Just weeks after Microsoft announced a controversial decision to remove copy protection technology from Windows XP Media Center Edition (MCE), which includes Digital Video Recording (DVR) functionality, Hollywood has started complaining that the product allows consumers to record and distribute premium cable programs such as pay-per-view events and movies. According to a report in the Los Angeles Times, the Motion Picture Association of America (MPAA) is concerned that XP MCE violates the rights of content creators.

"We have some real concerns about content that enters an unprotected input into a personal computer, where the rights associated with the content are not being obeyed," said Brad Hunt, MPAA CTO, who noted that MCE's original version, which didn't allow consumers to share TV recordings, was preferable.

But Microsoft says the current scheme is better for consumers and lets Hollywood control which content is protected. That's because XP MCE supports the Copy Generation Management System (CGMS), which lets broadcasters copy protect content when it's sent to viewers. CGMS-protected content can't be shared by XP MCE owners, though it can be recorded and watched just on the machine that made the recording. "This technology lets the content provider decide which content is marked no-copy," Microsoft's Tom Lammael told me recently.

Hollywood has a right to be concerned. Microsoft's XP MCE software is available on just one line of PCs from Hewlett-Packard (HP) in the US this holiday season, but those PCs are already selling fast. After being on store shelves for just a few days, the HP Media Center PCs are the best selling computers at CompUSA and HP executives told me at the XP MCE Wednesday that the company doesn't expect the systems to be available for very long. "We believe it will sell out," said David Galvin, Worldwide Product Marketing Manager for HP's Home Products Division. "So if you want one, be sure to go out and get one now." The HP Media Center PCs cost $1400 to $2000 and are available at Best Buy, Circuit City, CompUSA, and other retailers in North America.