The record industry is experimenting with a new strategy for protecting CDs from being copied in CD burners or on computers.
Unlike previous anti-copying measures, this plan will place two versions of an album on a single disc: one in standard CD form, modified so that it can't be transferred to a computer hard drive, and another in Microsoft's Windows Media Audio digital format, rigged so that files can be copied to a PC, but with some restrictions on how they can be used.
"I think this is a glimpse of the future," said P.J. McNealy, a digital-entertainment analyst with GartnerG2, a division of research company Gartner. "This meets both sides' needs. It gives people the compressed audio (to play on computers), and it protects copyrights."
Although only a first step, the strategy could reset the parameters of the music industry's campaign against online piracy and determine the future of "ripping," the popular practice used by consumers to convert CD tracks into computer files that can be traded freely on the Internet over services such as Napster.
Record labels have long sought technology to curb the practice of ripping, and they are on the verge of success with some new copy-protected releases. Tens of thousands of CDs loaded with anti-copying protections have been quietly released in U.S. retail stores over the past few months, with hundreds of thousands more landing on shelves overseas.
Those moves have provoked bitter criticism from consumers fearful of losing their ability to make digital record collections on their computers, a right they believe should accompany their purchase of the music. The new technology being tested offers a compromise aimed at pleasing most consumers while holding the line on mass underground distribution.
"The purpose of these releases is to test consumer satisfaction," said Macrovision President Bill Krepick. The labels "obviously don't want to do anything to turn off consumers...There's a lot of risk aversion right now."
The technology's potential carries important ramifications for the computer and music industries, as well as for the consumer--namely, a significant power shift toward Microsoft. The software giant is trying to turn its Windows Media technology into the basic infrastructure for future digital music and video, but rival efforts from RealNetworks, Sony and an assortment of smaller companies have thus far kept the market from settling on a single winner.
The record labels, for their part, have avoided exclusive support of any format, fearing that dominance by Microsoft or any other software company could threaten their control of the music industry. Some senior executives say they harbor these concerns even as Microsoft's technology moves onto their CDs.
Most of the major record labels are experimenting with the basic copy-protection technology created by Macrovision, SunnComm or Midbar Tech, or with some combination of these software companies' techniques. Sony also has its own copy-protection technology, which it is using in at least one upcoming promotional release.
Macrovision and SunnComm are upping the ante with their latest releases--each due out within 90 days, and perhaps as early as next month--by adding the ability to bundle the Windows Media-encoded files on a CD along with the protected standard audio files. Most of the big record labels already have their own explicit relationships with Microsoft to test the giant's anti-piracy software. SunnComm has been working with Microsoft itself, while Macrovision says it is relying more on its label partners for access to Microsoft technology.
Bertelsmann's BMG Entertainment has taken a lead in testing new technologies, in both Europe and the United States, and will release some promotional copies with the new protection this year. Vivendi Universal said Tuesday that it hopes to have all its new releases protected by mid-2002 but has not specified which technology it will use.
Still, analysts say all copy protection must overcome powerful skepticism from consumers unaccustomed to controls on what they can do with their retail CDs.
"I think the reality here is that none of these (CD copy-protection) techniques is going to be successful in the long term," said Jupiter Research analyst Aram Sinnreich. "They're fraught with technical difficulties, and if they did surmount those, they would meet with a severe consumer backlash."
Some record executives acknowledge that the new strategy is an interim, imperfect solution. Adding enticements such as videos or extra tracks onto copy-protected CDs might help counter consumer criticism, but the real goal is to move the market to a more secure format with greater options, such as DVD audio.
"A lot of copy protection around (CD) audio is really a stopgap solution," said an executive of one major label. "I don't think we know enough about how consumers react."
Lucking into the lead?
For Microsoft, the new compromise strategy could mean a windfall. The software company has spent considerable time wooing record labels and movie studios over the last few years as it has tried to develop Windows Media and associated anti-piracy technology into an industry media standard, but it has focused more on Internet sources than on delivery via old-fashioned CDs.
Although the company is making some small gains, the vast majority of digital music online and in personal collections remains in MP3 format, analysts say. The specialised computer program compresses standard audio tracks into smaller sizes without significantly compromising sound quality--and without carrying the anti-piracy controls used by Windows Media. MP3's lead could change quickly, however, if CDs are routinely released with easily accessible Windows Media versions of songs onboard.
"I think you're going to see (Windows Media) really come out in the marketplace now," said SunnComm Chief Technology Officer John Aquilino. "But not by design."
Along those lines, Microsoft itself seems less than absolutely bullish on the efficacy of copy-protected CDs. Committed pirates will eventually find a way around any digital protections, even if it is simply "holding a microphone up to the speakers," said Jonathan Usher, group product manager for Microsoft's Digital Media Division.
Indeed, reports of being able to break almost all forms of CD copy protection have already appeared in various forms around the Net. On his CD-R information site, a popular resource for recordable CD technology, software engineer Andy McFadden tells his own story of how he was able to get a digital copy of a SunnComm-protected CD.
In his discussion of how the various types of CD protection work, McFadden also takes note of a fear that is beginning to ripple through free-speech and computer-engineering circles: Creating tools to evade copy-protection measures, or even discussing their weaknesses online, may well be illegal under the Digital Millennium Copyright Act (DMCA). That's the same law movie studios have used to keep DVD-decoding tool DeCSS offline and to prosecute people who have posted it on the Net.
"It's possible that any software specialising in defeating the copy protection would run afoul of the DMCA...and the authors (would be) subject to fines and criminal prosecution," McFadden writes. "Come to think of it, the preceding discussion might be illegal."
