Archive for October, 2012

Vevo CEO's plan to shake up the music industry

Posted October 30, 2012 By David Kolle

The former Universal mobile chief Rio Caraeff reveals his frustration with MTV, and explains why no one need to own their music if his site succeeds.

Rio Caraeff:

If Caraeff succeeds, perhaps only diehard fans will need to own music. His online music video site, part-owned by the two largest record companies, also hopes to have the same impact as MTV and to be an answer to YouTube. Chuck those goals in with that of making the industry less dependent on the purchase of recordings, and for Caraeff there is clearly plenty to do.

Caraeff is the youthful chief executive of Vevo, launched in late 2009 with the backing of three of the four major groups, Sony Music, Universal Music and EMI. He is taking the venture international with a rollout starting in Britain and continental Europe.

“Sex, music and sports are the only entertainment categories on the planet that people love that can build audiences at the scale of billions of people. I’m in the business of connecting billions of people to music,” is his modestly stated aim.

“I believe the future is access, not ownership” … Rio Caraeff.

With global CD sales plummeting $US1.5 billion last year, Caraeff’s mission is clear.

“We wouldn’t have created Vevo if we didn’t need it,” he says. “The industry felt it was necessary. If MTV was doing a great job paying royalties, if YouTube [was], there would have been no need. We have invested tens of millions to be responsible for our own destiny. We can’t sit back and say, ‘I hope Apple or whoever figures this out.”‘

Vevo’s relationship with Google, the owner of the world’s largest video-sharing platform, YouTube, is clearly critical.

Former BBC chairman Michael Grade called the company a “parasite” and Sir Martin Sorrell, head of advertising giant WPP, described it as a “frenemy”.

Despite the combative relationship the music industry has historically had with players in the digital space, Caraeff prefers to characterise Vevo’s dealings with YouTube as “symbiotic” – although “declaration of independence” would be more appropriate.

“We said, ‘Let’s figure out how to work with them,”‘ he says. “There are no duplicate copies [of music videos] on YouTube, there were thousands before. The official versions are only available from us. They don’t threaten us. YouTube is a place where people can upload any video in the world; we’re not trying to compete.”

Caraeff points out that 50 per cent of Vevo’s traffic comes from YouTube search, and 30 per cent comes from recommendations of videos that users might like to watch that appear on the side of the YouTube web pages when a user is viewing clips.

Vevo’s business model is all about providing music videos that fans can access free, funded by advertising; or to put it another way, giving consumers an alternative to owning songs.

“I believe the future is access, not ownership, not iTunes as it is today,” he says. “We’re not trying to sell people music; our customers are not the small amount of people that want to buy music. We are about providing access: it is the only scalable model for the music industry. The question is, how do you do that and make money?”

Which raises the question of how well Vevo is actually doing. Caraeff doesn’t want to give away too much commercially but says it is already making “hundreds of millions of dollars” in revenue, although there are hosting costs to pay.

More than half of gross revenue goes to content owners – the label, artist or licenser – with the remainder being kept by Vevo or paid to partners such as YouTube.

Caraeff says that Vevo is “significantly ahead” of its original business plan — about 40 per cent ahead to be precise — and is on track to achieve profitability “in the very early part of next year”.

Yet there are problems. Caraeff’s business is dependent on advertising, and he is frustrated by the low rates companies pay to run campaigns around music content. His contention is that advertisers treat music content as inferior and that Vevo’s role is to “own” the prime content and then be able to position it as a premium product. Think the free-to-access equivalent of BSkyB owning Premier League football.

“The audience that loves music is vast and promising: it should be treated as if it were as valuable as the World Cup [audience to advertisers] or as premium TV content, not treated like it is a second-class citizen where advertisers don’t want to pay a premium,” he says.

“The revenue generated has historically been low. I don’t think it makes sense or is fair. I want to restore the premium lustre of music. Aggregation makes it as valuable as sport, Vevo is the catalyst.”

Vevo’s ambitions stretch far beyond simply cashing in on online music videos. Caraeff is keen on breaking into TV, through partnerships with broadcasters, as well as Vevo creating its own content. Vevo was briefly seen as a potential buyer for Rupert Murdoch’s MySpace (“when News Corp call, you take the call”). Caraeff says his shareholders Universal and Sony weren’t interested, but adds that “we are interested in figuring out how we work with them on TV business. How do you work with a Shine [Elisabeth Murdoch's production company], a Sky, a Star or Fox [News Corp-owned TV networks]?”

He points out that a significant proportion of programming on Fox, for example, is driven by music – such as American Idol, The X Factor and Glee – and Vevo is well positioned to look at all sorts of tie-ups such as awards shows.

“News Corp doesn’t have an MTV brand in their portfolio,” he says. “We wanted to figure out a way to work with them to be a brand in the programming space.”

While Caraeff admits that “nothing is going to completely fill the gap” of the massive decline in CD sales, Vevo is providing real returns to labels and artists, which bodes well for an industry that has struggled to adapt to the digital age.

He says Vevo has paid back about $US100 million in royalties to the industry in its short life to date.

“It is a tremendous figure, more than MTV has ever paid out,” he adds. “It is important to let artists, song writers, record companies and anyone else in the business of music know that there are new, viable revenue streams growing rapidly. That in a time of gloom in the sale of recorded music there are positive stories.” But still, also, some way to go.

Rio Caraeff

Age: 36

Education: Did not go to university because “I started my first company when I was 18″


2004 Vice-president of wireless, Sony Pictures
2005 General manager of Universal Music Mobile
2007 Executive vice-president, Universal Music eLabs division, responsible for e-commerce and new technology
2009 Chief executive, Vevo

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Google maps the popular trails of the Grand Canyon

Posted October 30, 2012 By David Kolle

Google has taken its street-view cameras and mounted them to a backpack and headed into the Grand Canyon.

Google Grand Canyon

It’s the latest evolution in mapping technology for the Mountain View, California, company, which has used a rosette of cameras to photograph thousands of cities and towns in dozens of countries for its Street View feature.

With a click of the mouse, internet users are transported virtually for a 360-degree view of locales they may have read about only in tourist books and seen in flat, 2-D images.

“Any of these sort of iconic, cultural, historical locations that are not accessible by road is where we want to go,” said Ryan Falor, product manager at Google.

Google announced the trek earlier this year but made its first official collection of data this week at the Grand Canyon.

The backpacks aren’t ready for volunteer use, but Google has said it wants to deploy them at national forests, to the narrow streets of Venice, Mount Everest and to ancient ruins and castles.

The move to capture the Grand Canyon comes after Apple chose to drop Google Maps from its mobile operating systems and opted to use its own mapping program that was derided for, among other things, poor directions and missing towns.

Steve Silverman, operations manager for Google didn’t directly address the competition in saying: “Just trying to document a trail, it’s going to be hard to beat this.”

Google launched its Street View feature in 2007 and has expanded from 5 US cities to more than 3000 in 43 countries. Google teams and volunteers have covered more than 5 million miles with the Street View vehicles on a scale that other companies haven’t approached, said Mike Dobson, president of Telemapics, a company that monitors mapping efforts.

“You could safely say that it’s a standout, well-used application and they don’t really have any competition,” he said.

As the sun rose on Monday, Luc Vincent, Google engineering director, strapped on one of the 18-kilogram backpacks and set down the Bright Angel Trail to the Colorado River – a nearly 16-kilometre hike that goes from 2100-metres in elevation to 731 metres.

He hiked back up from Phantom Ranch through the South Kaibab Trail and also gathered data on other trails.

The so-called trekker captures images every 2.5 seconds with 15 cameras that are 75 megapixels each, from the rest areas, the steep switchbacks, the change from juniper trees to scrub brush and the traffic that moves aside as a courtesy to mule riders.

The GPS data is limited, so Google must compensate with sensors that record temperature, vibrations and the orientation of the device as it changes, before it stiches the images together and makes them available to users in a few months, Mr Falor said.

Hikers that were on the trail when the data was gathered will have their faces blurred – an attempt by Google to ensure privacy. Street View has run into problems in places like Europe and Australia for scooping up information transmitted over unsecured wireless networks.

A removable hard drive on the trekker stores the data gathered at the Grand Canyon. Tourists looked at the trekker strangely this week, as if it was something from outer space.

Sharon Kerfoot, a first-time visitor from Alberta said being able to view the terrain ahead of time, gauge the difficulty of the hike and know just how wide the path is would benefit those considering a trip to the Grand Canyon. She and a group of friends headed down the same path as Vincent but on mules, not foot.

“I think it’s an excellent idea to give people a broader perspective on what they’re getting into,” she said.

What the images won’t tell visitors is how much water they should carry down the trails, how to prepare for temperature changes, what type of food to bring and how much, and how best to protect the natural resources, park spokeswoman Maureen Oltrogge said.

“Stitched together with other information out there, the technology could be valuable,” she said.

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People still fall short when it comes to their online security.

A new study shows, with passwords such as “password” rating among the most commonly used followed closely by ’123456′.

Consumer and business software developer SplashData conducts the annual review of the most common passwords shows we’re still seriously lacking in imagination when it comes to our online security.

Decades of warnings seem to have had no effect which means hackers seemingly have it easy.

The revelation comes after a year of security breaches at high-profile organisations such as Yahoo, Linkedin and eHarmony.

“Users of any of these passwords are the most likely to be victims in future breaches,” the researchers said.

“Even though each year hacking tools get more sophisticated, thieves still tend to prefer easy targets. Just a little bit more effort in choosing better passwords will go a long way toward making you safer online.”

But the news isn’t all bad. Some have been changing their password – to other common alternatives.

“Password1, welcome, jesus, ninja and mustang” have made first-time appearances on this year’s list.

SplashData urged people to take passwords seriously.

“Those who have been through it can tell you how terrifying it is to have your identity stolen because of a hacked password,’ said SplashData CEO Morgan Slain.

“We’re hoping that with more publicity about how risky it is to use weak passwords, more people will start taking simple steps to protect themselves by using stronger passwords and using different passwords for different websites.”

SplashData’s top 25 list was compiled from files containing millions of stolen passwords posted online by hackers.

The top 25 commonly used passwords:

  • 1. password (Unchanged)
  • 2, 123456 (Unchanged)
  • 3. 12345678 (Unchanged)
  • 4. abc123 (Up 1)
  • 5. qwerty (Down 1)
  • 6. monkey (Unchanged)
  • 7. letmein (Up 1)
  • 8. dragon (Up 2)
  • 9. 111111 (Up 3)
  • 10. baseball (Up 1)
  • 11. iloveyou (Up 2)
  • 12. trustno1 (Down 3)
  • 13. 1234567 (Down 6)
  • 14. sunshine (Up 1)
  • 15. master (Down 1)
  • 16. 123123 (Up 4)
  • 17. welcome (New)
  • 18. shadow (Up 1)
  • 19. ashley (Down 3)
  • 20. football (Up 5)
  • 21. jesus (New)
  • 22. michael (Up 2)
  • 23. ninja (New)
  • 24. mustang (New)
  • 25. password1 (New)
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Paul Ceglia, was arrested on Friday on charges he forged documents in a multimillion-dollar scheme to defraud Facebook and CEO Mark Zuckerberg.

Paul Ceglia ... claimed he owned half of Facebook.

Ceglia, 39, a one-time wood pellet salesman from Wellsville, New York, was charged with mail and wire fraud over what federal prosecutors and the US Postal Inspection Service said was fabricated evidence to support his claim to a large stake in Facebook through a 2003 deal with Zuckerberg.

Ceglia’s accusations against Zuckerberg had marked a bizarre twist to Facebook’s march toward its highly anticipated initial public offering in May. Facebook’s origins were also the focus of a separate legal challenge by Zuckerberg’s Harvard University classmates, the twins Cameron and Tyler Winklevoss.

Ceglia sued the Silicon Valley company and its chief executive in 2010, claiming that a 2003 contract he signed with Zuckerberg entitled him to a stake in the social media network. Zuckerberg had done programming work for Ceglia’s company,, while at Harvard University.

This past March, as part of that case, Facebook attorneys released emails sent by Zuckerberg to show Ceglia’s claims were false. The attorneys cited work by forensic experts who found that Ceglia had typed text into a Microsoft Word document and declared it was the text of emails with Zuckerberg.

Ceglia sought “a quick pay day based on a blatant forgery,” US attorney Preet Bharara in Manhattan said in a statement announcing the criminal charges. “Dressing up a fraud as a lawsuit does not immunise you from prosecution.”

A lawyer for Ceglia could not immediately be reached for comment.

“Ceglia used the federal court system to perpetuate his fraud and will now be held accountable for his criminal scheme,” Orin Snyder, a partner at law firm Gibson Dunn who is representing Facebook and Zuckerberg in the civil case, said in a statement.

In his lawsuit, filed in federal court in Buffalo, New York, Ceglia had claimed that Zuckerberg shared his plans for a social networking site with him while working at StreetFax. He contended that their contract granted him part ownership in Zuckerberg’s project in exchange for a $US1000 investment.

To build his case, Ceglia submitted what he said were emails from Zuckerberg that proved the pair had discussed the project that would eventually become Facebook.

But Zuckerberg said he had not even conceived of the idea for Facebook until December 2003, and submitted his own emails to prove his version of the timeline.

Ceglia went through a string of lawyers from prominent firms, including DLA Piper and Milberg, who worked with him on the case but later withdrew.

Ceglia was arrested at his home on Friday morning and appeared in federal court in Buffalo in the afternoon. In the hearing, a federal judge set bail at $US21,000 and stayed the bail order until Monday at noon to give prosecutors a chance to appeal it, authorities said.

Each of the charges against him carries a maximum sentence of 20 years in prison.

Investigators for the Postal Inspection Service, which is conducting the probe, made the arrest following Ceglia’s return to the United States this week after spending time out of the country, according to a source familiar with the matter who was not authorised to speak publicly on the case.

The judge in Friday’s hearing ordered Ceglia and his family to surrender their travel documents.

Separately on Friday, Massachusetts fined Citigroup Inc $US2 million to settle charges that two bank analysts improperly released confidential information about Facebook’s financials before the technology company went public.

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