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June 14, 2002

[Rants]
Tech Mandates or No DTV? Calling the Cartel's Bluff

Why are technology companies backing government-mandated content protection for digital television? In other words, why are so many going along with BPDG, when each and every one would prefer a world without government technology mandates?

Because they are being held up by the Hollywood cartel.

Major motion picture studios have made it clear that they will not license their movies for DTV broadcast until their tech mandate demands have been met.

Call their bluff, I say.

Hollywood has a miserable record as a cartel. They have tried this before. In the late 1950s, at the dawn of color television, the Hollywood cartel refused to license movies for color TV broadcast. Who broke ranks first? None other than Walt Disney himself, when he licensed "The Wonderful World of Color" to NBC for color broadcast. The cartel fell apart.

Same story with video cassettes. In 1976, the major motion picture studios, several of whom were trying to sue the VCR out of existence, refused to sell pre-recorded video cassettes of their films. Once again, one of their members broke ranks (20th Century Fox, this time; in the words of Fox exec Steven Roberts, "I took the position that I never wanted to see our company let a new technology come along and bury its head in the sand") and the cartel collapsed.

Already, there are signs that the cartel will not be able to hold the line on DTV. NBC, for one, is not going to wait around for BPDG mandates before getting in on DTV. NBC recently announced plans to broadcast its prime time line up in high-definition DTV. A new generation of producers like HDNet have also committed to DTV, without waiting for technology mandates.

It will be a hard thing to maintain a cartel in the face of new DTV opportunities. I don't think the Hollywood studios have the moxie, any more than they did in the face of color TV or the VCR.

Rather than hobbling DTV innovation with technology mandates, perhaps we should call their bluff and let the market forces take over?

Posted by Fred von Lohmann at 08:43 PM