RealNetworks Vs. Hollywood: Let the DVD Lawsuits Begin
Digital rights management, here we go again. First, it was the music industry. Now Seattle-based RealNetworks and Hollywood’s big movie studios are suing one another in California federal court, after yesterday’s release of RealDVD on RealNetworks’ site. The software, which costs $30, allows DVD users to make copies of their videos on their computer and transfer the copies to no more than five other computers (paying an extra $20 for each). The studios, which include Disney, Paramount, Sony, Twentieth Century Fox, NBC Universal, and Warner Bros., assert in their complaint that RealDVD violates the Digital Millennium Copyright Act, and are asking for a restraining order on its sale.
RealNetworks saw this coming, but went ahead with its release anyway—and fired back with its own lawsuit. In a statement, the company said, “RealNetworks took this legal action to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs…We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases.”
The reaction in the media so far has been fairly non-committal. The New York Times and others point out that RealNetworks thought its software would be legal, in part because of a recent court case involving Kaleidescape, a maker of media servers, in which the ruling was favorable towards media duplication. The Los Angeles Times says the case may hinge on the exact wording of the license RealNetworks obtained from the DVD Copy Control Association; the article quotes Stanford law professor Mark Lemley as saying, “If Real has a legitimate license to do this under the contract, the circumvention claim goes away, because they’re not cracking the encryption system.”
Meanwhile, the Seattle P-I says the suit is about the money, not the copyright law. Which, of course, it is—movie studios and retailers stand to lose up to $16 billion in annual DVD sales (2007 figure from the Digital Entertainment Group) if people can just borrow or rent the discs and copy them instead of buying them. The impact on DVD rentals, a $7.5 billion market, is less clear.