[Rumori] Five Tech Giants Unite to Deter File Sharing

[Carrie McLaren]

January 5, 2004

Five Giants in Technology Unite to Deter File Sharing
By JOHN MARKOFF
http://www.nytimes.com/2004/01/05/business/05share.html?th=&pagewanted=print&position=

AN FRANCISCO, Jan. 4 - The technology and entertainment industries 
have long been at odds over the best way to secure intellectual 
property rights as digital technology advances.

Now, five of what industry executives say are the world's most 
powerful computer, cellphone and electronics companies are planning a 
new system for protecting digital music, video and software from 
illicit file sharing that they hope will at least narrow that gap.

A global consortium of technology companies is laying the groundwork 
for a campaign to convince Hollywood and the recording industry that 
it has finally found an acceptable way not just to limit the copying 
of music CD's and movie DVD's, but to protect digital content in the 
fast-growing market for hand-held devices capable of playing music, 
video clips and computer games while wirelessly connected to the 
Internet.

As these groups prepare to converge on Las Vegas this week for the 
annual Consumer Electronics Show - by far the biggest trade show for 
the makers of digital devices and the shapers of what goes into them 
- the fight over what has come to be known as "digital rights 
management'' is expected to move to the back burner, at least briefly.

That way everyone can celebrate the long-awaited recovery for the 
consumer electronics and entertainment businesses that manifested 
itself in their best holiday buying season since the late 1990's. But 
the issue will not go away. The consortium - known as Project Hudson 
and made up of Intel, Nokia, Samsung, Toshiba and Matshushita - plans 
to announce its new approach in early February to precede the Grammy 
music awards and the movie industry's Academy Awards ceremony, 
executives say. Unlike the system used to protect DVD content, an 
Internet-based wireless protection plan could permit users of 
hand-held devices to share movie or music files on a limited basis or 
permit files to be shared for promotional purposes. Users could also 
hear a song before deciding whether to buy it.

For the entertainment industry, the Internet has often been viewed 
primarily as a threat because it makes it possible to transmit copies 
of just about any original work that can be converted to digital code 
to just about anyone in the world. But it is increasingly being 
viewed more positively by some entertainment strategists, who 
recognize that the Internet's nature as an "always on" medium makes 
it possible to refine new "digital leashes" to help ensure that copy 
protection plans are not subverted.

Beyond trying to convince Hollywood and the recording industry that 
new technology can prevent illegal sharing of digital content without 
unduly restricting use, the consortium's approach represents an 
effort to control the standards and garner the rewards from 
developing a successful system. Project Hudson pits the new group 
against other copy protection systems being advanced by Sony and 
Royal Philips Electronics, Apple Computer, RealNetworks and others. 
But the most important target is probably Microsoft.

"They would say they are anti-Microsoft forces," a recording industry 
executive close to the companies said. "The alternative is to sign up 
with Redmond."

Microsoft, based in Redmond, Wash., is promoting its own plan, known 
as the Windows Media Rights Manager. But it has been held back, in 
part, by a legal challenge over infringing on software patents 
belonging to a smaller American company, Intertrust, which was 
acquired in late 2002 by Sony and Philips.

Fears in Hollywood and the recording industry over Microsoft's 
potential control had also stalled the software maker's thrust into 
the world of digital media. But those fears have lessened lately, in 
part because of the emergence of competing technologies from Apple, 
RealNetworks, Roxio and others. Digital content providers are 
increasingly finding ways to use some of Microsoft's technology 
without giving up control of their content.

"There had been a general fear that Microsoft would own the entire 
security stack," said William Randolph Hearst III, a partner at 
Kleiner Perkins Caufield & Byers, the prominent Silicon Valley 
venture capital firm in Menlo Park, Calif. But companies are starting 
to tell Microsoft that they are willing to use only part of its 
software protection technologies, he said.

Another new consortium of companies is engaged in an effort to create 
a set of standards that will make it possible to universally 
distribute digital content across different platforms and 
technologies. That group, known as the Content Reference Forum and 
backed by Microsoft, Nippon Telegraph and Telephone, Universal Music 
Group, VeriSign and others, announced its effort last month.

The group cites an example of a personal computer user who wishes to 
share a digital video file with a friend. Instead of sending the file 
directly, the file owner would first send a "content reference," a 
digital pointer that permits the file to be downloaded tailored to 
the receiver's own country as well as the specific computer or other 
playback device. If the file needed to be purchased, the system would 
perform the commercial transaction before sending the file.

The interest in new copy protection approaches has also been spurred 
by Apple's successful iTunes music store, which has shown that 
consumers are willing to put up with digital copy protection plans 
that do not seriously interfere with their ability to enjoy 
entertainment products easily when and wherever they want and, within 
limits, share what they buy.

"If you put up the right kind of speed bump people will generally 
honor it," said Mike Godwin, a lawyer who represents Public 
Knowledge, a group in Washington that advocates giving consumers 
greater weight in the struggle with business interests over 
intellectual property rights.

Adding to the interest in developing new copy protection approaches 
was Sony's announcement last May that it expects to introduce a new 
wireless hand-held device in time for the 2004 holiday buying season.

Sony, with its Walkman line, was once the leading force in the field 
of portable electronics, but it has lost a lot of ground by not 
keeping up with innovations from others, particularly Apple's 
increasingly popular iPod digital music player.

To help itself get back in the game, Sony, which controls its own 
digital content and technology standards, is also expected to 
introduce a smaller audio CD standard.

Other consumer electronics companies consider the potential 
popularity of the format a threat, said Richard Doherty, an industry 
consultant who is president of Envisioneering of Seaford, N.Y.

After years of separate development of various hand-held digital 
devices, industry executives expect music and video players, 
cellphones, personal digital assistants and hand-held video game 
players to increasingly converge on common portable platforms. 
Moreover, such devices will have data networking capabilities that 
rival personal computers connected to the Internet via high-speed 
cable modems and DSL phone lines.

Sony has a great deal riding on its new hand-held player. Ken 
Kutaragi, the Sony executive who created the company's highly 
successful PlayStation business, has referred to it as a "Walkman for 
the 21st century.''

He said the Japanese electronics company was going to great lengths 
to create strong data protection plans for what it is now calling the 
PSP after facing extensive software piracy of videogame titles 
designed for its first generation PlayStation.

Balancing the proliferation of competing digital information 
protection plans is a growing realization that the industry needs 
common standards.

That failure is hampering the growth of digital technologies, said 
Leonardo Chiariglione, an Italian electrical engineer who founded the 
group that developed the original MP3 digital audio compression 
standard widely used to play music on computers and share it across 
networks.

"Content should be as transparent as it is today with MP3," Mr. 
Chiariglione said. "It should be movable anywhere and still be 
protected. If we stay with digital islands people have a legitimate 
excuse to piracy.''


-- 
Carrie McLaren
Editor, Stay Free!
www.stayfreemagazine.org
www.illegal-art.org
718.398.9324