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Digital Downloads Debated At CES Session

Las Vegas – The continuing digital cold war between copyright holders and new technology purveyors was on display at the spirited Digital Download Supersession yesterday.

Rapper Chuck D led the proponents of a virtually unfettered digital content marketplace where consumers controlled content, while a representative of the Motion Picture Association of America represented the content establishment.

Moderator Gary Klein, VP and government and legal affairs general counsel of the CEA, set the tone when he noted, “as new technologies emerge, the instinct of the content providers is to restrict its use.” Klein used Tarzan as an analogy: “Content providers hold on to one technology vine before they have to let go and grab another one.”

The often divisive discussion revolved primarily around business models – how the technology companies or the content providers could make money – by either using technology or even legislation to maintain the current business models of both record companies and movie and television studios, or allowing the market to create new business models.

“There’s a collision between the old way of doing business and the new way of doing business,” observed Chuck D. “The challenge is building a bridge between the two.” The former Public Enemy member noted that the current business model used by the major record labels stifled the “grassroots” artists and garage studio creativity, while digital technology promoted the creative entrepreneurship abandoned by record labels that spend mega-millions in search of mega-sellers.

The main point of contention between the denominations was what rights the consumer has to its content, and whether “fair use” actually had any meaning. “Forget about fair use,” declared Fritz Attaway, executive VP of the MPAA. “Fair use is the like the fish that’s left out in the sun – the longer it’s out there, the worse it smells.”

Instead, Attaway promoted preemptive partnership between copyright holders and technology companies. “The first step (for new technology hardware manufacturers) should be to establish partnerships with the content providers, rather than coming out in a threatening way and bludgeoning them into being partners.” Attaway cited the partnership between movie studios and hardware makers on a copy protection scheme for DVD as an example.

The one point of compromise between all the panelists, which also included former Record Industry Association of American executive David Leibowitz, now chairman of digital rights company Verance, Ken Potashner, chairman and CEO of SONICblue, and Jonathan Potter, executive director of the Digital Media Association, was the need to deliver high quality content to consumers at a fair price with services that would be better than what the consumer could get for free. “That’s something we can finally agree upon,” said Attaway.