Hollywood v’s tech companies (the DRM wars)
The folks who make movies, TV shows and music have had an often hostile relationship over the years with the companies that make the cool new devices to display, record and move that content around.
Only a few years ago, entertainment executives railed against digital video recorders that allowed TV viewers to skip ads (think TiVo), and lambasted music players that encouraged users to “rip, mix, burn” their songs onto portable devices.
But over the past year or so, studios have done an about-face and now regularly court technology ventures such as YouTube. Rupert Murdoch’s News Corp., owner of the Fox TV network and movie studio, went so far as to spend $580 million buying the social networking site MySpace, which is now jammed with snippets of video and music that entertainment companies once went to court to have taken off such sites.
Nowhere has this new, almost giddy relationship been better displayed than at this year’s International Consumer Electronics Show, where disruptive technologies that once gave studio executives nightmares often make their debut.
Leslie Moonves, chief executive of CBS Corp., and Robert Iger, chief executive of Walt Disney Co. both gave keynote addresses this year that emphasized cooperation between studios and device makers.
“If you asked me two years ago, did I want Disney in the keynote? No,” said Gary Shapiro, chief executive of the Consumer Electronics Association, annual sponsor of the show. “Disney was the poster child in Washington for the most anti-technology company there was.”
Moonves made the most aggressive push at this year’s show, sharing his stage with Chad Hurley, co-founder of YouTube, Philip Rosedale, founder of virtual reality creator Linden Lab, and Blake Krikorian, founder of Sling Media. That company’s Slingbox enables TV viewers to stream live and recorded video over the Internet from a home cable box to a computer.
A packed ballroom cheered Moonves when he said that the lines between “old media” and “new media” have been erased.
Disney’s Iger sparked much of the current rapprochement in October 2005 when, only weeks after being named CEO, he signed a deal to sell individual ABC-TV episodes on Apple Inc.’s iTunes store.
The groundbreaking deal sparked a flurry of similar deals, with networks selling shows on iTunes, Google Inc.’s video store and elsewhere. This week Apple said it would sell movies from Viacom Inc.’s Paramount Pictures, increasing Apple’s online selection.
Warner Bros., a unit of Time Warner Inc., even agreed to distribute its content using peer-to-peer technology from BitTorrent, but only after the once-renegade company agreed to share revenue.
“Change is always difficult for people who have invested millions or billions of dollars in basic business models,” said Dan Glickman, president of the Motion Picture Association of America. “Companies that keep up with what consumers want will make money.”