[Infowarrior] - A Copyright Cop In Every Zune

[Richard Forno]

Microsoft May Build a Copyright Cop Into Every Zune

By Saul Hansell

http://bits.blogs.nytimes.com/2008/05/07/microsoft-may-build-a-copyright-cop-into-every-zune/index.html

If you like to download the latest episodes of “Heroes” or other NBC  
shows from BitTorrent, maybe you shouldn’t buy a Microsoft Zune to  
watch them on.

A future update of the software for Microsoft’s portable media player  
may well include a feature that will block unauthorized copies of  
copyrighted videos from being played on it.

Tuesday, Microsoft announced that it would start selling video  
programming for the Zune, mainly TV shows. These include programs from  
NBC Universal, which has pulled its shows off Apple’s iTunes Store.

Late Tuesday afternoon I reached J. B. Perrette, the president of  
digital distribution for NBC Universal, to ask why NBC found  
Microsoft’s video store more appealing than Apple’s.

He explained that NBC, like most studios, would like the broadest  
distribution possible for its programming. But it has two disputes  
with Apple.

First, Apple insists that all TV shows have an identical wholesale  
price so that it can sell all of them at $1.99. NBC wants to sell its  
programs for whatever price it chooses.

Second, Apple refused to cooperate with NBC on building filters into  
its iPod player to remove pirated movies and videos.

Microsoft, by contrast, will accept NBC’s pricing scheme and will work  
with it to try to develop a copyright “cop” to be installed on its  
devices.

For now, both issues are rather theoretical. NBC does have some  
variation in its wholesale price schedule, although Mr. Perrette  
declined to describe it. Microsoft has chosen to absorb the  
differences and sell all shows for about $1.99.

Nonetheless, Mr. Perrette said, NBC wants the flexibility to sell  
older shows at lower prices and hit shows at higher prices than the  
standard Apple has set. It also wants to create various deals that  
would, for example, allow a discount for people buying a season or  
other group of episodes at one time.

“That separation of the wholesale pricing flexibility and what the  
retailer decides to charge is core to us,” Mr. Perrette said. “Zune  
was willing to provide that.”

Similarly, the copyright filtering system is still in development and  
its exact form has not been set.

Mr. Perrette said the plan is to create “filtering technology that  
allows for playback of legitimately purchased content versus non- 
legitimately purchased content.”

He said this would be similar to systems being tested by Microsoft,  
Google and others that are meant to block pirated clips from video  
sharing sites. NBC is also working with Internet service providers  
like AT&T to put similar filters right into the network.

Mr. Perrette added that NBC is trying to develop similar hardware  
technology with SanDisk, through whom NBC also sells its programming.

Adam Sohn, a spokesman for Microsoft, declined to discuss details of  
this effort other than to say that the software company is exploring  
anti-piracy measures with NBC. He said Microsoft, which suffers from  
its own piracy problems, is sympathetic to Hollywood’s concerns.

At the same time, it will be difficult for Microsoft to add features  
that consumers don’t like to its Zune products, which already lag far  
behind Apple in the market.

Mr. Perrette said NBC understands the potential resistance. “In the  
short term, this will not win us a lot of friends,” he said. “In the  
long term, the consumer wants there to be quality premium-produced  
content, and in order for that to continue to be a viable business,  
there needs to be significant protection around it.”