Dylan Tweney
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Hollywood vs. Your PC

Movie and music moguls are hopping mad over the new technologies that are transforming digital entertainment. Washington is listening. What’s at risk? Your ability to enjoy DVDs and CDs you’ve bought, your privacy–even your control over your PC. Dylan F. Tweney From the November 2002 issue of PC Wor
Dylan Tweney 11 min read

Movie and music moguls are hopping mad over the new technologies that are transforming digital entertainment. Washington is listening. What’s at risk? Your ability to enjoy DVDs and CDs you’ve bought, your privacy–even your control over your PC.

Dylan F. Tweney

From the November 2002 issue of PC World magazine
Posted Wednesday, September 25, 2002

Some PCs crashed. Macs locked up and were impossible to reboot, in some  cases requiring dealer repairs, according to Apple.

A nefarious new virus? Guess again. The culprit was the European release  of the latest Celine Dion CD, which used copy protection to render the disc  unplayable on anything but a stereo.

Meanwhile, stateside PC users who like a little background music have  been stymied by recent CDs from Charley Pride, ‘NSync, and others. Few PCs  crashed, but the copy protection on the discs sometimes prevented CD players or  car stereos from playing them, as well.

And Hollywood’s recent campaign against digital copyright infringement  is not limited to music CDs; it affects the way you use your PC as well as the  devices that talk to it.

Videotapes, DVDs, and many set-top cable boxes already have copy  protection. New bills backed by the $68 billion movie and music industry would  extend that and put copy protection hardware on all new PCs and consumer  electronics devices, such as stereos and personal video recorders like TiVo  (see ”  Following    the Money Trail,”). Also in the works: new laws targeting  peer-to-peer file sharing networks like Kazaa, and possible prosecution of  individual file sharers.

Jack Valenti, president and CEO of the Motion Picture Association of America

“All we’re trying to do is protect our investment in the digital  landscape,” says Jack Valenti, president and CEO of the Motion Picture  Association of America. “This is the first time we’ve faced this landscape,  where a 12-year-old can copy a movie and send it around the world with a click  of the mouse.”

But consumers may not be interested in new, high-tech products that do  less than the equipment they already own. That fear partially fuels the $150  billion tech industry’s opposition to legislated copy controls. It has just  gained a powerful ally in the fight: the $350 billion telecommunications  industry, which should get lots of broadband business when digital content on  the Net is mainstream.

Few people advocate rampant piracy, or dispute content owners’ right to  fair payment for their works. Still, “The industries that own content need to  shift their perspective from viewing consumers as potential pirates to dealing  with consumers as potential customers,” says Alex Alben, vice president of  public policy for streaming media pioneer RealNetworks. He believes most users  will opt for legitimate digital content if services offer a big, reasonably  priced selection with sufficiently flexible distribution controls to make  buying more convenient than illegal copying.

But few such services exist today, and some new ones have been scrapped.

The stakes are high all around: your ability to make copies of (and to  use freely) the music, movies, and hardware you’ve paid for, and tens of  billions of dollars in revenue for each industry–not to mention the future  direction of digital media and PC and Internet technologies. (See ”  What Can    You Do With Digital Media?” for a rundown on what’s allowed  today.)

Farewell, Napster

For the entertainment industry, Napster was a loud wake-up call. The    online file-sharing service demonstrated that people using readily available    equipment could easily download and distribute digital music and movies en    masse, regardless of copyright.

Not surprisingly, that sent the entertainment industry into a panic.    After all, one theory goes, if you can get digital files for free, why would    you ever pay for a movie ticket or a CD?

A lawsuit led by the Recording Industry Association of America shut    down Napster, stranding its 70 million users. But other peer-to-peer (P2P)    networks, such as Kazaa and Gnutella, quickly took its place. Kazaa alone has    been downloaded over 113 million times, according to CNet’s Download.com.

The RIAA blames 5.3 and 7 percent drops in the number of CDs sold in    2001 and 2002, respectively, in part on online file trading. To guard its    content and avoid further losses, the entertainment industry has hastened to    employ copy protection and digital rights management (DRM) technology.

Unfortunately, such technology doesn’t affect only pirated    distribution on P2P networks–it can prevent users from making any copies at    all, even ones that formerly would have qualified as fair use. (“Fair use”    allows consumers to make copies for personal or scholarly use as long as the    copying doesn’t affect the work’s commercial value.)

Jessica Litman, professor of law at Wayne State University and author of the book Digital Copyright

“With the possibilities of digital technology, what we’re seeing is    copyright owners taking the opportunity to try to extend their control,” says    Jessica Litman, professor of law at Wayne State University and author of the    book     Digital Copyright.

One of the most powerful weapons in the entertainment industry’s    arsenal is 1998’s Digital Millennium Copyright Act, which makes circumventing    copy-protection technologies placed on digital media a federal crime,    punishable by up to five years in prison plus a $500,000 fine. “In the old    days, the law said you have a fair use to what you’ve bought–go ahead and do    it,” says attorney Jonathan Bick, author of     101 Things You Need to Know About Internet Law. “Now it    says you have a fair use as long as you don’t employ certain technologies.”

After its Napster experience, though, the entertainment industry has    concluded it needs more than the DMCA to battle digital copyright    violations.

The Consumer Broadband and Digital Television Promotion Act, sponsored    by Senator Ernest Hollings (D-South Carolina) could strengthen its arsenal.    This bill would require vendors to put copy-protection chips in all future PCs    and consumer electronics devices. By preventing copying through hardware, it    could keep files from getting onto P2P networks in the first place. Combined    with the DMCA, it would give companies a nearly ironclad legal and    technological defense of their content–but could also let them restrict fair    use further.

The tech industry thinks such requirements are too broad and would    hobble innovation by tying it to government specifications. “For the government    to mandate how the IT industry designs and develops chips–or to try and force    agreement for design features–would be ludicrous,” Intel executive vice    president Leslie Vadasz said in congressional testimony earlier this year.    “Irreparable economic damage would result” from such intervention, he    added.

Intel has its own solution, code-named LaGrande, due in Pentium chips    in 2003. Both it and Microsoft’s Palladium security scheme, intended for future    Windows versions, are meant to protect PCs against threats like viruses and to    make tasks like online banking more secure. But they can also work with DRM to    restrict copying or playback.

The entertainment industry is also targeting P2P networks via lawsuits    and “spoofing”: posting corrupt or misleading files to discredit P2P network    files. A bill proposed by Representative Howard L. Berman (D-California) would    legalize spoofing and other P2P network attacks and would shield attackers from    liability for resulting network damage.

The telecom industry opposes both pending bills. “We’re against any    kind of government-mandated standards,” says Verizon’s vice president and    associate general counsel Sarah Deutsch. Furthermore, she says, both of the    bills run roughshod over carefully constructed compromises in the DMCA that    balance content owners’ and service providers’ responsibilities. The next    congressional session’s bills need to be negotiated with all stakeholders    present, she adds.

Finally, prosecution of P2P file-traders may be in the works. The 1997    No Electronic Theft Act lets copyright holders press charges against those who    share copyrighted products valued at over $1000–even if the sharing is done    only with family and friends. Guilty parties face a maximum of one year in    prison–five years if the traded files are worth more than $2500. Prosecutions    have yet to occur, but the Justice Department has said it will use this law    against file traders.

While acknowledging that piracy is a serious problem, some vendors    feel that the entertainment industry’s legal approach is misguided. “Hollywood    is focusing all its efforts on complaining to Washington instead of making a    sincere effort to compete,” says Chris Gorog, CEO of Roxio, maker of the    popular Easy CD Creator recording software.

Though legitimate sites with major-release movies are scarce, several    fee-based sites–such as MusicNet, Pressplay, and Listen.com–offer music. But    these services have flopped commercially, hobbled by much smaller selections    than P2P networks offer, and by restrictions on the number of songs users can    download and whether users can burn them to a CD. Only in 2006 will paid music    services begin to take off, predicts the Yankee Group.

Tracking Your Habits?

Even if legitimate digital media becomes available, the technology has    a downside that worries some consumer advocates: It lets vendors track what you    watch and listen to.

DRM technologies must be able to identify devices such as PCs and    portable players that comply with its rules, and must ensure that you don’t    misuse the content you’ve purchased. Does this raise privacy issues? If content    owners keep track of their customers’ devices and viewing habits, then yes.    Most do not, but “there’s no magical limit to what could be put into a DRM    system,” says Steve Canepa, vice president of IBM’s global media and    entertainment group. (IBM’s DRM system tracks keys used to unlock content, not    content itself or customers’ habits, he says.)

DRM aside, digital media’s connected nature makes consumer tracking    possible to a degree unmatched in the analog world. Take the case of Sonicblue,    maker of the networkable ReplayTV personal video recorder. As part of a suit    over ReplayTV’s “send to a friend” feature (which lets users send stored TV    shows to other local or Internet-connected ReplayTV sets), a magistrate ordered    Sonicblue to monitor its users’ viewing habits. (This is possible because    Sonicblue remains connected to ReplayTV sets to update TV listings or software,    and more.) A U.S. District judge overturned that order after consumers and    privacy advocates complained. What you watch is your business–for now.

Total control over digital media isn’t the only option for content    owners. And no copy-protection scheme will be perfect, as even the MPAA’s    Valenti acknowledges. The content industry’s best option may be to compete with    P2P networks on their own terms, offering for-fee services with comparable    selection but consistent, high quality.

According to Electronic Frontier Foundation (EFF) attorney Fred von    Lohmann, the movie industry is already starting to do that by lowering DVD    prices. “Why spend hours downloading a crappy version of a movie when you can    buy the full version for $9.99 at the supermarket?” he says.

Copyright holders might also have to learn to tolerate some file    sharing. Already, some independent labels (and many up-and-coming bands)    distribute MP3 files online as a marketing tool. Folk icon Janis Ian credits    the availability of MP3s online for her recent comeback tour’s success.

And it might even be good for the entertainment industry. “Over 100    years, every single new technology that copyright owners have protested has    turned out to make them more money, not less,” says von Lohmann. (    Here is     PC World‘s take on one possible    compromise.)

But that outcome is far from assured. Groups like the EFF and    DigitalConsumer.org have lobbied for fair-use rights, but with limited success.

Ultimately, it’s up to content publishers to decide what restrictions    they want DRM schemes to enforce, and up to consumers to decide whether they    will buy content with those restrictions. One thing is clear: PC users must    speak up or risk losing control over their PCs and the media they buy.

Dylan F. Tweney is a freelance writer and editor in San Mateo,    California.

What Can You Do With Digital Media?

In the days of vinyl records and cassette tapes, you could copy your  albums to your heart’s content. Same with videotape, VCRs, and TV shows today.  But digital media imposes new restrictions–some technical, and some legal–on  what you can do with blank discs and digital content.

Congress: Following the Money Trail

The entertainment industry has contributed $25 million to congressional  campaigns this year, according to Opensecrets.org, and it shows: Some key  players in recent and pending copyright laws have strong ties to entertainment  groups; one opponent does not. (The tech industry has only recently become a  serious player in Washington, moving from 53rd in contributions in 1990, to 8th  this year with $16 million donated.)

Sen. Ernest Hollings (D-SC): He proposed the     Consumer    Broadband and Digital Television Promotion Act, a bill to    outlaw the sale of PCs or consumer electronics devices lacking copy protection.

Money trail: $282,534 from TV/music/movie contributors since 1997–his    second-biggest supporting industry (after lawyers and law firms, who gave    $1,213,475).

Rep. Howard L. Berman (D-CA): The Berman     P2P    bill gives copyright holders legal immunity to attack P2P    networks to hinder file-sharing, if the U.S. Attorney General has been    notified. Files on users’ PCs can’t be damaged.

Money trail: $570,000 from TV/music/movie donors since 1993. He is the    leading recipient of entertainment industry money in the House.

Rep. Howard Coble (R-NC): Coble was the original    sponsor of the 1998     DMCA    and is cosponsoring Berman’s proposed P2P bill.

Money trail: $151,021 from TV/movie/music donors since 1993. Since    2000, law firms are his top contributors, with the entertainment industry a    close second. He is the number two recipient of music industry funds in the    House.

Rep. Rick Boucher (D-VA): Boucher has been an    outspoken critic of the DMCA since its passage in 1998. He has been trying to    rally support within Congress to amend the DMCA to explicitly affirm fair    use.

Money trail: $26,125 from computer industry donors in the current    election cycle. Even bigger contributors to his war chest, however, are    utilities ($57,902) and law firms ($31,250).

Copyright Chronicles


Anne guards the books: Publishers are up in arms and hint at  author strikes. The problem: fast (well, sort of) and loose replication and  sale of books without proper compensation to the owner. To remedy that,  England’s Queen Anne accepts the first Parliamentary copyright law, the Statute  of Anne. It gives copyright holders (defined as authors or another authority  with proprietary rights to a written work) exclusive rights to distribution and  copying for a period of 20 years. 1908

Play it again, Sam: Player pianos are all the rage, and    publishers of player-piano rolls are making a killing selling these recordings    of popular tunes–without paying composers a dime. (Sound familiar, Napster    fans?) Sheet music publishers file suit, claiming copyright infringement. The    Supreme Court rejects their claim, reasoning that the law doesn’t cover    player-piano rolls. The next year, Congress amends the law to include licensing    fees for player-piano rolls, phonograph records, and public performances.    Decades later, composers get over $500 million in royalties from recordings and    performances of their music.1984

Video saves the movie star: The U.S. Supreme Court rejects    Universal Studios’ lawsuit against Sony, which had contended that Sony’s VCRs    allow rampant copyright infringement by giving ordinary Joes and Janes the    ability to make copies of their own movies. The ruling upholds citizens’    fair-use right to make home recordings, and it supports Sony’s right to make    and sell VCRs. (Sony’s Betamax format loses the VCR war to rival VHS anyway.)    Two decades later, while box office receipts add up to about $8.4 billion,    video sales and rentals are a $16.9 billion market for the movie studios–not    bad for the lawsuit’s losers.Photograph by: Katherine Lambert; Photograph by: Blake J. Discher; Photograph by: AP/Wide World Photos; Photograph by: Michael Nicholson/Corbis; Photograph by: Katherine Lambert

Link: Hollywood vs. Your PC

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