SEATTLE (Reuters) - It took Brian Baker only five minutes to persuade a major U.S. television network that it needed his company’s technology to protect their programs from Web pirates.
Using software easily found on the Internet, Baker, chief executive of Widevine Technologies, recorded a video clip stream from that network’s Web site, stripped out the commercials and sent the company back the altered video.
The network executive’s reaction? “Wow, we need protection now!” Baker recalled. “Major television operators are seeing their offerings re-posted on the Internet, often times with the advertising stripped out.”
Media companies fear that video recording software will facilitate piracy and rob them of lucrative advertising revenue just as they are making more TV shows, movies and video available online.
Stream rippers, or software that records any online video and downloads it onto a computer hard drive, can be bought on the Internet these days for under $100. The technology is expected to move into the mainstream with the introduction of several new video players in the coming months.
“This is an application and development of great concern,” said a major U.S. network executive, who declined to be identified. “This is a dramatic move in the wrong direction.”
Media conglomerate Viacom Inc.’s VIAb.N $1 billion lawsuit against Google Inc. (GOOG.O) and its video sharing site YouTube demonstrates the lengths copyright owners will go to maintain ultimate control over where their entertainment ends up.
Three new recording video players are expected out before the end of 2007, with each company pursuing a different strategy.
RealNetworks Inc.’s (RNWK.O) new media player, which will be available for public testing next week, allows users to record video streams with one click. It prevents a user from downloading video embedded with digital rights management, but it does not prevent the recording of all copyrighted content.
“The technology we built is a utility, it’s a tool. The VCR or TiVo doesn’t really understand where the stuff is coming from,” said Jeff Chasen, a vice president at RealNetworks. “It’s really up to the consumer.”
RealNetworks and other media player makers see the software as a way for consumers to create a library of content they can view at a time that is convenient for them.
But media companies fear it could become a tool for pirates to widely distribute their entertainment and make money from it at their expense.
Internet video start-up Veoh Networks unveiled a new product called VeohTV, a digital video recorder (DVR) for the Internet that can find and store material from nearly every site on the Web including the major networks.
Veoh contends that it does not violate copyright laws and records videos with commercials contained. Analysts said major networks may take legal action to prevent the company from showing their copyrighted content next to ads sold by Veoh.
Adobe Systems Inc.’s (ADBE.O) new media player downloads video for offline viewing. Adobe, a leader with its flash video format, wants to hand over more control to media companies, allowing firms to serve ads and track video usage.
Forrester Research analyst James McQuivey said the media companies’ reservations about the streaming video recorders demonstrates a lack of understanding. Smart companies will embrace, not shun, the technology, he said.
“Ad-supported video is the way that the Internet video world is going to explode. The question is how far will you let your content go in order to increase your advertising revenue,” said McQuivey.
Seattle-based Widevine, which has or is close to deals with all the major U.S. networks, said its video protection technology is the answer for media companies.
Widevine, a survivor of the dot-com bust, encrypts digital content so that if the company’s algorithm detects a user recording the material off the portal, it will stop the video stream.
The key, according to Widevine’s Baker, is that the company’s digital rights management technology ensures that commercials will not be tampered with.
“Without the protection, you can bypass the advertisers,” said Baker. “From a business perspective, preserving the integrity of the advertising is crucial.”