e.Digital Corporation (fka EDIG)

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Move Over MP3 – DiVX is Here
by Marshal M. Rosenthal
Contributing Writer
(posted 06/07/2000) >

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Hollywood hates thieves—more to the point, film thieves. Consider the VCR. Studio executives battled long and hard over whom owns the rights to movies and television shows that consumers ultimately could record and premiere for profit. But just when you thought it was safe to go swimming again, a new technology comes along that’s even more worrisome than the previous predator.

Consider DiVX.

Now popular with hackers and those looking to pirate films, DiVX (unrelated to the defunct DVD rental system of the same name) is a relatively new software technology developed overseas that allows users to compress the contents of a DVD into a file small enough to be transmitted over the Internet, and without compromising quality.

Coming on the heels of DeCSS, a program that strips a DVD of its copyright protection and so makes it vulnerable to copying, DiVX opens the field for not merely copying a film for personal use but also for transmitting it over the Internet to “casual” viewers. Thus a user making an illegal copy can now share it with tens of thousands of other online users.

The Hollywood community has been actively working to discourage such piracy—both from those creating the technology to those using it. Film studios, in particular, have responded with strong measures against those using DeCSS. They’ve initiated lawsuits against those Web sites found to be harboring the program for downloading; individuals found to be passing the software via the Internet have been cited and sued; and the overseas-based creators of the software were located, reported to the authorities, and brought to court.

It can be expected that Hollywood will continue such efforts. That this new technology could adversely affect the “bottom lines” for those motion picture studios producing DVDs would seem a reasonable assumption. According to DFC Intelligence’s Digital Broadcast and Programming/Webcast Track subscription-based research service, broadband usage continues to rise, with projections of 240 million streams served by 2002. Broadband video usage on the PC screen also is expected to grow at close to double-digit rates.

To learn more about what Hollywood can do to stop the flow of “content-stealing” software, Digitrends interviewed a number of industry experts who all have strong opinions about the future of DiVX or some yet to be developed software that enables casual online users to easily and quickly download–or steal—copyright material. These interviews will run over the next few days. Today: Hear from Michael Collette, senior vice president of marketing for ICTV.

Protection Through Television

ICTV’s technology enables full Internet and broadband content to be delivered to television through any digital set-top box. Collette sees the issue of piracy best addressed by denying users “access” to the illegal data by having content delivered to the television, not the PC.

Digitrends: So the PC is really the problem here?

Collette: Yes. Right now, those viewing content through their PCs are receiving data—information they can acquire, store on their computers and manipulate. This enables them to receive a pirated file. That’s not the case when the user is watching a broadcasted signal, mixed with the Internet, because the user has no control over what he or she is seeing.

Digitrends: How does this work?

Collette: Unlike on the PC, the consumer does not “own” the data—which is being formatted and controlled from the “cable head” (the cable provider’s main server) before being transmitted. There’s no data to manipulate—everything has been converted already to a secure MPEG2 format that can’t be touched. The consumer can’t “steal” the file because the browser (the interface used on the TV) is owned and managed by the cable operator, unlike that being used on the PC. This degree of protection is similar to that of video-on-demand (VOD).

Digitrends: So protection for content being provided for television use is higher than what can be done on a PC-based system?

Collette: Unfortunately, yes. There’s no real way to stop a PC-based user from accessing copyrighted material that’s on the Internet. TV-based broadband, on the other hand, safeguards content because the servers and browser are at the “cable-head.”

Digitrends: If DiVX was no longer available, would that take care of the problem?

Collette: No, because even better compression schemes than DiVX are in the works. Besides, that’s not the real problem. Few people really watch movies on their computers so while someone getting a pirated copy of the Matrix from the Internet isn’t going to rent or buy it, he’s not going to be mass-producing it for his friends, either. But if that copy makes the leap from the PC to the television side of the room, if the pirated copy can be taken off the PC and played on a DVD player—then we have a problem because friends would then want copies.

Digitrends: If that happens, what could film studios do about it?

Collette: Move their content to the TV. Convergence space is a reasonable first step. As an example, a studio like Warner Bros. could shift its online strategy from bringing its content to broadband on the PC and instead aggressively promoting it on the TV front. Once this becomes acceptable to consumers, it changes their consumption patterns, since it’s easier to view on the television set than having to deal with all the problems of the PC. Since most content owners know that it’s nearly impossible to prevent dissemination of material over the Internet as things now stand, this kind of viewer shift could provide real relief. And with convergence continuing its march towards bringing all of the interactivity and strength of the Internet into the television, it would seem that the problem will solve itself in time.
==================Final Thoughts on DiVX
by Marshal M. Rosenthal
Contributing Writer
(posted 06/09/2000) >

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Over the last few days, entertainment industry execs have been discussing DiVX, the new software technology developed overseas that allows users to compress the contents of a DVD into a file small enough to be transmitted over the Internet, and without compromising quality. Michael Collette, senior vice president of marketing for ICTV said that he sees the issue of piracy best addressed by denying users “access” to the illegal data by having content delivered to the television, not the PC (see Move Over MP3 – DiVX is Here).

Eric Olson, senior editor for Express.com, a Web site selling DVDs, games and music, discussed why he doesn’t believe DiVX will wreak the same kind of havoc on the flourishing DVD market as MP3 did to CDs (where illegally copied MP3 files of copyrighted songs ended up on thousands of Web sites for users to easily download). (See DiVX -- Not a Threat to DVD Market? http://www.digitrends.net/digitrends/dtonline/features/contrib/m_rosenthal/dvd.shtml.)

Today, read why Cat Fowler, vice president of marketing for Escient Technologies Convergence Group, doesn’t see pirated copies online as being a serious threat for some time, and why Mark Ely, director of product marketing for Sonic Solutions, somewhat disagrees.

Time and Price Favor Those Selling Content
Escient Technology, LLC (Carmel, Indiana) is an incubator for high-tech companies, its current subsidiaries creating cutting-edge technologies, products, and services.

Digitrends: What factors are keeping consumers from downloading content for free online?

Fowler: First, DVDs are cheap to buy ($15 to $20 on the average), and second, there just aren’t too many people willing to take the time to download a (reduced quality) version of a movie.

Digitrends: But with bandwidth increasing, won’t more consumers be willing to wait to download a film for free?
Fowler: The kind of bandwidth needed for high quality video streaming is quite a ways off. For example, it takes roughly 20 hours using a 500kbit continuous broadband connection to download and store a full DVD (4.7 Gbytes). And even if using one of the better MPEG encoders (that can take the output of a DVD and recompress it as a smaller MPEG stream that approaches the quality of a VHS tape), you’re still talking about several hours for downloading.

But I keep coming back to this: Are floods of people actually going to do this when the media is reasonably priced? I’m not convinced we’re talking about millions of people who would go through all of the gyrations required to get pirated movies when all it costs is just $15 to go get a DVD that simply plays when inserted.

Digitrends: So you believe that consumers will continue to purchase content, rather that “steal” it because it’s more trouble to deal with a pirated copy?
Fowler: Absolutely. When all is said and done, there will continue to be plenty of customers willing to buy the discs they want to play in order to get quality and ease of use. Commercial pirating (where a DVD is illegally copied and then sold to consumers without any compensation to the copyright holders) is probably the issue the industry should worry about—not the hacker looking to get his “kicks” by getting movies for free.

Read why Mark Ely, director of product marketing for Sonic Solutions—a manufacture of software solutions for DVD publishing and interactive, streaming video on the Internet—disagrees with Fowler.


http://www.digitrends.net/marketing/13639_8796.html