Beginning with its title Off Limits, released to retailers and mail order companies through Paladin Video in February, Centaur Films began copy-protecting all of its VHS and DVD titles. According to Macrovision, the only company offering the U.S.-patented process of copy protection, over 40 percent of all VCR households - more than 30 million homes - have two or more VCRs, and thus are "copy-ready." Over 30 percent of VCR households admit to having unauthorized copies of pre-recorded videocassettes in their libraries, and over 40 percent admit to some involvement in "back-to-back" copying.
Without any copy protection, there would be virtually nothing preventing consumers from acquiring titles for the price of a blank tape. Consumers made over 75 million illegal copies of pre-recorded videocassettes in the past year, displacing over $250 million in home video revenues. On the other hand, copy protection prevented consumers from copying 22 million times last year, saving the industry more than $100 million.
A recent survey done by a major MPAA video supplier of over 2,000 retailers found that 96 percent wanted all their cassettes copy-protected, 92 percent see their revenues increase when cassettes are copy-protected, 83 percent reported that they will boost orders of a title if they are informed before the pre-book date that it is copy-protected, and that, on average, retailers believed copy-protected videocassettes increase their revenues by 18 percent.
An earlier survey found that 93 out of the top 100 retail chains in the country wanted studios to copy-protect all their cassettes. And now that DVDs allow consumers to gain access to programs on a near-professional quality format, consumers could make VHS copies from DVDs that are equivalent in quality to original VHS cassettes sold or rented in video stores. Copy protection is designed to prevent consumers from making "back-to-back" copies.
Except in DVD, it is not an effective deterrent against professional pirates. There are also "black boxes" advertised, which can circumvent Macrovision's VHS copy protection process as currently designed. However, Macrovision owns the patents not only for the copy protection technology itself, but also for the methods used to defeat the technology.
Any company which markets or distributes devices designed to circumvent Macrovision copy protection infringes on Macrovision's patents, and Macrovision is 20 for 20 in forcing these companies out of business. Macrovision's enhanced copy protection for DVD degrades copies made on over 95 percent of consumer VCRs in the market, and cannot be defeated by current "black boxes."
So far, the only other gay adult company other than Centaur Films that is copy-protecting both their VHS and DVD releases with Macrovision is Kristen Bjorn's Sarava Productions. "We believe that if every company would employ copy protection, the studios, retailers and mail order companies would all benefit," states Centaur Films' Jack Hazzard. "There is a lot of confusion about copy protection. To date, most of the gay companies have been mostly concerned about piracy and do not feel copy protection helps them there because, except for DVD, a professional can defeat copy protection with a time base corrector. However, that is too expensive an item for most consumers. And that's where we and Bjorn are seeking the benefits of our copy protection, in addition to protecting DVDs from the professional, because of their master-like quality.
"We believe that if the consumer's routine copying of rented tapes can be significantly reduced, or eliminated, both mail order and retail sales would increase, thereby benefiting the entire industry as increased revenues could be used to improve quality."
