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Home Entertainment Leaders Look for a Hedge Against Digital Piracy

30 Jun, 2003 By: Holly J. Wagner

As studios spend time and money on every front to stave off a free-content meltdown like the one that has drained revenue from the music business over the past five years, many are looking to high-definition programming as the bastion that will fortify the movie industry against the assault of rippers and burners.

“The introduction of recordable [DVD formats] is a call to arms to migrate to high-definition with a single standard,” said consultant Warren Lieberfarb, formerly head of Warner Home Video, at the recent DVD in 50 conference. “Hacking and burning, unfortunately for the music business, is standard practice among people that don't understand copyrights. If we took a lesson from the music business, we would migrate out of standard definition as quickly as we can.”

Devices like Hewlett-Packard's Media Center PC will help drive consumers to their computers for entertainment, but that road may not be smooth. Once consumers are accustomed to using their computers for entertainment, the leap from playing a disc to downloading a movie is indeed short. But downloadable movies today, for the most part, are not as high-quality as DVD images, partly because most homes have budget PCs that can't play the movies back at that quality. But that's changing.

Jon Peddie, principal of multimedia and graphics market research firm Jon Peddie Research, believes there's a need to reclassify PCs so consumers understand what kind of computer they are buying and what the capabilities of that computer are.

The PC industry's drive to get PCs into more homes with “Value PCs” -- those that typically sell for less than $1,000 and use integrated graphics parts to keep the manufacturing cost down -- got computers into more homes, but a PC that's good enough to do a term paper or spreadsheet may not be good enough to play more sophisticated games and movie content.

“With a simple designation that distinguishes between an entry-level corporate PC designed for office productivity or an entry-level entertainment PC designed to play the new games being introduced as well as video, compressed audio and streaming media, salespeople can clearly explain to the consumer what to expect,” Peddie said.

Media player software like Windows Media Player and RealPlayer have already trained consumers to play their favorite music and movies on computers, said Sanford C. Bernstein analyst Tom Wolzien at DVD in 50. “Society as a whole has already moved to a point of a software-based system. We're not really talking about how that software-based system evolves,” he said, adding that improvements in digital compression over the next five to seven years -- as much as “an 85 percent improvement in the bits necessary to make the same-quality picture” -- will push even more consumers to more portable formats.

Recognizing the opportunities and dangers of emerging technologies, retailer Best Buy is preparing for the future on several fronts, SVP Gary Arnold said. “We chose to approach the future with many small bets,” he said, citing the chain's variety of hardware and software, and membership in the Echo music consortium.

Protecting content in the digital age also will require educating youngsters about the basics of copyright law, Lieberfarb said. “It should be as important as the history lessons they get in schools,” he said.

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