<http://www.nytimes.com/2005/01/30/arts/television/30manl.html?th=&pagewanted=print&position=> The New York Times January 30, 2005 Steal This Show By LORNE MANLY and JOHN MARKOFF SAAC RICHARDS didn't think of himself as a rebel, or a shock to the well-lubricated system of the television industry. He was merely unhappy with the cable box provided by his local operator. Dismayed by the sluggish channel-changing capability and the sparsely informative program guide, he decided to build a better cable box from scratch. Today, nearly three years since Mr. Richards, a 26-year-old computer software programmer in Willoughby, Ohio, embarked on his quest, hundreds of thousands of do-it-yourself television viewers are using the free software program he wrote, MythTV, to turn desktop personal computers into customized cable boxes, complete with the ability to record shows, surf the Web and strip out unwanted commercials. The members of the MythTV community, who now do not have to pay monthly fees to rent set-top boxes or digital video recorders, have plenty of more mischievous company in trying to outwit the television industry. Millions of viewers are now watching illegal copies of television programs - even full seasons copied from popular DVD's - that are flitting about the Internet, thanks to other new programs that allow users to upload and download the large files quickly. And entrepreneurial souls are busily concocting even newer applications, including one that searches the Internet for illegal copies of any television shows you may desire and automatically downloads them to your computer. These high-tech tricks address desires that have become standard in an age of instant media gratification: the desire to watch what you want, when and how you want it. And they're turning television - traditionally beamed into homes at the convenience of the broadcast and cable networks - into something more flexible, highly portable and commercial free. Not surprisingly, the repercussions - particularly the rapidly growing number of shows available for the plucking online - terrify industry executives, who remember only too well what Napster and other file-sharing programs did to the music industry. They fret that if unchecked, rampant trading of files will threaten the riches of the relatively new and surprisingly lucrative television DVD business. It could endanger sales of television shows to international markets and into syndication. And it could further endanger what for the past 50 years has been television's economic linchpin: the 30-second commercial. Hollywood has gotten a lot of headlines in recent months for fighting the online traffic in feature films. But behind the scenes, the studios and networks are just as focused on the proliferation of television shows being downloaded. Even more quietly, the conglomerates that produce the vast majority of television shows are scrambling to beat the downloaders by offering viewers a slew of attractive new gewgaws, from video-on-demand offerings that could let viewers order up an episode of "CSI" any time they like to a device that allows viewers who tune into the middle of a live TV broadcast to restart the program instantly. "We have to try as an industry to get ahead of this and give the audience an attractive model before the illegal file-sharer providers meet their needs," said David F. Poltrack, CBS Television's executive vice president for research and planning. "The clock is ticking on this," he added. It all started with the digital video recorder. First popularized by TiVo and ReplayTV about five years ago, the DVR gave consumers a new degree of control: instead of being at the mercy of the broadcast schedule or VCR's, they could now be their own television programmers, scheduling shows at their convenience, pausing live television and skipping easily past commercials. Smith Barney estimates that though only a little more than 6 million Americans now use DVR's, by 2010 nearly half of American television households, or 58 million homes, will have them. Meanwhile, the file-sharing networks that are the scourge of the music industry began to have their way with television. Two factors slowed the spread: television isn't as expensive as recorded music, and its digitized files are significantly larger and harder to maneuver than their music equivalents. But hacking the cable box or stealing pay-cable channels like HBO is a longstanding tradition. "There is a sense of entitlement that once it hits the airwaves it's free," said Brandon Burgess, NBC Universal's executive vice president for digital media, international channels and business development. Until recently, it was hard for average viewers to act on that sense. But these days all it takes is a broadband connection and a program like BitTorrent. Created by Bram Cohen, a 29-year-old programmer in Bellevue, Wash., BitTorrent breaks files hundreds or thousands of times bigger than a song file into small pieces to speed its path to the Internet and then to your computer. On the kind of peer-to-peer site that gave the music industry night sweats, an episode of "Desperate Housewives" that some fan copied and posted on the Internet can take hours to download; on BitTorrent, it arrives in minutes. BitTorrent may sound like some obscure techno-trickery, but more than 20 million people have already downloaded the application. Each week dozens of shows are shared by hundreds of thousands of people. "The Simpsons," "Family Guy" and "Friends" top the most-popular list, but even "SpongeBob SquarePants," "Trading Spaces" and "Extreme Makeover: Home Edition" landed in the Top 20 for the week ending Jan. 16, according to Big Champagne, which measures file-sharing activity. And the technology is getting easier to use by the day. Sajeeth Cherian, a 20-year-old communications engineering senior at Carleton University in Ottawa, decided there must be a better way to find BitTorrent files on the Web after listening to the constant gripes of his roommate about how much time he was spending searching for Japanese anime. Videora was his response. Plug in what shows you want to find, and it does all the work. He's charging $22.95 for the software. "I thought this was a big idea, a bigger idea than trying to shut my roommate up," Mr. Cherian said. Although it can be used for piracy, Videora is legal, he said: "I've considered this. I wouldn't want to get my pants sued off, and this has many legitimate uses." However, Videora's illegitimate uses threaten one of the most welcome bonanzas for the television industry in recent years. Television DVD's, an afterthought in the DVD market just three years ago, were an estimated $2.3 billion-dollar business last year, according to a recent Merrill Lynch research report. They now represent nearly 15 percent of total DVD revenue, with profit margins between 40 and 50 percent. Recent hit shows like "The Simpsons" can make a profit of $15 million - a season. And those are exactly the shows traded most online, according to Big Champagne. Although older shows are not quite as lucrative, the better ones can still bring in $1 million in profit for each season, the Merrill Lynch report found. So it's no surprise that the studios and networks are emptying their vaults; "The Bob Newhart Show," "Dynasty," "The A-Team," "Moonlighting" and "Remington Steele" are just a few of the DVD's planned for release this spring. Executives at the entertainment conglomerates and the Motion Picture Association of America argue that the industry and the government have to move - fast - to establish rules by which copyrighted television programming "cannot be moved around willy-nilly," as Rick Cotton, executive vice president and general counsel of NBC Universal, puts it. Otherwise, television executives say, the very creation of television programming is placed in jeopardy. "It's very expensive to produce and market, and people will be very reluctant to provide that content if it can't be adequately secured," said John Malcolm, the senior vice president and director of worldwide antipiracy operations for the M.P.A.A. One way to protect such content, according to the industry, is through the introduction of something called the broadcast flag. The Federal Communications Commission announced in the fall of 2003 that any digitally broadcast show must include an invisible antipiracy device. This has not gone over well with viewers. Last October, nine nonprofit groups petitioned the United States Court of Appeals for the District of Columbia Circuit, arguing that the action oversteps the F.C.C.'s authority, making life more complicated for law-abiding home viewers while being "entirely ineffective at stopping any pirate." At the grass roots, the response has been more direct: a rush to buy and even build television sets and DVD recorders that sidestep the ruling. Home consumer devices, from digital televisions to DVD recorders, sold before July 1 do not have to recognize the broadcast flag. So the Electronic Frontier Foundation, a digital civil liberties organization (and one of the nine petitioners), has decided to set up what it is calling the Television Digital Liberation Front. Starting last July 29, it began holding the first of a planned series of nationwide "buildathons" to help novices build home-brew digital televisions and DVR's based on systems like the perfectly legal MythTV software. Those systems are still pretty clunky to assemble, requiring technical skills beyond the grasp of most couch potatoes, not to mention bulky, fan-noise-spewing P.C.'s. But television tinkerers are trying to smooth these experiences - for profit or not. Cecil Watson, a 32-year-old software expert in Fontana, Calif., created KnoppMyth to make the installation of MythTV as simple as possible. The MythTV movement is "picking up steam," Mr. Watson said, because it satisfies the way he wants to watch television today - and he doesn't have to pay rental fees for a cable box or a DVR if he chooses not to. "It records the shows I want to watch and I now have the choice to spend the time the way I want," he said. The build-your-own-TV advocates say they're not looking to steal content; they're just looking for a reasonable amount of flexibility to watch the same recorded program in different rooms, or on the train to work; to lend friends a TV recording the way they used to lend videotapes; to bring the same set of recordings from their city home to their vacation house. Playing the same show on different screens around the house seems reasonable, said Mr. Cotton of NBC Universal. But he added that expanding the circle much beyond that, the way future versions of the recently released TiVoToGo offering might allow one to send recorded programs over the Internet to nine other devices, including P.C.'s and laptops, was dangerously excessive. "Once you allow that much, is the technology really secure?" Mr. Cotton asked. A spokeswoman for TiVo said that the current analog version does not allow transferring files outside a home network, but that the F.C.C. has nonetheless approved the company's security measures if it rolls out a robust digital version. Ultimately, whether the television industry can avoid the disruptive fury that sideswiped the music industry - and even find lucrative ways to benefit from a digital, broadband, interconnected and portable entertainment world - will depend on how fast and flexible the conglomerates are in meeting viewers' changing desires. It will also depend on understanding the motivation behind this flurry of new activity. It's not just the thrill of the illicit, like lighting up behind a Kroger's in high school. That is "woefully inadequate to describe why millions of people steal," said Mr. Garland of Big Champagne, the online media measurement company. "People aren't essentially lawless. It takes far more motivation than that." The industry has begun experimenting, rethinking the rules by which television is disseminated. Some of the proposals, which center on video on demand, are fairly radical, going beyond the movies, news programs and N.F.L. highlights that make up today's most ambitious offerings. Mr. Poltrack of CBS said that according to his network's research, a large number of viewers would welcome the chance to pay $1 to watch each television show, if they could do it on their own schedule and with the ability to skip commercials. With commercials, they'd be willing to pay 50 cents. And because the average viewer sees only half of a show's episodes, he said, this on-demand viewing won't hurt the regular showing. A further CBS study gave viewers the chance to build their own night of television, where they could choose among a select group of pay-per-view shows in addition to the regular schedule of free programming that night. More than half of the 211 respondents chose to pay extra for at least one show. "This is the way people want television delivered," Mr. Poltrack said. Before this video-on-demand vision materializes, a bewildering thicket of contract and revenue-sharing issues among the producers, programmers and distributors of television must be overcome. Nonetheless, executives understand that they have little alternative but to push ahead. Chasing after the people trafficking in television programming can do only so much good. "You'll make more money and suffer far less from the black market if you simply create the opportunity to access content freely," said Mr. Garland of Big Champagne. -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'