Movie Industry Faces Digital Rights

Friday, August 18th 2000, 12:00 am

By: News On 6

NEW YORK (AP) â€” While the movie industry celebrates its legal victory against a Web site that encouraged computer users to copy DVDs, analysts said entertainment companies would be better off embracing digital file-sharing technology and its profit-making potential.

``The most important issues here aren't being resolved,'' said Jupiter Communications analyst Mark Mooradian.

Instead of bringing lawsuits, Mooradian said, Hollywood executives should focus on improving technology so they can begin charging those consumers who want access to digital music and films.

On Thursday, a federal judge rejected the notion that the First Amendment should protect computer software used for descrambling the code meant to prevent DVDs from being copied. The software, which had been posted on the Web site www.2600.com, helped make it possible for computer users to copy full-length feature films from digital versatile discs onto their hard drives.

To be sure, DVD piracy is hardly hindered by encryption technology or a lack of how-to guides for would-be pirates. Effective computer code for copying DVDs is widely circulated on the Internet.

However, there is one major deterrent to copying digital movies, a technological hurdle that even the film industry must overcome if it is to profit from online sales of digital movies â€” the amount of time it takes to download all of the data.

Even with a high-speed Internet connection, copying a digital movie takes hours.

By contrast, a digital song can be downloaded in less than 10 minutes with a standard modem and a file-sharing program like Napster. As a result, a number of companies are already developing pricing models for digital music sales.

Universal Music Group has partnered with a host of music Web sites to make songs available over the Internet in a secure format.

For instance, a customer can download Lynyrd Skynyrd's ``Sweet Home Alabama'' for $1.99, then play it using an add-on to the popular RealPlayer software. If the song is copied and passed on to someone else, it won't play.

Universal uses software from Intertrust Technologies Corp., based in Sunnyvale, Calif., to scramble the song. The Intertrust software sends a message back to the company every time a track is played, enabling several different ways to sell a song. It can be sold, rented or even leased with an option to buy.

``Every possible business model that's practiced in the commercial space can be programmed with our system,'' says Intertrust executive Talal Shamoon.

The software even allows a record label to sell a Britney Spears song with terms like: ``If you get ten of your best friends to buy it, I'll give you two free Britney tickets next time she's in town,'' Shamoon says.

Intertrust's program for downloading secure music will be included in the next version of America Online Inc.'s browser software, due out later this year.

While similar technologies for the film industry lag behind, a number of companies are hoping to tap into this market.

The number of possible customers remains limited because only the fastest home Internet connections are capable of carrying VHS-quality video. Also, companies need special networks to distribute high volumes of data without the lags and interruptions the Internet is prone to.

One industry leader is Los Angeles-based Intertainer, which is testing digital video distribution networks in Cincinnati and Denver, selling movies and TV shows online that they've scrambled using Microsoft Corp. software.

Technology experts admit that keeping the content of entertainment companies protected from would-be pirates will be a challenge. After all, said University of Wisconsin computer scientist Eric Bach, people who rightfully purchase encrypted songs will need to have software to unscramble them.

Indeed, content may always be vulnerable to tampering.

``Any single component may not be fully bulletproof,'' said Shamoon of software maker Intertrust, ``but we have the ability to actually refresh and renew tears in the security fabric.''

For their part, the music and electronics industries have united in the Secure Digital Music Initiative to put digital ``watermarks'' on CDs, but these will likely only prevent illegally copied tracks from playing on portable digital music players.

In the end, it will take more than encryption schemes to stop piracy, Shamoon says. Even if Britney Spears puts out her next single only in a protected digital format, ``it's always possible today to record that song out of the loudspeaker, and then put in back onto Napster or something.''

The solution is for companies to put out digital content that's cheap and of better quality than what's available illegally, Shamoon says.

``Historically, you destroy a black market not by arresting all the black marketeers or shutting them down. You destroy a black market by creating a competitive legitimate economy.''

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On the Net:

http://www.sdmi.org

http://www.intertainer.com

http://www.intertrust.com

Universal's secure music site: http://www.bluematter.com