Coding Scuttling Video Pirates

There’s bad news for all the home video pirates--amateur and professional--out there.

Macrovision, the most effective anti-piracy process around, is spreading.

In its best-known form, it’s encoded in prerecorded videocassettes, distorting the picture on any copies that a pirate would want to make. Early problems with the system apparently have been corrected, paving the way for more extensive use.

Now Macrovision is moving to pay-per-view TV to prevent unauthorized taping there too.

Piracy, even on a small scale by the average VCR owner, who perhaps rents a movie and then tapes his own copy at home, cuts into video company profits. Macrovision is the only effective weapon they have in their war against piracy, although, because certain combinations of VCR circuitries can neutralize it, it only works about 70% of the time. Still, that is enough to discourage most copiers.

Companies that sell their movies to home video outlets also market them on pay-per-view, a service available to homes with cable TV. In many cities, pay-per-view is seriously cutting into the home video market, because many people prefer the convenience of having movies beamed into their homes--one showing is roughly the price of a movie ticket--to renting them at video stores. But another attraction is being able to copy without interference.

That’s where Macrovision comes in. Technicians at the Cupertino, Calif.-based company, which was founded in March, 1983, have developed a system that will distort the picture sent to pay-per-view customers if they try to copy it.

Eugene Eidenberg, president of Macrovision, said that this system, operated at cable control facilities, will be in operation sometime next year.

“It will make pay-per-view much more attractive to copyright holders (video companies),” Eidenberg said. For instance, if MCA wants to show “E.T” on pay-per-view and foil the would-be copycats, it would pay to have it Macrovision-protected.

The Macrovision picture wasn’t always rosy.

Introduced in 1985 on Embassy’s release of “The Cotton Club,”Macrovision works through impulses implanted in the prerecorded cassette that reduce signal strength, forcing the recording VCR to produce a badly distorted picture.

At first, unwatchable copies weren’t all that Macrovision generated. In some cases, Macrovision produced an irritating side effect, distorting the picture in the original too. Initially there were nothing but horror stories from retailers about customers angered because they rented or bought “defective” cassettes--defects, the retailers charged, that resulted from malfunctioning Macrovision.

“Macrovision was creating more problems than it was solving,” said Meir Hed, co-owner of the Videotheque chain on the Westside.

Tom Edwards, manager of Salzer Video in Ventura, also recalled problems: “People would bring cassettes back and complain that the picture would get real dark and real light and then real dark. Even some closed-captioned tapes were affected. On particular movies there were no captions. The Macrovision people said otherwise but we traced these defects to Macrovision.”

That blame was always misplaced, Eidenberg maintained. “Macrovision was a convenient dumping ground for complaints that had nothing to do with Macrovision,” he said. “If people got a bad picture from the original cassette, they blamed it on Macrovision. Our investigations showed that Macrovision was taking blame it didn’t deserve.

“One problem is equipment that’s hooked up in a way that will trigger the Macrovision process. If you play a cassette in a system that has two VCRs and put it in the wrong VCR, you’ll get a bad picture, which isn’t the fault of Macrovision.”

Eidenberg did fess up to problems with the process on 1985’s “The Cotton Club,” insisting that Macrovision was then still in an experimental stage. But he said the process has been improved since then.

Among many others, Salzer Video’s Edwards verified this turnabout: “For the last six months, we’ve had no complaints about Macrovision screwing up cassettes.” Ron Castell, executive with the East’s Erol’s chain, said, “There were some complaints traceable to Macrovision in the past, but we don’t get them any more.”

Allan Caplan, who heads the Midwestern Applause Video chain and was once Macrovision’s most vocal critic, agreed. “Macrovision isn’t causing the picture problems now,” he said. “These problems are due to cassettes being manufactured sloppily.”

Since these complaints have largely been eliminated, Macrovision is more attractive to video companies, who are charged as much as 10 cents per cassette for the encoding process. Major companies such as CBS-Fox, MCA, MGM/UA, Warner and Disney use it on their important releases.

Yes, the two biggest releases of the year, Disney’s “Cinderella” and MCA’s “E.T.: The Extra-Terrestrial” (due out at the end of the month) are protected by Macrovision.

Among the majors, the two holdouts have been Paramount and RCA/Columbia. But Paramount, which experimented with the process on “Beverly Hills Cop II,” is reportedly close to announcing a deal with Macrovision. And according to an RCA/Columbia executive, that company is considering boarding the Macrovision bandwagon.

Until recently, Macrovision was battling more than its bad reputation. Several companies were marketing devices--”Macro-eliminators”--that neutralized the process. But recent successful patent-infringement suits have largely eliminated that obstacle.

What about pay-TV?

There have been reports that Macrovision is about to invade the world of HBO and Showtime, preventing monthly subscribers from duplicating movies. The technology is there. It’s the same, Eidenberg said, as that ticketed for use by PPV companies.

Apparently, though, pay-TV, which gets movies about six months after they’ve been on home video and PPV, is safe from Macrovision, for now anyway.

“Pay-TV companies don’t want Macrovision,” Eidenberg explained. “But even if they did, we wouldn’t license it to them. People who pay for that service claim they have the right to tape something and watch it later. That right-to-time-shifting conflict is between the pay-TV companies and the subscribers. We don’t want to get involved in it.”

For pirates, that’s at least some consolation.