VIACOM TO CEASE DTV PROGRAMS WITHOUT PIRACY PROTECTION IN FALL

CBS TV Network won’t transmit any DTV programming after summer 2003 “if a broadcast flag is not implemented and enforced” by then, parent Viacom told FCC. Commenting on rulemaking (MB 02-230), Viacom said sale of digital sets and broadband subscriptions had “reached the tipping point at which it can no longer afford to expose its content to piracy.” Viacom said potential revenue loss by CBS due to program piracy, and resulting “devaluation” of over-air broadcasting, “could reach hundreds of millions of dollars.”

Without piracy protection, Viacom said CBS would cease all digital transmissions at start of 2003-2004 prime-time TV season next fall. Citing TV and cable programming, along with Paramount movies, that it produces in high-definition, Viacom told FCC it had played “crucial role” and was “the undisputed leader” in transition to digital. In current season, all of CBS’s scripted prime-time programs are sent to affiliates in digital format, plus minimum of 120 hours of sports programming, Viacom said.

Programming is digitized and compressed, which makes it easy to copy and places broadcasters at “a severe disadvantage” because they're unable to protect their programming, Viacom said: “In essence, the broadcaster put the content in a form that is ready-made for Internet distribution… Left unaddressed, this vulnerability to [piracy] could destroy television production economics.” Such outcome, Viacom said, would result in “rendering free, over-the-air television the poor stepchild [with] leftover programming.”

Viacom said its engineering staff had “easily consumed many years of effort” seeking copyright protection solution, and workable broadcast “flag” had been subject of “intense industry discussions” for nearly 2 years (CD Dec 5 p2). Concern over widespread privacy has been “mitigated” by low number of DTV receivers owned by consumers, Viacom said, but figure had reached 2.8 million by last April, with CEA predicting 2.1 million digital sets will be sold to consumers this year, increasing to 10.5 million in 2006.

ABC, NBC, Fox and NAB had no comment on Viacom’s filing, and other parties to transition also were reluctant to comment. Said MPAA official: “We do not comment on marketing plans of our members.” Viacom’s position was called “disappointing but understandable” by nongovt. official who has followed transition closely. Said another: “If Viacom is serious, it should help things move along at FCC.”