Hollywood hopes to have answer to internet piracy at its fingertips

Hollywood is evaluating proposals for a "digital fingerprint" that it can implant into online films in order to make it impossible for purchasers to share them with other internet users.

Discussions with technology companies come as the film industry braces for the development of a string of new movie-download sites that could transform the business, and which many fear could unleash a torrent of internet piracy.

The Motion Picture Association of America (MPAA) has quietly asked a number of established and start-up tech companies for proposals to help forestall a big increase in peer-to-peer file sharing. It believes fingerprinting technology is necessary if studios are to agree to let more of their films go on sale as digital downloads.

Hollywood is desperate to avoid the fate of the music industry, which saw widespread file-sharing eat into sales of CDs, turning a generation of internet users on to the idea that music is free.

It has been encouraged by innovative partnerships with formerly renegade technology companies such as Guba, whose website allows users to search for content on peer-to-peer networks. Earlier this year, Guba agreed to filter out copyrighted material by marking it with a digital fingerprint. The electronics giant Philips and a little Silicon Valley firm, Audible Magic, are among those that have fingerprinting technologies that could be used by websites, college networks and internet service providers to filter out illegal content. The MPAA is currently evaluating some early proposals.

Importantly, the plan would give Hollywood control over the anti-piracy technologies used to protect its content. The studios are desperate to avoid ceding power to Apple, whose own digital rights management technology for music downloads means songs purchased from iTunes can only be played using Apple software or on its ubiquitous iPod. As a result, Apple has been able to dictate prices.

So far, only Disney - on whose board Apple's chief executive, Steve Jobs, sits - has agreed to let iTunes sell its movies; other studios have preferred to license a limited number of films to online stores. Clickstar, part-owned by the actor Morgan Freeman, set up shop on Friday, selling titles including The Da Vinci Code and Superman Returns.

Kori Bernards, a spokesman for the MPAA, said developing new anti-piracy technologies was only one part of the industry's strategy for preventing illegal downloading from becoming widespread. "We have a multi-pronged strategy involving law enforcement efforts against individuals and folks running servers, [and we have] public education and a push for new legislation to protect copyrights," she said. "And all the studios are already doing a lot to provide legal alternatives and to find out how people want to watch movies. Someday, you are going to be able to see a movie on a spoon."

An ABI Research survey revealed that only 5 per cent of broadband internet users have paid to download an entire film so far, but that the numbers who have downloaded an entire film for free over a file-sharing network is only slightly higher. The industry argues that it need not rush since there are still few ways for viewers to watch internet downloads on their televisions with an acceptable sound and picture quality, and this will give DVDs the edge for the time being.

So far, the industry is mostly concerned about online distribution of yet-to-be-released material, including films still showing in cinemas. Camcorder recordings of blockbusters such as Casino Royale, the latest James Bond movie, are already widely available online and on pirate DVDs. The MPAA estimates that studios lost $2.3bn worldwide to internet piracy alone in 2005.

David Price, the head of the anti-piracy team at Envisional, a UK company that tracks illegal downloads for most of the big Hollywood studios, said: "It is certainly possible to get most movies for free, and a lot of people are doing it, but what the industry can do is make it as difficult as possible for the casual downloader, and at the same time make it easier to download films legally."