Keeping Oscar’s treasure away from the pirates

Hollywood loves a sequel, but nobody wants a replay of last Oscar season’s bitter fight over screeners. The original Battle of the Screeners, you’ll recall, sparked family feuds within studios and a high-stakes courtroom battle -- all over whether piracy concerns trumped one of the town’s most sacred entitlements: the free videotapes and DVDs that start flowing as the quest for Hollywood awards gold begins.

Battle of the Screeners II hasn’t opened yet. But the coming attractions already reveal a new player in the drama -- an 11-pound device the Academy of Motion Picture Arts and Sciences hopes will emerge as a techno-hero of the show. So far, however, the would-be hero has yet to make a convincing entrance.

The academy has agreed to allow a Reston, Va.-based firm called Cinea to send “secure” DVD players to thousands of academy members, free of charge. The machine, which will cost $800 ($500 wholesale), will play encrypted DVDs that, according to Cinea, are piracy-proof.

Executives at Cinea’s parent company, Dolby Laboratories, say the plan is an act of near-charity -- but it’s also a shot at eventually harvesting some big profits. Two Dolby executives, both longtime and active academy members, persuaded the organization to back the technology at a presentation in May.

Cinea hopes the studios will sign up to use its encryption technology -- committing for a minimum of three years -- so they can send out screeners on DVD without worrying about illegal downloading. (Last season, many studios sent out individually watermarked VHS screeners so that illegal downloading would be cumbersome and traceable to a source; the move was effective enough to allow pirated videos to be linked back to academy members in a couple of cases.)

Cinea’s problem: So far, no studio has committed to the plan and several have reservations about using the new technology. Even Warner Bros., one of the most aggressive studios in the fight against piracy, is hesitant. “We hope to support this because we think it’s a really good idea,” says spokeswoman Barbara Brogliatti. “But there are still some kinks to be worked out.”

The studios have several concerns, mostly centering on the machine, rather than the technology for encrypting the disks. Cinea has demonstrated the device using a prototype but the finished product has not yet come off the assembly line. (The company says they’ll be ready in days.) Even assuming that the machines work well, many studio executives are worried that technology-impaired academy members may not hook them up, and will then receive encrypted disks that they can’t play on their ordinary DVD players.

At 11 pounds, the Cinea machines are not exactly portable. That’s a problem for voters who screen DVDs on the road because they’re traveling for business or for pleasure over the holidays. “The first thing I said to [my boss] was, ‘You’re going to ship this baby to Hawaii?’ ” one studio executive says.

Some also wonder whether critics or the various guilds will accept the free machines. The Directors Guild, which wants members to view movies on the big screen, will not; the Screen Actors Guild has not settled on a position; the Writers Guild declines to comment. The critics groups have yet to voice a position but Peter Rainer, chairman of the National Society of Film Critics, says many “may not be in a position to accept such a gift.”

If those groups don’t accept the machines, studios that send out encrypted disks take a chance that their films won’t be seen by groups that influence Oscar voting. Even if they do take the special players this year, there may be future complications. SAG, for example, has a nominating committee with membership that rotates from year to year.

Bruce Davis, the academy’s executive director, says he’s not concerned about some of these issues. “If you went away for vacation, you might -- God forbid -- have to watch a movie in a movie theater,” he says. Although he has heard other concerns from the studios, he says, “We don’t care if they use [the machines] or not. But some of these frettings seem awfully minor. They seem like first-week problems. Does anybody think that cinematographers and editors won’t be able to plug in two cables? People have DVDs right now and somehow they get them hooked up. “

Davis says the academy adopted this plan not just to combat piracy but to address the concerns of members who feared they might be blamed if a watermarked disc were stolen or intercepted in the mail.

“Not long ago, there were four different studios saying this is great,” Davis says. “I think most of these problems will go away. Or maybe this whole [approach] will go away. Let’s bring on the next solution.”

According to Davis, the academy and its executives have no financial interest in Cinea. David Gray, vice president of production services at Dolby Laboratories, says at this point the exercise is “pretty close to charity.”

The company’s request that studios sign up for its encryption technology for a minimum of three years is another sticking point for some studios, which fear that technology may advance in that period. The process costs about $5 per disc, which is slightly cheaper than watermarking. (Studios are also being asked to pay an additional one-dollar duplication fee per disc but a studio executive confirms that this is still less expensive than watermarking.)

Cinea executive Laurence Roth says the company hopes the giveaway will encourage the studios to use Cinea’s technology to protect unreleased footage on a routine basis -- to transport dailies or rough cuts of movies, for example. At this point, the company acknowledges that it is taking a multimillion-dollar risk, incurring the expense of sending out what could easily be more than 10,000 free players with no guarantee that studios will sign on for the encryption technology.

Gray and colleague Doug Greenfield, director of production services at Dolby, presented the idea of sending out the machines to the academy’s six officers and some senior staff members last May. Gray is a member of the academy’s scientific and technical standards committee and recently became chairman of the theater standards committee. Greenfield was a member of the board of governors from July 1997 until July 2003.

Cinea’s Roth says the encryption means that, in the months leading up to the Feb. 27 Oscar ceremony, Academy members and others can watch films in the DVD format, which is technically superior to the VHS format. The encryption technology is so secure, he continues, that academy members don’t need to worry if a DVD is stolen or mislaid. And Cinea says the studios will find its process easy to use, since only the master is encrypted and it is unnecessary to mark individual DVDs or videos.

But with no deals in place, Dolby’s Gray acknowledges that it’s getting late in the day to handle the logistics of getting DVDs out to prospective voters. “I’ve had a fair amount of concern that the schedule’s tough,” he says. “I don’t think it’s a ludicrous schedule but it counts on some precision timing.”

Members of the academy -- not to mention thousands of other movie-industry professionals -- have not forgotten the pandemonium that developed last year when the Motion Picture Assn. of America ordered the major studios not to distribute screeners. Despite the MPAA’s contention that it was trying to deter piracy, some in the industry complained that the measure penalized smaller pictures that didn’t get the exposure big, splashy movies receive as a matter of course.

After lots of arguing and confusion, a court ruled that the screener ban violated antitrust law and barred the studios from colluding on this issue. Most studios sent out screeners and a number of veteran academy campaigners believe that helped bring awards to some smaller films (such as the best actress Oscar that went to Charlize Theron for her performance in “Monster”).

Since the court ruling precluded Cinea from approaching the studios though the MPAA, Gray says the academy was the best way to reach all the studios without running afoul of the antitrust ruling.

But some executives at studios and other organizations now say the academy committed to sending out the machine without adequate discussion. The academy sent out a letter informing members about the free machines in August, when many members were on vacation.

Executives at several studios, concerned about violating the antitrust ruling and not wanting to be accused of attempting to collude, asked to speak anonymously. Given the fact that they have not been able to test the machine, they say, they are displeased the academy agreed to have a machine sent to all members except those who opt out by mailing in a card declining it. “It’s really silly to say, ‘Unless we hear from you, it’s going to end up on your doorstep,’ ” says one. “How many people are away? How many live in apartments? We’re not going to know who’s going to get the machines.”

“Let’s say there’s a problem with a batch of disks,” says an executive at another studio. “Since everyone is always looking for a reason why they did not get nominated, is there some [legal] ramification if things don’t go off perfectly?”

Still, some executives feel the technology could be useful for some films that are highly vulnerable. Those include animated pictures like “Shark Tale” or “The SpongeBob Squarepants Movie,” which stand to make millions when sold in the DVD format.