Device for DVD Movies Raises Legal Issue

Henri Crohas’s company, Archos SA, makes a small hand-held device, like a bulky Palm Pilot, that can record and then play back scores of movies, TV shows and digital photos on its color screen or a TV set. The gadget — which in effect does to movies what Apple Computer Inc.’s iPod does to music — already has sold 100,000 units world-wide during the past six months, beating the big consumer electronics makers to the U.S. market.

Archos’s device, which costs about $500 to $900 depending on the model, ignores an anticopying code found on a majority of prerecorded DVDs. That means consumers can plug the Archos device into a DVD player and transfer a movie to it. Users also can transfer recorded TV programs and digital music files to the Archos device. The Archos uses a video compression standard called MPEG-4 to cram as many as 320 hours of video at near-DVD quality onto its hard drive, the company says — the equivalent of 160 two-hour movies.

A second kind of anticopying protection thwarts users from recording a playable copy of a DVD movie onto the hard-drive of a personal computer and then onto the Archos. But videos can be transferred from the Archos to a PC, where they could be burned onto a DVD or sent over the Internet, though that would likely violate copyright laws.

The gadgets alone aren’t likely to spawn a Napster-style boom in online film piracy. Already, scofflaws with a PC equipped with a DVD player and special software can rip off films and share them over the Internet. And the process is slow: It takes as long to copy a DVD movie to the Archos device as it does to watch the movie. Still, Mr. Crohas and his 150-employee team at Archos ( pronounced AR kos) present a fresh headache for Hollywood because they show how the industry’s campaign to keep control of its films could be challenged by small players.

Source: Wall Street Journal, Dow Jones Press Wire