Buy and yell

PUBLISHED : Monday, 24 April, 2006, 12:00am
UPDATED : Monday, 24 April, 2006, 12:00am

WHEN TOM LE Goff put a DVD his mother sent from France in his computer, the only thing he saw was an error message. 'My PC is a real IBM, the DVD is real, so why shouldn't it work?' says Goff, who works in financial risk management in Hong Kong.

Le Goff was aware of software he could download to override the regional encryption that prevented the DVD from being viewed. But rather than risk infecting his computer with a virus, he bought a pirated version of the film, Akira Kurosawa's Seven Samurai. 'Film distributors want to protect the DVDs, but they end up making it so you can't watch them,' he says.

Like many consumers, Le Goff is frustrated when he buys CDs, DVDs and computer games from authorised sources only to find he can't enjoy them the way he wants to.

As movie and music companies bring in more restrictive measures to combat piracy and illegal downloads, consumers complain that their rights are being trampled on.

Some CDs are encrypted to prevent them being copied to computers, from where users download songs to portable players such as iPods. Or the sound suffers when played on a PC. Songs bought from online sites can be delivered in a format that makes them incompatible with some music players, or they lose quality when copied.

But to content providers, such measures are needed to stem huge losses from illegal recordings. According to the International Federation of the Phonographic Industry (IFPI) business lobby, major music companies lost US$4.6 billion worldwide to piracy last year. During the same period, movie distributors claim losses of about US$300 million from piracy on the mainland alone.

And those figures don't include lost sales from the increasing volume of free internet downloads. BigChampagne, a research firm tracking file-sharing networks, recorded more than nine million users of peer-to-peer file-sharing programs worldwide last October - double the number two years ago.

But while the record companies continue to cry foul, many rights groups and industry experts question whether ordinary consumers are the casualties in the entertainment industry's fight to protect content. In Britain, the National Consumer Council told a parliamentary inquiry in January that anti-piracy efforts were eroding users' rights to digital media. Consumers were finding that they couldn't easily move copies between different devices or make compilations for personal use, the watchdog body said.

Take the experience of Hong Kong musician Indrayudh Shome. When he tried to transfer songs from a CD to an MP3 file, he found it copy-protected. It didn't take the 17-year-old long to get around the barrier. 'I ripped them to WMA [Windows Media Audio] format and then converted to MP3. Easy.'

But not all are that tech-savvy, and give up on legal downloads or seek a pirated copy that isn't copy-protected.

Gino Yu, chairman of the Hong Kong Digital Entertainment Association, says music, movie and gaming companies should work with new technology such as file-sharing rather than fight it. It's their right to stop pirates from copying content, he says, but their methods are creating hassles for consumers. And worse.

In the case of Sony BMG, one attempt created security risks for customers instead. Last year, the company released about 20 million CDs secretly embedded with software to block copying. The problem was that the program used virus-like codes that were automatically downloaded when users put the CD into their disc drives - making their computers vulnerable to infection by internet viruses.

That resulted in legal action by the Electronic Frontier Foundation (EFF), a US-based advocacy group of lawyers, techies and concerned consumers. Sony BMG settled with the group last November, promising to reimburse harmed consumers and to stop using the software.

Meanwhile, the movie industry has always encrypted DVDs, even if consumers don't intend to sell the copies. DVDs are released with regional coding to restrict distribution. So a disc meant for North America will play only on North American DVD players, theoretically preventing early-release movies from being shipped to markets around the globe. But many DVD players, such as those sold in Hong Kong, for instance, are multi-regional models so it's a practice the Motion Picture Association of America has been unable to stop.

Joe Yau Cho-ki, a graduate student at the University of Hong Kong researching copyright protection, says such strict measures are pointless. Both are media for storing data. 'So the act of burning CD/DVDs itself is reasonable and should not be prohibited,' he says. Besides, people will find a way around the encryption, he says. Just search for 'burn DVDs' in Google and plenty of tips appear.

David Sung, a fashion firm manager, downloads most of his music from the internet, from pay sites and free peer-to-peer. 'I try to have several sources to download,' he says. Various programs are available to transfer the files to his MP3 player.

Music companies view consumers such as Sung as greater threats than those who copy discs. The industry worldwide has been plagued by file sharing, says Ricky Fung Tim-chee, the head of IFPI Hong Kong, who is spearheading efforts to sue illegal downloaders. Fung's campaign has produced the world's first conviction for illegal uploading: Chan Nai-chung was sentenced to three months' jail for using the BitTorrent program to access content. Four other writs are pending, including one against Yeung Chun-choi, a reportedly computer illiterate resident from Sheung Shui. Fung says the IFPI has about 50 more cases to be filed. The Film Industry Response Group says it has 49 cases of illegal uploading on BitTorrent.

Some observers say that such aggressive action may rebound on companies. 'Suing your customer base is not a sustainable business model,' says new technology researcher Yu. Rather, companies should derive profit from innovation in technology rather than block it, he says. 'New business models are possible.'

The IFPI insists that it isn't against legal downloads. The group says it's encouraging members to provide quality online pay sites. Laws often change with technology, Fung says, and licences might be available in future for consumers to make free copies of content.

For now, many legal online music sites have yet to encourage consumers with easy-to-use content. Numerous protections work against the user. 'There's an increasing variety of options for purchasing music online, but also a growing thicket of confusing usage restrictions,' says the EFF.

For instance, songs bought from Apple's iTunes can be loaded only onto an iPod. Although files can be burned to CDs and then played on most formats, the transfer often results in a loss of sound quality. Similarly, formatting restrictions on Microsoft's Windows Media Audio mean files can't play on all devices. Other companies, such as RealNetworks, restrict the number of back-up copies or mixes you can make with a song - sometimes to five.

The movie industry, which has begun to launch true downloadable movies off the internet this month, looks set to play by the same restrictive rules. Movielink, which isn't available in Hong Kong, costs 'twice as much as physical DVDs and has very little, if any portability', says Michael McGuire of research firm Gartner.

Matthew Hutchison, a Hong Kong-based consultant on online music, says companies are overstepping their bounds with copyright control.

The real answer to piracy is innovation by companies and musicians, Hutchison says, pointing to internet sites such as and Music Strands as the future of music distribution. Both rely on users to popularise the content. For instance, musicians can market their music at no charge to listeners on MySpace.

'In future, more artists are going to be found out about through those channels,' Hutchison says. 'The reality is the record companies don't want to change the old model. If it changes, the guys at the top of the company don't have a job any more.'

For now, industry groups such as the IFPI are winning battles in court. A recent newsletter cites victories against illegal downloading from Italy to Taiwan.

Shome, a guitarist for the band Molten Lava Death Massage, doesn't blame them. 'There's no love lost between me and any record company, but I don't see their action to prevent piracy as unjust. They're protecting their livelihoods.'

Meanwhile, he's helping to change the way fans get their music. Molten Lava's music is available for free on 'MySpace and sites like it are giving people an opportunity to sidestep the traditional ladders of the music business and push ahead.'