JAN. 4 | The International Consumer Electronics Show has become a major meeting place for the technology and entertainment industries, sometimes to cooperate, sometimes to argue, sometimes just to look each other over.
Paul Sweeting is editor of Content Agenda
Although the two industries have long been entwined, digital technology has made their interactions more complex, challenging and exciting than any time since the introduction of TV, making this year’s CES a perfect time to assess how the industries are navigating their new shared terrain as well as what lies ahead.
In that spirit, the editors of Content Agenda—a Web site dedicated to the intersection of entertainment and technology—compiled a brief run through of the topics likely to dominate the conversation in 2008.
1) Digital Rights Management
DRM is never really off the agenda, but in 2008, two new elements will likely have the floor.
First, this could be a make-or-break year for efforts to tackle the problem of DRM non-interoperability through technical measures. The Coral Consortium, made up of device makers, DRM vendors and a few content companies, began working toward an interoperability solution in 2004, and in late 2007, it issued its complete specification and “Coral Ecosystem” license agreement.
Coral’s approach was to create a framework that will allow multiple DRM systems to be used within an “ecosystem” of Coral-compliant devices, services and content, so that content can move seamlessly from one device to another without regard to whether they use the same DRM.
Having accomplished the technical piece, the really hard work will begin this year: getting content companies, device makers and service providers to buy in.
Consumer electronics makers have the least to lose; greater interoperability would allow their devices to be used with more services. DRM vendors generally support the idea, but those that have achieved success through a proprietary approach (i.e. Apple and Microsoft) remain standoffish.
NBC Universal and 20th Century Fox have been actively involved in Coral, but broader support from content companies will be needed to get content delivery services to go along.
If the industry can’t figure out interoperability, however, it could get some unwelcome help from regulators, especially in Europe. The French government’s recently proposed plan to crack down on Internet piracy also contains provisions to force greater interoperability between devices and online services.
The European Union was scheduled to release its own plan for regulating digital distribution of content at the end of December. It also is expected to contain provisions calling for some level of mandatory interoperability (hello, Apple?).
Even if the U.S. demurs from a regulatory approach, content owners and device makers could soon face serious pressure to get with the program, even if they don’t buy into Coral.
2) Format-shifting
The movie companies have long managed to stave off any serious reckoning on the format-shifting of video. But their luck could run out in 2008.
Currently, no statutory or judicial authority gives consumers a clear right to move (i.e. copy) video from a disc to a hard drive or a portable device. But with DVD ripping tools widely and easily available, the practice is common. So common, in fact, that many consumers would be surprised to learn that it is illegal.
The studios would like to keep it illegal—unless licensed by the copyright owner—but the tide of technology and consumer expectations are against them. Outside the U.S., moreover, the regulatory tide has begun to turn against them as well.
The studios lost a major format-shifting battle in early 2007, when the DVD Copy Control Assn. lost its breach-of-contract case against Kaleidescape Systems, a Mountain View, Calif.-based maker of high-end home media servers.
DVD-CCA charged Kaleidescape with violating the license agreement for the Content Scrambling System because its servers allowed users to make encrypted copies of their DVDs to the unit’s internal hard drive for streaming over a home network. But the court ruled that the license, as written, did not actually preclude such a design.
Since then, DVD-CCA, at the prompting of the studios, has tried to change the license retroactively, prompting threats of litigation from Kaleidescape.
DVD-CCA has appealed the ruling, but if it loses the appeal, the studios will be left with a stark choice: Leave Kaleidescape alone and tacitly accept consumers’ right to place-shift DVDs; or charge the company with copyright infringement and risk a federal court ruling that consumers have a fair use right to copy their own DVDs.
Policymakers outside the U.S., meanwhile, are increasingly siding with consumers. Australia, New Zealand and Germany have all legalized some types of format-shifting, and more countries are looking at it.
Some studios are now working to develop “authorized” systems of format-shifting, offering access to pre-ripped digital copies of a movie with the DVD, perhaps in hopes of heading off further regulation. But don’t count on consumers paying for a right they think they already have.
3) Content Filtering
The last few months of 2007 saw the opening skirmishes in what could be a pitched battle in 2008 over the filtering of copyrighted content from Internet networks and platforms.
The biggest skirmish last year involved YouTube, which is facing a $1 billion copyright infringement suit from Viacom over its alleged failure to filter copyrighted video clips from the site, as well as a proposed class-action complaint spearheaded by the English Premiere League.
In October, YouTube unveiled its own, “voluntary” plan to filter content using digital fingerprinting technology, which was met with guarded optimism by the content industry. Still, several studios, along with Microsoft, Veoh Networks and a few other tech allies, issued their own “statement of principles” on filtering a few days later, which differed in one critical respect from YouTube’s plan. YouTube wants to examine clips for infringing content after they’re already posted to the site and then pull them down if it gets a fingerprint “match.” The studios want to filter out infringing content before it gets on the site.
The difference is likely to become one of the major skirmish lines in the battle over filtering.
Meanwhile, the studios have had better luck with major Internet service providers, particularly telcos such as AT&T and Verizon, which are keen to gain access to premium content for their new video services.
AT&T announced last summer that it would cooperate with the studios in investigating ways to keep unauthorized content from traversing its network, regardless of the application a consumer is using. At least half a dozen other major ISPs have since fallen in line.
The technology used in filtering, however, is likely to come under scrutiny from lawmakers and regulators because it overlaps with the technology at the heart of the ’Net neutrality debate in Washington.
Clearly worried about the potential to become collateral damage in the ’Net neutrality war, the Motion Picture Assn. of America sent a letter to the Federal Communications Commission in the fall urging it not to take any steps to enforce neutrality that could prevent ISPs from implementing filtering technology.
By the end of this year, there won’t be any neutral ground left.
Paul Sweeting is editor of Content Agenda. Get more of Sweeting's analysis here.
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