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Monday, September 8, 2008

RealNetworks to Introduce a DVD Copier

By BRAD STONE

People have been avidly feeding music CDs into their computers for years, ripping digital copies of albums and transferring the files to their other computers and mobile devices.

This has not happened nearly as much with DVDs, for both practical and legal reasons. But that may soon change.

On Monday, RealNetworks, the digital media company in Seattle, will introduce RealDVD, a $30 software program for Windows computers that allows users to easily make a digital copy of an entire DVD — down to the extras and artwork from the box.

Robert Glaser, chief executive of RealNetworks, called it “a compelling and very responsible product that gives consumers a way to do something they have always wanted to do,” like make backup copies of favorite discs and take movies with them on their laptops when they travel.

But RealDVD is also sure to be a controversial product — one that will easily earn its maker the ire of Hollywood’s powerful and litigious movie studios.

Since the DVD format was introduced more than a decade ago, Hollywood has unremittingly sought to protect the DVD from the fate that befell the CD, which has no mechanism to prevent copying.

Pirate music services like Napster sparked the digital music revolution. The ability of regular consumers to make digital copies of CDs easily with their computers fed such services and, in Hollywood’s view, led to the weakening of the major music labels.

A vibrant movie rental market makes the threat of widespread DVD copying even more ominous. If people who lack technical knowledge can easily copy DVDs, Hollywood worries, they will stop buying DVDs and instead simply visit the local Blockbuster to “rent, rip and return.”

To stave off this outcome and protect what is now $16 billion in annual DVD sales, studios and consumer electronics companies have enveloped their discs with encryption that is intended to prevent copying.

They also regularly go to court to fight any company that offers software to break the encryption. More than five years ago, several studios and the Motion Picture Association of America sued 321 Studios, a company in St. Louis, that had sold the popular program DVD X Copy. A judge ruled that the software violated the Digital Millennium Copyright Act, and the company closed in 2004.

Since then, anyone who wanted to make a backup copy of his “Star Wars” or “Lost” DVDs had to turn to free but illegal programs on the Web, with names like Handbrake and Mac the Ripper. These programs are hard to legally stop because they have many creators who are typically overseas and have few resources. They are used mostly by sophisticated Internet aficionados who may just as easily download movies directly from illicit file-sharing services.

Now RealNetworks believes that the industry’s legal stranglehold on DVD copying has begun to weaken. In March 2007, the DVD Copy Control Association, an alliance that licenses the encryption for DVDs, lost a lawsuit against Kaleidescape, a Silicon Valley start-up company that sells a $10,000 computer server that makes and stores digital copies of up to 500 films.

The DVD association has appealed the ruling. But Mr. Glaser thinks the decision has created the framework for a legal DVD copying product with built-in restrictions to prevent piracy.

The software, which will go on sale on Real.com and Amazon.com this month, will allow buyers to make one copy of a DVD, playable only on the computer where it was made. The user can transfer that copy to up to five other Windows computers, but only by buying additional copies of the software for $20 each. The software does not work on high-definition Blu-ray discs, which the movie industry has even more aggressively sought to protect from illicit copying.

“If you look at the functionality of the product, we have put in significant barriers so people don’t just take this and put it on peer-to-peer networks,” Mr. Glaser said. “I think we’ve been really respectful of the legitimate interests of rights holders.”

Bill Rosenblatt, editor of the online newsletter DRM Watch, said the future for RealDVD probably depends on the outcome of the Kaleidescape appeal. If a higher court reverses the decision and hands the movie industry a decisive victory over DVD copying technology, “Real will have to withdraw the product and could get sued,” he said.

RealNetworks began informing the studios of its new product late last week. Representatives for several major studios and the copy association declined to comment, saying they wanted to examine the software first.

However, one technology executive at a major studio, who did not want to be named because the matter is legally delicate, predicted there would be staunch resistance to RealDVD. He also questioned Real’s motives.

“When so much of their success depends on having reasonable relationships with content owners, you wonder why they would be quite so bold in doing this, unless they are desperate,” this executive said.

“Desperate” may not be quite the right word, but the company could use a hit product. RealNetworks was among the first in the mid-’90s to introduce software to play digital audio and video on the Web.

More recently, despite the steady growth of its Rhapsody subscription music service and RealArcade gaming service, RealNetworks has been eclipsed by other digital media companies, including Apple and Amazon. Its stock is down sharply over the last two years.

Mr. Glaser, however, thinks RealDVD will have widespread appeal, and he is already pondering its future. He says the software could eventually work across home networks and play movies on televisions, instead of just computer screens.

He also plans to solicit the cooperation of movie studios, which he says could sell digital copies of movies and TV shows to people who rip their own DVDs. So, for example, someone who copied the first season of “Mad Men” would be a prime candidate to buy and download Season 2.

“Once you give consumers a legitimate path, you can do all kinds of other interesting things with them,” he said.

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