LAS VEGAS Looking to stave off a potential video versions of services like Napster, a newly formed group of movie makers and systems companies will meet the week of Jan. 14 in Los Angeles in an effort to resolve issues related to preventing the unauthorized rebroadcasting of movies or television content over the Internet. Participants hope to be able to settle one small but significant aspect of a broad mesh of issues that has threatened the growth of Internet audio and video.
The new working group within the existing Copyright Protection Technology Working Group (CPTWG) will review a technical method for flagging video content that is not authorized for Internet transmission. A top technologist at Fox Studios proposed the technique as a video flag that both movie makers and consumer electronics companies could adopt.
The group was formed at the suggestion of Gary Shapiro, head of the Consumer Electronics Association (CEA), in a letter sent roughly two weeks ago to Jack Valenti, head of the Motion Picture Association of America (MPAA). Since then the group has had one telephone conference to review the approach proposed by Andy Setos of Fox.
"I am confident we can resolve this piece of the puzzle, the broadcast issue, in a fairly short time frame. The next challenge is to develop a more general video watermark that provides broader protection," Fritz Attaway, general counsel for the MPAA, told EE Times.
"We are developing a technology to handle the most pressing concern of free over-the-air TV on the Net," confirmed Gary Klein, general counsel of the CEA.
Just how long it may take to forge that resolution or how final the resolution might be is anyone's guess. "The CPTWG has been working on issues like this for years, but the content makers keep changing the rules every six months," said Jonathan Potter, executive director of the Digital Media Association. "They keep moving the goal posts."
Indeed, a battlefield rife with enmity between systems makers and music, movie and video producers was perhaps one of the ugliest parts of the industry on display at CES. Multiple panel sessions expressed worries and lobbed barbs over frustrations stemming from a variety of standoffs retarding the development of digital media markets.
Among the many outstanding issues:
Makers of portable music players fear music studios' plans to encrypt audio CDs this year will create a backlash among potential buyers of their systems.
Television networks worry that personal video recorders that allow users to zap commercials and share favorite TV shows over the Internet will crater their advertising business.
Makers of digital music jukeboxes fear their products will come under legal or legislative threat for violating fair-use laws that are vague about new digital capabilities.
Fledgling music subscription services are putting a brave face on their emerging businesses despite the fact the Internet industry can point to few success stories for subscription business models.
Independent companies fear large music and movie studios are ganging up to create mega Web ventures that will control the emerging market and cut them out of this potential business.
Wall Street support for fledgling Internet audio and video ventures has all but dried up in the current economic climate.
All sides foresee government intervention should the warring sides not find a way to hammer out their own business and technology solutions on copyright protection.
A Jan. 8 CES panel session on digital downloads showed there is no love lost among large studios, artists and systems makers.
"The days when there was a select group of artists, created by the studios, up on top are over, because today anyone can create anything," said Chuck D, an independent music maker on the panel. "The studios put all their money into Britney Spears, and they tank if she doesn't have a good year. Meanwhile there's a whole field of Britney Spearses out there."
SonicBlue Inc. chairman and chief executive Ken Potashner was equally vitriolic. His company has been sued over its Replay 4000 personal video recorder, which makes it easy for users to automatically skip commercials and send favorite shows over the Web to up to 15 people.
"Some of the people who are suing us are the very networks who are our investors," said Potashner. "That's even more ironic, he said, because the company recently won an entertainment industry award for forwarding television. "But apparently we have taken TV further down the road than they were ready to go."
Potashner said the Replay system could spawn new business models, helping advertisers target more well-defined demographic splits of users than broadcasters can define and selling custom ads to those users' hard disks. However, he said, the systems technology was ready to roll before new TV business models were in place.
SonicBlue continues to sell the Replay 4000 absent an injunction. A court review of the suit is expected in late summer.
"Our position as an association is that we know a solution has to be found to providing a secure environment for content," the MPAA's Attaway said during the panel discussion. "We think the best thing is to develop something along the lines of the Copyright Scrambling System that was worked out by various players in the marketplace. But if that doesn't happen, it's hard to see any alternative to a legislative solution."
Others on the panel said it's difficult for key industry players to get together to discuss the issue without raising antitrust concerns among their own lawyers. And any legislative ruling set by Congress would not apply outside the United States.
While the new working group holds some hope for a break in the video logjam, other issues are piling up in the audio realm. In the wake of the demise of Napster, a handful of subscription online music services, such as music.net and pressplay, have debuted with backing from major studios. Online movie services are not far behind.
"We assume there will be a lot of new online music services with a lot of content available shortly," said Andy Schuon, president of pressplay, which was launched Dec. 19 with backing from EMI, Sony and Universal.
But the industry remains skeptical. A separate CES panel on subscription services concluded that few companies have been able to eke out success with subscription models to date. And many people fear the announced music and movie services formed by giant studios will shut out other players. Indeed, the Department of Justice is reportedly investigating some of the collaborations.
"The long-term solution is that rights holders need to set reasonable licensing fees," said David Mandelbrot, general manager of entertainment at Yahoo. "We hope this does not have to be done through legislation."
Mandelbrot related Yahoo's experience with Internet radio. After having secured rebroadcasting rights from the artists and radio stations, it started a service that Mandelbrot claims now broadcasts 10 million hours of streaming audio a month.
Then groups representing the people who created the radio advertisements threatened action against the rebroadcast of their work, forcing Yahoo to take down 70 percent of its Internet radio offerings in April until a workaround could be found.
"Content providers are not embracing these media," he said.
Some blasted the Secure Digital Music Initiative the Recording Industry Association of America-backed effort that sought to hammer out an architecture for protecting Internet audio copyrights as a waste of industry resources, because it never came up with a workable solution.
The vigilance of studios over Internet music is duplicitous when those studios ship insecure audio on CDs "by the truckload," Mandelbrot said. But major music studios' plans to start encrypting CDs so they cannot be "ripped" onto PCs are generating other concerns.
"The encrypted CD will be an absolute nightmare," said Hock Leow, chief technology officer for Creative Labs, which sells portable MP3 players. "This will cause a big backlash from consumers."