DRM Free Audio Books

Three little letters still have the audiobook divisions at various houses—and at least one agent—concerned. The use of DRM, or digital rights management, to deliver digital audio files has been debated by spoken-word publishers for well over a year now. Last week Random House became the first big house to announce it will start distributing its entire digital audio catalogue DRM-free beginning March 1. Many hope the move will significantly expand the market for digital downloads (already the fastest-growing segment of the audio market), while others fear the change poses a threat to the industry.

The DRM debate was first stirred up when the online music retailer eMusic.com started selling digital audiobooks last year. eMusic, the second-largest digital music e-tailer, significantly trailing the juggernaut iTunes, sells its files DRM-free. The lack of DRM, which differentiates the e-tailer from iTunes, allows customers to more easily transfer downloaded files among devices. Critics charge that DRM-free files are easier to pirate; proponents say the format is more customer-friendly and will encourage more e-tailers to sell digital audio.

Gambling From Cellphones

On Aug. 2, online sports gamblers wagered $7 million on a tennis match in Poland. Stunningly, the money favored 87th-ranked Martin Vassallo Argüello, even after the Argentine lost the first set. Suspicious that the fix was in, the Internet gambling site Betfair voided the bets and alerted the Association of Tennis Professionals. Those reservations seemed justified when top-seeded Nikolay Davydenko quit in the third set, citing an ailing toe. In the wake of that fishy match, multiple tennis players have admitted they’ve been asked to fix results. Along with exposing the seamy side of pro tennis, the scandal has also spotlighted the site that handled the action. Most Americans probably haven’t heard of Betfair, but it’s the biggest thing going in global gambling.

Betfair, which opened for business in 2000, is best described as day trading for sports bettors. Using Web-based accounts, anonymous users can set their own odds or bid on odds offered by other players. Online “betting exchanges”—there are dozens, but Betfair is the kingpin, with a 90 percent market share—eliminate the role of odds-setting middlemen like local bookies and Las Vegas sports books. Instead of wagering on take-it-or-leave-it odds set by the house, gamblers are free to choose among many different price points, striking bets for as little as $1 up to hundreds of thousands.

Now imagine betting on sports or playing casino games from your cellphone. No longer are you restrained to sitting in front of the computer you can play games or place wagers on the sport game you’re watching at the bar.

Mortgage Crisis

Ben S. Bernanke, the Fed chairman, told a group of bankers in Florida on Tuesday that “more can and should be done” to help millions of people with mortgages that are often bigger than the value of their homes.Though Mr. Bernanke stopped well short of calling for a government bailout, he used his bully pulpit to try to push the banking industry into forgiving portions of many mortgages and signaled his concern that market forces would not be enough to prevent a broader economic calamity.

He also suggested that the Federal Housing Administration expand its insurance program to let more people switch from expensive subprime mortgages to federally insured loans.

And he urged the two government-sponsored mortgage companies, Fannie Mae and Freddie Mac, to raise more capital so they could buy more mortgages. The companies already guarantee or hold as investments about $1.5 trillion in mortgages.

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