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| DVD burners may be hot gifts | | | | As electronics makers hope for strong sales, Hollywood frets | | | By Anna Wilde Mathews
THE WALL STREET JOURNAL |
| | | Oct. 28 — This holiday season, electronics companies and computer makers hope DVD “burners,” or recorders, will become a hot new product, following the success of compact-disc burners in recent years. Another industry, the movie business, has reason to dread the same prospect. |
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THE RISING POPULARITY of the devices, which enable consumers to make their own digital videodiscs, is raising the anxiety level of the motion-picture industry. The studios are aiming to avoid what has happened in the music industry since CD burners started being snapped up by even the least tech-savvy consumers. Record labels blame the burners for the recent drop in album sales, because the devices allow music fans to easily create their own compact discs using songs copied from CDs or downloaded from the Internet.
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Now, film studios fear that DVD burners could do the same thing for movies, which are increasingly available through renegade Internet peer-to-peer services that allow users to freely trade movies and music. Indeed, a small company called 321 Studios says it soon plans to roll out software that will allow consumers to copy movie DVDs onto blank DVDs.
The movie studios must move to “disallow happening what is so plainly and perilously happening to the music industry,” says Jack Valenti, chief executive of the Motion Picture Association of America.
Until recently, DVD burners appealed only to a narrow, high-tech audience. That is now changing, and it is likely to accelerate with the holiday season. World-wide shipments of DVD burners totaled slightly more than 300,000 in 1999, according to technology research firm International Data Corp. of Framingham, Mass. This year, the firm projects 4.32 million, with the numbers mounting even faster in the coming few years. | | |
The main reason is that as more companies have rolled out products, the price of new DVD recorders and blank DVDs has dropped sharply. Pioneer Corp.’s Pioneer Electronics, which makes the DVD-burning SuperDrive offered with Apple Computer Inc.’s computers, says the speed of its computer-DVD burner has grown, even as the prices for certain versions dropped from around $1,000 in early 2001 to a $299 edition due in November. DVD burners that hook up to televisions and burn copies of TV shows, much like VCRs, have dropped from around $1,600 in 2000 to $700 today, according to IDC.
Makers of DVD burners say they warn consumers that their products aren’t meant for copying movies, and add that DVD burners are primarily purchased by people interested in making or preserving their own high-quality home movies. “Our primary focus is the home video,” says Dean Sanderson, DVD product manager at Hewlett-Packard Co. Moreover, says Robert DeMoulin, marketing manager for branded storage products in Sony Corp.’s information-technology products division, the burners aren’t simple to use for any kind of movie copying. “There’s so much copy protection, and it is so difficult to get around,” that few consumers would ever take the trouble, he says.
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Still, 321 Studios, the DVD-duplication software maker and a unit of closely held Terr LLC of St. Louis, says its new product has significant advance orders, even before it is officially available. The MPAA declines to comment on the software, citing continuing litigation between 321 Studios and movie studios over an earlier product.
DVD movies have always included encryption intended to block copying. Hackers have broken through it, though, and the studios argue that now, partly because of the prospect of DVD burners and other digital devices that hook up to TV sets, they need a new layer of protection. They are pushing a technology called “watermarking,” which embeds protective information in the movie itself. The idea is that the watermark would stick to the movie even if it were in the nondigital, or analog, form in which most of today’s television programming moves. “You’ve got to have watermarking to plug the analog hole,” Mr. Valenti says.
The question of how to do so has become the latest flash point between entertainment and technology companies. In a vote last July by a board of a DVD-industry licensing body, representatives of the computer industry — employees of Microsoft Corp. and Intel Corp. — moved to block an effort to adopt watermarking. The stances by the Microsoft and Intel executives were supposed to represent their industry, not specifically their companies. (MSNBC is a Microsoft-NBC joint venture.)
Both Intel and Microsoft say they want to protect copyrights, but that current watermarking technologies would be ineffective and expensive. “It’s generally viewed that video watermarking is at a state of technology that’s easily circumvented,” says Don Whiteside, director of Intel’s content program office. Andy Moss, director of technical policy for Microsoft’s Windows division, says watermarking “is like using Scotch tape as a secondary bolt behind a dead bolt,” the current DVD encryption. Another industry group is expected to begin discussing how to protect programming that moves between analog and digital form.
Copyright © 2002 Dow Jones & Company, Inc.
All Rights Reserved.
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