Jack Valenti, MPAA CEO, has written a rude and thought-free article
He takes a hard Tinseltown line gainst the professors (the 'nutty' is implied) who beseige the movie industry.

The reason pitifully few films are legitimately available on the Internet is not producer hoarding.
Oh really? Why is Disney running TV ads about Snow White going back in the vault then?
It is that those valuable creative works can't be adequately protected from theft. The analog format (videocassettes) and the digital format (DVDs) are different. Videocassette piracy costs the movie industry worldwide more than $3.5 billion, even though the sixth or seventh copy of analog becomes unwatchable. But the thousandth copy of digital is as pure as the original. Moreover, digital movies on the Internet can be pilfered and hurled at the speed of light to any spot on the planet. This is what gives movie producers so many Maalox moments.

This is true. But DVDs are out there and making lots of money, despite their copyability. The restricted version of DVDs, DIVX, with a player that would phone the MPAA to find if you were allowed to play it today, died an unmourned death 3 years ago.
It's a simple proposition, Jack. A market works two ways. Set the price too high, and no-one buys. Adding restrictions to your DVDs makes them less valuable to purchasers, not more. I explained this to Universal about CDs, and it is just as true for Movies.

What's keeping the movie industry from making its creativity theft-proof? Simply put, in order to transport movies as agreed to by the consumer on a rent, buy or pay-per-view basis with heightened security, computers and video devices must be prepared to react to instructions embedded in the film. Other ingredients are necessary to protect digital content, but it gets too complex to explain in a few sentences. At this moment, that kind of interaction is nowhere to be found in any computer or set-top box. Some security is available, but it is porous. The movie industry is, however, consulting with the finest brains in the digital world to try to find the answer.

This is false. It cannot be made theft-proof, without outlawing computers. Ask Bruce Schneier, who wrote the book on encryption:

All entertainment media on the Internet (like everything else on the Internet) is just bits: ones and zeros. Bits are inherently copyable, easily and repeatedly. If you have a digital file -- text, music, video, or whatever -- you can make as many copies of that file as you want, do whatever you want with the copies. This is a natural law of the digital world, and makes copying on the Internet different from copying Rolex watches or Louis Vuitton luggage.

What the entertainment industry is trying to do is to use technology to contradict that natural law. They want a practical way to make copying hard enough to save their existing business. But they are doomed to fail.

The problem with Hollywood is that they love a good story, a good pitch. The snake-oil salesmen who claim that this is possible are telling them just what they want to hear, and in Hollywood the truth can never get in the way of a good story. Truly smart thinkers like Schneier and Lessig are ignored, in the great Hollywood tradition of the outsider who defeats conventional wisdom, and is free in one bound.

Here's Jack again:
As for the third charge -- that copyrighted movies are destroying digital innovation -- what the critics mean by "innovation" is legalizing the breaking of protection codes, without which there is no protection.

This is ad hominem slander. If Valenti read Schneier and Lessig, he would see that they are trying hard to help the industry develop models that can work with publicly-visible content. They do exist after all, in broadcast television.

Schneier's book 'Secrets and Lies' discusses the issues of how to design an entire system that is not vulnerable to code being cracked.

Movie producers are eager to populate the Net with movies in a consumer-friendly format. There is a way to achieve adequate security for high-value movies on the Net. Computer and video-device companies need to sit at the table with the movie industry. Together, in good-faith talks, they must agree on the ingredients for creating strong protection for copyrighted films and then swiftly implement that agreement to make it an Internet reality.

This protection racket isn't going to happen. The computer industry is not going to indemnify the Movie backers against the inevitable copying. Which brings us to the next item in the master plan (at this point Valenti switches roles, and gets out a white cat and a swivel chair)

Without concord, one option is left: Congress must step in to protect valuable creative works on the Net and thereby benefit consumers by giving them another choice for movie viewing.

This is the tail wagging the dog. The computer and communications industry generates far more revenue and value than the entertainment one. Ask Andrew Odlyzko. But then, he is a professor, who argues from logic, not a professional manipulator of emotions...