Protected CDs quietly slip into stores

Consumers in ordinary record stores are unwittingly buying CDs that include technology designed to discourage the making of digital copies.

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Ted Cohen, VP, EMI Records, and Len Rubin, copyright attorney, Gordon & Glickson
For the last several months, consumers in ordinary record stores around the world have unwittingly been buying CDs that include technology designed to discourage them from making copies on their PCs.

According to Macrovision, the company that has provided the technology to several major music labels, the test has been going on for four to six months. Although it's not disclosing just which titles have been loaded with the technology, at least one has sold close to 100,000 copies, the company said.

The technology, which inserts audible clicks and pops into music files that are copied from a CD onto a PC, highlights what could become a critical part of the major music labels' efforts to stem digital piracy.

Although the labels can do little to stop consumers from "ripping," or digitally copying, the hundreds of millions of old CDs already on the market, they are looking for ways to protect new releases, which constitute the bulk of their annual sales.

But the tests also take aim at the basic consumer practice of copying CDs to a computer for personal use without ever trading the songs with others. Although this is a familiar--and legally protected--task in the world of cassette tapes, the legality of creating music collections on a personal computer is more cloudy.

If the Macrovision tests prove successful and the technology is widely adopted, the ability to create personal music collections on PCs, or to create mixed CDs from purchased CDs, may significantly diminish. Analysts say this is particularly likely if the labels finally start selling protected downloads online.

"I do see this as the future if labels have gone down the path of secure digital downloads," said P.J. McNealy, an analyst with GartnerG2. "But I would be surprised that the labels would not communicate this to consumers."

Clicks and pops
Record companies have toyed with protecting CDs against copying for several years. But the technology is a difficult one, because anything added to a CD risks degrading the sound on an ordinary CD player to the point where audiophiles--or even ordinary consumers--start complaining.

Previous efforts have largely foundered. A BMG Music trial in Germany was scrapped after many consumers said the copy-protected discs would not play on their CD players. An album release by country artist Charley Pride earlier this year misfired when unprotected versions were released in some markets, allowing songs from the CD to seep onto file-swapping networks.

The most high-profile effort, the cross-industry Secure Digital Music Initiative (SDMI), has all but scrapped its plans to add digital "watermarks" to recorded music, after disagreements between labels, consumer device manufacturers and technology companies derailed the effort.

The Macrovision tests are based on a technology acquired from Israeli company TTR Technologies. Rather than blocking copying altogether, the technology introduces some digital distortion into a file. Macrovision says this is all but inaudible when a CD is played through an ordinary CD player, but when a song is copied into digital format on a PC's hard drive, the distortion shows up as annoying "clicks and pops" in the music.

The company said it and the labels are in large part testing to see if the changes in the audio are audible to consumers. Reports so far have turned up no significantly higher number of CD returns or consumer complaints, a spokeswoman said.

The company would not say which CDs or labels have been involved, citing nondisclosure agreements with the music labels.

"They don't want to influence the listener's potential experience," said Macrovision spokeswoman Miao Chang.

BMG Entertainment confirmed that it was interested in the technology but stopped short of confirming that any of its CDs in the market include the copy protection.

"BMG is interested in copy-management technology, and we will be conducting tests on some available technology including Macrovision," a BMG spokesman said.

Other major labels would not immediately comment on the issue.

Can they do that?
The tests highlight the questionable legal status of what is now a widespread practice of making digital copies of CDs, if only for home MP3 collections or to transfer to MP3 players.

The Audio Home Recording Act, a law passed in 1992, says that copyright holders can't sue people who are making personal home copies of music. But lawyers note that the act does not require copyright holders to make this power available to consumers.

"There's no affirmative obligation to make this available," said Leonard Rubin, a copyright attorney with Gordon & Glickson. "They just can't sue you if you do it."

Moreover, legal precedents have clouded the issue of whether a PC is actually protected by this law. In the course of a case that gave Diamond Multimedia the right to create and distribute MP3 players, judges ruled that a personal computer was not deemed a "digital recording device." Although the ruling helped protect the legality of MP3 players, it called into question whether copying a CD to a hard drive is in fact protected by law, even solely for personal use, some lawyers said.

The upshot of this is that consumers may not have much recourse if the ability to rip new CDs begins to go away.

"There might be consumer expectations here," McNealy said. "But there is no legal right."

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