Hollywood Studios Seek Control over Delivering Movies to Homes

June 12, 2008
By Amy Schatz and Sarah McBride

Hoping to persuade federal regulators to close a piracy loophole, Hollywood studios are dangling the prospect of allowing consumers to watch newly released movies at home. In exchange, the studios want new rights to block video from being sent over the cables that many consumers currently use to connect their televisions to their cable boxes.

Federal regulators are considering whether to allow the movie industry to choose how newer movies will be delivered to high-definition set-top boxes and televisions. The studios have asked the Federal Communications Commission for permission to block signals from certain sorts of plugs on the back of televisions and video recorders to prevent copies from being made for future viewing.

If Hollywood gets approval to do this, it could accelerate plans by the studios to offer in-home viewing of new movies via cable and satellite providers shortly after the movies' theatrical debut and months before they are released on DVD.

"One of the things we grapple with in the movie industry is giving people who aren't regular moviegoers more choice," said Bob Pisano, president and chief operating officer of the Motion Picture Association of America. "Young parents, older folks, folks who live in rural areas. We want to give those folks...the option to watch (first-run movies) at home" and in high definition.

Not everyone supports the proposal, about which the FCC began soliciting public comment earlier this month. More than 80 people have emailed the agency, most complaining about the industry's request. The FCC isn't expected to make a decision until the fall or later.

Hollywood's petition revives the long-contentious question of how much leeway the government should give the industry to protect movies and videos from being copied and illegally distributed on the Internet, while maintaining consumers' rights to make copies for their personal use.

"Our concern is that this will allow them to choose among digital (connections) for competitive purposes. A TV set or a product without a certain (connection) would be cut off," said Michael Petricone, a senior vice president at the Consumer Electronics Association, a Washington trade group.

The issue has arisen in the wake of FCC rules passed in 2003 designed to make it easier for consumers to buy their own cable boxes that would be compatible with any cable service. Movie companies complain that the rules make it hard for them to prevent their programming from being stolen.

In many houses, TV sets -- even newer digital ones -- are connected to cable boxes with analog cables. The studios want FCC permission to block televisions and digital video recorders from receiving a movie if the signal isn't coming through digital cables and plugs -- which have built-in copy-protection technology -- from start to finish.

Studios say that would allow them to experiment with delivering movies and shows over pay television before they come out on DVD. Opponents say allowing the studios to block some TV or set-top-box functions could confuse consumers, who might not understand why they could watch some programs and movies but not others.

The proposed prohibition would involve only new movies released in high-definition format and would stay in effect only until the movies come out on DVD, the industry says.

Many cable and satellite subscribers already are restricted from recording pay-per-view programs onto their TiVo or DVR set-top boxes.

Comcast Corp., the nation's largest cable company, says it doesn't allow consumers who rent DVR boxes to record pay-per-view or video-on-demand shows. In mid-April, TiVo Inc. changed its policy at the request of the studios so that customers can keep pay-per-view and video-on-demand programs for only 24 hours.

Even if the studios get their way, it isn't likely to do much to curb movie piracy. For movies, the bulk of piracy comes during the first days of a movie's release, with thieves relying on in-theater camcording. The impact could be bigger for TV shows, although thieves typically quickly find their way around copy controls. Many people have figured out how to remove piracy protections from DVDs, for example.

Studios say that keeping control of their release schedules, a process known in Hollywood as "windowing," is key to their business plans. Usually, studios release movies first into theaters, then onto DVD and online movie stores such as Apple Inc.'s iTunes and CinemaNow Inc. They then go onto pay-per-view services and premium cable before ending up on regular free television.

Recently, studios have been tinkering with their windows. They have narrowed the time between when a movie goes into theaters and when it appears on DVD. Warner Bros. is putting most movies onto video-on-demand at the same time they appear on DVDs. Paramount Pictures released the latest movie in its "Jackass" franchise, "Jackass 2.5," onto the Internet before any other distribution channel.

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