For most consumer-electronics companies, subtracting a feature from their products means subtracting dollars from their profits, but Replay Networks did just that last year.
The first models of its "personal video recorder"--a set-top box that stores broadcasts on a hard disk in digital clarity--included two digital output ports on the back, which were supposed to let you offload recordings to external storage modules. The company planned to offer these add-ons once the consumer-electronics industry had settled on a copy-protection technology. But that hasn't happened yet, leaving early adopters stuck with "a $40 part on the box that's now unusable," in the words of ReplayTV product manager Jim Plant.
So new Replay boxes ship without the digital ports; if you want to store your Replay recordings for posterity, you'll be doing it on VHS until further notice.
It's not Replay's fault; it's not any one company's fault. It would be more exact to say that it's everybody's fault. For the past several years, the entertainment and consumer-electronics industries have been wrestling--very slowly--over what kind of copy-protection mechanisms to implement in new digital gear.
This isn't a new issue--tape decks and VCRs have been taking business away from music and movie producers for years. (That's why film studios tried to get VCRs outlawed in the early '80s; they lost in the Supreme Court and went on to make billions of dollars in video rentals.)
But analog tape of either the video or audio kind imposes built-in limits on piracy; each copy of a copy gets progressively worse. With digital media, whether CDs or digital video discs, a copy can be a bit-for-bit clone of the original. And now add to that the Internet and its friction-less, boundary-less ability to distribute content around the world.
"The problem with the Internet is that unlike any other distribution system, it's completely open," said Bert Carp, a lawyer with Williams and Jensen in the District who works with the Advanced Television Coypright Coalition, a group of broadcasters and networks. He and others find the implications of broadband connections to be troubling. " 'ER' would run once on NBC [and then] would then be on the Internet in compressed digital form and be available for free all over the world. Since 'ER' is a product that doesn't pay for itself in its first run under current economics, this is very threatening."
To limit the odds of this happening, the parties involved have been straining to reach some sort of agreement on how to police usage. The two current copy-protection contenders are called 5C and XCA. The former (its name is shorthand for the five corporations backing it, Hitachi, Intel, Matsushita, Sony and Toshiba) has the edge, according to most industry observers. It would encrypt a video or audio signal as it travels from one digital device to another, and it would be able to tell the receiving device what sort of permissions are associated with particular content--copy all you want, make only one copy or don't copy it at all.
The second contender, the Thomson and Zenith-backed XCA (shorthand for "extended conditional access"), would rely on "smart cards" to verify who owns what--like the cards that the DirecTV satellite-broadcast system employs to track usage by individual customers. It seems to be slipping further and further behind 5C, but few manufacturers have voted with their circuit boards yet. Sony, for instance, only just introduced its first 5C-enabled digital television sets.
What kind of rules to enforce with this new technology is a wholly different question, the answers to which could upset a lot of consumers. For instance, should a movie distributor label a digital copy of its latest release "don't copy," you might not be able to time-shift the Saturday night flick on HBO with your DVD recorder.
"The American consumer will not stand for some studio telling them when they can record a program," said Dave Arland, Thomson's director of government and public relations. "Hollywood needs to realize that consumers will continue to record things."
But while these debates continue, nobody in the consumer-electronics business seems ready to ship any new kind of digital video recorder, whether DVD-based or otherwise. This "we'll take our ball and go home" mindset is a problem for consumers. (A writer at the E-Town consumer-electronics Web site was less charitable, calling it "self-lacerating paranoia.") It's also a problem for the people engaged in this ongoing tussle, although not perhaps in the way they think.
Consider the case of MP3s, the compressed digital copies of songs you can "rip" off a CD (this format has no built-in copy-protection), then transfer back and forth across the Internet. The music industry's response has been the Secure Digital MusicInitiative--a push to develop a technological framework that would let record labels sell songs online with copy protection intact. But the SDMI specifications have yet to be nailed down, and the SDMI-enabled devices that were supposed to have been on sale by Christmas are nowhere to be found.
Instead, what you see in stores is a growing variety of portable MP3 players, accompanied online by an increasing selection of MP3 music, including entire albums sold by smaller music labels. The market doesn't like to wait; one reason these things sell is that, unlike their SDMI competitors, they exist.
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