Sneaky Sharing

Upping the Ante

Despite an overall drop in P-to-P activity, the RIAA, the Motion Picture Association of America, and the BSA continue to publish apocalyptic estimates of revenue lost to online and offline piracy. The BSA, for instance, maintains that in 2003 nearly $29 billion worth of pirated software was installed on PCs worldwide. The music industry primarily blames file sharing and music piracy for drops in U.S. sales, from a peak of $14.6 billion in 2000 to $11.9 billion in 2003. What's more, as worldwide broadband adoption continues to grow--especially in Asia--these groups expect the problem to worsen.

Widely available broadband has enabled pirates to expand beyond music to other kinds of digital media. "Accesses for movies and games are increasing dramatically," says Morgenstern. "As soon as a game or movie is released, there is a race out there to get it onto peer-to-peer."

How are antipiracy groups responding? For one thing, they're pushing for more targeted legislation to strictly limit behaviors and technologies that can encourage copyright infringement, points out BigChampagne's Garland.

A flurry of such bills is advancing through Congress, including the Inducing Infringement of Copyright Act (S 2560), which would effectively criminalize P-to-P networks that encourage trading of copyrighted material (see "Top Legislative Billing" for details on this and other bills).

The legislative effort won't end the cat-and-mouse game, says Morgenstern, because some of these P-to-P software vendors, such as EDonkey, are offshore. And with Gnutella, a popular open-source P-to-P program, "there is no there, there," he says--it's a super-distributed network. "This is a gnarly, worldwide problem. Peer-to-peer networks are not going to go away."

So in addition to new laws, entertainment and computer companies are bringing new technologies to the content-protection table. One of the more notable is in Microsoft's upcoming Windows Media Digital Rights Management 10 software, formerly code-named Janus. Though it's meant to facilitate the secure downloading of content from subscription services to portable players, its mission could expand. Janus includes a protected, real-time clock in digital media that permits playback only after verifying that a license is valid. Microsoft has a bevy of partners; expect compatible devices and digital media offerings this year.

Microsoft's software could also work with another DRM scheme called Advanced Access Content System. AACS is intended for use with next-generation optical discs, such as Blu-ray and HD-DVDs. It's in the development stage and should work with other existing DRM technology; it may also let users copy a disc onto a compliant movie server in their home or onto select portable devices. AACS has backing from Disney and Warner Brothers, as well as from several major computer firms like IBM, Intel, Microsoft, and Sony, among others.

TiVo's upcoming digital broadcast security technology, recently blessed by the Federal Communications Commission, permits some sharing of DTV broadcast content over the Internet. It allows a TiVo user to send recorded free, over-the-air DTV programs via the Net to other TiVo boxes or PCs registered to that user.

File sharing is here to stay, and the new DRM technologies do acknowledge that and plan for it. Whether they will give users enough rights to make illegal sharing no more than a blip in the digital media market remains to be seen.