Plotline; Where Studio And Tech Execs DisagreePlotline; Where Studio And Tech Execs Disagree

Two issues are the subject of great debate between movie studios and consumer-electronics and computer-hardware vendors: the analog hole and the broadcast flag.

The analog hole can be summed up thus: To transmit signals to older analog television sets, DVD players put out an unencrypted analog signal that enterprising pirates can intercept, redigitize, then record and redistribute. That means DVDs aren't safe, even when wrapped in digital-rights-management software that defines usage rules.

The broadcast flag refers to an identifying mark that would prevent protected digital-TV content from being sent over the Internet. The matter gained notoriety when the studios sued SonicBlue, parent of personal video-recorder maker ReplayTV Inc., in 2001 for letting subscribers share recorded shows over the Internet. The growing popularity of digital TV makes it a hot issue.

Hollywood has found itself toe to toe with consumer-electronics and computer-hardware vendors, tussling over who should plug the holes. Doing so with identifying marks requires software embedded in devices that can detect those marks. Studios are lobbying Congress to require vendors to include detection tools in future products, while vendors say they don't want to be forced to invest in features that won't increase product demand.

There's disagreement over what technology would best plug the analog hole, but the most likely candidate is some form of digital watermark that would survive the digital-to-analog-to-digital conversion. Digital watermarking got a shot in the arm this month when Universal Pictures said it would seek to use technology from Verance and Digimarc Corp. to block digital copies of bootlegged films from being played on supporting devices. Universal is in talks with device makers to make this happen, says Jerry Pierce, senior VP of technology.

Comments from both sides suggest an accord is still a ways off. "The burden falls on the consumer-electronics and IT companies to detect [something illegal]," says Ron Wheeler, senior VP of content protection at News Corp.'s Fox Entertainment Group. "What good would it do for us to spend a zillion dollars researching [that] only for us to come to them and have them say, 'This doesn't work for us; you don't know anything about our business.' We're humble about it. We don't know anything. We just need something that's implementable."

Conversely, Jim Burger, an attorney with Dow Lohnes & Albertson who represents vendors in their talks with Hollywood, says studios are attempting to lobby their way into forcing vendors to pay to protect the studios' content. The studios should focus more energy on building viable online business models, Burger says.

The two sides have been discussing both issues over the past few years via the Copy Protection Technical Working Group, which includes studios, labels, technology vendors, and electronics manufacturers. The 247-member Analog Reconversion Discussion Group, a subset of the copy protection working group that's been looking for a solution to the analog hole, is reviewing possible technology fixes, most involving digital watermarking, that could be proposed to Congress as a standard for future devices.

And the analog reconversion group also has approved the first-ever digital output for DVD players, which could lead to a new generation of players that takes the analog hole out of the equation when connected to digital TVs.

Return to main story, File Sharing's Close-Up