Coming soon: The untouchable compact disc

[mgraham333]

Since 1999, CD unit sales have plunged 26 percent -- a decline of $2 billion -- thanks in part to file-sharing services and other forms of digital piracy. The record labels' frustration is so acute that the Recording Industry Association of America has begun suing hundreds of consumers who have exchanged music on peer-to-peer networks like Kazaa, Morpheus, and Gnutella.

But what technology giveth, can it taketh away?

The industry hopes so: This month the first copy-protected CDs are expected to start showing up on music-store shelves in the United States. And that's great news for the one or more lucky companies whose music-locking tech will be adopted. Even by modest estimates, licensing fees will amount to more than $100 million annually.

The big winner could be Macrovision, a major provider of copy protection to Hollywood. With revenues of $102 million in 2002, the company, based in Santa Clara, California, commands a near monopoly on video and DVD copy protection, providing the system used in more than 2.1 billion DVDs and 85 million DVD players.

Dueling firms

Macrovision also built the antipiracy technology used to protect 150 million music CDs sold in Europe and Japan.

"Our DVD business is in the $40 million- to $50 million-a-year range, but the CD market is twice as big," says Macrovision CEO Bill Krepick.

The technology for the U.S. market is expected to be a better version of the trouble-prone systems introduced in Europe and Japan, which generated complaints when they failed to play on many car stereos and PCs.

Macrovision's technology, called CDS-300, hides the original audio tracks but makes pre-compressed music files available for limited downloads to PCs. The company's main competitor is Phoenix-based SunnComm, a 25-person upstart that already has a contract to supply copy-protection technology to BMG, the fifth-largest record label. SunnComm's MediaMax CD-3 also restricts the original audio files, but does so on the user's PC, rather than the disc, by installing a kind of software lock.

Krepick argues that Macrovision's experience and size give it an advantage.

"We're not a garage operation," he says.

But Bill Whitmore, SunnComm's chief operating officer, points out that CDS-300 has been plagued by delays.

"Nobody's seen Macrovision's new technology work," he says.

Looking for sales

No need to fight, boys: Analysts like Sterling Auty of J.P. Morgan say the labels may well hedge their bets, relying on several vendors to provide copy-protection technology.

But even if everyone's system works flawlessly, will the new CDs improve sales? Don't bet on it.

In Germany and Japan, where the labels began selling copy-protected CDs in 2000, sales have continued to decline.

Source: CNN

[wesbed]

I’m constantly surprised how ‘digital piracy’ is always the single reason for the decline in CD sales. Other possible reasons might include music that is not enjoyable and/or high CD prices. Also, there are so many other things to spend one’s money on these days… computer software, DVDs, computer hardware, big screen TVs, cable, broadband, cell phones, etc.

I remember, in the 1970s, I could find nothing else to purchase besides record albums (maybe books). There is so much more competition for the entertainment dollar in the modern day. Recorded music is just not the only form of entertainment anymore.

Yeah, stop those CDs from being copyable and music sales will increase?

Edited September 10, 2003 by wesbed

[vibes]

Well said, wesbed. It would be nice if the industry would at least wait to see what happens to sales under Universal's new pricing scheme before putting out copy-protected material all over the place. I hope it bites them in the ass.

[David Ayers]

Well I agree with that.

And I sure as hell don't get any fun or pleasure out of buying product with a STOP THIEF label on it.

[Tom Storer]

I hate the idea of not being able to convert my CDs to MP3 format. Even folks who are not trading thousands of files on the net like to be able to make home compilations, to have a music library on their computer and make their own playlists on the fly, etc. Man, I'll be steamed if they make that difficult.

But I imagine there will sooner or later be software that gets around these protection mechanisms and renders the audio files convertible again. At least I hope so.

[Jim Alfredson]

It won't save them. You can always just take a regular CD player and hook the audio outputs into your soundcard and make a copy (without any protection) that way.

[Claude]

Macrovision's technology, called CDS-300, hides the original audio tracks but makes pre-compressed music files available for limited downloads to PCs.

Macrovision CDS200 (previously known as "Cactus Data Shield") is the technology used on the latest european Blue Note releases.

CDS300 has some new features:

- Enables playability on PCs through the Microsoft® Windows Media® Player

- Users may copy files to Windows Media Library for play without original CD

- Music files will not play if distributed over the Internet or e-mailed.

With CDS-300, consumers can make a back-up copy of the original disc to any PC through the Windows Media® Player and listen to their music without the CD present. Any further duplication or Internet sharing is inhibited.

http://www.macrovision.com/solutions/audio/

I have two portable MP3 players in different sizes and capacities that I use when traveling or jogging. Being unable to transform my own CDs into MP3 files by "ripping" the CDs would really be very inconvenient. The industry should find a solution for this. The WMA files on the Macrovision CDs are unplayable on most hardware players. If I download MP3s of the same music (through illegal filesharing) or try to crack the copyprotection, just to be able to listen to it on my portable devices, I'm considered a music pirate.

Edited September 11, 2003 by Claude

[Tom Storer]

You can always just take a regular CD player and hook the audio outputs into your soundcard and make a copy (without any protection) that way.

And how would you do that, exactly? I have an application (MusicMatch) that reads the CDs in my CD drive and converts them from there. How would it work if you hook up your audio CD player?

Edited September 11, 2003 by Tom Storer

[Noj]

Will this make cds which are not copy-protected worth more?

[wesbed]

It seems so dumb and so greedy, to me, that the recording industry's plan to sell more product is by punishing it's customers. With the exception of the recent announcement about lowering CD prices (I forgot which company announced, and its taken several months to arrive), the only other way the industry is attempting to sell more is by punishing those that want/enjoy the product by way of lawsuites, etcetera. It seems that a better-priced or better-quality product would attract more buyers?

[mmilovan]

from

http://www.macrovision.com/solutions/audio/system.php3

"CDS-300™ (NEW)

With CDS-300, consumers can make a back-up copy of the original disc to any PC through the Windows Media® Player and listen to their music without the CD present. Any further duplication or Internet sharing is inhibited. And because CDS-300 allows labels to copy protect their major releases with a single global technology, open source discs from one market can’t

be used to fuel file sharing in other markets. The honest customer’s needs are satisfied. The labels stay protected. And CDS-300 is the key to it all.

Creates barriers to ‘open source’ Red Book audio sessions

Uses only 5–10% of a CD for compressed files and support programs, allowing for a minimum of 67 minutes of audio on a 74-minute CD

Original audio quality maintained"

Edited September 11, 2003 by mmilovan

[wolff]

Many of these codes have been broken before they got to market.

Digital audiophile labels will go under, do to the fact that this technology degrades sound quality.

Edited September 12, 2003 by wolff

[SEK]

this technology degrades sound quality.

That's what I fear, and at a time when redbook is sounding more consistently nice.

[shawn·m]

For what it’s worth, I’m not terribly concerned about copy protection per se. As b3-er and couw point out, there’s nothing to prevent analog copying followed by digital conversion. It wasn’t long ago that I did this with Crescent and Love Supreme while playing with the stereo spread –heresy, I know, but that’s another story.

True, it adds a step to the process and it won’t deliver a perfect digital copy, but it served my purposes well enough.

On the other hand, I have no intension of ever buying a disk whose copy protection scheme relies upon faulty or missing data: I’m not thrilled with the idea of working a player’s error correction circuitry any more than necessary and I wonder about such a disk’s longevity.

Depending on the kind of copy protection and how prevalent it becomes, the value of older unaffected disks certainly could increase.

[Claude]

I just read on the german Heise news page that copyprotected CDs will soon be distributed on the US market too.

BMG announced that the Anthony Hamilton album "Comin' From Where I'm From" (hip hop) will be protected by the "MediaMax CD-3" scheme from SunnComm Technologies.

This protection is different from the previously known schemes, as it alows the compressed files (WMA format) from the original CD to be burned on maximum 3 audio CDs. So it is still possible to make a limited number of lower quality copies of the CD, for example for the car.

Edited September 19, 2003 by Claude