Five media giants prepared to sue digital pioneers
08/16/1999
Austin American-Statesman
Page D2
(Copyright 1999)
SAN JOSE, Calif. -- Five media giants have joined to assert their copyright privileges over companies that use digital technologies to give consumers new and easier ways to find and record TV programs. CBS Corp., Discovery Communications Inc., ABC owner Walt Disney Co., the Fox Network's owner News Corp. and Time Warner Inc. last week said they were prepared to sue companies such as Sunnyvale-based TiVo Inc. and its rival, Mountain View-based Replay Networks, unless they obtain licenses to use their programming.
At issue are the companies' new digital video recorders, hybrids of a computer and a VCR that go a step beyond traditional VCRs by letting users automatically record shows that match criteria they specify. For example, users can tell TiVo they want to see every episode of "Star Trek" or direct Replay to find and record every show Tom Hanks appears in.
The dispute is bigger than just consumers' ability to benefit from new technologies that exceed traditional VCRs. Members of the Advanced Television Copyright Coalition say the new machines could cut people's viewing of commercials to the point that there wouldn't be enough advertising to support free television.
Viewers can use the devices to simultaneously record and play back their favorite shows a few minutes later, so that they could skip through commercials, eventually "catching up" with the program as it's broadcast. The technology also allows TiVo to substitute broadcast commercials with others that might more closely match the viewer's demographic information.
All of this has the networks worried that they'll lose control of their content. They argue that because companies such as TiVo and Replay are building a business by using and repackaging their programming, they should have to acquire the rights to that content.
"The future's in front of us, and we need to take the position that if people find ways to build service businesses on picking our networks apart and putting them back together, they need to talk to us about it," said Bert Carp, an attorney representing the coalition.
Jim Plant, Replay's director of marketing, said it is working with the companies and is eager to understand their concerns.
TiVo officials declined to comment on the new coalition.
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