June 15, 2024

DRM and the Market

In light of yesterday’s entry on DRM and competition, and the ensuing comment thread, it’s interesting to look at last week’s action by TiVo and ReplayTV to limit their customers’ use of pay-per-view content that the customers have recorded.

If customers buy access to pay-per-view content, and record that content on their TiVo or ReplayTV video recorders, the recorders will now limit playback of that content to a short time period after the recording is made. It’s not clear how the recorders will recognize affected programs, but it seems likely that some kind of signal will be embedded in the programs themselves. If so, this looks a lot like a kind of broadcast-flag technology, applied, ironically, only to programs that consumers have already paid a special fee to receive.

It seems unlikely that TiVo and ReplayTV made the decision to adopt this technology more or less simultaneously. Perhaps there was some kind of agreement between the two companies to take this action together. This kind of agreement, between two companies that together hold most of the personal-video-recorder market, to reduce product functionality in a way that either company, acting alone, would have a competitive disincentive to adopt, seems to raise antitrust issues.

Even so, these are not the only two entries in the market. MythTV, the open-source software replacement, is unlikely to make the same change; so this development will only make MythTV look better to consumers. Perhaps the market will push back, by giving more business to MythTV. True, MythTV is now too hard to for ordinary consumers to use. But if MythTV is as good as people say, it’s only a matter of time before somebody packages up a “MythTV system in a box” product that anybody can buy and use.


  1. Actually, it is my impression that MythTV may be hurt by this delvelopement. If Tivo and Replay become widespread, then cable companies can stop offering pay-per-view directly, and offer them only through Tivo and Replay, effectivly shutting Myth out.

  2. By agreeing to enforce short term-deletion on some downloads, TiVo and replay are simply trying to create a market that would not otherwise be there. They will probably find companies that are glad to provide the short term downloads for a reasonable price. Those same companies would charge more for unrestricted doewnloads, or perhaps not sell them at all.

    I do not see any deep DRM issue here, except for this: If there really IS a market for these restricted downloads, then hackers will soon disseminate info on how to eliminate the restriction. We’ll have the usual battle to see if TiVo and Replay can stay ahead of the hackers.

    – The Precision Blogger

  3. I think it’s helpful to distinguish between things that PVR developers are doing that they are legally obliged to do, things that they are contractually obliged to do (to get lawful access to some source of programming), and things that they are just doing for business reasons.

    When PVR manufacturers impose restrictions that (within present law) they have a choice about, people criticize them. But those criticisms don’t seem to go far beyond the community of people who read slashdot, Prof. Felten’s blog, Prof. Lessig’s blog, etc.

    In the U.S., until the effective date of the broadcast flag regulation, people who make devices to receive and record over-the-air broadcasts and basic-tier cable (whether analog or digital) do not have to impose technical restrictions on their users. People who make devices to receive satellite and premium cable signals do, under the law, need some sort of permission and, under an unfortunate FCC decision from 2000, that permission may be conditioned upon applying technological restrictions after the programming has been lawfully received. (That programming is called “conditional access” programming when a subscriber may or may not be entitled to receive it.)

    Most commercial PVRs are aiming at being able to receive conditional access programming directly, because many customers want to receive it. But that has meant giving up a tremendous amount of freedom and flexibility. PVRs like MythTV receive only non-conditional-access programming or else use the “analog hole” and external equipment like a set-top box to receive it without coming under contractual obligations. That lets them preserve the greatest possible amount of functionality available under the law.

    Something major would have to change before the market started to seriously punish the commercial PVR vendors for voluntarily adopting measures that lead them to restrict their customers.

    Trying to reverse the FCC’s decision on navigation devices would be a good start, but the FCC has been moving in the direction of allowing more, rather than less, technological restriction of consumers.

  4. As PPV is a “Xcast” technology, I would bet that in addition to being Legal, there would be some attempt to implement the PVR restrictions in technology and that either MythTV honors the restriction, or its developers/users will be in a continuing WAR to Crack Develop, the DRM code.

    Personally, I think this is a foolish “restriction”. It seems to me that the cost of storage is sufficient to practically make the user delete even a PPV show from their hardware. On the other hand, if we assume that they have the right to maintain their business model, I understand restricting PPV and HBO-type content to the local area, and trying to not permit it to be off box recorded or set over wide area networks.

    On the third hand, I realize that:
    1) Many people feel that the content producers must adapt to the new technology and should not control their access.
    2) Such loopholes such as the “Anolog Hole” etc, may make it practically impossible to control access.

    So, though I disagree with what the providers are doing, I think that, given their success at generally controlling access to their signals, they will be able to GENERALLY prevent MythTV from accessing their protected content if they want and MythTV does nto cooperate.

  5. I assume that TiVo and Replay did this due to legal pressure from the content companies. Replay has been sued on other issues, while TiVo has so far managed to avoid it; but both are clearly at risk. They are constantly treading a line between fair use and copyright infringement, a line which (contrary to popular belief) is actually very blurry in legal terms.

    I doubt that either company thinks that limiting what customers can do with Pay Per View recordings is going to sell any additional units. This is not exactly something that customers have been begging for. At most you could make a case that in the very long run, if no such limitations were in place and PVRs became much more widely used, movie companies might stop allowing their movies to be shown on PPV, which would somewhat decrease the utility of a TiVo. But that is surely years away. It would not be a motivation for these companies to make such a change at this time.

    The only reasonable conclusion is that they were coerced into making the change by threats of legal action. (Or, less plausibly, they were paid to make the change by secret bribery from the movie industry.) If so, it is likely that MythTV will face some kind of similar legal pressure; and if there is no one to sue or threaten, then the pressure will be applied through legislation.