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Hollywood Studios And RealNetworks Trade Lawsuits

Wednesday, 1 Oct 2008 | 9:58 AM ET
RealNetworks
RealNetworks

The six major Hollywood studios sued RealNetworks, parent of the Rhapsody music service, to prevent it from distributing a new DVD copying software called RealDVD which launches Tuesday.

Seeking a temporary restraining order, the studios say the $30 software bypasses DVDs copyright protection, argue the software would allow customers to "rent, rip, and return" movies or copy their friends DVD libraries. The MPAA, Motion Picture Association of America, argues that people won't buy DVDs if they can copy rented DVDs. The stakes are high--the DVD business generated $14 billion in revenues this year.

RealNetworks is defending its software, saying "it does not enable users to distribute copies of their DVDs." RealNetwosks suit asks a court to declare the RealDVD software, which allows users to copy DVDs to their computer hard drives, is legal. RealNetworks' argument is that it simply allows consumers to copy their own DVDs onto their hard drives and they say it complies with the DVD Copy Control Association's license agreement.

RealNetworks is even attacking the movie industry as old fashioned, so old fashioned they risk going the way of the music industry. The company says its software doesn't allow users to distribute copies of the DVDs, saying they just can copy their DVDs onto their hard drives.

Piracy or technological sophistication? The movie industry certainly wants to innovate when it comes to digital distribution, allowing people to access their content in new and different ways. But it's also wary of unlocking piracy protection on their discs. It'll be interesting to see how these suits play out. To a certain extent, the direction the movie industry goes in lies in the balance.

    • Hollywood Aims to Block RealNetworks' DVD Software
    • Netflix to Make Starz Movies Available for Streaming
    • Media, Tech Companies Unite to Fight Piracy

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.