Customers put kibosh on anti-copy CD

BMG Entertainment confirmed Monday that it has set up a hotline for consumers in the United Kingdom who are having trouble playing Natalie Imbruglia's latest CD in some CD and DVD players. The disc will be replaced by retailers or by the label itself, a company representative said.

"Certain limitations of the protection technology were unforeseeable and only (emerged) when the CDs were released into the general public," said Regine Hofmann, a BMG spokeswoman. "We do need to respond."

Imbruglia's "White Lilies Island," which hit stores less than two weeks ago, is the highest-profile release to be shipped with technology preventing it from being copied onto another CD or from being "ripped" into MP3 files using a PC. While still a test, the release is one sign that labels are becoming bolder in their quest for technology that prevents widespread CD piracy.

Universal Music Group has gone the furthest in its promises, saying it hopes to have all of its CDs protected with some kind of anti-copying technology by mid-2002. The other big labels have said they are experimenting with technologies and hope to find an acceptable version as soon as possible. For example, BMG tested Midbar Tech's Cactus Data Shield with the Imbruglia release.

According to Midbar, more than a million copy-protected CDs from various artists have been released in European markets. Macrovision, a rival company, said it has released more than 100,000 in the United States. However, most of the titles have been small releases and have not been confirmed.

But as labels issue more albums packed with copy protection, consumers are getting used to playing CDs on personal computers and creating digital versions of their music collections. Record labels note that sales of blank recordable CDs have gone up by 80 percent in the last year while album sales have dropped, adding a new sense of urgency to their efforts.

In this environment, BMG's return policy raises another potentially dangerous issue for record companies. Retailers are already seeing sales drop and may be loath to support and promote albums with copy protection for which they may later have to give refunds.

In a message board on Natalie Imbruglia's official Web site, a fan posted a letter this weekend purporting to come from Virgin Megastore's customer service, in which the store apologized and directed the customer to BMG's help line. A Virgin representative could not immediately be reached for comment.

At least in the United States, the relationship between retailers and record labels has been rocky in recent months, as labels have moved toward increasing direct online sales and offering subscription services. The release of copy-protected CDs could wind up giving the retailers more leverage with labels as they seek to protect their own businesses against online sales.

Protected discs could also fuel consumer backlash in the already contentious debate over anti-copying technology. Several Web sites have been set up to track reports of which albums have been released with the technology installed. In the United Kingdom, a consumer activist group has mounted picketing campaigns of record stores to bring attention to the issue.

That group, the Campaign for Digital Rights, says it is happy with the way BMG is handling the replacements of the Imbruglia disc.

"It's extremely satisfying," said Julian Midgley, a spokesman for the campaign. "This should make it harder for people to use ill-thought-out copy protection in the future."

BMG did not say how many protected copies of the disc had been distributed, but noted that the number was small compared to the overall release. The company gave no details on which models of CD or DVD players were unable to play the "White Lilies Island" album.

Still, there have been few complaints so far, Hofmann said.

"Of those people who complained the (most), we have the impression that (they) are the people who are burning" copies of CDs, she said. "But if there is a lack of playability, we have to do something about it."