Microsoft May Build a Copyright Cop Into Every Zune

Yet another reason I’m happy my Zune was a POC and I decided to go back to my iPod.

If you like to download the latest episodes of “Heroes” or other NBC shows from BitTorrent, maybe you shouldn’t buy a Microsoft Zune to watch them on.

A future update of the software for Microsoft’s portable media player may well include a feature that will block unauthorized copies of copyrighted videos from being played on it.

Tuesday, Microsoft announced that it would start selling video programming for the Zune, mainly TV shows. These include programs from NBC Universal, which has pulled its shows off Apple’s iTunes Store.

Late Tuesday afternoon I reached J. B. Perrette, the president of digital distribution for NBC Universal, to ask why NBC found Microsoft’s video store more appealing than Apple’s.

He explained that NBC, like most studios, would like the broadest distribution possible for its programming. But it has two disputes with Apple.

First, Apple insists that all TV shows have an identical wholesale price so that it can sell all of them at $1.99. NBC wants to sell its programs for whatever price it chooses.

Second, Apple refused to cooperate with NBC on building filters into its iPod player to remove pirated movies and videos.

Microsoft, by contrast, will accept NBC’s pricing scheme and will work with it to try to develop a copyright “cop” to be installed on its devices.

For now, both issues are rather theoretical. NBC does have some variation in its wholesale price schedule, although Mr. Perrette declined to describe it. Microsoft has chosen to absorb the differences and sell all shows for about $1.99.

Nonetheless, Mr. Perrette said, NBC wants the flexibility to sell older shows at lower prices and hit shows at higher prices than the standard Apple has set. It also wants to create various deals that would, for example, allow a discount for people buying a season or other group of episodes at one time.

“That separation of the wholesale pricing flexibility and what the retailer decides to charge is core to us,” Mr. Perrette said. “Zune was willing to provide that.”

Similarly, the copyright filtering system is still in development and its exact form has not been set.

Mr. Perrette said the plan is to create “filtering technology that allows for playback of legitimately purchased content versus non-legitimately purchased content.”

He said this would be similar to systems being tested by Microsoft, Google and others that are meant to block pirated clips from video sharing sites. NBC is also working with Internet service providers like AT&T to put similar filters right into the network.

Mr. Perrette added that NBC is trying to develop similar hardware technology with SanDisk, through whom NBC also sells its programming.

Adam Sohn, a spokesman for Microsoft, declined to discuss details of this effort other than to say that the software company is exploring anti-piracy measures with NBC. He said Microsoft, which suffers from its own piracy problems, is sympathetic to Hollywood’s concerns.

At the same time, it will be difficult for Microsoft to add features that consumers don’t like to its Zune products, which already lag far behind Apple in the market.

Mr. Perrette said NBC understands the potential resistance. “In the short term, this will not win us a lot of friends,” he said. “In the long term, the consumer wants there to be quality premium-produced content, and in order for that to continue to be a viable business, there needs to be significant protection around it.”

Thank you NY Times for getting this story out there.

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