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Negotiating New-Media Pitfalls

Denver— New technologies are opening the door for traditional TV programming to find its way onto mobile phones and other consumer devices, but a host of troublesome issues ranging from rights to revenue erosion are slipping in alongside.

A collection of cable and TV programming notables hashed out those issues here last week, at the IP Summit on Intellectual Property and Digital Media hosted by the Cable Center. While there weren’t many clear-cut answers offered, an overall theme held that fears of losing revenue and control won’t stop content from finding its way down new distribution avenues.

REWARDS AND RISK

For programming outlets like NBC Universal, the new-media developments carry equal parts opportunity and danger. In a panel session, NBC Universal vice president of new media Ron Lamprecht noted that his company is exploring the distribution of content to computers and wireless devices, but it is also struggling to protect a $15 billion business among its content brands.

For example, he cited Sci Fi Channel’s hit series Battlestar Galactica, which NBCU is now offering for paid download to users of Apple Computer Inc.’s iPod devices via the iTunes service. But thanks to rogue Internet download sites, Battlestar also has the dubious honor of being one of the most pirated TV shows in NBCU’s programming stable.

Instead of focusing just on ways to prevent this distribution, that phenomenon could be an indicator that the viewers want a service that NBCU isn’t offering, and “maybe we need to put Battlestar in more places,” Lamprecht said.

'ANALOG HOLE’

Elsewhere on the digital-piracy front, programmers and cable operators are grappling with a major vulnerability dubbed the “analog hole.” This occurs because cable operators still supply TV content in analog form to non-digital video customers. Those analog signals can’t be copy protected, so users can record it, convert it to a digital form with readily available software and distribute it.

To combat the problem, for the last two years Home Box Office has used a digital flagging standard called Copy Generation Management System for Analog (CGMS-A). Inserted with the analog video, CGMS-A tells equipment downstream that the content is copy-protected and sets limits as to how the content can be recorded or transferred. The flag can be set so the content can be recorded once, transferred to another device once, or not copied at all.

Problem is, that scheme only works if the consumer device — be it a TV, set-top box or computer — has the built-in software to recognize the flags.

While some electronics and computer providers (including Microsoft Corp.) do so, “they are competing with manufacturers that don’t do that,” said HBO executive vice president, technology operations and chief technology officer Bob Zitter.

With no industry remedy, analog copy protection is an area in which Zitter advocates government intervention. In fact, a bill dubbed The Digital Transition Content Security Act, now moving through the U.S. House of Representatives, would require device makers to conform to the CGMS-A standard.

“We believe that is something that needs to be dealt with, and we believe that will have to happen through legislation,” Zitter said.

DRM AS BARRIER

During another session, panelists examined whether digital rights-management technology was misguided or broken, unable to offer protection for TV content as it moves onto wireless and Internet distribution systems.

DRM schemes have been a barrier to innovation because their creators have been overly ambitious, coming up with complex systems that are unwieldy to use, according to Edward Felten, professor of computer science and public affairs at Princeton University.

“When you have a technology that is fundamentally designed to prevent devices from talking to each other, it’s no surprise that it is a limit to innovation,” he said.

Peter Fannon, vice president of technology policy and regulatory affairs for Matsushita Electronic Corp. of America, echoed that idea. He pointed out that the DRM system contributes to the price tag for consumer devices, and the more complex, the higher the cost to consumers.

“We do not need to build Fort Knox into every device,” he said. Digital rights-management systems are often more complex than they have to be, and “I think that’s part of the tentativeness of the manufacturers in getting into DRM.”

NO MANDATES

The idea of one universal, government-mandated DRM standard didn’t find much support. The politics of the marketplace are better suited to coming up with accepted protection systems for content, Fannon argued. “If there was more focus on collaboration and cooperation, the marketplace has a reasonable incentive for content providers and users to work together,” he said.

Vince Groff, director of video product development at Cox Communications Inc., noted Cox’s customers have not cancelled their video subscriptions because they can watch Desperate Housewives on their iPods, he said.

Younger audiences are enthusiastically adopting these mobile devices, but “they are not paying the bills,” he said.