Both NATPE and ALTV dedicated panels to the discussion of protecting digital content from unauthorized distribution over the Internet, and the consensus was simple: Get serious about Internet rights and digital-rights management today instead of waiting for serious problems to develop.
"I suspect that there will be some relatively catastrophic rip-offs of valuable assets that will make the front page of USA Today
," said On2.com President and CEO Doug McIntyre. "At that point, the board of directors will worry about it. But I don't think anything is going to be done about it until at least one torpedo hurts the ship."
McIntyre took part in the NATPE panel titled "Protecting your property from pirates of the digital revolution." The problem today is that nearly everyone can be a pirate in the age of Napster and other file-sharing programs.
"We don't have a single person in our encryption department who can't rip a CD and encode a movie in two hours," McIntyre said. "The studios, in general, have not come up with a solution even though, technologically, they can solve it. But because they haven't agreed on what that solution should be, that tends to delay the solution's being implemented. And that delay opens up the opportunity to see a fair amount of file-sharing."
On the positive side, though, panelists agreed that, if content owners and local broadcasters address digital-rights-management issues today, those opportunities opening up will be new revenue streams.
That was the message of Rich Lappenbusch, director of strategic planning, Windows Digital Media, Microsoft. On an ALTV panel titled "Don't be Napstered, he pointed out, "There's an opportunity for broadcasters who already have a relationship with their local communities to address those communities in ways they haven't been able to do with current technologies.
"We believe," he added, "that local programming is some of the most popular programming out there, and that can be seen by portals that try to localize their content with ZIP codes."
Alec French, Democratic counsel for the House Judiciary Committee's Subcommittee on Courts and Intellectual Property, said the opportunities can be broadening as well, providing broadcasters a chance to reach a bigger audience than before, "assuming you can work out the contracting issues."
There are some pitfalls. French advised content owners to jump into the market and start providing content online. Otherwise, the technical and legal backflips being done to protect content would be a waste of time.
Video-content rights may be an even bigger issue. Some day, producers that distribute programs to television will be able to distribute that same material over the Web. The question will then be one of deciding between broadcast and Internet rights, or a combination of such rights.
If a sitcom producer or studio decided to offer old episodes through a Web site, though, wouldn't broadcasters object? "I don't know who is going to have the rights, but it's clear that there is going to be consumer demand if for nothing else than time-shifted content," explained Tom Gillis, senior vice president and general manager, media services, iBeam. "If I was a local broadcaster, I'd be working hard to secure those rights because today broadcasters probably have as much leverage they'll ever have."
Noted French, "That's an issue that the copyright owner is going to have to resolve with broadcasters," but he surmised that broadcasters would want both of those rights.
Panelists theorized about why a local broadcaster's Web site may be the best place for content owners to reach viewers. Lappenbusch observed, "They're used to going there on the TV dial, so, in a sense, you already have a market position that others don't have. That may be the first place they'll go on the Internet. And if you can provide that content after signing licensing deals, then you can have first-mover advantage in streaming."
One problem that will surface in that situation would be how content owners will control syndication of product, something Gillis said iBeam is attempting to resolve with a product it introduced at NATPE that would allow suppliers to put content on the iBeam network and then give links to other Web sites licensed to distribute it. "Media companies across the board are realizing that it's too expensive to drive traffic," he said, "and that the Internet requires skills they don't have."
Gillis raised a few broadcasters' eyebrows as he warned, "When there is change, typically, the losers are those in the legacy industry. Change is difficult to embrace, especially when it means threatening existing business. Furthermore, if you're the master of your market, it's difficult to think in a new way."
Although studios may be hesitant to deal with such issues, Massive Media Group CEO Howard Weitzman believes the time to move is now. "Everybody is concerned about getting paid for what goes out there," he said. "To me, it's like moving glaciers: It's very hard to get someone to make decisions. But now is the time, and we have to start looking ahead and creating business models."
Producers Guild of America Executive Director Vince Van Petten is concerned that the video industry is much more vulnerable than the audio industry. "In the motion picture field, the first release is important to almost every economic model."
He says the studios have been brilliant in the past about building business models around a new technology. He believes that they will do the same with the Internet but safety of encryption codes is critical: "If you can't protect the medium you're distributing in, then you can't make economics out of it."
Hoping that legislation will serve as the ultimate protector is misguided, he believes. "Remember, the copyright laws say very specifically that the protection of the owner is a secondary concern to the dissemination of free information. And when you have that sort of open society, you're going to have a difficult time lassoing things in. That's why it's important to evolve the encryption process because [content owners] can't rely on the statute process."
Weitzman added that, if the studios don't get involved in digital-rights management, they'll lose billions of dollars of revenue they could make with reasonable and logical business models. "We're never going to eliminate pirates. We just want them to do their work in the dark. Today they do their work in daylight."
Van Petten also gave out a Web address (www.loc.gov/copyright/onlinesp/list) for content owners who would like to notify an Internet Service Provider that subscribers are engaging in illegal activities. Once the ISP is notified of the activity, it is liable for potential damages. If a company is interested in finding out who may be ripping off content, logos or scripts, they can also turn to such companies as Cobion.com, cyveillance.com, netsearchers.net.