Hollywood vs. the Internet

Why entertainment companies want to hack your computer.

If you have a fast computer and a fast Internet connection, you make Hollywood nervous. Movie and TV studios are worried not because of what you're doing now, but because of what you might do in the near future: grab digital content with your computer and rebroadcast it online.

Which is why the studios, along with other content providers, have begun a campaign to stop you from ever being able to do such a thing. As music software designer Selene Makarios puts it, this effort represents "little less than an attempt to outlaw general-purpose computers."

Maybe you loved Napster or maybe you hated it, but the right to start a Napster, or to infringe copyright and get away with it, is not what's at issue here. At some date in the near future, perhaps as early as 2010, people may no longer be able to do the kinds of things they routinely do with their digital tools today. They may no longer be able, for example, to move music or video files easily from one of their computers to another, even if the other is a few feet away in the same house. Their music collections, reduced to MP3s, may be movable to a limited extent, unless their hardware doesn't allow it. The digital videos they shot in 1999 may be unplayable on their desktop and laptop computers.

Programmers trying to come up with, say, the next great version of the Linux operating system may find their development efforts put them at risk of civil and criminal penalties. Indeed, their sons and daughters in grade school computer classes may face similar risks if the broadest of the changes now being proposed -- a ban on software, hardware, and any other digital-transmission technology that does not incorporate copyright protection -- becomes law.

Whether this scenario comes to pass depends mainly on the outcome of an emerging struggle between the content industries and the information technology industries. The Content Faction includes copyright holders such as movie and TV studios, record companies, and book publishers. The Tech Faction includes computer makers, software companies, and manufacturers of related devices such as CD burners, MP3 players, and Internet routers. In this war over the future shape of digital technology, it's computer users who may suffer the collateral damage.

Digital television will be the first battleground. Unlike DVD movies, which are encrypted on the disk and decrypted every time they're played, digital broadcast television has to be unencrypted. For one thing, the Federal Communications Commission requires that broadcast television be sent "in the clear." (The rationale is that broadcasters are custodians of a public resource -- the part of the electromagnetic spectrum used for television -- and therefore have to make whatever they pump into that spectrum available to everyone.) Then, too, digital TV has to reach existing digital television sets, which cannot decode encrypted broadcasts.

The lack of encryption, coupled with digital TV's high quality, poses a problem for copyright holders. If a home viewer can find a way to copy the content of a digital broadcast, he or she can reproduce it digitally over the Internet (or elsewhere), and everybody can get that high-quality digital content for free. This possibility worries the movie and TV studios, which repackage old television shows for sale to individuals as DVDs or videotapes and sell cable channels and broadcast stations the right to air reruns. Who is going to buy DVDs or tapes of TV shows or movies they can get for free online through peer-to-peer file sharing? And if everybody is trading high-quality digital copies of Buffy the Vampire Slayer or Law & Order over the Internet, who's going to watch the reruns on, respectively, Fox's F/X network or the Arts & Entertainment channel? What advertisers are going to sponsor those shows when their complete runs are available online to viewers, commercial-free, through some successor to Napster or Gnutella?

The Content Faction has a plan to prevent this situation from developing -- a plan Hollywood's copyright holders hope will work for music and every other kind of content. The first part of the plan involves incorporating a "watermark" into digital TV signals. Invisible to viewers, the watermark would contain information telling home entertainment systems whether to allow copying and, if so, how much. But the watermark won't work without home entertainment equipment that is designed to understand the information and limit copying accordingly. Such a system has not been developed yet, but in theory it could apply to all digital media.

There are some problems with this scheme. If Prince-ton computer scientist Edward Felten is right, a watermark that's invisible to the audience yet easily detected by machines will be relatively easy to remove. To put it simply, if you can't see it, you won't miss it when it's gone. Which is why the components of new home entertainment systems probably would have to be designed not to play unwatermarked content. Otherwise, all you've done is develop an incentive for both inquisitive hackers and copyright "pirates" to find a way to strip out the watermarks. But if the new entertainment systems won't play content without watermarks, they won't work with old digital videos or MP3s.

The implications of a watermark system extend beyond the standard components of today's home entertainment systems: VCRs, CD and DVD players, TV and radio receivers, amplifiers, and speakers. What tech industry pundits call "convergence" means that one other component is increasingly likely to be part of home entertainment setups: the personal computer. Says Emery Simon, special counsel to the Business Software Alliance (an anti-piracy trade group), "That's the multipurpose device that has them terrified, that will result in leaking [copyrighted content] all over the world."

This prospect is what Disney CEO Michael Eisner had in mind when, in a 2000 speech to Congress, he warned of "the perilous irony of the digital age." Eisner's view of the problem is shared by virtually everybody in the movie industry: "Just as computers make it possible to create remarkably pristine images, they also make it possible to make remarkably pristine copies."

Because computers are potentially very efficient copying machines, and because the Internet is potentially a very efficient distribution mechanism, the Content Faction has set out to restructure the digital world. It wants to change not just the Internet but every computer and digital tool, online or off, that might be used to make unauthorized copies. It wants all such technologies to incorporate "digital rights management" (DRM) -- features that prevent copyright infringement.

At stake in this campaign, according to Eisner, is "the future of the American entertainment industry, the future of American consumers, the future of America's balance of international trade." Lobbyists at News Corporation, Vivendi Universal S.A., and pretty much every other company whose chief product is content agree with Eisner, the Content Faction's acknowledged leader, about the magnitude of the issue (although foreign-based companies such as Bertelsmann A.G. are understandably less concerned about the U.S. balance of trade). All of them tend to talk about the problems posed by computers, digital technology, and the Internet in apocalyptic terms.

The companies whose bailiwick is computers, digital technology, and the Internet tend to take a different view. Of course, Tech Faction members, which include Microsoft, IBM, Hewlett-Packard, Cisco Systems, and Adobe, also value copyright. (Adobe, for instance, last year instigated the prosecution of a Russian computer programmer who cracked the company's encryption-based e-book security scheme.) And many of them -- especially those who have been developing their own DRM technologies -- want to see a world in which copyrighted works are reasonably well-protected. Yet if you ask them what they think of the Content Faction's agenda for the digital world, you invariably get something similar to the position expressed by Emery Simon of the Business Software Alliance (BSA), a group that includes the Tech Faction's major players: "We are strongly antipiracy, but we think mandating these protections is an abysmally stupid idea."

The two factions' agreement about the importance of protecting copyrighted works online makes them uncomfortable to be on opposite sides now. The Tech Faction and the Content Faction both supported the Digital Millennium Copyright Act (DMCA) of 1998, and both like it pretty much as it is. The DMCA prohibits the creation, dissemination, and use of tools that circumvent DRM technologies.

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