Published on October 20, 2009

Disney is expected to unveil technology next month that will give consumers “access rights” to movies and TV shows, allowing them to pay a single price for permanent access to content across the web, mobile devices, and cable services that allow on-demand viewing.

The technology, known as Keychest, allows users to purchase rights to a movie from a participating store, and the user’s accounts with other participating services, such as mobile providers or VOD cable services, show the content as available for viewing, the Wall Street Journal reports. The movies reside with the particular delivery company, and the user can access the movie from any device. This could mean an end to the necessity of owning of physical DVDs.

Disney has not named any other participating companies.

If successful, Keychest could conquer the hurdles that are holding back widespread adoption of movie downloads, mainly the difficulty of playing movies on any device other than a computer, and limited computer storage space.

DVD sales have plunged by 25% for some studios, weakening the studios’ business model. Keychest, though it may not be profitable for as many as five years, could bring the category “up to a healthy state where we can expect growth in the future,” says Bob Chapek, president of home entertainment at Disney Studios.

Time Warner and Comcast are working on a similar initiative, dubbed TV Everywhere. The service will allow subscribers to access their favorite cable content on other devices. Currently, a challenging debate is taking place between content owners and the cable operators on a proposed revenue split.

It could also be a challenge for Disney to rope movie studios, which may be unwilling to allow a competitor to control access to their content, into participation on Keychest.

Keychest could compete with the Digital Entertainment Content Ecosystem (DECE) initiative - made up of five major Hollywood studios and tech companies like Comcast and Intel - which hopes to create a new set of standards and formats to allow viewers cross-channel access to content. The DECE website says the group is a “consortium of some of the world’s top media companies,” and says the consortium will “provide a revolutionary new way to enjoy your favorite movies and TV shows.” The website contains no other information, but encourages visitors to “come back soon to learn how this groundbreaking technology will dramatically change how we experience digital entertainment.”

Legality of iPodMeister
Colette Vogele expands on the TWIL panel discussion on the legality of iPodMeister Her conclusion is iPodMeister would lose any U.S. copyright action that is brought against it.

Ben Franske's comment on the economic effects compromising the fair use rights to make a digital copy of the CD are important. Consider a world that contains 26 people. A is an artist who produces a CD, and sells it to B for $10. B make a digital copy - a fair use - and then to remove house clutter, sells the CD for $2 to a second-hand store run by Z. Z then sells the second-hand CD to C for $5 who makes a digital copy, and then sells it back to Z's store for $2. Z then sells it to D and so on.

At the end of this, A the artist will have sold one CD and received $10 (less any costs of production), B the original purchaser will have a digital copy for a net cost of $8, C to Y will also have a digital copy for a net cost of $3, and Z, the second-hand dealer will have the CD and made a net profit of $67.

So the scenario that Denise Howell practices, of keeping digital copies and selling her CDs second-hand can, in the extreme, mean no payment to the artist, significant payments to the second-hand stores, and everyone else owning a digital copy. That can't be justified by fair use.

Colette Vogele's article referenced above refers to this problem of the longevity of a fair-use copy. Denise makes a fair-use copy of her CD. Does it remain a fair-use copy after she sells the original CD? The market argument above, where everyone keeps a digital copy, suggests that for public-policy reasons the answer should be no. Would you argue that you could keep and use a backup copy of commercial software, when you have on-sold the original commercial software CD? That argument seems unsustainable.

Put simply "space-shifting" copying of a CD is a fair-use right of a product you own. Because you own it, you may do with it as you wish. Once you cease to own it, you may no longer do with it as you wish. After you sell your CD to your friend, you can't go a rip a fair-use copy of it. So why should you be able to keep the copy you made earlier. Does the fair-use copy expire? This has not been tested by the courts. It is unlikely that a court would find that the fair-use rights exist indefinitely, and continue after the originating source of the right - ownership of the CD - has ended.

Colette also dispatches the relevance of the "right of first sale" doctrine, noting that it relates to distribution rights, and not reproduction rights.

http://wiki.twit.tv/wiki/This_WEEK_in_LAW_20