Why is Hollywood so against consumers?

I will admit up front that I am not a lawyer nor a techie.  But someone recently brought this issue to my attention and it struck me as just another example of Hollywood being anti-consumer.  Here is the basic story:

In September 2008, the motion picture industry sued RealNetworks over its RealDVD software, which was designed to allow consumers to copy their DVDs to their computers for later playback. Real had obtained a license from DVD-CCA for its software, apparently relying on earlier court rulings in the DVD-CCA v. Kaleidescape case, where a California state court ruled that Kaleidescape’s licensed digital DVD jukebox was within the scope of the DVD-CCA license.

On September 30, 2008, the day Real was to formally launch its RealDVD product, the motion picture studios filed a lawsuit in Los Angeles and asked for a temporary restraining order (TRO) to block the launch. The same day, RealNetworks filed a lawsuit in San Francisco asking the court to declare that distribution of RealDVD is lawful. The court in Los Angeles subsequently transfered the case to San Francisco, where it is pending.

Proponents of RealDVD make a pretty persuasive case on the usefulness of this software:

• Back up DVDs the same way you back up your music CDs onto your computer with iTunes or some other utility ? a well?established legal fair use under U.S. Copyright law.

• Watch your DVDs anywhere —especially important for travelers who like to watch movies on airplanes, trains and busses.

• For families with small children who watch the same movies over and over again, making a backup copy helps prevent against the inevitable lost and scratched DVDs that come with little hands.

• If you’re not lugging around your DVDs, you don’t have to worry about scratches, skips, or lost titles.

• Never lose your place. RealDVD remembers where you are, so you can stop, shut down and come back later without losing your spot in the movie.

• Includes features that allow you to go to any part of the movie you want, even between chapters.

• Parental Controls allow you to control the types of movies your children can access.

I am a fan of all of the above.  In fact, as a parent and frequent consumer of entertainment on my laptop, I regularly run into just these issues.

So why would Hollywood try to stop this type of innovation?  I am not sure, but EFF argues that it is to force innovators to come to Hollywood for concessions first:

As we’ve said for years, DRM systems like the Content Scramble System (CSS) used on DVDs are not principally about preventing piracy. Rather, DRM is the legal “hook” that forces technology companies to enter into license agreements before they build products that can play movies (Hollywood lawyers candidly admit this “hook IP” strategy). Those license agreements, in turn, define what the devices can and can’t do, thereby protecting Hollywood business models from disruptive innovation.

This arrangement reverses the previous innovation status quo. Where non-DRM’d content (e.g., books, broadcast TV, the CD) is concerned, innovators do not have to ask permission before building new products that can copy and play copyrighted works (e.g., the photocopier, the VCR, the iPod). But where DRM’d content like DVDs are concerned, Hollywood intended the DMCA’s anti-circumvention provisions to slam the door on that kind of disruptive innovation. After the DMCA, technology vendors would have to ask permission, sign licenses, and make concessions, if they were going to build things to play DRM’d Hollywood movies.

So it’s not that Hollywood implacably hates personal use format-shifting and space-shifting — rather, Hollywood wants to make sure those new features happen on Hollywood’s terms (“pay us again”), on Hollywood’s timetable (“later”), and only after valuable concessions have been wrung from technology companies (“watermark detection, compliance & robustness requirements, down-rezzing”).

That’s why RealDVD is such a threat. By reading the existing CSS license carefully, Real (and Kaleidescape before it) found a way to create a new product category without first getting permission from (and paying obeisance to) the Hollywood studios.

What I do know is this type of heavy handed legal action hurts consumers by slowing innovation, limiting flexibility, and raising the cost for everyone.

I am not sure how much leverage we have in these types of situations, but at the very least we can make it clear to Hollywood and other industries that we see these actions as unacceptable.  And we should reward those companies and industries that allow innovation and value consumers.

Those of you with a deeper knowledge on these issues feel free to weigh in.