Studios Want FCC to Re-Think SVOD Copying Rule

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Hollywood studios want federal regulators to reverse gains made by Starz Encore Group LLC in the adoption of rules allowing consumers to attach DTV sets to digital cable wires without needing a set-top.

In comments filed Dec. 29, the Motion Picture Association of America asked the Federal Communications Commission to reconsider its classification of subscription video-on-demand services under so-called digital plug-and-play DTV rules.

After a tough lobbying battle, Starz Encore Group chairman and CEO John Sie persuaded the FCC not to shoehorn SVOD into the "copy-never" category, as called for in the private agreement reached by major cable operators and consumer-electronics firms that they submitted for FCC ratification.

Instead, the FCC classified SVOD as an "undefined business model," protecting Starz Encore Group in its quest to develop SVOD in a liberal copy-protection regime.

Sie lobbied the FCC that a "copy-never" restriction would dampen consumer interest in SVOD and perhaps doom the service as a business model.

Starz Encore spokesman Tom Southwick said last week that consumers buying SVOD products Starz On Demand or Encore On Demand, only to learn that they cannot make copies, would likely drop the service. "It makes it more difficult for the service to get started because it has a negative aspect to it, which it shouldn't," he said.

The MPAA said in comments that the FCC should not have lifted the "copy never" restriction, claiming the agency "unnecessarily tampers with the unvarying decision of the content distribution marketplace that SVOD requires the full range of possible encoding schemes, up to and including copy never."

Even though the FCC removed SVOD from the copy-never category, Southwick said cable MSOs can insist on copy-never in negotiations. "The other question now is what is the position going to be of the MSOs, because they now have the responsibility of what the copyright status will be of SVOD."

A spokesman for Comcast Corp., which is rolling out Starz Encore's SVOD products, did not respond to a reporter's request for comment.

MPAA executive vice president Fritz Attaway said the MPAA did not have a problem with private parties agreeing to a copy-once standard for SVOD, but opposed an FCC veto of private agreements that include copy-never restrictions.

SVOD rules allowing single copies could harm the studios' ability to make money from that release window and from other release windows, he added. Copy-once permission "narrows the marketability of content," Attaway said. "We think the marketplace should work these issues out, not the FCC."

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