(Simon Chester is the research partner and a member of the KNOWlaw Group of the Toronto law firm of McMillan Binch. This article was prepared with the assistance of malcolm j. andrade.)

Remember back to July 1969 when the world watched in amazement as Neil Armstrong became the first man to set foot on the moon? Less well known is that in the same year, a number of American computer scientists also embarked on their own quiet journey into space, cyberspace that is, conducting the first experiments which eventually led to the development of the Internet.

Today the Internet is a global network of computer systems linking governments, universities, commercial enterprises and personal users in over 150 countries. An estimated 30 million to 40 million users now have access to the Net, and this figure is said to be doubling every year. This column is the first in a series on law and the Internet, and it offers a closer look at how the Net is shaping current thinking in the entertainment business.

An increasing number of services are available on the Net, but the most popular one is the World Wide Web. The Web also happens to be the service of greatest significance for the entertainment industry. There are two Web sites where ‘home pages’ are set up for major movie studios (Disney, Columbia, mca, Universal, Twentieth Century Fox), television networks and stations (cbc, Discovery Channel, Citytv, cbs, cnn, Fox, mtv, MuchMusic), and music enterprises (Warner Bros., Sony, Geffen).

A ‘home page’ is a virtual site on the Web which serves as a sort of brochure for a company, and it can be designed to incorporate color pictures, text, sound and animation to provide users with value-added information. cbc’s Street Cents, a consumer show for young people and families, was recently honored with a bronze ranking by Point Communications of Massachusetts for the quality of its home page, ranking just behind Popular Mechanics and Apple Computer.

As easy as falling off a surfboard

Those who have little or no experience surfing the Net can take comfort in the fact that the Net has become increasingly user-friendly. The World Wide Web is built on a ‘point-and-click’ hypertest system using Windows, which allows surfers to maneuver from site to site magically with the use of a mouse.

There is also a nifty linking ability which enables you to travel from one home page to another by simply clicking on the hypertext link within the initial page. Take the Sony home page where, with a simple click, you can move to your favorite artists, whether Aerosmith, Sade, Barbra Streisand or Cypress Hill.

All you need to establish a presence on the Net is a computer, an Internet account, a modem, a mouse and possibly a multimedia pc. Access to the Net is based on a relatively inexpensive monthly fee or an hourly rate. There are some additional costs for obtaining professional advice on setting up a home page using multimedia features, but an up-front investment will certainly pay off in the form of a higher quality product.

How does the Net affect your business?

There are at least five major reasons why people in the entertainment industry should care about the Net.

Reason 5: The Internet is poised to have an enormous impact on world culture.

Given the immense popularity of the Internet, it is fast becoming a storehouse for literature, music, video and pop culture. For example, the much talked about cbc children’s show, Theodore Tugboat, is interactive on the Web, and its home page allows parents to order postcards directly from Theodore and to download pictures for their children to color.

Alliance Communications has capitalized on the ability of multimedia computers to access sound and motion and is among the first companies to launch a movie trailer on the Net. Alliance’s trailer is artfully designed to promote its upcoming movie, Mortal Combat. Hollywood has also become fascinated with the marvels of the Internet, and has announced a summer movie release about the world of cyberspace intrigue entitled The Net, featuring Sandra Bullock of While You Were Sleeping fame.

Reason 4: The Net is a virtual channel for interactive feedback and public opinion.

It is increasingly common for companies to post messages in cyberspace to elicit reactions and responses from television viewers, moviegoers and news-watchers.

In January, the Discovery Channel set up a questionnaire on the Net inviting viewers to vote on their favorite pilot as a way of assisting Discovery to decide which show to continue in its regular lineup.

Meanwhile, the Sci-Fi Channel has designed a novel home page known as The Dominion. This home page serves as the Web headquarters for most of the science fiction on the Net and includes public reaction to television and movies.

Reason 3: Everyone can benefit from a highly cost-effective means of global communication.

It is possible to communicate with your clients, colleagues or professional advisors through electronic mail (e-mail) if they have an Internet address. Not only does e-mail cut down on endless telephone tag, it also provides a paperless means of routine communication which can reduce mail, fax and courier costs. Since confidentiality is often a concern, messages can now be encrypted to enhance security.

Reason 2: Your competitors are already likely capitalizing on the fact that the Net is a powerful advertising and marketing tool.

There is a rapidly expanding market of ‘netizens’ venturing into cyberspace, many of whom are well-educated and informed customers. Entertainment enterprises are realizing the enormous potential the Net offers to promote their visibility in a highly competitive market, given the vast opportunities to advertise, market, and distribute their products and services. For example, the Walt Disney Company has launched Buena Vista MoviePix, a prominent marketing service for movies on the Web.

The immensely popular sci-fi series, The X-Files, has also entered cyberspace. Surfers on the Net can now order paraphernalia such as X-Files caps, mugs and sweaters directly from the X-Files home page which contains a handy order form that can be faxed to a 1-800 number.

Reason 1: Your business interests and legal rights could be at stake.

The Net offers many opportunities for the entertainment industry, but it also creates some significant risks. The problem in a nutshell is that law has not been able to keep pace with rapid developments in cyberspace technology.

Copyright infringement on the Net is a central concern for the entertainment industry, but it is without a quick and easy legal solution. In particular, music, photographs, and even the voices of your favorite cartoon characters can be loaded on the Net, copied and distributed to countless users around the globe without any compensation to the work’s creator or legal rights holder.

The dilemma posed by the Internet is that since no single agency or jurisdiction ‘owns’ or controls the Net, the regulation of cyberspace to protect and enforce legal rights becomes very difficult.

Watch this cyberspace

The Net clearly has many virtues, but it also has a dark side which raises serious legal questions for both the entertainment industry and society at large. Upcoming columns in the Internet series will deal with copyright infringement, obscenity and defamation in cyberspace.

(this article contains general comments only. It is not intended to be exhaustive and should not be considered as advice on any particular situation.)