Digital Freedom and CE Innovation

As the Consumer Electronics Association (CEA) announces the newest inductees to the CE Hall of Fame this week during our Washington Forum event, we are at the same time working to protect future Hall of Famers — the future innovators and leaders of our industry who will contribute to society and the overall economy through life-changing products and services we cannot begin to imagine.

Today, the promise of new convergence — the convergence of content, services and devices — is tangible and exciting. But some in the content community continue to sour at the digital age and how it requires they change old business models.

Their reaction to change is to attack the very people who adore their products and simply wish to consume it anytime, anywhere as new digital technologies allow. This anti-consumer, anti-innovation attitude puts everyone in our industry at risk and deserves your attention.

Many in the content community are so alarmed at the size of consumers' appetite for digital technologies and their sophistication with digital content's flexibility that they are turning to Congress and the courts to seek new protections against change. Several events have been hosted on Capitol Hill that purported to focus on commercial piracy, but ended up trailing off into consumer fair-use terrain.

In fact, one major studio head spent most of his luncheon keynote at one such event critiquing my address at the 2007 International CES, which centered around new convergence and consumer fair-use rights. While flattered my remarks warranted such a spotlight, I am dismayed at the time and resources the content community is devoting to stopping progress rather than updating their business models and attacking true pirates.

The CE industry understands well the need to adapt to changes in technology, but often the incumbent giants in related industries do not respond favorably to such innovation. As Professor Clayton Christensen discusses in "The Innovator's Dilemma," successful companies with entrenched market share are often challenged by new, disruptive technologies, and whether they survive is dictated by the way in which they respond to such challenges.

The content community has not always been kind to the technology sector — witness the Hollywood reaction to the VCR three decades ago, or the response today to innovative new digital devices that allow consumers to time- and place-shift their lawfully acquired audio and video content. Some in the content community have chosen lawsuits over innovation, which has a trickle-down effect through the entire CE value chain, because new products never make it out of the pipeline, and consumer enthusiasm for new digital technologies is tempered by the lack of new product innovation.

Fortunately, some lawmakers understand the right of lawful use of content and the importance of innovation to the U.S. economy. Rather than legislating against consumers, these policymakers are working to restore incentives to innovate and provide protection to consumers, educators and libraries.

Specifically, Representatives Rick Boucher (D-Va.) and John Doolittle (R-Calif.) recently introduced the Freedom and Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (H.R. 1201). This legislation reduces potential fines to innovators and codifies fair use — the ability to make full use of legally acquired content for lawful purposes.

Fair use is not piracy — consumers who want to start watching movies they own in their living rooms and finish watching them in their bedrooms are not pirates. I applaud Congressmen Boucher and Doolittle for standing up to protect today's consumers and tomorrow's Hall of Famers.

Innovation is at the core of our industry, so when it is threatened, everyone in the industry must react. Retailers, manufacturers, distributors, integrators, consumers — everyone — must stand up and speak out in defense of digital rights. We are proud to participate in the Digital Freedom Campaign, which joins innovators, artists and consumers together in the fight to protect technological progress against those who fear advances in technology.

I urge you to join the Digital Freedom Campaign today by learning more about the effort and signing the petition at www.digitalfreedom.org.

Preserve innovation, digital freedom and the future of the vibrant CE industry we proudly represent.