Under the deal, SunnComm said BMG will use its technology, dubbed MediaCloQ, which prevents people from being able to "rip" songs directly from a CD onto a computer. BMG said it is testing SunnComm's technology and is starting to implement it on promotional CDs. BMG said it will decide later whether to use SunnComm's technology for commercial releases.
The announcement comes as major record labels are testing ways to stop the flood of unauthorized MP3s onto the Web. Thousands of CDs incorporating anti-copying technology have already been sold to unsuspecting consumers in one test that began months ago.
SunnComm has worked with record labels in the past on CD-copy protection, although the results have been inconclusive. A CD by country artist Charley Pride incorporating its technology was released in U.S. stores in May, but that did not stop unauthorized copies from leaking onto the Net. SunnComm said the leaked songs did not come from a cracked CD but were likely copied from an unprotected set of CDs released in Australia.
Last year, BMG Germany experimented with secure CDs using technology from Israeli security company Midbar. The experiment failed, and BMG abandoned its project after complaints from customers who said their players could not read the discs.
"Certainly, we learned a lot from that experience, especially in terms of playability," said Sami Valkonen, senior vice president at BMG Distribution. "It's more proof to the fact that this is an evolutionary process...It's a process in which we're working to perfect it, and once it's perfect enough then we're comfortable in rolling it out."
Valkonen said the German experiment was a "very early" generation version of Midbar's technology and since then, Midbar has released a second-generation version in which the company addressed a lot of these problems.
Valkonen added that BMG is testing technologies from SunnComm, Midbar, Macrovision and a handful of other companies.
Valkonen said the most important criterion that the label has set for its partners is to ensure that the quality of the recording is not affected by anti-copying features. He added that any solution must also ensure that the discs can play on all types of machines.
"It's not just about copy-protection," Valkonen said. "It's finding a solution to a problem that addresses everyone's needs, including the consumers."
To date, CDs have been the source of pirated music on the Web. Companies have been attempting to develop a copy-protection technology that would not degrade the sound on an ordinary CD player.
In the Macrovision test, copy-protected CDs were released without notice to consumers to ensure unbiased feedback, according to the company. Macrovision, which uses technology from Israel-based TTR Technologies, aims to introduce audible pops and buzzes into digital copies of CD tracks, without altering the audio quality of the CD itself.
Phoenix-based SunnComm would not disclose details of its technology. SunnComm said the MediaCloQ technology is applied to the CD at the manufacturing stage--at the encoding level--so that it prevents people from ripping songs.
"You cannot see the content," said William Whitmore Jr., executive vice president at SunnComm. "You cannot rip what you can't see."
While the deal with BMG is at an evaluation stage, SunnComm is hoping that the deal will enable the company to move forward and get noticed by the other record labels.
"We understand that it's chaotic in the marketplace right now," Whitmore said. "What we're trying to do is offer solutions to help restore order to this chaos."