Real's Glaser vows commitment to copyrights

Coppola, who directed works including the "Godfather" triptych, presented a scene from his film "Apocalypse Now" using the newly released version 8 of the RealSystem with Glaser at his side.

Although his immediate audience at today's Real Conference 2000 was the RealNetworks faithful--developers and technology partners who use the company's software--Glaser's repeated reassurances on digital piracy and copyright issues seemed geared more to Coppola's community of performing artists and the studios that produce their work.

RealNetworks' sharpened focus on copyright was also a shot across Microsoft's bow, which has made digital security a key component of its push into multimedia.

Microsoft's Windows Media format offers so-called digital rights management (DRM) as an integrated feature for audio and video downloads. On the audio front, its format has won support from major labels in part because of such security features.

RealNetworks, by contrast, has taken an agnostic approach to security, leaving content companies free to choose from several competing DRM systems. Its RealSystem 8, released this week, supports seven DRM formats.

Much is riding on these divergent security strategies.

Though Microsoft is betting that content companies will gravitate toward an all-in-one security solution, there are strong signs that record companies are not eager to see any one company control the key DRM gateway--a trend that could favor RealNetworks' approach over the long haul.

In response to industry pressure, Microsoft has already backed off pushing its DRM component as an exclusive feature of its audio format. For example, it is working with BMG Entertainment to create interoperability between its audio format and a competing DRM format created by IBM and InterTrust.

In his keynote address, Glaser made frequent references to Napster, an application for sharing digital media files that has come under attack for its lack of copyright protection. Glaser repeatedly sought to drive home the point that an application with legitimate copyright protections has the best chance of long-term market success.

"Napster creates a battleground between consumers and rights holders," Glaser said in his keynote. "It's important to work to serve both goals, (serving) consumers and rights holders."

Glaser named intellectual property protection as one of the primary challenges facing his company and the digital media industry as a whole. But he criticized what he termed a "damn-the-torpedoes" approach that protects copyrights at the expense of consumers' comfort or ease of use.

"You don't treat users as prisoners," Glaser said.

Instead of using brute force, Glaser said, the industry must create attractive alternatives to piracy. In making this argument, he repeatedly drew parallels to Prohibition, a constitutional amendment, later repealed, that banned the sale and distribution of alcohol in the United States.

"The way the bootleggers got shut down was by ending Prohibition," Glaser said.

Later, at a meeting with the press and analysts, Glaser amplified the comparison, asking rhetorically whether consumers today would rather "go into a licensed bar and buy a drink, or get a bootlegger to give you something in a dark bottle."

Analysts said RealNetworks' apparent nerves about the piracy issue had more to do with reassuring traditional content providers than with any threat to RealNetworks' own distribution network from the popular Napster application and its copycats.

"You could argue that Napster threatens their media portal business," said Malcolm Maclachlan, a media analyst at International Data Corp. "But it's not so much that Napster directly threatens their business model, but that they don't want to be associated with it. Napster has 10 million users and no friends in the industry."

Maclachlan said RealNetworks has clearly intensified its focus on copyright protection as Internet media distribution becomes increasingly mainstream.

"I don't think they've ever talked this much about it," Maclachlan said. "The big-name content is appearing. So you have to pay a lot of lip service to it publicly and have to provide some kind of protection as well."

Coppola weighed in on the copyright issue in remarks to the press, arguing that law and policy rather than technology hold the answer to the copyright conundrum.

"I get annoyed when I see people using technology to protect something that is more of a legal issue," Coppola said. "If we can just get a clear definition, we can get past this flurry" of piracy concerns.

Maclachlan agreed with Glaser and Coppola's position that ease of use has to be a paramount concern for the industry.

"Copyright protection is a huge pain in the ass for consumers," he said. "They have to make it simple."

News.com's Evan Hansen contributed to this report from San Francisco.