Why Hollywood should be afraid of the iPad (video)

By Eriq Gardner

The technorati may be drooling over the iPad, but you'll forgive the Hollywood elite if they don't line up at the Apple Store to get their hands on this brawny new tablet computer.

In fact, the introduction of this device could interfere with with one of Hollywood's biggest cash cows -- adapting literary works for the big screen.

For years, studios have made trillions of dollars from such franchises as "Harry Potter," "The Da Vinci Code" and "Twilight." Typically, this happens after studios license film rights to underlying source material directly from an author. Book publishers usually don't pose much of an obstacle to licensing these works. Studios will often obtain a release from a publisher, but it's usually almost an afterthought.

Perhaps not anymore.

One of the long-running open secrets in the book publishing world is that publishers and authors don't see eye-to-eye on digital rights. For years, publishers didn't know to lock up digi-rights. More recently they have panicked and started demanding anything that has the faintest whiff of a 0 and a 1. Now that Apple's iPad has the potential to repopularize books and news articles with multimedia capabilities, book publishers want authors to give them multimedia rights to enhanced ebooks.

One problem: Authors may need these rights for film adaptation deals.

"This potentially could become a real conflict between the publishing world and Hollywood," says Matt Galsor, a transactional attorney at Greenberg Glusker. "The authors with less clout may be forced to accept broad and possibly vague language defining 'enhanced' editions, which may overlap with the rights studios traditionally expect as part of the movie rights. If this were to happen, the studios might think it's necessary to obtain a broader than usual publisher's release, and the publisher may use this as leverage to get a piece of the author's movie deal."

This issue is already rattling some nerves inside Hollywood. We talked to one studio lawyer who acknowledged it's a touchy subject. Also, a presentation made last week by publisher Hachette to a group of agents set off alarms.

The issue goes beyond movie rights negotiations. Galsor adds that studios may be fearful of facing copyright claims from publishers. A literary work and a movie may seem like two different breeds, but devices like the iPad threaten to diminish the distance.

Here, for example, is a "digital magazine" feature spread created for an iPad by Alexx Henry Photography. Looks close enough to a movie to our eyes.