NBC Universal Chairman Bob Wright is one executive at the forefront in the fight to protect intellectual property, particularly digital information. Pirates are stealing more than a quarter-trillion dollars of the U.S. economy annually, with millions of pirated copies of TV shows available worldwide, according to estimates. Wright says the threat to TV is growing and broadcasters are behind the curve. Fresh from a trip to London to meet with other CEOs about stemming global piracy, Wright took the time to talk with B&C's John Eggerton.
What brought about the London piracy meeting?
It was an offshoot of a proposal last year by Jean-Renee Fourtou, then-chairman of the International Chamber of Commerce, for business people to talk about the state of piracy and what they can do to protect themselves. The idea is to exchange information between these various companies and groups and to focus on what is being done on legislation or enforcement or providing attention to the subject.
An appeals court held that the FCC did not have the power to mandate so-called broadcast-flag technology. How crucial is this to protect TV content?
Very important. The broadcast flag, in one form or another, is going to be used in commercial-content protection, irrespective of what the court ruled relating to broadcasting.
The security technology that is being used already is watermarking. That is the core part of the security technology for software, and it's certainly going to affect DVDs and other things that are transmitted digitally.
It is unfortunate that it did not get picked up relative to spectrum usage, but it is going to become part of the security culture. People aren't going to put material into formats that aren't secure.
What about ABC, which seemed secure enough to launch Lost and Desperate Housewives into that digital stream?
Those are all going to be watermarked. Those aren't going to go anywhere. They are basically designed to be used with the iPod or your computer. They have limited transportability, which is one of the advantages that the iPod system has.
I haven't seen the technical system in the video iPod, but that's what made the iPod attractive to the music people.
What broadcasters were trying to do with the broadcast flag was to provide limited transferability to a digital signal—the same thing that's done in iPod and some other commercial digital-distribution methods.
All of those things that broadcasters have been trying to do with the flag are going to be a reality—if not in broadcasting itself, then in other forms of distribution.
Are there limits on what new NBC Universal content can be put out there into those other digital streams?
We try not to put out anything if we believe we are diminishing the value more than we thought we were. It's just too early today for us to tell. We haven't seen enough of the impact of the piracy.
At this stage, most of the broadcasters are a little behind the curve on this digital-piracy issue. But at some point, they are going to find that people are going to put restrictions on the use of their programming if they think the unintended consequences are going to diminish its value a great deal.
Disney is releasing the first year of Lost and Desperate Housewives on DVD as quickly as possible. They are getting right out into the market. Perhaps they believe it is just a great opportunity, or maybe they think the digital loss is potentially significant and they want to get out there while they can with the hard goods.
Do your affiliates get a piece of any of this potential new revenue from new ways of viewing your content?
Not directly. Indirectly, they get the full use of it during the time it's on the television in their “window,” if you will, but [the stations] don't have any right to the usage beyond that unless they specifically negotiate that.
Are peer-to-peer networks, which allow free exchange of TV shows over the Internet, the biggest threat to television?
That is certainly a fact. Peer-to-peer will potentially hurt the syndication rights or DVD rights. Those things are all coming into play.
But you also have legitimate third-party services, which are legitimate digital-rights acquisitions where programming is distributed to a device that could be a TV or something else, whether it is a PlayStation 2 unit, an iPod or a computer. That is a whole work-out area.
As technology offers more alternatives, will over-the-air broadcasting be one of the winners?
It's already a winner. The question is, does it become something other than what it is? But it's the question of whether these other devices challenge it in terms of viewership, and I don't know the answer yet. Certainly, what's out there today is not in itself a significant challenge. But we are going to get a little smarter every day.
The word “disintermediation,” which I always thought was a handful—or a mouthful—back in 1999, means that into your comfortable commercial environment comes a technology or a distribution that truly upsets the balance.
That was the word that came out when AOL and Yahoo were being developed in the '90s, went quiet with the dotcom bust and is now back again.
This is a very exciting time. I hope that the National Association of Broadcasters, the Motion Picture Association of America, the Association for Maximum Service Television, and other broadcasting and film groups will put the necessary resources into working these issues, because it is very, very important.