January 22 - Project Mayo will set us free - The Guardian

There is a chilling moment in the movie Poltergeist, when the little girl turns away from the TV set and says in a small, mysterious voice: "They're here." Since the advent of MP3, Hollywood and the TV industry have been waiting in fear for a similar moment when the soldier ant hackers out there finally work out how to do a Napster on them. Well "They're Here!" -maybe. In the US, the merry boys and girls who dedicate their lives to using the web to screw up conventional media economics have been working on something called DiVX, a modified form of Microsoft's MPEG4. This produces at least VHS quality pictures that can be compressed and downloaded to a CD or held on a hard disk.

DiVX was created a few years ago by a French video engineer and a German hacker who took a piece of code Microsoft released for developers only and rewrote it for general use. Initially called DiVX;-), it cocked a snook at the now defunct DiVX, a DVD rental format that tried to reassure Hollywood by guarding against piracy. The smile at the end of the new format tells you all you need to know of the intentions of the new hackers on the block. Throughout last year the movement built and now the cutting-edge people, such as the guys at the mysterious Project Mayo, are preparing new and better versions of the software. "We are," they claim on their website, "a Big Deal." And they probably are.

Nonetheless, digital nirvana is currently horribly difficult and slow to deliver on 56k dial-up. But with the rise of broadband, DiVX and its successors will come into their own. When the next Star Wars comes out on DVD (or before if someone pirates a copy), you'll be able to download it to a CD within hours.

How are audio-visual content providers supposed to respond to this new force? Well, we could take the music industry's initial approach to Napster and run into the middle of the road, bury our heads in tarmac and shout: "Go away nasty truck," as the juggernaut hammers towards us. Or, we could get the legal and technical rottweillers on the case. In the US, Paramount and Time Warner are already suing some of the people in the movement, and the studios are putting pressure on the manufacturers of digital reception equipment to install obliteration codes that will seek out and destroy any illegal content - such as a DiVX download.

No doubt various combinations of these approaches will swirl around the industry in the next few years. There is a third option, however. Which is to try to harness DiVX and use it legitimately, rather than try to strangle it in the cradle. We wait to see where Bertelsmann's tie up with Napster goes, or whether new legal alternatives to Napster, such as Wippit.Com, which tags the download and asks the users to pay for their bytes of Britney, begin to make money. But they do show a way forward for the TV, movie and games industry faced with digital grand larceny. If the software might eat Hollywood, then Hollywood must eat the software.

Broadband as a technology is neutral in all of this. It will either host the pirates, because it will be incredibly difficult to block them, or it can help enable safe, legal alternatives. The challenge will be to control the windows. Currently, there is a very tightly defined set of rules and markets from the premiere of a piece of content to it turning up for a fifth rerun on the Turner Network, or in a remainder bin at Woolies. All this is under threat with these new DiVX-type developments. If the premiere of a movie, or for that matter a TV show, is de facto the moment at which it is available to broadband web, then how do you control your intellectual property and make money from it?

That's where digital rights management companies come in. These new outfits are developing encryption padlocks as fast as the hackers are unpicking the locks. In the end, though, the big companies will find a way of making the consumer pay for the digital transfer of movies and TV shows. They will because they must.

The good news in all of this is that as with MP3 where anyone with talent and access to a home PC and studio can put their music onto the www, now anyone who wants to make a show can also do it. And it will be seen in just the same way as anything George Lucas is shooting. These will be people of imagination finally taking advantage of a low-cost distribution medium to get their type of humour, interest, dramatic perception, aesthetic judgment out to like-minded people and have them pay for it. Broadband and DiVX are the real foundations for the streamed narrowcasting world we've been predicting these past few years. Broadcasting in the fullest sense of the word.

David Docherty is managing director of broadband content at Telewest.