June 2014

Time spinoff reflects a troubled magazine business

Time will officially become a separate company, completing a spinoff from parent Time Warner that has been in the works for over a year.

With a portfolio of more than 70 overseas and 23 domestic magazines -- including Time, People and Sports Illustrated -- Time has created a widely renowned publishing brand. But over the past decade, it has also suffered from an economic decline that reduced its revenues by 34% and cut its operating profit by 59%.

Time’s troubles are emblematic of the economic challenges facing the consumer magazine industry. While the digital side of the business has been making some gains, overall magazine print circulation (including single-copy sales, subscriptions and even digital replicas) has been down each of the past six years, while the number of print ad pages fell for the eighth year in a row in 2013.

The most recent data show that total magazine circulation dropped 1.4% in the second half of 2013 compared with the second half of 2012, according to the Alliance for Audited Media, which tracks 417 consumer magazines. Paid subscriptions, which make up 90% of total circulation, were essentially flat in the second half of 2013 (down 0.3%) at 158 million copies. Meanwhile single-copy sales dropped around 10% for the second half of 2013 -- to 18 million -- after an 8% and 9% decline in 2012 and 2011 respectively.

The news is somewhat positive on the digital side. Consumer magazines’ online and mobile ad revenue is expected to increase by 22.4% to $3.9 billion in 2014, while digital circulation revenues, including digital subscriptions, are projected to enjoy a 42% boost to $743 million, according to PricewaterhouseCoopers. But for now, digital dollars remain just about 10% of the overall revenue pie for magazines and have not offset the print losses, according to the latest data from the investment firm Veronis Suhler Stevenson.

Should you have a right to sell your e-books and digital music?

People can be surprised to discover that they don’t actually own the digital books and songs they buy, but that they instead rent them from large companies like Amazon and Apple. In response, Congress is asking whether copyright law should be changed to ensure people can resell or lend out their digital goods.

The House Judiciary Committee is scheduled to heard testimony from publishing and technology executives as well as public interest groups over whether the government needs to update a long-standing rule known as “first sale” that lets people do what they want with works they lawfully purchased.

The short answer, based on the upcoming hearing, appears to be no as members of Congress and those testifying appeared skeptical that people should have the same property rights in digital goods as they do in physical ones. But some suggested that it might be time for companies to do a better job of explaining to consumers about what they are allowed to do with the books and music they “buy.”

The House Judiciary Committee, which is in the process of reviewing US copyright law, held a field hearing in New York on June 2 to get the views of publisher John Wiley, the New York Public Library, and tech CEO John Ossenmacher among others as to whether Congress should require a digital resale right. For practical purposes, a change in the law could mean giving consumers the right to sell their iTunes library, or to lend e-books bought on Barnes & Noble to a friend.

The mood at the committee hearing, chaired by Rep Bob Goodlatte (R-VA), was skeptical, however. Several of the witnesses pointed out that requiring first sale for digital media, which is so easy to exchange and reproduce, would likely bring major harm to the primary market for books and music. Others noted that second hand digital files don’t really become “used” or become deteriorated like books and records.

IHS Sees Big Growth in MIMO Wi-Fi for Cellular Offload

Wireless network operators are turning to multiple in-multiple out (MIMO) Wi-Fi technology to cope with a “deluge of data traffic generated by smartphones,” according to a report from IHS Technology.

Employing multiple antennae at wireless networks’ transmitter and receiver ends, wireless carriers are using next-generation 802.11 2×2 MIMO Wi-Fi equipment to offload cellular traffic and enhance network throughput. With worldwide unit shipments of smartphones having surpassed 1 billion in 2013 and expected to nearly double to 1.9 billion in 2018, IHS sees “massive” opportunity for growth in the MIMO Wi-Fi market given the early state of adoption. Furthermore, IHS notes in a company press release, “96 percent of all mobile handsets in 2018 will support Wi-Fi and Bluetooth.”

IT is bracing -- but not preparing -- for the Internet of things

Although 71 percent of IT professionals queried in a recent survey believe the so-called Internet of things will affect both users and the workplace, 59 percent said they were not doing anything specific to prepare for it. As usual for new technology, security is a huge concern, at 86 percent. In fact, 43 percent plan to isolate new Internet-enabled things to a separate network, and only 23 percent plan to allow them onto the corporate network. Network management vendor SpiceWorks surveyed 440 IT pros in North America, Europe, the Middle East, and Africa about IoT. IoT involves potentially billions of network-connected devices, tools, medical equipment, and appliances. More devices connected to the Internet means more data generation and greater demands for bandwidth and IP addresses. Thus, SpiceWorks concluded that IT is preparing for IoT more than it may realize as it addresses individual projects.

Edward Snowden took less than previously thought, says James Clapper

[Commentary] As the intelligence community continues its assessment of the damage caused by Edward Snowden’s leaks of secret programs, Director of National Intelligence James Clapper says it appears the impact may be less than once feared because “it doesn’t look like he [Snowden] took as much” as first thought.

“We’re still investigating, but we think that a lot of what he looked at, he couldn’t pull down,” Clapper said. “Some things we thought he got he apparently didn’t.” Although somewhat less than expected, the damage is still “profound,” he said.

This assessment contrasts with the initial view in which officials, unsure of what Snowden had taken, assumed the worst -- including the possibility that he had compromised the communications networks that make up the military’s command and control system.

Officials now think that dire forecast may have been too extreme. It’s impossible to assess independently the accuracy of what Clapper said, either about the damage Snowden allegedly caused or its mitigation. That’s one reason why a legal resolution of the case would be so valuable: It would establish the facts.

Vodafone reveals existence of secret wires that allow state surveillance

Vodafone, one of the world's largest mobile phone groups, has revealed the existence of secret wires that allow government agencies to listen to all conversations on its networks, saying they are widely used in some of the 29 countries in which it operates in Europe and beyond.

The company has broken its silence on government surveillance in order to push back against the increasingly widespread use of phone and broadband networks to spy on citizens, and will publish its first Law Enforcement Disclosure Report on June 6, 2014. At 40,000 words, it is the most comprehensive survey yet of how governments monitor the conversations and whereabouts of their people.

The company said wires had been connected directly to its network and those of other telecoms groups, allowing agencies to listen to or record live conversations and, in certain cases, track the whereabouts of a customer. Privacy campaigners said the revelations were a "nightmare scenario" that confirmed their worst fears on the extent of snooping.

How the NSA can 'turn on' your phone remotely

Even if you power off your cell phone, the US government can turn it back on. That's what ex-spy Edward Snowden revealed in a recent interview with NBC's Brian Williams.

It sounds like sorcery. Can someone truly bring your phone back to life without touching it? No. But government spies can get your phone to play dead.

It's a crafty hack. You press the button. The device buzzes. You see the usual power-off animation. The screen goes black. But it'll secretly stay on -- microphone listening and camera recording.

How did they get into your phone in the first place? Here's an explanation by former members of the CIA, Navy SEALs and consultants to the US military's cyber warfare team. They've seen it firsthand.

Government spies can set up their own miniature cell network tower. Your phone automatically connects to it. Now, that tower's radio waves send a command to your phone's antennae: the baseband chip. That tells your phone to fake any shutdown and stay on. A smart hack won't keep your phone running at 100%, though. Spies could keep your phone on standby and just use the microphone -- or send pings announcing your location.

John Pirc, who did cybersecurity research at the CIA, said these methods -- and others, like physically bugging devices -- let the US hijack and reawaken terrorists' phones. "The only way you can tell is if your phone feels warm when it's turned off. That means the baseband processor is still running," said Pirc, now chief technology officer of the NSS Labs security research firm.

US technology companies beef up security to thwart mass spying

A year after Edward Snowden exposed the National Security Agency's mass surveillance programs, the major US technology companies suffering from the fallout are uniting to shore up their defenses against government intrusion. Instead of aggressively lobbying Washington for reform, Google, Microsoft Corp and other tech companies have made security advancements their top priority, adopting tools that make blanket interception of Internet activity more difficult.

"It's of course important for companies to do the things under our own control, and what we have under our own control is our own technology practices," Microsoft General Counsel Brad Smith told Reuters. "I don't know that anyone believes that will be sufficient to allay everyone's concerns. There is a need for reform of government practices, but those will take longer."

As part of a "Reset the Net" campaign now reaching a mainstream audience, Google said it was releasing a test version of a program allowing Gmail users to keep email encrypted until it reaches other Gmail users, without the company decrypting it in transit to display advertising.

Google, Microsoft and Facebook moved to encrypt internal traffic after revelations by Snowden, a former NSA contractor that the spy agency hacked into their connections overseas. The companies have also smaller adjustments that together make sweeping collection more difficult.

"Anyone trying to perform mass surveillance is going to have a much harder job today than they would have even six months ago," said Nate Cardozo, a staff attorney with the civil liberties group Electronic Frontier Foundation.

Senators voice concerns over telephone tech switch

Senators are concerned that an ongoing switch from traditional phone lines to Internet-based phone technology could leave some in the US without reliable phone service.

During a hearing held by the Senate Commerce Subcommittee on Communications, multiple Democratic senators expressed concerns that the new technologies would be less reliable than the traditional technologies, especially during emergencies.

“If there’s one thing that every person is worried about … its public safety,” Sen Amy Klobuchar (D-MN) said. “We need to make sure that these new technologies are functional,” especially when callers are trying to reach emergency services, she continued.

Sen Cory Booker (D-NJ) pointed to 2012’s Hurricane Sandy, which wiped out communications networks in parts of New York and New Jersey that had moved off of the traditional technology.

The so-called IP -- or Internet Protocol -- transition to Internet-based phone technology is being overseen by the Federal Communications Commission, which voted earlier to allow telephone companies to propose transition trials for areas where they intend to remove the traditional technology.

Benton

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