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Media Execs Debate Digital Future

13 Feb, 2004 By: Anne Sherber

NEW YORK CITY -- Motion picture and media executives from the technology, creative and financial sides of the entertainment business gathered for two days to speculate on how best to both protect and exploit content in the digital age.

Expanding digital distribution systems are a boon to, and the bane of, content providers, according to executives at the 2004 McGraw Hill Media Summit, held here Feb. 9-10.

Mitch Singer, EVP, digital policy group, Sony Pictures Entertainment, said content providers must beat pirates to the punch with viable business models.

“The industry has a need for new and adaptive, transformative business models before we have 30 percent loss of profits,” he said.

Several executives said there is a need for legislative remedies, but there was no consensus on what that relief might look like. Singer said the industry would have to develop a litigation strategy. “Some might argue that the worst thing the music industry did was to litigate against Napster,” he said.

Discussing the case being heard before the Ninth Circuit Court of Appeals brought by the entertainment industry against peer-to-peer file-sharing network Grokster, Ron Wheeler, SVP, content protection, Fox Entertainment Group, noted that “questioning by the judge appeared to be hostile to the content side.”

Several executives spoke of the need to remind consumers that pirating content is illegal.

“When we're competing with free, we have to persuade people not to take the free copy. We have to marginalize that activity,” Wheeler said. He also noted that increased public relations efforts and public service announcements in theaters will educate the majority of consumers who prefer not to break the law.

Singer noted that the studios are not alone in the fight to protect content. “When we can no longer protect our content against redistribution, Congress will take action to protect intellectual property, which has become our No. 1 export,” Singer said.

But, he warned, there will always be those “with more time than money,” who will look for ways to obtain content for free.

According to John Godwin, chief technology officer of Movielink -- a partnership of five of the major studios that offers movies via broadband downloads -- films available through his company's Web site are encrypted.

“We think we are very secure,” he said.

But, according to Singer, signals downloaded from Movielink or virtually any secure Internet-based program provider must be decrypted to play on most TV sets. Once the encryption has been removed, the files can be redigitized and copied or uploaded to the Internet. Executives agreed that it will be at least 10 years before the installed base of display technologies, TVs and computer monitors is largely digital.

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