After a long-running legal battle with movie studios over the RealDVD product, RealNetworks has settled the suit on terms very favorable to Hollywood. The issue was over RealDVD's use of a CSS key to allow DVDs to be ripped to personal computers. A disappointing ending for RealNetworks, who lost several important motions including a preliminary injunction against the sale of RealDVD.
RealNetworks argued that RealDVD did not remove the CSS encryption - it copied the DVD, encryption and all, to the computer while limiting playback to the computer on which the digital copy was originally ripped. Therefore the copies would not contribute to piracy and would not end up on file sharing networks. The movie studios disagreed and argued that the software bypassed encryption in violation of the DMCA. The preliminary injunction was on appeal, but it appears that the battle will come to an end with Real admitting paying $4.5 million to the studios as well as refunding sales of RealDVD made prior to the injunction.
It will be interesting to see if this case results in the death of movie management or copying systems, especially after Kaleidescape lost on appeal after beating an infringement suit at the trial level. It is difficult to get behind suits like this. Real took steps to secure digital copies against piracy and provide consumers with a legitimate way to watch their legally purchased DVDs from a home server. Now consumers interested in creating a central digital library of their legitimately purchased DVDs pretty much have to turn to products that remove CSS and are much more likely to contribute to piracy.
The "my way or the highway" approach taken by content owners is not helping them out of the revenue pickle they are in. If you want people to buy DVDs, a good solution is encouraging solutions that add more value to a DVD purchase. There is a consumer need that is not being met by the legitimate market. Rather than giving consumers no legal option then complaining about piracy, movie studios could focus on providing legitimate solutions and providing value to their customers. I'm not holding my breath.
