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Hollywood, Tech Piracy Efforts May Curtail Choices

Entertainment: Meeting the demand for secure content could limit consumers' use of TV shows, movies and songs.


REDMOND, Wash. — As the entertainment and technology industries publicly are locking horns over electronic piracy, they privately are moving closer to a consensus that consumer advocates fear may limit how people watch or listen to movies and music.

The fight focuses on how entertainment will be distributed in the future, particularly the digital transmission of movies and music to homes by broadcast and the Internet.

Studios and record labels want their products protected from the widespread thievery popularized by services such as Napster. Spurred by the threat of federal legislation, technology companies such as Microsoft Corp. and RealNetworks Inc. are scrambling to prove that their systems do more than the other fellow's to keep content under lock and key.

Microsoft has been particularly aggressive, launching a number of efforts to satisfy entertainment moguls' hunger for security in a digital age when content can be perfectly reproduced millions of times. Other companies are making similar efforts, chasing what they see as lucrative business at a time of flagging technology sales.

But Microsoft, which faces its own considerable battle against pirates, would give copyright owners unprecedented power.

"I was looking at their new innovation, and I was very much impressed," Motion Picture Assn. of America President Jack Valenti said after a trip to Microsoft's Redmond, Wash., headquarters. "Some of the plans they had certainly could include my [member] companies."

Those plans center on three efforts, including Microsoft's latest Media Player, to be unveiled Wednesday in Los Angeles by company founder Bill Gates.

* Media Player 9, like competing offerings from RealNetworks and Apple Computer Inc., is designed to make Internet video look more like a TV broadcast, with less delay and crisper quality.

Behind the scenes, it also will improve content owners' ability to manage the rules they set for users, so that a song or clip can be downloaded but not copied, or can be made to disappear from a computer after a day or a week.

"Giving the content owners flexibility in how they assign rights and bring content to consumers has been a huge focus of ours," said Will Poole, Microsoft corporate vice president for new media.

Movielink, the fledgling multi-studio effort to offer films online, is expected to use the Windows Media format, movie executives said, though it may also use software from RealNetworks.

Pressplay, one of the two major record label-owned music services, already uses Windows Media.

* Today, Hewlett-Packard Co. will announce a new type of home computer based on Microsoft's Windows XP operating system and aimed at the living room, a top unclaimed prize for Microsoft.

At a cost of $1,500 to $2,000, the XP Media Center Edition allows viewers to surf the Web and watch cable or broadcast TV programming and record that material on a high-capacity hard drive or DVD--but not copy it, play it back on the bedroom television or e-mail it.

"In the abstract, that certainly works for us," said Andy Setos, president of engineering for Fox Group.

"From a consumer perspective, it is obviously not optimal" to prevent TV shows from being played back on other DVD players or computers, said Mark Bony, product manager for HP's Pavilion line of home PCs. But "this is a feature that Microsoft felt very strongly about."

* Microsoft's Palladium design initiative, begun with both content protection and security in mind, would bar computer users from doing some things in a walled-off part of their machines.

The multiyear Palladium plan knits hardware and software to create a virtual vault that would be protected from hackers. But a key attraction for Microsoft is that it would encourage consumer deals with trusted third parties--a bank, for example, or Blockbuster, which could lend a video over the Internet for a day on condition that it could check in the vault and delete unapproved content.

In process for years, Palladium gathered momentum recently in response to film industry feedback.

"Microsoft has finally admitted that what it really needs to do is Palladium," Fox's Setos said. The implication, he said, is that "everything before Palladium is really not as secure as they'd like, and we agree with them."

A number of privacy and consumer activists are concerned. More ominous for some are things Microsoft hasn't announced, such as changes in its small-type licensing agreements with those who downloaded a security patch for Media Player in the last month.

Those agreements give Microsoft the authority to disable bootlegged content or software Microsoft doesn't like--such as a peer-to-peer file-swapping application or copying mechanism--on consumers' machines.

That provision has made entertainment executives very happy, a Microsoft strategist said.

Virtually all of the proposals could be used to limit what consumers do, potentially eroding what generally has been considered the fair use of songs, television shows and movies.

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