AACS, DRM and Hollywood
The latest blow-up over efforts by AACS LA, the group that supplies anti-copying technology for Hollywood's high-definition movie discs, to suppress information about how to circumvent that technology reflects how much the debate over rights management has become a religious war. The sides are highly polarized, with Hollywood insisting that DRM is an essential element of its home video releases and movie hackers arguing that consumers are being treated like criminals. But as the weaknesses in AACS mount -- I'm particularly intrigued by the conversion of the XBox HD DVD drive into a machine that converts high-def movie discs into unlocked movie files -- it makes me wonder what happens to the rental market.
One of the reasons that studios put anti-copying technology onto home video releases is that it makes it harder for people to copy the movies they rent. Without that deterrence, there would be no reason (other than compunction) for movie buffs to buy a DVD -- they'd just rent (or borrow) and copy them. The studios' profit margins are much higher on the DVDs they sell than on the ones that Blockbuster or Netflix rents, but given the "first sale doctrine," the only way to stop a disc from being rented out is to not produce it in the first place. In other words, simply selling a DVD version of a movie guarantees that it will be available for rental.
On the other hand, even a broken DRM can be enough to, as studio execs like to say, "keep honest people honest." That's largely been the case with conventional DVDs, which continue to rack up more than $16 billion in North American sales despite the fact that their Content Scramble System was hacked long ago. Of course, Hollywood fought hard to keep mainstream retailers from carrying programs that could circumvent CSS and make usable copies of their DVDs....
The skirmishing between hackers and studios has just begun, so it's way too early for AACS' troubles to change Hollywood's attitude toward home video. Even if AACS is thoroughly defeated, the Blu-ray format offers additional layers of copy protection that have yet to be implemented. Still, I wonder if the results so far suggest a premature death for the high-def disc formats. Downloadable movies and high-def video on demand can be protected in ways that discs can't. It's worth wondering which of these things will be more common in U.S. living rooms two years from now: HD-capable set-top boxes linked to high-def movie services (say, from their cable or satellite TV provider), or HD DVD and Blu-ray players.
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Of course, DVDs today are readily copyable with software like DVD Shrink and Handbrake, yet Netflix and other video rental businesses continue to thrive. Just goes to show that you don't need DRM to enable rental business models -- you just need prices to be low enough and convenience to be high enough that consumers can't be bothered to make copies.
Posted by: Fred von Lohmann | May 05, 2007 at 03:57 PM
Granted, the statistics speak for themselves -- DVDs have been a tremendously successful product despite the wide availability of software that circumvents the DRM. But the very fact that you have to find circumvention software online -- rather than having the capability to rip DVDs built into your PC or Mac out of the box -- tells people that they're doing something that's against the rules set by Hollywood. As long as the value proposition of a DVD is good, most people are willing to accept those rules.
It's probably true, too, that the ripping restrictions don't raise many hackles today because only the earliest of early adopters wants to copy his/her DVDs onto a home video server. But home entertainment networks will become mainstream at some point, and that's when DRM will really become an issue for most consumers, IMHO.
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Posted by: andy | June 22, 2007 at 02:03 PM
If the first sale doctorine allows a DVD to be rented then wouldn't it allow for a downloaded movie to be rented? If this is the case, VOD just went out the window.
Posted by: Vidi | June 27, 2007 at 04:49 PM
Re: first sale -- Yes, it would be legal to rent out any downloadable movie that you've bought, but good luck doing it. The DRM on those downloads will make it very difficult to get the movie off of your personal computer network. One of the complaints about the combination of DRM and the DMCA's anti-circumvention provisions is that they effectively eliminate first-sale rights.
Posted by: Jon Healey | June 29, 2007 at 03:49 PM