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Consumers are ready for home networks with movies, music and more. But is Hollywood?

January 12, 2007

THIS WEEK'S International Consumer Electronics Show in Las Vegas highlighted not only the latest in home-entertainment gadgetry but also some emerging fault lines in Hollywood's approach to the digital era.

In addition to the customary array of ever-larger flat screens and ever-smaller portable devices, manufacturers showed off a growing number of things that could be linked together in a home network. But even if consumers are ready for them, it's not clear Hollywood is.

It wasn't just computers and printers that were sharing files. There were TV sets, stereos and other entertainment-oriented gear ready to connect, and networks with enough bandwidth to handle high-definition video. And in a relatively new twist, numerous companies were showing off digital storage vaults that could gather all the pictures, music and videos scattered on a family's computers, cameras and MP3 players.

The risk for the entertainment industry is that this dream of a "connected home" doesn't work with the downloadable movies and songs being sold by the major studios and record labels. One problem is that the electronic locks they use on downloadable movies and songs won't let a working copy be stored in a digital vault. Thus, consumers will be left to fill their storage devices with pictures, songs and films that they didn't buy from online retailers. Alternatively, they'll buy devices -- like Sling Media's new SlingCatcher -- that help them play their purchased audio and video files through their home networks despite the restrictions imposed by the locks.

It's not that studios don't like home networks. It's just that networking technology is far ahead of anti-piracy technology. And that may not be the studios' fault. At least part of the problem is that most online retailers have relied on the electronic locks supplied by Microsoft, which tie movies and songs to a PC or similarly high-powered machine instead of allowing the movies and music to play on all the devices in someone's personal network. Apple has taken a more network-oriented approach, but its approach is not compatible with most non-Apple products.

It's not too late for the entertainment industry to close the gap between what consumers will want to do and what Hollywood will want to let them do. The number of homes with networks able to share video is relatively small, although the percentage is rising as high-speed Internet connections proliferate. The studios need to focus less on the technology that prevents people from using their products and more on the technology that enables people to enjoy them more easily.

That means letting people use the movies and songs they buy on as many devices in their home as possible. Otherwise, they'll be looking for movies and music that don't play by Hollywood's rules.

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