Movie hackers steal Hollywood blockbusters via the internet

Computer hackers have discovered a way of copying the latest Hollywood films completely free of charge. Armed with highly sophisticated technology they now have the skills to make unlimited copies of blockbusters.

Computer hackers have discovered a way of copying the latest Hollywood films completely free of charge. Armed with highly sophisticated technology they now have the skills to make unlimited copies of blockbusters.

Film company executives confirmed yesterday they were aware of the problem and are investigating ways of combatting it. Gladiator, The Matrix and Saving Private Ryan have already fallen victim, and thousands more movies could follow.

E-pirates have now got their hands on the revolutionary new MPEG-4 software, or MP4 for short. This compresses video in the same way that MP3 - the software for downloading music free of charge from the internet - compresses audio. A recent US survey estimated that 13 million Americans have already used MP3 technology to download music without paying for it. Now it appears the movie industry could be the next victim.

The MP4 can squeeze a movie down to 1 per cent of its size, making it easy to pirate. Now this powerful software is loose on the internet. Probably the MP4 was originally stripped by hackers from the Microsoft Windows Media Player, a programme designed to handle moving pictures sent over the web.

Last night, a spokesman confirmed that Microsoft was examining its legal options. Although the company has now locked the software in question, this is a case of shutting the barn door after the electronic horse has bolted.

Although there are no signs of George Lucas or Steven Spielberg and their production companies following Metallica's recent example and taking legal action against hundreds of thousands of fans copying their songs free of charge from the internet, there are murmurs of discomfort in cinematic circles. "The technology can be used for any purpose, it doesn't distinguish between good and bad," said Rob Koenen, president of the MPEG-4 Industry Forum and chairman of the MPEG Requirements Group. "It's like a hammer. You can use it to build a house, or to damage people."

Vivian Meyer, head of publicity for Dreamworks World-wide said: "This is an issue that Dreamworks takes very seriously. We will take whatever measures necessary, including appropriate legal action, to vigorously protect our copyrights."

Ron Sanders, senior vice president of Warner Brothers Home Video Europe, said: "Our people are working ceaselessly to build in protections." But he said there was no need to exaggerate the crisis in the audio-visual market: "A big component of videos is gift-giving. Half of our annual business is done between October and Christmas. Downloading at home might be possible, but it does not come complete with packaging. You can't put it into your son or daughter's stocking."

Alexander Ross, a music lawyer at Theodore Goddard who has been working on intellectual copyright issues connected with the MP3 player, suggested that this is a warning shot which the film production companies could not ignore.

"The music industry faced this problem a lot earlier," he said. "DRM (Digital Rights Management) software is already being put into place, and can report who has taken the download. The record companies can then follow an electronic credit trail."

Similar measures must surely be taken by film producers soon, especially with advanced broadband technology arriving within the next three years. "Broadband is going to mean that looking at the web will be like watching telly," warned Ross. "The problems haven't even started yet. You just wait."