Napster Stirs Apprehension in Movie Industry

What thought keeps film and publishing executives awake at night? The thought that what happened to the music industry will happen to them.

"There's a generation out there that thinks this stuff [media] is free," says John Seamster, director of marketing at Conxion Corp., in Santa Clara, California, which manages high-volume downloads such as Microsoft Corp.'s Internet Explorer and Stephen King's online novel, The Plant.

Studios are not casual about losing control of films that can cost US$50 million to $60 million to produce, says Rich Taylor, a Motion Picture Association of America (MPAA) spokesman. If media companies are going to retain control of their products, now is the time to lay the plans. But no one, including Taylor, wants to reveal what those plans are. The consensus is that it's too soon to tell how the digital media distribution market will take shape.

A variety of schemes for online distribution of all kinds of digital media are under discussion in the boardrooms of Hollywood, Silicon Valley, and New York, including the following.

-- Web-based downloads that include digital rights management software to control both use and payment for media.

-- Peer-to-peer file sharing, such as that embodied by Napster Inc., Gnutella, and Scour, with the addition of a usage control and payment scheme, such as the ability to prevent playing of files without payment.

-- Advertising-supported media, which may include the embedding of advertisements in media files.

-- Subscription services, such as that available at EMusic.com, which allows for the unlimited, legal downloading of files for a flat monthly fee.

A recent lawsuit, initiated by the MPAA and the Recording Industry Association of America Inc. (RIAA) against Scour, a file-sharing service and search engine site based in Beverly Hills, California, is an attempt to gain that control.

Scour enables peer-to-peer file sharing and Web searches for specific digital media types, including video, which the MPAA and the RIAA allege facilitates the same type of piracy they say Napster is engaged in.

But the desire for control evinced in the Scour and Napster lawsuits may be the industry's undoing. Gene Kan, one of the developers of Gnutella, says that if strict rights controls are implemented, the file-sharing community will simply go underground.

"With the ease of use of file-swapping software increasing, [the] underground ... will be a well-lit place," Kan says.

That light may fall on vast quantities of films, as well as the music already there.

"Napster and music is the first big battleground for digital media on the Internet; clearly it's a preamble to what will happen ... with movies," says Jim Long, CEO of RioPort, in San Jose, California, which develops software and services for music sites and music player manufacturers.

Despite the war scenario Long's words evoke, Conxion's Seamster is optimistic.

"People will be willing to support their passions and they will pay for what they care about, even if it is available for free," Seamster says.

New music, film, and literature may simply stop being made available if artists do not continue to receive payment for their work, Long says. But if it does happen, "the ecosystem will correct itself," and payment will resume, he says.

Whether the ecosystem will need correction at all, however, is not yet clear.

It seems most likely that the media ecosystem of the future will contain a variety of models.

"Nothing is foolproof," the MPAA's Taylor says.

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More about ConxionEMusicGnutellaMicrosoftMotion Picture Association of AmericaNapsterRecording Industry Association of AmericaRioPort

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