September 29, 2004 4:00 AM PDT

Piracy fears threaten Hollywood innovation

SANTA MONICA, Calif.--Digital technology will eventually force big changes in how Hollywood sells movies, but security remains a key stumbling block.

Imagine, for instance, a technology that one day might allow a studio to release "Spider-Man 3" simultaneously in theaters and for sale over Internet-enabled, high-definition televisions. Such a move would be unprecedented, breaking current "release windows" that keep movies off video rental store shelves for months after they premiere.

But before that can ever happen, Hollywood would need strict anticopying guarantees. Specifically, locks would need to be pushed deep into the guts of television set-top boxes, PCs and home networks--broaching a hot-button issue that's riled device makers that largely oppose such measures.


What's new:
Hollywood's security fears may delay new ways of doing business made possible by the Internet and an array of digital services.

Bottom line:
Studio executives want strict anticopying guarantees, and they're pushing both for new legislation and new technologies to retain control of content distribution.

More stories on this topic

"We don't want to be MP3-ified," Sony Pictures Entertainment Executive Vice President Mitch Singer said this week at Digital Hollywood conference here.

Singer was referring to copyright headaches for the music business that were brought on by the Internet and the MP3 music file format. "We have to make our content better than free and fast. But until there's security...(the PC) will not be the platform of choice for new business models."

Like the music industry before it, Hollywood is at a crossroads. New technologies from digital video recorders to portable video players promise to make its products more available than ever before, and the studios hope to use these to tap into vast new opportunities for profits. But at the same time, executives fear consumers could soon have so much control over when and how they consume their products that the studios will wind up losing out.

Studio executives gathered at the Digital Hollywood conference to debate new ways of doing business made possible by the Internet, home networks and a burgeoning array of digital devices. They also warned that copyright concerns could delay for years new products and services that fully take advantage of the new technologies.

At the heart of the debate are so-called digital rights management (DRM) tools that aim to prevent unauthorized access to digital files, including music and video. DRM is considered a crucial glue for new digital entertainment services, giving studios, record labels and others powerful tools for protecting their copyrighted works, and laying the groundwork for profitable new ways to sell their products.

Locking down content
The studios are pushing both legislation and technology to help maintain control over their products.

"We're not antitechnology--we want technology to be smart enough to stop people from stealing our stuff," said Ron Wheeler, senior vice president of content protection at the Fox Group.

On that front, the Motion Picture Association of America (MPAA), Hollywood's chief U.S. lobby group, has pushed technology known

"We're not antitechnology--we want technology to be smart enough to stop people from stealing our stuff."
--Ron Wheeler, senior VP of content protection, Fox Group
as the "

The FCC has recently begun to certify technology proposals from dozens of companies that aim to comply with the broadcast flag directive.

Sony's Singer on Tuesday said that Hollywood needs significantly more robust copy protection technology than is currently available. He said Sony and other studios ultimately want end-to-end security from the source to the screen.

Microsoft's new version of Windows, Longhorn, seeks to secure video delivery to the screen, but Singer said he didn't know of any PC that is protected that way today.

What's more, DRM is only as strong as the weakest link in the chain of content transfers across multiple devices, Singer said. He added that unlike the open architecture of the PC, set-top boxes can be more closed and secure, and therefore easier to develop new services for.

In the burgeoning home-networked environment--which Sony, Microsoft, Intel and others are developing--there also needs be a common set of usage rules among consumer electronics devices and content distributors so that consumers know what they're getting and how they can use CDs, DVDs and other content on their devices, studio executives said.

"Interoperability is the biggest challenge to new services," said Kevin Gage, vice president of strategy technology and new media for Warner Music Group. "Next year, you'll start seeing people with potentially large libraries of content that won't play with their devices."

Flexing legal muscle
The MPAA, meanwhile, is backing bills that would criminalize some forms of file swapping. One such bill, known as the Induce Act, is expected to face a Senate committee vote this week.

The measure enjoys strong support from the entertainment industry, which claims it will target file-swapping networks with minimal collateral damage. But it has drawn sharp protests from technology companies, including publisher CNET Networks. More than 40 technology companies and trade associations warned bill sponsors on Tuesday that the legislation would engender an "unmanageable flood of litigation that would tie up innovators and chill investment."

Separately, the U.S. House of Representatives on Tuesday handed Hollywood and entertainment companies a legislative victory, voting to boost penalties for online piracy and increase federal police powers against Internet copyright infringement.

"Millions of pirated movies, music, software, game and other copyrighted files are now available for free download from suspect peer-to-peer networks," said Rep. Lamar Smith, R-Texas, who heads a copyright subcommittee. "This piracy harms everyone, from those looking for legitimate sources of content to those who create it."

Studio executives at the Digital Hollywood conference said that the Induce Act needs to be written narrowly enough so that it doesn't overrule the seminal Betamax court ruling, widely considered a key decision on home-recording rights.

"We don't want to overturn that," Sony's Singer said.

Rather, he and other attendees on the studio side said that technology companies should be counted on to provide filtering software to prevent trafficking of copyrighted works.


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Legislating ourselves back to the Stone Age
The INDUCE act is just another part of the United States legislating itsself back to the Stone Age.

Thanks to the efforts of well-heeled corporations innovation will cease and all knowledge will be locked up in pay-per-use Digital Rights Minimizations systems. In the future people will look back at the End of the 20th Century as another lost "Golden Age of Knowledge."

I sincerely hope that everyone has enjoyed the ride as it is about to come to a crashing halt.
Posted by Seething Ganglia (12 comments )
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DRM strips legal uses as well
Beware the Hollyood DRM future, product makers. You may find that your market HollyWont.

Here in Canada DRMed HP DVD +/-R drives sell for a song relative to some competing products. Why? Because the built in DRM of products like the HP DVD 420e makes then less attractive even to legal users.

Recently I purchased a DVD 420e external model. I require the external drive strictly for data backup, and it was a fine buy as an external writable DVD drive relative to competing unlocked drives.

However, even though I was aware of the DRM built into the device and deemed it not likely top affect my data backups, I was greatly disappointed by the fact that HP seems to have implemented the Hollwooders dream request of stripping the analog outputs from the device as well. That was NOT stated on the box to my recollection, while the digital part of the DRM was stated.

Unlike external CD-Rs of days past, it lacks BOTH an earphone jack and any kind of other analog output jack such as the RCA output that used to be on many external CD-R drives.

This means that even if one has ones own audio files, such as meeting notes recorded in the field, or memos to be translated to letters etc, one cannot play them pack directly from the DVD 420e.

A poor value indeed, because the stripped output capability essentially censors legitimate content that one may have generated on ones own as well.

Still, the Hollywoodized DRMed HP drives are cheaper drives (owing more to market resistance I suspect, not to intentionally lower prices), if you only need data backup, since they are less favored as a product choice.

Consequently HP has lost me in terms of recommending their product, as it punishes legit users in order to pander to rightsholders.
Posted by PolarUpgrade (103 comments )
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Title should have been: "Holywood fears innovation"!
Has Holywood innovated in the past few years? They seem to produce just those "one film fits all" kind of films. The reason they "need" DRM is to make it hard for small innivative competitors. Holywood's business model is to spend a lot of money on lowest common denominator content, and then spend a lot of money on marketing to sell it to lots of people. Now they are threatened by new technologies that can be used to make a profit by reaching smaller more targeted audiences, serving a much more varried content. What they really want is to block innovative smaller competitors by blocking their cheaper distribution channels.

Yes, people do download some pirated Holywood stuff. But there's a mich more effective and cheaper way to reduce that! Holywood just needs to spend a lot less on marketing. If people \wouldn't know about their stuff, they wouldn't download it, pirated or not! And then people would look around and see that there's a new world with new kinds of content, and they don't have to buy everything Holywood decides to shove down their throats!
Posted by hadaso (468 comments )
Reply Link Flag
No innovation at all
The innovations that come from hollywood:

-How to sell increasingly bad movies for increasingly more money!

WOOOO!! Yeah, "Spiderman" was just such an innovative movie! So was the Hulk! Such innovation!

You want to see innovation motherfockers? Look at Japanese Anime. These films are so innovative that they are pirated on a massive scale just outside japan in Taiwan, S. Korea, China, etc.

How do the Japanese fight back? DRM? Circle the wagons? NO!!!!!!!!!!!!!! They package the movie with some arcane gift like a blanket or a toothbrush that cannot be easily duplicated by a pirate. They ACTUALLY could give a flying frack if the movies get copied, BECAUSE THEY KNOW IT WILL DRIVE SALES of the originals / sequels / special editions / etc!

So to lets ask the idiot author of this article, where does hollywood innovate? They don't innovate, they STAGNATE.
Posted by (60 comments )
Link Flag
The only reason...
The only reason Hollywood wants all of this is so that they can lock their stuff so that they can charge whatever they want. They aren't happy gettting $20 to $25 a DVD for a movie any more. If they can fix it so that they are the only source for a movie then they can charge whatever they want, plus control how, when and where you watch it. For some reason copyright issues always comes back to greed by these companies.

Posted by (336 comments )
Reply Link Flag
Here's a scenario...
Imagine, one day, your TV and DVD player will be required to communicate with each other. A type of DVD will be created where the player will be able to write to a small section of the DVD. When the DVD is first inserted into the player, it will check for this "data". If it is not found, then your DVD will request from the TV its unique ID, which will then be "burned" to the disc along with the player's unique id. Now you cannot watch that movie on anything but that TV/DVD player combination.

Then later on down the road, a new field will be added to the burned data stating how many times the movie has been watched. If you go over your limit....BAM you have to buy a new disc.

Hang's a coming.
Posted by Brian Grover (19 comments )
Reply Link Flag
It's already here!
just look at DirecTV w/ their SmartCards
Posted by dudehehe78 (4 comments )
Link Flag
DRM Attempts to grab new rights beyond copyright protection
The whole idea behind government-granted patent and copyright protection is that it is in the PUBLIC INTEREST to protect the author/inventor in return for disclosure and FAIR USE.

This original idea is now becoming perverted, and Hollywood is now pursuing DRM as though they have a right to unrestricted revenue for anything they spend 5 minutes creating.

For those who think that the new manifestation of DRM is a good idea, why shouldn't we also pay bricklayers a royalty every time we enter a building with a brick facade? Why shouldn't we pay the automobile manufacturer a royalty every time we turn the key (until the car auto-destructs at a manufacturer-chosen date)? Why shouldn't anyone who has been a student also pay a royalty every time he uses something he learned? Why should only Hollywood be allowed this kind of infinite-duration protection for a finite work product?

Yes, it is totally absurd when you strip "public interest" and "fair use" out of the "rights" concept.

In my opinion, DRM in its current form - that is, without "fair use" protection and thus devoid of any defensible "public interest" - can only be justified by simultaneously revoking all government patent, copyright, and legal protection for those who use it.
Posted by landlines (54 comments )
Reply Link Flag
Convienience - the idea that I have over 200 channels on my Cable Box with a myriad of PPV channels should satisfy the consumer. The bulk of the market that would potentially use a IP based movie and music solution are not the people that would consider DRM an issue since most consumers are honest and ethical about their content. I could CARE LESS about trying to STEAL a movie of song - I could also care less that Hollywood and the Labels are so worried about DRM - there are solutions to manage such, it is just that they now actually have to keep accurate records and payment structures to the artist of sales in an elecronic distribution world - as opposed to a physical product distribution world where the number of units sold - might not be the actual numbers.
When Hollywood wakes up and realizes that those that share files - are different that those that actively PIRATE files - they should realize that people who want convienece and have the ability to pay for their product will do so - those that don't - WON'T. THE COMPUTER SOFTWARE WORLD UNDERSTANDS THIS AND HAS HAD A SOLUTION FOR MANAGING, DISTRIBUTING AND COLLECTING REVENUE FROM THE SALE OF THEIR IP FOR YEARS - AND IT WORKS.


Posted by (4 comments )
Reply Link Flag
DRM is like a time machine. Just because you can IMAGINE it, doesn't mean it is possible to build.

Can you see the movie? Then you can record the movie. Can you hear the movie? Then you can record the movie.

These *idiots* (and I do mean IDIOTS) have had almost 10 years to develop new business models. THEY STILL HAVEN'T. The movie industry has relied on the fact that movie files are large and bandwidth is small to protect them.

It is hilarious to see them step in the same pile of ******* that the RIAA has already tracked into the house with DRM.

"We are not anti-technology"... we just want to control it. Yeah, f*ck you and everything you stand for. I will never use DRM, I'd sooner ***** myself.
Posted by (60 comments )
Reply Link Flag
If DRM worked...
Why did SONY (the device manufacturer) recently CAVE IN and offer MP3 support on their walkmans? Because nobody is stupid enough to buy a "digital music player" that doesn't play MP3!!!

Posted by (60 comments )
Reply Link Flag
Same Old Idea / Different Wrapper
Has everyone gone stupid lately? If not, OK but by all means "Here's YOUR Sign !"

I remember back when DVD Player first came out. People had to choose between DVD and Divx. The players looked the same but Divx limited the number of times or days you could watch to movie. Sound Familiar. Not only that, it was locked to that particular divx player. I remember people asking the sales clerks which was the best to have at the time. Of course, you know the monkeys were already programmed with the right words to say! Here are a few that I remember. "Do you really want to pay $24.95 for this movie or would you rather only pay $3.50 and get to watch it for up to 30 days?"

Which is cheaper? Divx! Of course... You can play the DVD and Divx disks on the same system! Yea Right.

I don't know about anyone else but my family has gotten our egos bruised lately. We watched the advertizements for a new show at the theaters. My spouse says to me lets go since we have been to the movies lately.

We leave and get to the movie house. We are blasted by a small fee of 8 people @ 12.75 each.
Not to mention the snack bar. After the trip, I came to the realization that I could have gone to Walmart and 10 to 30 movies for the amount we spent at the Theater and walked out with nothing.

Want me to go back and pay that kind of money again. Offer to give me a DVD copy of the movie for free for two or more coupons issued by the theater. You know the drill. Mail in this coupon with a valid ticket stub from your favorite theater and get a free DVD of the movie. Wait up to 6 to 8 weeks for processing.

Small Movie houses are closing due to the high prices and Large movie houses are packed due to the theater hoppers.

This is what I found out at the movie house I spent my small fortune on. People get there for the first movie of the day. Halfway thru the movie, they leave that one and go into the next one. They are constantly on the lookout for any ticket stub left by the last customers. They pick them up and put them in their pocket. They watch that one until it is halfway over. They move to the next and repeat. By the end of the day, they have watched most all the movies and have ticket stubs in case someone asks.

I have seen some enterprising people but I'm talking about Adults doing this!!!!!!!!

The answer to all this TechnoBabble is simple.

Consumers: Say no and stop buying or patronizing any establishment that tries to take away your natural rights. DirectTV,Tivo,Cable,DVD,Homebeam,BlockBuster,NetFlix
are all trying for your business.

Do you want to watch a movie that bad as to be willing to pay RANSOM amounts to watch.

Just Say NO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Lets all start a neighborhood club and watch movies all night.
Posted by (1 comment )
Reply Link Flag
The music industry has been threatened by piracy. Many artists are having trouble to sell out their albums because of this illegal selling of cd?s and dvd?s. But still a lot aren?t losing hope and still making good and quality music for the sake of their fans. Just like the Depeche Mode band who still are having concert tours. The Depeche Mode free concert will be performed in April on Hollywood Boulevard, to promote their new album. The band will be playing a concert at Madison Square Garden later in the year, with nosebleed seats going for over $50, so they aren't hurting for payday cash advance loans. Depeche Mode is considered to be the longest lasting and most successful of New Wave electronic bands from the 80s, and is still a top concert draw. The band will repair credit with fans that are strapped with the <a rev="vote for" title="Depeche Mode to Play Free Concert on Hollywood Boulevard" href="">Depeche Mode free concert</a>.
Posted by BlaineDDDD (1 comment )
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