Disney Chairman and CEO Michael D. Eisner Urges Senate Committee to Support Open Standards To Protect Creative Content Against Digital Pirates.

Business & Editorial Page Editors

BURBANK, Calif., and WASHINGTON--(BUSINESS WIRE)--Feb. 28, 2002

Michael D. Eisner, Chairman and CEO of The Walt Disney Company, urged federal lawmakers to facilitate and establish open and common standards for the technological protection of creative content in digital distribution.

In his testimony to the U.S. Senate Committee on Commerce, Science & Transportation, Eisner noted that he represented "not only the shareholders of The Walt Disney Company, but also the hundreds of thousands of people all across the country who participate in the creation of American filmed entertainment...directors, writers, animators, actors, editors, electricians, truck drivers, laborers.

"If the result of their efforts can be digitally stolen, copied and distributed around the world before the first ticket is purchased on opening weekend, then these people will no longer be able to earn their livelihoods because there will simply no longer be a movie business to employ them," he said.

Eisner noted that the creative content industries, which account for a larger percentage of U.S. foreign sales and exports than most other sectors of the U.S. economy, could be seriously threatened by digital piracy.

"We know that we can never achieve -- and do not expect -- 100% content security," Eisner said. "But there must be a reasonably secure environment to prevent widespread and crippling theft of the creative content that drives our economy." He suggested several options to help solve the problem of digital piracy, noting that, "In addition to being in the interests of the creators of content, it is also in the interests of consumers, content owners and device manufacturers that there be common technological standards."

Eisner suggested that technological standards not be dominated by any single company and should be open to give consumers convenient access to all content from all producers. The private sector also should be given every reasonable opportunity to develop appropriate means of protection and to adopt common open standards for use in a wide variety of delivery devices, he said, adding that the government should create such standards "only in the event that the computer companies, consumer electronics manufacturers, software companies and content providers fail to act."

Technological standards also must be consistently adaptable, by being renewable, upgradeable and extendable without the necessity of "time-consuming bureaucratic processes in either private sector, or government, standards-setting organizations," Eisner said. Further, once standards are set, they must be mandated for inclusion in all digital media devices that handle creative content.

In his testimony, Eisner also responded to a letter sent by the CEOs of several major technology firms, saying, "We're delighted that yesterday eight companies offered to get to work immediately, so any time period you put into legislation -- whether 18 months, 12 months or six months -- should begin today."

Separately, Eisner expanded upon the letter's content, saying that "it in no way diminishes the need for the legislation that establishes a necessary time frame within which to accomplish the development of effective solutions to piracy. Without deadlines, the process threatens to continue indefinitely while the pirates inflict even greater damage on the livelihoods of people involved in the production of films and television programming.

"We are reminded that the PC industry only took action to develop tools to protect DVD content after there was the threat of legislation to create solutions to copy protection issues."

Ultimately, Eisner told lawmakers, "It is critical that the government act now to help achieve appropriate solutions. The digital pirates are not waiting to act. Neither can our government."