"We're looking to diversify now," says Julia Bishop-Cross, a 321 Studios spokesperson. "We're pushing full throttle ahead with our appeals. We're still continuing the fight for fair use, but at the same time we have a business to run."

The ruling, following a suit brought by Hollywood studios, said that the copying programs violate copyright law.

321 Studios' software allows users to copy DVD movies onto recordable DVDs or standard CD-R discs with the appropriate rewritable drive. The program circumvents the CSS encryption technology used on the discs. 321 Studios uses a freely available decryption technology called DeCSS to evade CSS.

New Application

DVDXtreme enables users to create their own DVDs and CDs, repair scratched discs, and make copies of their creations as well as nonprotected DVD movies. The ripper has been removed from the DVDXCopy Xpress program (now denoted with an RF, for "ripper-free").

"There are all kinds of movies out there that aren't CSS protected," Bishop-Cross says. "For example, all the John Wayne movies are in the public domain, so you'd be able to back up your collection."

DVDXtreme is available online directly from 321 Studios and currently sells for $79.99 after rebate.

Ongoing Court Fights

The fight over fair use has gotten a lot of attention, first from the music industry and now the movie industry. It's all part of the cliched but inevitable digital revolution, say several analysts monitoring the accelerating copyright battles.

"The whole issue is in such a state of flux," says Michael McGuire, a Gartner analyst. "It's all going through this transition from physical to digital or analog to digital. The law is sometimes keeping up and sometimes not. It paints a confusing picture for consumers."

This clouds issues of intellectual property rights and fair use rights, says Julia Bassett Schwerin, chair and CEO of InfoTech, a media forecasting research firm.

"The idea of making personal copies versus fighting piracy at the mass-distribution level is really where most people are missing the point," she says. "Arresting teenagers because they're file-sharing or because they're making a copy of a movie for a friend or a backup copy is always going to be bad publicity. It's bad for business, and it's ultimately not worth it."

321 Studios says 60 percent of the users of DVDXCopy are parents. "They were buying the product because their kids were scratching Finding Nemo or The Little Mermaid and they wanted to back them up," Bishop-Cross says.

You might want a copy for the DVD in the minivan or one to send with the kids on an overnight visit. "These are very legitimate personal uses," she adds.

Analysts Urge Compromise

Consumers view the issue from the perspective of fair use, McGuire says.

"When we ask them about TV content, for example, they feel that they are getting it, it's theirs, and they can do basically what they want with it," he says.

And the industry needs to realize that consumers are in control, he adds. If the products they buy are too restrictive, they'll just walk away, McGuire says.

"When companies tried to restrict access in the early days of e-commerce, people didn't call and scream, they just walked away from the Web site and never went back. They found alternative ways to get the same content," McGuire says. "The movie industry, rather than trying to put the genie back in the bottle, needs to find ways to embrace it, leverage it, make money on it."

That's a challenge, he acknowledges. "It's a very complex issue. But at the core, consumers who are armed with technology are in control," McGuire says. The industry must meet their needs on the devices they want, or it will "watch them go somewhere else."

Schwerin agrees there's no easy solution.

"These are all issues that are going to be debated for years. But fighting people [who are] making one-off copies is not where the industry should be spending its time," she says. "They should be making it very easy and enjoyable to utilize the content that they buy and not have the technology make it difficult for them."

Source: PCWorld