Blog Post

Have The Hollywood Studios Finally Beaten Down Kaleidescape?

In the mid-2000s, a technology called Kaleidescape was all the rage among the Hollywood intelligensia. Fillmakers like Brett Ratner and high-end consumers raved about Kaleidescape, which lets owners upload their entire DVD collections onto one centralized hard drive that can be accessed from any screening room in their swanky homes.

The company behind the service had big plans to take it to the mass market, but then the studios set out to block the move, touching off an eight-year legal battle.

The latest ruling may have put a nail in the coffin of the once-trendy service. Last month, a Santa Clara Superior Court judge quietly issued a tentative ruling, which was obtained by paidContent, that sides with the studio-backed DVD Copyright Control Association. The group claims that the servers used by Kaleidescape illegally override the copy protection found on DVDs.

With DVD sales dropping every year, and streaming services like Netflix (NSDQ: NFLX) taking over as dominant forces in the living room, why would the studios continue to fight to stop Kaleidescape from selling a pricy home media server system that has never caught on with mainstream consumers?

The answer likely lies in the studios’ UltraViolet movie cloud initiative, which encourages movie lovers to upload their disc collections to a studio-authenticated cloud-based digital locker rather than personal home storage devices. The studios and their UltraViolet partners are embarking on a big promotional push for the cloud-based system, and clearing out any competing technology that distracts consumers might suit that objective.

If Judge William J. Monahan’s ruling is confirmed, it could spell an inglorious end for Kaleidescape. Available only through dealers, Kaleidescape had Bush-era business plans of lower-costs versions of its servers catching on with mainstream shoppers prowling the lanes of Best Buy, looking for ways to better manage and enjoy their burgeoning DVD collections.

The court battle with the studios stymied those plans. The studios took legal issue with the way Kaleidescape’s servers copy DVDs – the systems override the Copy Control System (CCS) encryption found on every studio-sold disc, and the DVD CCA has argued that it is illegal unless the DVDs remain loaded into the device. (For early adopters, getting rid of thousands of DVD discs and boxes was kind of the point all along.)

Kaleidescape, which argued that it was fair use for individual consumers to upload their DVDs onto a device that allowed them to better enjoy their personal use, actually won the first round of the battle, in a California Superior Court in 2007. But the case was sent back to the court on appeal in 2009, and it now appears as though Kaleidescape could lose.

Kaleidescape CEO Michael Malcom, in a letter sent to the company’s dealers shortly after last month’s ruling, pledged to fight on. He said the company has already filed its objections to the tentative ruling and will appeal if its not successful.

Of course, this is not the first time the studios — or more specifically, DVD CCA — have offed a technology. as CNet’s Greg Sandoval noted Thursday, Real Networks was stopped in court by the group when it tried to bring a similar media server system to market in 2010. And last year, the studios won a court ruling that effectively shut down virtual DVD service Zediva.

3 Responses to “Have The Hollywood Studios Finally Beaten Down Kaleidescape?”

  1. MrPoindexter

    The fight wasn’t that Kaleidescape broke the copy protection but that they breached the terms of service of the DVD CCA contract. It is interesting to note that the general specifications of the agreement isn’t divulged until after you pay to enter the contract. The DVD CCA states that “the disc must be present in the tray” as part of that general specification.

    Normally, such agreements are allowed so that one can keep secret information secret until somebody is bound under the terms of the contract, but “the disc must be in the tray” is hardly a trade secret that must be protected.

    I have had a Kaleidescape for over 8 years now and there is no way in hell I would go back to using the discs. It would be like abandoning the DVR and going back to using a VHS deck. Interestingly, Hollywood sued Sony to try to put an end to the VCR, claiming it would destroy their industry. They fought all the way to the Supreme Court only to lose 5-4 in the landmark Sony Betamax ruling. Instead of destroying Hollywood, it created the home video market which is now the largest source of income for Hollywood.

  2. TheBrett

    That’s pretty lame. I wish the DMCA allowed for this stuff, provided that the hard drive device you upload the DVDs on to had protection designed to prevent people from simply copying the hard drive content on to other hard drives. Instead, we’re still stuck with a big pile of discs that we don’t want.

    Ultraviolet is nice, but it’s not really what I need. I need some way to get rid of the giant pile of DVDs I’ve got sitting in a closet, and the best way would be to upload them into a single server and/or hard drive to watch them On Demand.

    • Steve Austin

      You already have such a device at your finger-tips. It’s called a personal computer. Stick in your DVD, rip it, upload the file to file hosting site. Yes Megaupload is now gone, but there are literally thousands more to choose from.