Film Studios, Consumers Battle over RealDVD

Published March 1, 2009

The six largest movie studios in Hollywood are suing to prevent the distribution of software that allows consumers to legally save movies to their computers.

Supporters of the RealDVD technology say concerns about piracy should take a back seat to the freedom of consumers to view and save digital movies the way they listen to and store digital music.

RealDVD software, produced by RealNetworks, allows users to save DVDs onto their hard drive. RealDVD does not crack or destroy Digital Rights Management copyright protections encrypted onto DVDs, so users cannot make copies to other DVDs.

“So where’s the problem, Hollywood?” asked Cord Blomquist, senior communications director at the Competitive Enterprise Institute in Washington, DC. “If I want to load my laptop with DVDs and watch them on a plane, that’s perfectly fair use. Plus, this product is actually pro-DRM, which should make studio execs happy.”

Studios Worried

But movie studio executives are not happy. A lawsuit filed late last year by Disney, Fox, Sony, Universal, Viacom, and Warner Bros. won a temporary restraining order against the release of RealDVD to the public. The injunction was still in effect at press time.

The studios claim the technology violates the Digital Millennium Copyright Act (DMCA) of 1988. The movie industry, experts say, is afraid computer users will get in the habit of storing movies digitally and then sharing them on torrent sites.

Torrent sites—online clearinghouses for peer-to-peer transfer of digital movies, music, books, and software—are notorious for the trafficking of pirated goods. One of the more popular torrent sites is called “The Pirate Bay.”

“[RealDVD] could lead consumers to believe that copying movies is always legal,” said Jim Williams, chief technology officer at the Motion Picture Association of America.

Piracy or Innovation?

Fred von Lohmann, senior intellectual property attorney at the Electronic Freedom Foundation, disagrees with Williams and supports the introduction of RealDVD.

“RealDVD has no nexus with piracy,” von Lohmann said. “Any Hollywood arguments to the contrary are pure fantasy. DVD rippers are widely and freely available. RealDVD, in contrast, is designed to create copies that are locked to authorized personal computers.

“It’s laughable to suggest any ‘piracy’ will be unleashed by RealDVD in a market that’s had free access to unrestricted rippers like DVD Shrink, Mac The Ripper, and Handbrake for years,” von Lohmann added.

Von Lohmann believes Hollywood is punishing RealNetworks in order to send a message to those who implement innovations without the studios’ permission.

“Real[Network]’s defection represents a threat to several schemes that Hollywood has been working on for throttling DVD innovation over the next several years,” von Lohmann said.

Flaws in DMCA Laws

Timothy Lee, an adjunct scholar at the Cato Institute, sees DMCA as the crux of the problem. He thinks Hollywood “probably has a pretty good case in terms of its right to protect [copyrighted] material.

“But from a policy, philosophic, and economic perspective this case is a perfect example of what’s wrong with DMCA,” Lee added. “If we want to prevent piracy, RealDVD is the kind of product we want. But DMCA as it’s currently written has a lot of problems. … It’s not a good idea to limit innovation.”

Von Lohmann likewise sees DMCA as counterproductive.

“It’s actually encouraged piracy by giving otherwise law-abiding consumers a reason to prefer ‘Darknet’ channels to authorized ones,” von Lohmann said. “At the same time, the DMCA has impeded competition, chilled free speech, and blocked fair use.”

“Not only are anti-DRM-breaking laws, such as DMCA, attacks on free speech as it applies to software writing,” added Blomquist, ” but DRM itself is just a bad idea.”

Innovation Benefits Cited

Von Lohmann believes policymakers should enact and fortify laws that leave room for “disruptive” innovation.

“Disruptive innovation and free markets are the chief engine for economic growth, both for the economy as a whole and the copyright industries in particular,” von Lohmann said. “After all, it was the VCR, an innovation that was greeted with lawsuits by Hollywood, that sparked Hollywood’s most profitable years.”

Brien Farley ([email protected]) writes from Genesee, Wisconsin.