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A new, barred window for pay-TV movies

May 7, 2010 |  5:48 pm

Hollywood won another incremental battle Friday in its war on digital piracy, persuading the Federal Communications Commission to approve a new approach to protecting movies on cable and satellite TV systems. The likely result is that some, but not all, pay-TV subscribers will be able to pay a premium to watch a movie at home, in high definition, before it comes out on disc. My colleague Richard Verrier wrote about the order for the Company Town blog, focusing on the complaints voiced by movie theaters and consumer advocates. My take is a bit different. Although it's unnerving to think about the studios turning off certain TV sets and digital video recorders via remote control, the FCC did a credible job limiting the studios' influence over new technology.

The order concerns an anti-piracy technique known as "selectable output control." For a movie made available before its release on disc, a studio will be able to instruct pay-TV operators to turn off the analog connectors on viewers' set-top boxes, transmitting the movie only through encrypted digital outputs. Analog connectors have rudimentary anti-piracy controls at best; encrypted digital outputs, such as HDMI with DTCP, can be programmed to bar or limit copying. 

A 2004 FCC rule had forbidden pay-TV operators from using selectable output control, largely out of concern for the millions of early digital-TV buyers whose sets don't have encrypted inputs. But the commission had also said the prohibition could be waived for a new Hollywood business model. The Motion Picture Assn. of America applied for a waiver almost two years ago for movies made available on pay TV before they came out on disc, only to be fiercely opposed by lobbyists for the consumer-electronics industry, tech companies and consumer groups. These groups argued that the MPAA hadn't demonstrated that analog outputs were a piracy problem. They also argued that too many consumers would be hurt by the use of selectable output control, and that the studios were seeking a dangerous degree of control over technology development.

The FCC accepted the anecdotal evidence the studios offered about piracy, and I'm not troubled by that. A decade ago it took professional-grade equipment to record high-definition programs transmitted through an analog output, but that's not true today. And the ready availability of bootlegged cable-network programs online, in high definition, strongly suggests that the "analog hole" really is a hole. 

As for the harm to consumers, it's hard to see how anyone is hurt when programs are made available in additional ways in a format that only some people can access. That kind of thing happens any time a new technology is introduced -- witness HDTV and Blu-ray discs, for example. And the FCC smartly barred studios from turning off analog outputs for more than 90 days on any given title, to avoid the possibility of consumers who rely on older TVs and conventional DVD players from being cut off completely.

Admittedly, the studios will have the power to impose far tougher viewing limits on early-release movies than on, say, a film aired by Showtime. For example, they could bar consumers from using a digital video recorder to pause a film halfway through and resume watching it the next day. But if the studios make the experience unappealing in their zeal to deter piracy, people can always wait to watch movies when they come out on disc or a cable movie channel, just as they can today.

A more serious threat posed by the MPAA's application was the risk that Hollywood would force pay-TV operators to adopt new anti-piracy controls on their digital outputs, limiting the use of home networks and dictating technology winners and losers. The FCC appeared to have heard the tech industry's complaints, though, ruling that the studios will have to settle for any technology approved by pay-TV operators based on objective criteria.

Conspiracy theorists may see the advent of selectable output control as another step by Hollywood deeper into your living room, giving studios the ability to keep its content off of legal devices used in perfectly legal ways. In that sense, it dovetails with the arrival of Blu-ray (and its erstwhile rival, HD DVD), whose players can be disabled remotely en masse if their security is hacked. But to me, the early-release movies seem like just another format whose success will depend on Hollywood's ability to set the right terms of use. If selectable output control turns off too many consumers, the format will fail, just as it will if the price isn't right.

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division. Follow him on Twitter: @jcahealey