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Brave new world for a couch potato - DVR Law set for review in Australia...

After decades of illegally taping TV programs and CDs we are about to be made honest by the Government, writes Julian Lee.

We are TV viewers, iPod owners, computer users - and most of us are criminals. Any Australian who has recorded Law & Order on Channel Ten while watching Desperate Housewives on Seven has broken the law. It is also illegal to tape a CD for the car stereo, copy songs onto an iPod or make a back-up copy of a computer program - although most of us ignore such laws and no one has ever been prosecuted in these circumstances.

Our creaky 35-year-old copyright laws are being further exposed by a wave of new consumer electronic products such as DVRs, or digital video recorders, that can be programmed weeks in advance at the touch of a button to record hundreds of hours of TV programs and films.

Unlike the US or some European countries, where laws are in place to allow copying for personal use - a clause known as "fair use" - Australians are subject to draconian laws, which are set to get even tougher as we fall into line with the US after the introduction of the US-Australia free trade agreement.

Under new US laws, which must be in place by 2007, anyone found selling or using software that breaks a copyright lock on encrypted CDs or DVDs faces a spell in jail.

It is this threat to liberty that has finally prompted the federal Attorney-General, Philip Ruddock, to review the law and consider a "fair use" clause that will bring the Australian public in from the cold. Fair use allows consumers who have bought a film or a piece of music to be able to transfer it to another medium for their own use.

"There's a reasonable argument for putting forward the opinion that when someone has bought something in one format and has acquired the copyright for it in that particular format, then there is a fair use for them to take it to another format," Ruddock told the Herald.

"I think it's a strong argument. It's not unreasonable to allow its use again and again." It is the first time the Attorney-General's office has said it would consider such changes.

Ruddock's review would also examine ways of compensating artists for any increase in copying that accompanied a change in the law.

The real test for the review panel will be to define what is meant by "fair use". Is recording a TV program for later viewing "fair"? What about taping songs from the radio for personal use? What if you then give that recording to a friend?

New consumer technologies such as DVRs, portable digital music players and computerised "media centres" are in legal limbo until these details are nutted out. A lot of money is at stake.

The DVR - also known as a PVR, or personal video recorder - promises "the idea that you can get any show whenever you want", as Microsoft founder Bill Gates has put it. About 1.9 million US households subscribe to a DVR service called TiVo. Microsoft has created a special version of its Windows software to do the same thing, and store music and photos.

This long-awaited convergence of television, computers and the internet threatens to overturn the established order of television. DVR owners rarely watch live TV, instead choosing to watch their favourite shows (minus the ads) at a time suitable to them - a process known as "time-shifting". DVRs can even learn the preferences of viewers and suggest shows to record.

Today's laws have been a hindrance to the pay TV operator Foxtel, which next month plans to launch the first Australian DVR service (albeit without TiVo's ad-skipping feature).

Foxtel predicts a slowburn effect when it launches its DVR (see breakout). It combines the station's electronic program guide, which allows viewers to scroll through the schedule of all its channels, with its recorder. Live television can be recorded and replayed.

Foxtel says its service will knock the competition out of the water and change viewing habits forever.

"It'll do to television what the PC did to computing," says Foxtel content director Patrick Delany. Viewers would be able to build a library of TV programs by recording any program they wish.

Yet this library might be illegal under Australian copyright law. Foxtel has been forced to seek permission from scores of film studios and TV producers so users of its DVR can legally record programs and films.

Panasonic's latest DVR boasts, among other features, the capacity to store more than 700 hours of viewing material, record two programs at once, and transfer your VHS collection to DVDs. Yet the legal use of the machine is unclear because recording TV shows is illegal in Australia. Panasonic declined to address this issue when asked by the Herald.

The weight of the law was too heavy for a Sydney entrepreneur, Damian Ivereigh, who planned to launch a locally designed DVR. Called Ebony, the DVR would have automatically downloaded shows for viewing on TV or a notebook computer. It would also have acted as a digital music centre.

But the 40-year-old entrepreneur from Drummoyne has reluctantly shelved his plans after realising that many of Ebony's features could not be used without breaking copyright law.

"I felt that as a small player I would be an obvious target for a lawsuit from the TV or movie companies, who could see Ebony as a significant threat to their revenue model," Ivereigh said.

Of course the issue is not new. People have illegally recorded music and TV shows as long as tape decks and video cassette recorders have been around.

But in a connected, digital world, the threat to copyright holders is far greater. Witness the downfall of the music industry in recent years. (The Australian record industry has lobbied against changing Australian copyright law).

Digital convergence poses a greater threat to the music and film industry than the old fashioned video cassette, says copyright expert Kim Weatherall of Melbourne University's Law School.

"The problem with PVRs and DVD recorders is that they make digital copies - and unlike tapes and ordinary videos, digital copies can be endlessly copied and distributed, including online."

That threatens to make ordinary TV viewers dangerous copyright infringers, as they could threaten the profits and business models of the copyright owners.

Less profit means less innovation, which leads to fewer new acts and films, and ultimately means cheaper and more uninventive content for the consumer - or so the argument goes.

To lessen this danger, Foxtel's DVR will encrypt TV programs to prevent them being recorded onto a DVD disc. "If they don't pay their bills when we cut them off, their library will be instantly erased," Delany says.

Simon Lake of copyright collection agency Screenrights says: "It's hard to quantify the damage [of duplicating copyright material] other than to say that consumers value the right to copy because they are buying equipment at record rates."

Harvey Norman reports strong sales of digital recorders and PCs equipped with the Microsoft program. It's early days yet, says director John Slack-Smith, but he predicts both will be big sellers. "These have the potential to be massive ... the viewer is no longer going to be beholden to the [TV] station," he says.

Market research firm Gfk says 77,199 DVD recorders at an average price of $829 were sold in Australia last year and forecasts strong growth in 2005.

Still, many in the TV, film and music industries do not agree with the introduction of a fair-use clause.

"Fair use is often misunderstood as free use and you have to be very careful how you use that clause," says Adrianne Pecotic, who heads the film industry's Australian Federation Against Copyright Theft.

Another solution under consideration is a levy on the retail price of CDs, DVD, DVRs and other devices to compensate copyright owners for lost income through piracy and copying.

Unlike their recording labels, many songwriters and music publishers support a fair-use concept in tandem with a compensation plan.

"We have a culture of copying but as yet no means of remuneration," says Screenright's Lake.

Music record labels and film studios dismiss the idea as unworkable and tantamount to raising the white flag. "You'd be saying 'take my film, make a copy and give it away and maybe we'd get some money further down the line," says Pecotic.

Competition an obstacle for Foxtel

Australian couch potatoes have so far missed out on a wave of sophisticated new viewing technologies because of infighting among TV networks and low penetration of pay TV.

Foxtel promises its digital video recorder (DVR), due next month, will revolutionise the way we watch TV. The box - available in the 560,000 households connected to Foxtel's digital service - will feature an electronic program guide. This allows viewers to record and save dozens of shows without a tape.

But because of infighting, only one of the three commercial networks, Nine, is expected to appear on the system alongside Foxtel's channels.

The Foxtel box needs a program guide to function effectively. "Without that it's little more than a glorified video recorder but with a bigger memory and without the tape," says the Herald's TV technology reviewer, Rod Easdown.

Seven and Ten are reluctant to hand over their program guides to a rival; Foxtel shares a parent with the Nine Network in Kerry Packer's PBL.

Viewers may be discouraged from paying for Foxtel's DVR without access to Seven and Ten's TV listings. The technology has also been delayed because of the slow uptake of pay TV. Unlike the US, Canada and Britain, pay TV here is very much the younger sibling to the free-to-air networks. Only 24 per cent of Australian households subscribe to pay TV compared with 70 per cent in the US, 68 per cent in Canada and 56 per cent in Britain.

"Things would be very different if, say, Foxtel had the exclusive rights to broadcast cricket," says Mike Porter, the chief executive of Mediaedge:cia, a media strategist.

"Because of our anti-siphoning laws it has meant that pay TV has never really been able to dominate a program strand that has been in heavy demand."

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