The pirates of prime time

Michelle Chaplin can't get enough Sex and the City. She has seen virtually all 66 episodes of the series--some of them, like the one in which Samantha tries to seduce a priest, repeatedly. But unlike most people, who pay an extra $13 a month on their cable bills to get HBO, which carries the show (and is owned by TIME's parent company AOL Time Warner), Chaplin gets her Sex and the City free. Using a program called Morpheus, she goes online and downloads any episode she wants in as little as 10 minutes. Then she watches her haul on the computer. "I know it's not legal," the college sophomore says, "but it's easier for me to download than it is to get HBO or cable."

People like Chaplin pose an increasingly worrisome problem for the $80 billion television industry. Just ask anyone who works in the music business, which in 1999 was upended by a free music service called Napster that made music swapping easy online. While Napster was subsequently hobbled by lawsuits, it pried open a Pandora's jewel box: Last year CD sales declined for the first time in a decade. Now, with the proliferation of a new generation of "file sharing" programs such as Morpheus, people are swapping TV shows and movies along with their music--more than 11 million Americans do it. And since the current programs, unlike Napster, are decentralized, it's much harder to shut them down.

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