize it to create copies that removed the discs' restrictions on playback and copying. She also ruled that Real violated its contract with the DVD CCA, and that it had bargained in bad faith. In short, she rejected virtually every aspect of Real's defense.

The injunction, if it isn't overturned on appeal, also makes it all but impossible for Real to proceed with plans for a home video jukebox that can copy and store people's DVD collections onto a hard drive. Real had hoped to develop a mass-market version of Kaleidescape's high-end movie storage and playback system. The DVD CCA had sued Kaleidescape for breach of contract, only to lose in state Superior Courttwo years ago. But the major Hollywood studios sued Real for allegedly violating not only the DVD CCA contract, but also the anti-circumvention provisions of the 1998 Digital Millennium Copyright Act.

Patel's holding on the DMCA claim...

DivX lands two more Hollywood studios

Continuing its slow march to acceptance in Hollywood, DivX Inc. has persuaded two more studios -- Paramount and Lionsgate -- to use its compression and antipiracy technologies on the movies they make available for downloading. The deals announced this morning aren't exclusive, so the studios will continue to support other companies' codecs and DRMs as well. DivX has two other nonexclusive deals with major Hollywood studios -- it revealed alliances with Sony Pictures in January 2008 and Warner Bros. in October. At its current pace, it should have another deal or two to announce in June 2010.

I'm not criticizing DivX. The studios are the ones moving at a snail's pace. They should have embraced DivX's technology years ago, as some independent film outlets did.

Zookz: A license to infringe?

Companies that offer downloadable movies and music online without licenses from the copyright holders typically wind up answering lawsuits from the Hollywood studios and the major labels. So it was odd to see a news release announcing the impending launch of Zookz, a site that offers unlimited music or movie downloads for about $10 a month, or both for $18. That's a bit like waving a red cape in front of a couple of bulls, isn't it? But Zookz believes it's in the clear, legally, thanks to the World Trade Organization. It's a far-fetched argument, but you've got to give Zookz credit for nerve.

The main differences between Zookz and most online outlets for bootlegged goods are that it's not a file-sharing network and that the content isn't free. Instead, it's just insanely cheap. The company's impossibly low prices reflect the fact that it doesn't pay for most of its inventory or share revenues with copyright holders. All the proceeds go to Zookz, its 10-person staff in St. Johns, Antigua, and (through taxes) the Antiguan government.

How can it get away with this, you ask? I'm not sure it can, but here's its argument....

Universal Music and Virgin Media, striking out with MP3s?

The major record companies' retreat from DRM took another step today, when Universal Music Group and Virgin Media, a leading broadband provider in the U.K., announced what amounted to a DRM-free, all-you-can-eat subscription music service. Although it's still vaporware and confined to the U.K., the new service strikes me as a big deal, with some equally large caveats.

Unlike Napster or Rhapsody, which essentially provide access to an unlimited library of music for a monthly fee, the Virgin Media service will let people acquire an unlimited amount of music. (The service is due later this year, the companies said; Virgin is still trying to round up licenses from other labels and music publishers.) An offer like that could completely trump today's subscription offerings, which have struggled to win acceptance among mainstream consumers. It's simple to explain and requires no change in music fans' approach to collecting tunes. But this brings us to caveat No. 1, which is pricing. There was no indication from the companies today what they planned to charge for the service, but it's likely to be considerably more than what Nokia collects for its DRM-based "Comes With Music" phones (where the downloads are nailed to the user's phone and/or PC). My back-of-the-envelope calculation was that "Comes With Music" carries an $8 to $16 monthly premium for two years' worth of unlimited downloads from all four major record companies. I know there's some argument that music fans aren't hugely sensitive to prices, but I have trouble believing they'll tolerate ISP rates that are 40% or 50% higher so they can download tracks guilt-free.