Apple Sues Burst. Video Business In Jeopardy?

The picture of the future of online movies is becoming clear. Here’s the latest news.

Apple wants fast downloads of big movie and video files. Patents and greed stand in the way of profits and greed. Apple sues. Lawyers win. Details and exclusive video at 11:00.

A small company called Burst.com owns a bucket (over 40; that’s a bucket) of patents on video and audio distribution and delivery techniques.

This isn’t about streaming video. It’s about “bursting” video; getting video to a user’s computer before they need it. Think of Burst’s techniques as pretty cool caching of audio and video content.

Streaming video needs bandwidth. Lots of it. Lots more of it. While it takes only a minute or so to download a three minute song from the iTunes Music Store, it takes 30-minutes to an hour to download a comparable quality full length movie.

Apple plans to add movies to their current product line, probably a new version of the iTunes Music Store. Streaming movies for sale will be a major technical challenge that customers probably won’t go for (certainly not the dial up folks, maybe not broadband users, either).

What if there was a way to get movies (those files are huge) to users and store some of it on their computers before they view the movie?

That would be cool. It would also infringe on a bunch of patents owned by Burst. So tight is their patent portfolio that Microsoft tried to steal the technology for Windows.

Burst and Microsoft finally settled and Bill Gates dished out $60-million for the privilege of “licensing” from Burst.

Apple wants to expand the iTunes Music Store business into videos and new generation iPods with video playback. Standing in the way is that pesky licensing issue with Burst and that bucket of patents.

Once neogtiations failed (meaning, Burst asked for too much; Apple wasn’t willing to pay that much), Apple sued Burst to get the patents invalidated.

What’s Burst have to say about it all?

“SAN FRANCISCO, Calif., (January 5, 2006) – Burst.com, Inc. (OTC.BB: BRST), an innovator and provider of media delivery technology, was sued in U.S. District Court in San Francisco yesterday by Apple Computer for declaratory relief, alleging patent invalidity or non-infringement.”

“The suit follows a break-down in protracted negotiations for issuance of a license of Burst’s patents to cover Apple’s iPod and iTunes products.”

“Burst anticipates responding to the complaint and filing a counterclaim for patent infringement shortly. Burst remains committed to the enforcement of its intellectual property and looks forward to successfully resolving this litigation through a license covering Apple’s Quicktime, iPod and iTunes products, including Apple’s iTunes Music Store.”

“Last year, Burst settled its patent and antitrust suit against Microsoft with Microsoft taking a license to Burst’s patents and paying a lump sum of $60 million.”

“Since the Microsoft settlement, the company has been in patent licensing discussions with several companies engaged in the distribution of audio and video content on computer networks.”

Looks like Burst wants the business from Apple. Looks like Apple doesn’t want to pay. Is it important to you, the Mac user, iPod owner?

Yes. Robert X. Cringely says Apple may have a Video Storage Locker business on the way.

You could look at movies but not own them or store them on your computer. Sorta.

Think of it as a public storage facility for your video files. Anywhere you have a connection you get access to your files. Movies. Videos. Music. Anything.

Meanwhile, ThinkSecret, the guys with a good record at predicting what Apple’s about to do says Apple is about to do it.

Way back last year, ThinkSecret said, “Apple is planning to unveil a robust new content distribution system in January at Macworld Expo alongside its revamped media-savvy Mac mini...”

And what else? Here’s where it gets interesting. ThinkSecret says:

“In an effort to appease media companies wary of the security of digital rights management technology, Apple’s new technology will deliver content such that it never actually resides on the user’s hard drive. Content purchased will be automatically made available on a user’s iDisk, which Front Row 2.0 will tap into.”

“When the user wishes to play the content, robust caching technology—for which Apple previously received a patent—will serve it to the user’s computer as fast as their Internet connection can handle. The system will also likely support downloading the video content to supported iPods but at no time will it ever actually be stored on a computer’s hard drive.”

Whoa. Apple has a patent for some kind of caching technology. So does Burst. Apple’s been negotiating with Burst. Burst wants too much money. Apple sues to invalidate the Burst patents. Lawyers buy new cars.

What’s going on? In a nutshell, sometime soon, Apple will launch a movie version of iTunes Music Store. If it’s like Vongo, then we’ll get the movies stored on our computers (and iPods with video).

If it’s something else, then maybe the movies we buy from Apple won’t be stored locally, but will simply be “available” if we have a fast connection.

Whew. I’ve got a headache and barely enough aspirin to get me through to Monday, let alone the Macworld keynote address.

What I want, as a Mac user and Windows user, is the ability to treat movies and TV shows the same way I treat music from iTunes Music Store. It’s mine. I own it. It plays on players I want, where I want, when I want.

The patent issues and storage lockers and merely pieces of a bigger puzzle. But it’s still a puzzle.

Tera Patricks
Guessing what Apple will do is a fool’s game.

Bambi Hambi
Jack nailed it. I want to own it, hold it, store it, move it. Some kind of public storage locker for my files only works when bandwidth is very, very fast and available everywhere.

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