Escaping the Napster trap

Hackers and movie traders love the digital film compression software DivX -- but will Hollywood? Second of two parts.

Published March 19, 2001 8:30PM (EST)

Despite DivX Networks' popularity with hackers and support from open-source software developers, the company still has a long way to go before it realizes its grand ambition -- becoming the standard for digital video compression online.

Only 500,000 people have downloaded the new version of DivX, DivX ;-) Deux, and most of the movies available online -- including "Snatch" and others that have been released since the appearance of the upgraded DivX software -- still flow only through the original DivX.

Veterans of the DivX scene say Deux hasn't caught on because the original still offers higher-quality playback. This may or may not be the case. Quality depends not just on the version used, but also on who does the encoding -- a multi-step process that requires a relatively high level of technical know-how.

After having reviewed several movies and clips encoded in both formats, I can safely say that the difference appeared negligible. Both displayed pictures that are better than what you'll find on a non-cable television, but still suffered from the same weakness: pixelization. Images, especially in high-action scenes, break down from fluid motion into jagged, small squares.

DivX ;-) Deux aims to address some of these technical weaknesses. The software automatically detects problematic high-action scenes, for example, and changes the encoding bit-rate accordingly, cutting down on pixelization, though not completely. The new code is also not derived from Microsoft's original Windows Media codec, which DivX Networks' founders hope will keep Microsoft's lawyers at bay.

The homegrown nature of the code has another advantage -- because it's built from the ground up, it's also easier to fix or change. Given DivX Networks' plans for ubiquity, the pliability of DivX ;-) Deux is particularly important. When it's easier to make applications that run on top of it, it's easier to scale and enter new markets.

But technical issues are, in the long run, only one factor in determining DivX's success, and possibly not even the most important one. For DivX Networks to truly succeed, the company needs the support of the film industry -- and that means incorporating features that may not jibe with the desires of the open-source/hacker community upon whom DivX Networks is counting for support. Those are features that Hollywood will demand.

Some form of copy protection will be one of the first additions. Without Hollywood's support, there will be no convergence upon DivX as the standard. And Hollywood wants better defenses for its intellectual property. The lack of any current form of copy protection, or so-called "digital rights management" software, represents the single greatest roadblock to widespread, official distribution -- and DivX legitimacy.

The current plan at DivX Networks is to include the copy protection and digital rights management software as part of a "wrapper" that will be on top of the open-sourced codec. But that presents an interesting contradiction. Will the hackers who are contributing to the open-source development of DivX balk at a product that inhibits them from freely trading movies online?

Many of the hackers who came to DivX don't care much for Hollywood's needs. They're still angry at the studios for suing Eric Corley, the publisher of 2600 magazine, and for convincing a federal judge to keep Corley's site from doing so much as even just linking to DeCSS code on the 2600 Web site. And they're not all that impressed by what they think Hollywood will ultimately offer.

"The studios are probably going to come up with something that's complex, that makes people deal with encryption keys and digital rights management," says Shawn C. Reimerdes, a defendant in one of the DeCSS lawsuits (who settled his case), and the founder of Yo!NK,a file-swapping service.

"No one's going to go for it," says Reimerdes, a fan of DivX who says he downloads five movies a week. The hardcore traders would never bother, he says, because "most of them are doing it because they love to trade, whether it's music or movies. To them it's about downloading it their way, not the official way."

Representatives of DivX Networks say they think they can win people over with quality. Many DivX movies now circulating through the underground cut out halfway through the download. Most people, including hackers, would probably pay for complete downloads and official copies, says Eric Smith, another DivX trader and the founder of, which sponsors contests for open-source compression codecs, and awards money to victors such as 3ivx, a DivX competitor.

"I know I would much rather have a clean, well-recorded, studio-approved copy," he says. "The studios aren't getting in gear yet but if they release [their catalogue], people will come."

Whether or not DivX succeeds in becoming the standard, make no mistake, copy-protected Hollywood content will soon be coming to a screen near you. Sony Pictures Entertainment plans to start distributing movies online this year and other studios will follow, says the MPAA's Jack Valenti. After several failed starts, Hollywood has begun to believe that the Net is ready for the big time.

"We're looking at a new medium, through which we think audiences will enjoy and access new levels of entertainment," says Don Levy, a spokesman for Sony Pictures. "Studios now believe that there is a market online for entertainment, specifically movies."

There's no guarantee that this year's crop of content will flow through DivX, but judging by Valenti's conciliatory comments, Rota and Greenhall may not have to worry about a lawsuit, à la Napster or Valenti says that the industry holds no grudge against DivX for spawning widescale movie trading.

"People are trading pirated movies because they're not encrypted," says Valenti. "Once we get encryption, DivX becomes a wonderful ally."

Why? Because "anything that's helpful to consumers will be helpful to us," he adds. "The faster we can get it to customers, the better off we'll be."

Greenhall, who has already met with several studios and the MPAA, predicts that DivX will catch on because Hollywood has learned a very important lesson from Napster -- that free sharing could have been avoided if the industry embraced the underground rather than trying to sue it out of existence.

"Look at Napster," he says. "If the music industry had created something that offered all their songs for a fee, people would have flocked to it. Instead, they waited too long and paid the price. The movie industry knows that. They've learned their lesson."

Greenhall's co-workers echo his worldview. They may answer only to nicknames that conjure up images of childhood innocence -- Piglet, The Kid -- but their faith in DivX hinges on the hope that the entertainment industry and Web start-ups are both learning from experience. They believe wholeheartedly that Napster has stirred the entertainment industry from its slumber, and that DivX Networks will thrive as a result. If DivX Networks had a corporate mantra, to be spoken at conferences and in business meetings, there's no doubt what it would be: "Napster could have been avoided."

Piracy will be inevitable on the Web, they argue. About 20 percent of the population will always choose to route around copy-protection, estimates Darrius Thompson, leader of DivX Network's free-software development effort. But the message that DivX Networks keeps drumming into the studios is that the vast majority of people will embrace anything that's easy to use and affordable.

Representatives of the studios decline to comment on what they may or may not have learned from the Napster example. But the hackers at DivX Networks are confident -- sure that a happy ending is just around the corner. In between hacking on the codec, they dream of a future filled with digital movies, accessible on any whim.

Greenhall hopes for a day when DivX movies are available on demand.

"When I go to Blockbuster, I'm in the new releases section for hours. With DivX, I could someday say I want a romantic comedy set in the '50s, done by a few of my favorite directors and get a movie I really want to see. That's nirvana for me."

And Rota? What does he want? Sitting in a conference room, he struggles with the question. He wears the T-shirt and sneakers of an American college student and is rumored to be a big beer drinker, but his taste for DivX is definitely French. He says that he would most like to see DivX act as a catalyst for variety, a way to distribute old experimental movies like "Shadows," the John Cassavetes film. With DivX, he says, consumers can set themselves free from the one thing Rota has come to hate about San Diego: American television. "There are 80 channels with nothing," he says. "Big nothing."

By Damien Cave

Damien Cave is an associate editor at Rolling Stone and a contributing writer at Salon.

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