Rebecca Day

The FTC approved nine final orders settling allegations that seven rent-to-own companies and a software design firm and its two principals spied on consumers using computers the consumers had rented from them (CD Sept 26 p16) . Using software, the companies recorded screenshots of confidential and personal information, logged customers’ computer keystrokes, and took photos of people in their homes without the customers’ knowledge, said the complaint. Under the settlement, respondents will be prohibited from using monitoring software and banned from using “deceptive methods” to gather information from consumers, the FTC said (http://1.usa.gov/14qqOhT). The respondents will be prohibited from using geolocation tracking without consumer consent and notice, and from using “fake software registrations screens” to collect personal information. The seven rent-to-own stores are also barred from using information “improperly gathered” from consumers to collect on accounts, the FTC said. Respondents include DesignerWare and its principals Timothy Keller and Ronald Koller; Aspen Way Enterprises; Watershed Development Corp., doing business as Watershed and Aaron’s Sales & Lease Ownership; Showplace Rent-to-Own; J.A.G. Rents and Red Zone Investment d/b/a ColorTyme; B. Stamper Enterprises; and C.A.L.M. Ventures d/b/a Premier Rental Purchase. The agency’s vote, which took place after a public comment period, was 3-0-1. Commissioner Joshua Wright didn’t vote. Software company DesignerWare, and its principals, Koller and Keller, are prohibited from “providing others with the means to commit illegal acts,” said the FTC in announcing the approved orders. Under the settlements, the commission will have access to records so it can monitor compliance for 20 years, it said. Kelly said his company’s restricted Detective Mode Program could only be installed after a computer was reported stolen for tracking purposes, according to his public comment (http://1.usa.gov/11aDELh). The program was only installed when the renter claimed the computer was stolen and couldn’t be returned, he said. “DesignerWare has never had any reports that its license agreement with rental stores was ever violated and that the Detective Mode Program was ever installed on any computer other than one reported stolen.” He conceded that DesignerWare doesn’t know how all its licensees used the Detective Mode Program. Regarding improper use of video recording, Kelly said, “We have never been shown any evidence from the FTC that anyone was recorded having sex, pictures of children, etc.” He said every renter signed an agreement saying “if they steal it then the [sic] might be subject to being monitored!”

Pandora’s goal is to be available in the U.S. and worldwide “everywhere you would get traditional radio,” Paschel said, but the car holds particular promise. He cited the various phases of Internet radio in vehicles, breaking out phase one as connection of a smartphone via Bluetooth or auxiliary jack where data can’t show whether the smartphone is being used in a car or not. In phase two, where the 85 vehicles fit in, Pandora is integrated with the infotainment systems of car makers such as Cadillac’s Cue. Users still pair through the phone in the Cue setup, but GM’s future connected car through the AT&T 4G network that’s set to launch with 2015 vehicles will take Internet radio to phase three of integration, where Pandora “won’t require your phone” but will operate seamlessly over a 4G chip in the vehicle, he said.

The vehicle’s dashboard is the next technology frontier for content companies, according to panelists on the Future of Radio session at the Piper Jaffray Technology, Media and Telecommunications Conference Wednesday in New York. “The battle for the dashboard is real,” said Bob Struble, CEO of HD Radio developer iBiquity Digital. Where AM/FM used to have a monopoly position in the dash, now “you can clearly assume that the dashboard will have Sirius radio built in, it will have Internet connectivity, native Pandora or Slacker or iHeart or TuneIn and Bluetooth connectivity,” he said. It will also have HD, AM/FM and hard disk storage for the user’s music collection, he said. A vehicle-based radio world is emerging where there will be a variety of choices rather than an either/or scenario Struble said. Rather than picking from Internet, satellite or broadcast radio, “they're just going to build it all in,” he said. The competition will be for “who has the most relevant content for the consumer,” he said. “There won’t be one clear winner,” he said, as consumers will “jump back and forth” between media. HD Radio, he said, makes broadcasters more competitive in that environment by offering interactivity and the ability to show album art. Lew Dickey, CEO of Cumulus Media, compared the competition for ears in the car to that for eyeballs in the living room. “This is media today,” he said. “It’s all a competition for consumers who want compelling content,” he said. Internet radio service provider Slacker, too, is “moving into drive time,” said CEO Jim Cady. Cady noted the ability of Slacker servers to keep track of listeners, offering data telling when listeners are in vehicles and when they're interacting with the service.

The joint app announced at CES by Time Warner Cable and Roku, which launched last week with the debut of the Roku 3 streaming player and software upgrade, is a “glimpse into the future” of cable TV, BTIG Research analyst Richard Greenfield wrote in a blog post Friday. The pact between Time Warner and Roku marks the first time TWC TV is available for streaming on a consumer device connected to a TV (CD Jan 17 p10). The authenticated app replicates Time Warner’s existing app -- available on iOS devices and TWCTV.com services via PC -- which streams live linear TV channels and soon, VOD programming.

Margin pressures on set-top boxes, and the ability of cable customers to choose their own cable decoder boxes, could drive a new model for set-top distribution in homes, said Keith Kocho, Cisco director-strategy and business development, on a panel at Media Summit New York Tuesday. Within 12 months, Kocho said, the industry will see “something that resembles the handset subsidy model you see in mobility happen in the living room."

Tely Labs hopes to build its customer base using what’s left of the Cisco umi subscriber list, which will be left without video service as of Jan. 31 when Cisco pulls the plug on the ill-fated and pricey umi telepresence service. Cisco’s umi components began at $599 when launched in 2010 and then took a price cut to $499. Amazon was selling the umi unit Thursday for $399. Reports began circulating a year ago that Cisco planned to stop selling the umi system -- comprising an HD webcam, console and remote -- but it was unclear what would happen to existing customers who were still paying the $10 monthly service fee for the HD service.

Kaleidescape, Hollywood’s legal scapegoat for the digital content age, has emerged as a digital download trailblazer with the announcement Monday of the Kaleidescape Store. The purchase and download website is stocked at the onset with roughly 3,000 films and 8,000 TV episodes from Warner Bros. Digital Distribution. After years of ongoing legal wrangling with the DVD CCA over the Content Scramble System used in DVDs, Kaleidescape appears to have rebounded comfortably with a Hollywood-sanctioned method for delivering bit-for-bit video downloads to Kaleidescape servers.

Netflix won’t raise subscription rates to pay for the multi-year Disney distribution deal announced Wednesday, said Netflix Chief Content Officer Ted Sarandos at the UBS conference Wednesday in New York. Sarandos said the company’s focus is on “how great a product can you build for that low subscription price,” while “remaining profitable.”

TiVo has “reinvented the notion of what we should be,” said CEO Tom Rogers at the UBS annual Global Media and Communications Conference on Monday. Nine of the top 21 U.S. TV service providers have signed with TiVo for advanced television solutions, “and no one else has anything close to that kind of following among the operator base,” Rogers said. This follows a perception in the industry as “the guys who had been rejected by the cable industry” because cable operators found their own DVR solutions and “people thought TiVo had been passed over,” Rogers said.

As the amount of quality TV content grows along with the number of ways consumers can access it, the traditional cable model is at risk, panelists said at the Future of TV conference in New York Friday. Panelists debated whether there’s a “breaking point” for consumers determining how much they're willing to pay for bundled packaging that offers too many niche channels in a digital world where they can easily find the content they want to view.