Entertainment firms attack digital copying gizmos
By Michelle Kessler
USA Today
When Sonicblue, maker of ReplayTV, designs new products, the team includes some unlikely people: lawyers.
That's because Sonicblue builds products that Hollywood hates and consumers love. It specializes in gadgets that let people download, copy and share digital music and video.
Those devices, entertainment companies say, often infringe on their copyrights because they allow the sharing of pirated content.
Twenty-eight entertainment companies are suing Sonicblue to get ReplayTV off the shelves, because the digital video recorder lets viewers skip commercials and send shows to friends over the Internet. Sonicblue said it has no plans to voluntarily scratch ReplayTV.
The fight between Hollywood and Sonicblue is one of many being waged between the industries. Entertainment companies, burned by piracy that's cutting into their bottom lines, want more control over digital copies of movies, music and TV shows. They're lobbing lawsuits at companies such as Sonicblue as never before. At the same time, tech companies are putting out more products that encourage customers to "Rip, Mix, Burn," as Apple's advertising slogan said.
At stake: Hollywood says the very future of its industry; public advocates say the freewheeling nature of the Internet; tech product makers say innovation that benefits consumers.
A battle replayed
The fight sounds like a drama worthy of a summer blockbuster. But it's actually a rerun.
A century ago, sheet-music makers claimed player pianos were violating their copyrights by using their tunes without permission. The Supreme Court ruled that they were not, and Congress soon after created the royalty system.
Music composers filed a similar suit in the 1930s against radio, then new. They lost and learned to use radio as a way to promote records. In 1984, movie companies claimed in court that the VCR would destroy their business by making films available to anyone who owned one. They lost the Supreme Court case, and video and DVD recordings now account for about a third of the industry's revenue.
But this time is different, entertainment executives say. Digital technology is the first that lets consumers make perfect copies of songs, films and shows — a big step up from fuzzy cassette duplicates.
The two sides are at a stalemate. And Hollywood is coming at its tech brethren with:
Lawsuits. Audiogalaxy, a Napsterlike file-swapping service, last month became the latest to succumb to a lawsuit.
It agreed to stop users from trading copyrighted music over its system to settle a lawsuit from the Recording Industry Association of America. That could severely hurt Audiogalaxy, one of the most popular music-swapping sites on the Internet. Napster, the first mainstream Internet music-swapping site, was ordered by a judge last year to stop letting users swap illegal tunes.
Audiogalaxy's loss could lend more oomph to a similar music-industry lawsuit against rivals KaZaA, Grokster and Morpheus.
Lawyers for KaZaA say it has run out of money thanks to the "Rambo-style litigation" of the music industry. They say prosecuting attorneys have a "scorched earth" policy designed to overwhelm small defendants.
Lawmakers. Hollywood has used its influence in Washington to push a bill that would force tech companies to build piracy protection into their products, from PCs to MP3 players.
The Hollings bill, introduced by Sen. Fritz Hollings, D-S.C., in March, orders tech companies to come up with a piracy protection system that meets Hollywood's needs. If they can't do it in a year, the government can mandate standards.
Entertainment companies want a digital "watermark" detector embedded in most electronic gizmos. A processor chip inside a PC, for example, would check each file for a digital watermark indicating that it wasn't pirated. Files without watermarks wouldn't play.
Tech companies say that kind of system would slow computers. "It turns us into police," said Intel Vice President Don Whiteside.
And there's no guarantee any technical anti-piracy system would work. Many have already flopped.
Experts say the Hollings bill is unlikely to pass because it's too controversial. An alternative bill is expected to be introduced in the next few months.
Most tech companies balk at any legislation, saying it would stifle innovation. Movie executives disagree. "Is stopping thievery, bringing it down to a modest level — is that stifling innovation?" asks Jack Valenti, president of the Motion Picture Association of America. "I never understood that argument."
New business models. Hollywood is trying to lure consumers with hard-to-duplicate features and by staying one step ahead of pirates. The new Eminem CD, for example, came with a DVD of concert footage. Its release date was bumped up after illegal copies started appearing online.
Music companies are also running their own services where customers pay to download songs.
But while millions every week download songs from free Internet music-swapping sites, few are willing to pay for sites that don't have a big enough selection of music because record companies and artists won't make enough available.
Meanwhile, tech companies are pushing hard with products that make digital copying easier and cheaper. CD burners, a technology just a few years old, now come standard on new PCs.
Apple is reclaiming market heft with a strong lineup of new digital multimedia programs for editing movies, sharing photos, and playing music and movies.
PC maker Gateway is running TV ads that show CEO Ted Waitt and a cow — the company's mascot — singing along to a homemade CD. The spot directs viewers to a Web site that encourages them to join the fight against Hollywood.
Critics say illegal copying occurs because companies haven't come up with a compelling legal way for consumers to enjoy digital movies and music.
"I don't think music companies want to change. They would rather protect their current model than evolve," Waitt said.
