A prominent Century City entertainment law firm spearheaded the concept and much of the design for the latest piece of consumer technology expected to sweep the nation and it will play a major role in marketing the new disposable DVD system to studios and video retailers.
Ziffren, Brittenham, Branca & Fischer, which boasts a current and former client list ranging from Harrison Ford to the National Football League, last week unveiled a disposable digital video disc system along with equity partner Circuit City Stores Inc.
Unlike the DVD system now coming to market, the disposable DVD or Divx system prevents a user's machine from replaying a disc 48 hours after the first viewing, through a signal transmitted via modem between the home machine and a central tracking system.
Thus, there is no need to return the disc, and it is nearly impossible to pirate.
Already, the new disposable discs have considerable support from the entertainment industry, in part because the Divx format is less susceptible to piracy. Walt Disney Co.'s Buena Vista Home Video unit, Dreamworks SKG, Viacom's Paramount Pictures and Seagram Co.'s Universal Pictures have signed licensing agreements to put their titles on Divx.
The Divx players and discs are expected to be available next March or April.
At the center of this activity is Ziffren, Brittenham. While it is not unusual for an entertainment law firm to take an interest in such technology on behalf of its studio and television clients, in this case, Ziffren, Brittenham itself was the key player in developing the disposable video disc.
"It's unusual for a law firm to be involved with something like this. It's primarily a question of technology and distribution, not something you would expect from a law firm, even from one that is as big a player in media and entertainment as Ziffren, Brittenham," said Jeffrey Flathers, an analyst with Paul Kagan Associates. "If it works and that's a big if this could peel off about $2 billion, or about 7 percent, from the video rental market."
Lionel Sobel, visiting professor of entertainment law at UCLA, said there are potential ethical conflicts that could arise between Ziffren, Brittenham's movie studio clients and the licensing of the new technology to many of those same clients. But he said those concerns are surmountable.
"The key is a full disclosure to its clients. Then you advise the client to seek independent representation on Divx dealings," Sobel said. "Since all of these major studios have other law firms that they can and do turn to, this should not be a major problem.
Paul Brindze, a partner with Ziffren, Brittenham and president of a new entity formed to market the Divx system to studios, said that the Divx technology remains totally separate from the rest of the law firm's affairs.
Ziffren, Brittenham's involvement in Divx technology can be traced back five years when Brindze and senior name partner Skip Brittenham noticed that their studio clients were trying to tap into the home video-on-demand market.
There was tremendous demand for a system allowing consumers to watch a movie whenever they wanted, and not tying them to a clock or a video store. But research and development to create such a system costs money more money than Ziffren, Brittenham had sitting in the bank.
That's where Circuit City came in. Not only did the retail chain have deep pockets, it also had the research and development capabilities necessary to bring the concept to market, Brindze said.
In 1994, Brittenham negotiated a 50/50 partnership deal between his firm and Circuit City to develop and ultimately market this new digital video-on-demand technology. It would result in a new company based in Herndon, Va. called Digital Video Express, which was formally unveiled last week.
With an additional $100 million investment, Circuit City became 65 percent majority owner and Circuit City Chairman Richard Sharp was named the chairman and chief executive of the new company. Brittenham became president of Digital Video Express.
With this month's announcement that the system will be ready for market in six months, a new entity, Digital Video Entertainment, has been formed as a subsidiary of Digital Video Express.
Digital Video Entertainment will be headed by Brindze and will lease space from Ziffren, Brittenham in Century City for its headquarters.
Brindze's main task will be to market Divx to studios and to video retailers. The manufacturing and tracking portions of the business will be run by Digital Video Express.
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