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SunnComm - Bomb or DRM Success Story? 164

Posted by michael from the guaranteed-to-cure-what-ails-you dept.
pacopico writes "The Register has one of best tech feature stories done in a long time on SunnComm - the infamous Shift key problem DRM makers. The story charts the awesome path SunnComm took from being an Elvis impersonator company eventually to creating CD protection technology almost out of thin air. Great read!"
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SunnComm - Bomb or DRM Success Story? More

SunnComm - Bomb or DRM Success Story?

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  • You gave us how much to make this? (Score:5, Funny)

    by MustardMan ( 52102 ) on Tuesday September 28, 2004 @02:10PM (#10375819)
    You gave us how much money to make a DRM technology that's able to be over-ridden with a single key press?

    Well thank ya, thank ya very much

    Sincerely,

    SunnComm

    LADIES AND GENTLEMEN, SUNNCOMM HAS LEFT THE BUILDING

  • Amazing story (Score:5, Insightful)

    by Marxist Hacker 42 ( 638312 ) * <seebert42@gmail.com> on Tuesday September 28, 2004 @02:12PM (#10375849) Homepage Journal
    Of Parasites taken over by Parasites- and searching for a business plan *after* creating the business and selling stock. Amazing that they were allowed to survive at all.

  • kudos to the register (Score:3, Insightful)

    by NetMagi ( 547135 ) on Tuesday September 28, 2004 @02:13PM (#10375854)
    for getting them to respond to this. . .

    what's scary though is that it's things like this that scare ppl from any sort of .com of technology type investing.

    As a shareholder, I'd be mad too to find out you can defeat the copy protection by holding down the shift key. That's ABSURD!

  • Shift Key, Magic Marker, Bic Pens... (Score:5, Insightful)

    by Anonymous Coward on Tuesday September 28, 2004 @02:20PM (#10375908)
    It's amazing how apt Leia's "the more you tighten your grip..." prediction is coming true for DRM: That DRM systems don't work [craphound.com].

    • Re:Shift Key, Magic Marker, Bic Pens... (Score:2, Insightful)

      by Anonymous Coward
      Bzzt. Nice try. DRM systems DO work. You find very few Joe Averages copying videotapes, due to Macrovision. Also, its very hard for one who doesn't want to take risks with fly-by-night Taiwanese firms to find a de-Macrovision device.

      Also, though DVD may be cracked, as well as FairPlay, there are absolutely no cracks for WMA, OpenMG, or other formats -- Sony and Microsoft have done their job well.

      • I just think no one wants to use those formats. I don't believe I've *ever* seen a WMA or OpenMG file, although I know they exist. Just out of curiosity, anyone know how these formats encrypt or where I can get specs for it? Regardless, anyone with a decent sound setup can just loop the analog out back in and record, a little time consuming but it only needs to be done once to be enjoyed by millions.
        Regards,
        Steve
        P.S. Doesn't real claim intercompatibility with WMA? Not sure if they licensed it or reverse eng
      • What amazes me is that there have been no successful hacks against the CSS/DRM/whatever in DVD-Audio yet. At least none that I've come across on the 'net.

      • Re:Shift Key, Magic Marker, Bic Pens... (Score:4, Insightful)

        by Hatta ( 162192 ) on Tuesday September 28, 2004 @04:55PM (#10377581) Journal
        Bzzt. Nice try. DRM systems DO work. You find very few Joe Averages copying videotapes, due to Macrovision. Also, its very hard for one who doesn't want to take risks with fly-by-night Taiwanese firms to find a de-Macrovision device.

        Thing is, in this digital age, it only takes one person to crack the DRM scheme once, and the unprotected content can be copied perfectly around the world.

  • Holy conspiracy theories (Score:5, Insightful)

    by BobTheLawyer ( 692026 ) on Tuesday September 28, 2004 @02:20PM (#10375910)
    Jacobs' theory that the complaining Internet posters are motivated by making money from shorting SunnComm's stock is nonsense - it's very difficult to sell "short" (i.e. bet that a share goes down) when the share is obscure and rarely traded.

    A professional trader *might* be able to find someone willing to go "long" (take the other side of the bet) but it's pretty unlikely. Joe Public has no chance.
    • The damn company doesn't even have any damn current filings with the SEC, but as of a 2001 filing their were 100MM shares outstanding. By the stock's peak in late 2003 at over 40 cents a share, there could have been sufficiently more than that and could certainly have been short interest around. Not *easy*, but it's actually a pretty actively traded pink sheet, if you didn't know.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Tuesday September 28, 2004 @02:23PM (#10375940)
    Comment removed based on user account deletion
    • I have seen a lot of this in the software industry. From Fortune 500 to small start-ups. After a while I have to wonder if a good chunk of the industry is just a pyramid scam.
    • I few years ago I wouldn't have believed it. But the megaeurocorp that bought out my past employer has made me change my mind. I swear they're literally in the business of being in business. We could be selling chewing gum and they would be just as happy.

      But this isn't "business" as a group that's doing this. Only corporate business. Private businesses aren't. When you product isn't a stock price, what you do product has much higher quality.
      • I swear they're literally in the business of being in business. We could be selling chewing gum and they would be just as happy.

        When it comes down to it, they have a choice: Work for someone else, or run their own business. If their business gives them a nice, fat, steady paycheck, they don't care what they're selling! Being "in the business of being in business" isn't as sexy as maybe running a Fortune 500, but it sure beats working for someone else who just wants you to help them buy that Lexus and in
    • Yes, but the article is 5 pages long. Do you really expect the average slashdotter to get through the first 2 paragraphs.

    • Re:Not About DRM... (Score:2, Insightful)

      by geomon ( 78680 )
      This is really an article about corporate predators and the nature of Business As Usual (TM).

      WHINE ALERT!!!!

      And what would you have done in his place? Folded the company?

      What many of the posters on this thread fail to realize is that this guy, and thousands of CEOs like him, have a FIDUCIARY responsibility to their shareholders to return value. That is how capital markets work. If they fail to do their jobs, they will be terminated. If they are negligent in carrying out their duties, they will be sued.
      • And what would you have done in his place? Folded the company?

        What many of the posters on this thread fail to realize is that this guy, and thousands of CEOs like him, have a FIDUCIARY responsibility to their shareholders to return value. That is how capital markets work. If they fail to do their jobs, they will be terminated. If they are negligent in carrying out their duties, they will be sued.

        What's wrong here is that there is no honor in this type of employment. If I were in his place, and found tha
        • What's wrong here is that there is no honor in this type of employment.

          In your opinion....

          If I were in his place, and found that I could not get my company to do anything worthwhile, such as produce quality products, sell them, and improve the world somehow, then I would keep my honor and resign my position.

          And leave hundreds of innocent investors holding the bag?

          Great. I'm glad you don't run a company.

          The problem with western society,

          Here we go.....

          at least in business, is that there is no hon

          • Re:Not About DRM... (Score:5, Interesting)

            by Grishnakh ( 216268 ) on Tuesday September 28, 2004 @03:43PM (#10376816)
            So if you live in a country where it's legal to torture and murder certain people, and your employer tells you to do so, would you do it? Sounds like you would.

            Legal doesn't mean ethical.

            I don't care what someone's "job" is, if their job requires them to do something unethical, then their only way of not being complete scum is to resign their job. The investors would be better off losing their money, so they'll learn not to invest in stupid scams again. Rewarding this behavior does not result in a healthy society.
            • So if you live in a country where it's legal to torture and murder certain people,..

              Right.

              Murder and torture.

              Sure.

              When you are in a position to make money for someone other than yourself, re-read my post to see if you feel differently on your ethical responsibilities.

              After all, the employees who depend on the paychecks from their jobs will appreciate the fact that you will not do something you feel is unethical to keep food on their table.

              And the pensioner who relies on the investment in your company
            • Wow you're never going to get ahead with views like that.

              If theres anything I've learnt from watching the news recently it's that it's clearly wrong to torture people, plus it's also illegal here in the UK. But that is just a technicality.

              Fortunately our Home Secretary David Blunkett has explained this neat little trick for getting round the moral dilemma. You can out-source the actual torturing to americans thus gaining the benefit from torturing people whilst still holding the moral high ground.

              I think

        • [applauds] (Score:2, Insightful)

          by Anonymous Coward

          Mod parent up.

          Couldn't have said it better myself. If your responsibility is to make money, by hook or by crook, you're living a perverted form of capitalism. Capitalism is supposed to reward people for innovating and producing--not to reward people who pretend to produce and do it well. If your real goal is innovation, you will make your money.

    • Re:Not About DRM... (Score:4, Insightful)

      by swb ( 14022 ) on Tuesday September 28, 2004 @03:43PM (#10376808)
      That's what scares me the most about "business" anymore. It's no longer about wanting to run an organization, create or sell a compelling product. It's all about finding and using gimmicks to ultimately make yourself wealthy, whether those gimmicks are patents, copyrights, or semi-fraudulent business practices.

      I think a lot of our economy is built this way, and I think that it's largely what they've been teaching in business schools -- outsource everything but your core marketing staff. It makes you a more "pure" businessman.

    • Re:Not About DRM... (Score:2, Insightful)

      by Al Dimond ( 792444 )
      "Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation." - John Keynes (1936)

      (although he meant that in a macroeconomic sense and this is the case of one company, I think it's still apt.)

  • Focus people! FOCUS!!! (Score:3, Insightful)

    by Ced_Ex ( 789138 ) on Tuesday September 28, 2004 @02:23PM (#10375942)
    This business doesn't seem to have any idea as to what it really wants to do. The CEO seems like the type of person that could be easily influenced by his surroundings.

    *CEO walking down street*
    "Hmm... I think I'll have a hot dog. Aren't they also called tube steaks? Steak! Maybe I'll run a steak restaurant. I'll need meat. But I need a butcher to cut it. Butcher shop..."

    This guy just doesn't have any focus. If he just stuck to one plan and worked at it, he'd actually have a legitimate business rather than a mirage.

    How on earth does a business that lives off shams stay afloat for so long?!?
    • Companies that seem to us totally mismanaged, drowning in red, and should have failed years ago stay afloat alot of times because no one's gotten around to sink them.

      It's much like a small clothing retailer I worked briefly at in NYC 3 years ago, the turnover was horrible, unsellable inventory was piling up, collections groups had been holding shipments constantly until the outstanding balances are paid, the company credibility was so bad that we'd have to fax copies of the checks we write at the end of
      • But what I want to know is how does everyone get paid, how do the bills get paid, where does revenue come in? Lastly, why aren't creditors knocking down your door with a ram?

        If you can answer those questions, we should get together and talk some business. :)
        • If they're anything like a small retail shop I once tried to collect from, it's because they're a corporation. Get a judgement against the proprietary and he shifts his assets to the corporation. Get a judgement against the corporation and the proprietary gets a huge bonus. If you're only trying to collect a few thousand, it's not worth taking it to a higher court to stop the shell game. You eventually settle for fifty cents on the dollar, close the books, and place them on your blacklist. In the meantime t
        • Well it breaks down like this for my store example, milelage may vary depending on industry and size.

          The stores do generate revenue through selling inventory. It's not clearing the shelves, but every day a certain amount of goods are sold, and the money first goes to the employee salaries, 'cause without them we might as well pack up now.

          Now if you have no product, you'd have to get outside investment (read: suckers) to keep you afloat. Or you buy/sell parts of businesses.

          The really big reason why the

  • Awesome? (Score:2, Funny)

    by sczimme ( 603413 )

    The story charts the awesome path SunnComm took from being an Elvis impersonator company

    Okay, stop right there. -10 points for using 'awesome' and 'Elvis impersonator' in the same sentence.

    Re: awesome: I do not think it means what you think it means.
  • Did anyone else get the picture of a bunch of elvis impersonators standing around a board room coming up with the idea of shift key drm.
  • (Speaking of failed oil and gas exploration company Fan Energy (Quiet Tiger) - "They had no prospects before."

    On a more serious note, I'd say this story tells a lot about how much the board of a failing company can get away with in the interests of turning a profit. One of the many good reasons for becoming a Public company is to give greater oversight to the public over the company's actions in exchange for an influx of capital. It appears that Desert Wind/sunnComm came charging in with a lot of glitz (

  • I'd say it failed... (Score:5, Funny)

    by el-spectre ( 668104 ) on Tuesday September 28, 2004 @02:28PM (#10375995) Journal
    given that I'm listening to a mp3 rip of Velvet Revolver right now...

    • Re:I'd say it failed... (Score:1, Insightful)

      by Anonymous Coward

      I'm listening to a mp3 rip of Velvet Revolver

      Well, the DRM may have failed, but the marketing machine certainly won.

      Velvet Revolver is about as far from good music as you can get.

  • "protection" (Score:3, Interesting)

    by latroM ( 652152 ) on Tuesday September 28, 2004 @02:29PM (#10376007) Homepage Journal
    CD protection technology almost out of thin air...

    From whom does this "protection" "protect" the CD?

  • SunnComm have responded (Score:5, Insightful)

    by doodlelogic ( 773522 ) on Tuesday September 28, 2004 @02:29PM (#10376009)
    And they are not happy [sunncomm.com].

    I don't know what American libel laws are like, but here in Britain, what was said about the Register's journalistic practices would, if unprovable, cause SunnComm some trouble...

    'Its funny. No one in the legitimate news community would touch the OurStreet dirt package with a 10-foot pole. Theyve been trying to find such a dupe for a year. Our Oregon friend from OurStreet must be jumping up and down with glee that finally he found his "patsy."'

    ' Mr. Vance proceeded to mischaracterize the source purposely in the article even after being told otherwise. In other words, Mr. Vance purposely made a decision to carry the water for OurStreet.Com even after knowing of the possibility that his source had lied to him about his standing.'

    'he didnt bother to fact-check his single main source'

    Needless to say, from a regular reader of the Register's perspective, these allegations seem extreme. However, I must say, the SunnComm director is very reassuring: "SunnComm is NOT a get rich quick scheme" - a Nigerian friend of mine told me the same thing the other week.
    • HAHA, thier reply makes for a more amusing story than the original, with classics like "The author did just what Dan Rather and CBS did when they took the bogus paperwork from Lt. Col. whathisname." and "jumping up and down with glee that finally he found his "patsy.""

    • Ignore the junk about El Reg - check out the rest of that page. Some of those "Questions" are so posed it's hysterical. I mean..."my wife was trying to copy some CDs but couldn't because of this tech. When I told her we had a ton of cash invested in the company she became very interested". I mean....
    • you missed the best part of that quote:

      Theyll be more on this.

      Uh, sir? Don't you mean, there'll, as in, "there will"? Just checking.
    • Check out the last five questions and answers on the same page! Get the fealing it came from the redundancy department of redundancy?
    • I don't know what American libel laws are like, but here in Britain, what was said about the Register's journalistic practices would, if unprovable, cause SunnComm some trouble...

      I'm American, not British, but I've read of several British libel cases. It seems to me (being neither a lawyer nor British, mind you) that Britain places the burden of proof on the defendant: "Prove that what you said was true, or you're guilty." On the other hand, in America, they have to prove that what you said was untrue for

  • DRM? (Score:5, Interesting)

    by The-Bus ( 138060 ) on Tuesday September 28, 2004 @02:32PM (#10376036)
    I have yet to find any DRM which (even on Windows!) can circumvent the following:

    1. Turn off auto-run on all CD drives.
    2. While the computer is off, put in a CD in the drive.
    3. Upon boot, retrieve the music you paid for using a program like EAC [exactaudiocopy.de].

    Most DRM relies on #1 to begin with.

    Now once Longhorn comes about, that's a different story (for Windows users).
  • After reading the related article "SunnComm CEO demands to be called a laughing stock", I'd have told the caller from the Register to go fuck themselves.

  • Maybe ... (Score:1, Troll)

    by Udo Schmitz ( 738216 )
    Maybe they should merge with SCO ...

  • DRM? (Score:1, Funny)

    by Anonymous Coward
    I'm such a gaming nerd. The first thing I thought when I read that was "Dice Roll Modifier?"
  • I have tried the shift key fix on the Christopher Lawrence cd, it stops the autoplay which doesn't install the program, but you still can't copy the cd.

  • Hey (Score:1)

    by Tablizer ( 95088 )
    stop bashing Elvis impersonators. At least they don't snoop and gum up media technology usage.
  • The first time I entered their site, I got a long disclaimer about how they weren't reporting in an open procedure and investing in their stock was extra risky and you have understood and agreed to this [click here].

    It was in Flash so I couldn't copy/paste the text or even the graphic. The next time I entered, to read it closer, it never appeared, so obviously they're setting a cookie. I'm too lazy to delete the cookie, and figure out a quick way of copy/pasting the text for review here. Anyone have any br

    • Re:Company's disclaimer vanishes in a Flash (Score:4, Informative)

      by fdiskne1 ( 219834 ) on Tuesday September 28, 2004 @04:08PM (#10377090)
      Here it is:

      Important Notice to Sunncomm Shareholders and Prospective Shareholders

      SunnComm International, Inc. is a Phoenix, AZ company whose stock is publicly traded in the Over-the-Counter (OTC) market under the symbol SCMI. Our 4-year old company is currently in the development stage of its life cycle and, to date, has only just begun earning revenues from sales of its CD copy magement products.

      It is the intention of management to remain a non-reporting company listed on the "The Pink Sheets" until such time as the company reports significant sales of its technology. It is within the corporation's legal rights to elect this option. However, this means that you, the investor or interest-holder, will not be afforded public access to regular company audits and therefore you must solely rely on the company's press releases, news stories, or other publicly available information.

      Not having access to audit detail or other significant reporting dynamics can put SunnComm shareholders or interest-holders, at a significant disadvantage from a risk standpoint. Due to SunnComm's current, legal, non-disclosure status, your investment in SunnComm may carry with it an even higher degree of risk than that of other publicly traded companies which are currently fully reporting.

      Because of our non-reporting status, SunnComm's management feels you need to understand these very important facts prior to making a decision to invest in the company's shares, and you should also be totally aware that you run the risk of losing your entire investment should you make the decision to purchaseshares in SunnComm.

      If you have additinal questions regarding this notice or anything you may read on SunnComm's website, we urge you to contact the company directly.

      Thank you for giving me this moment of your time. Please click the button below to acknowledge reading the above and to access The SunnComm Website.

      Thanks for stopping by,

      [signed by Peter H. Jacobs]

      There is an html form button below that reads "I have read the above statement, take me to SunnComm International".

      In other words, you will believe what we tell you and if you buy our stock, tough noogies!

  • Going public via a reverse merger (Score:4, Informative)

    by Animats ( 122034 ) on Tuesday September 28, 2004 @02:48PM (#10376164) Homepage
    Going public via a reverse merger [entrepreneur.com] is not that uncommon. It's usually loser companies that do it.

    A typical comment [pacificavc.com] on reverse mergers: "It's a perfect setup for a 'pump and dump' stock scam. Take a stock that has been trading for pennies, merge it into a business that has at least the facade of respectability and a presence in a market that is perceived as hot, hype like hell, sell off as many of your shares as possible, and make a run for the border before the price drops like a rock. There have been enough of these to give the whole approach a dubious aura."

    A reverse merger, unlike an initial public offering, doesn't raise any money for the company. It costs money, and at the end, you have a publicly traded stock nobody cares about. Which you then have to hype. So they are an inherently suspicious transaction.

    Here's an example of a reverse merger [stockpatrol.com] involving a company claiming to be engaged in gold mining, biotech, and casino gambling. Reverse mergers tend to be at that level of flakeyness.

  • Why companies speak through prof. PR reps (Score:5, Funny)

    by mcmonkey ( 96054 ) on Tuesday September 28, 2004 @02:55PM (#10376253) Homepage
    "I came into the company like Harvey Keitel came into Pulp Fiction - to fix the deal," Jacobs said.

    Um...didn't Harvey Keitel come into Pulp Fiction to hide the bodies and help the gangsters get away with the loot?

  • What would have happened to Scratch music if LPs at the time that it was popular had any DRM on them?

    What other kind of Art Genre was lost in the void because of MacroVision, DVDcss and other DRMs?

    DRMs are false solutions to false problems and it should be illegal to use it over any cultural content.

  • Wouldn't the success of DRM be a bomb or would bombs be necessary in the advent of successful DRM?

  • From http://www.sunncomm.com/asktheprez/asktheprez.asp [sunncomm.com]

    Q: Peter,
    Last weekend my wife was copying CDs from a friend. She was successful on all of her choices except for Afterglow by Sara M. She did not realize that we were invested in the company that prevented her from burning that CD. After I told her that we had a large position in Sunncomm, she was excited about the technology.
    Peter, when will the shareholders be rewarded for their patients with Sunncomm? (9/7/2004 8:44:35 AM)

    A: Hey, wait a minute.

  • Changed their ticker (Score:4, Funny)

    by fdiskne1 ( 219834 ) on Tuesday September 28, 2004 @03:27PM (#10376608)
    Don't forget that Sunncomm also changed their ticker symbol. When the Princeton student lawsuit was filed, their ticker symbol was STEH. Since then, they've changed their symbol to the more appropriate SCMI [cnn.com].

    If you don't get it, pronounce it.
  • After reading that, you can see what SCO are up to. There is _NO_ actual product (or sales)... just a string of purchases/deals/shares (were does the real money come from?) to keep the share price up and cause investment to the coffers - all electronic, of course - no 'real paper money' to actually have in yer wallet.

    Bubble gum money - non-existant.

  • Success story (Score:3, Insightful)

    by dtfinch ( 661405 ) * on Tuesday September 28, 2004 @04:06PM (#10377070) Journal
    They made a fortune peddling their snake oil resulting from a minimal software development investment. If they don't lose it all in class action suits I'd consider it a success (for them).

  • Philips & the CD tradmark? (Score:3, Interesting)

    by CrazyWingman ( 683127 ) on Tuesday September 28, 2004 @04:32PM (#10377363) Journal
    Hey - does anyone know whatever happened to the rumor about Philips twisting arms over the use of the "CD-ROM" logo. I remember hearing that Philips had invented the CD and companies had to pay to put that little icon on the jewel case that says "CD-ROM". Philips was supposed to be looking in to not allowing people to put that logo on their CD if it was copy protected in a certain way, since the CD no longer complied to the spec. Anyone know anything about this?

    • Hey - does anyone know whatever happened to the rumor about Philips twisting arms over the use of the "CD-ROM" logo.

      I noticed recently that the latest Norah Jones album, which has copy prevention on it, does not have any Audio CD logo on it, not on the CD itself and not on the case. Personally I think it's pretty sick and borderline criminal of the record companies and record stores to sell these as if they were Audio CD's, with no warning whatsoever that they are not. I don't get the impression that m

  • Some insiders within the industry say that SunnComm's DRM technology is far superior to that of MacroVision in that it allows for more customization into how many times a CD can be copied onto a PC or moved to a portable device.

    What I don't understand is how they can limit the number of copies. The vast majority of CD players are exactly that - players only, not writers. It's a read-only medium, so they can't be updating a copy count on the CD itself. They have to be assuming that you only ever use a

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