New CD copy-lock technology nears market

Sony BMG Music Entertainment likely to release experimental CDs with new form of copy-protection early next year.

A new kind of copy-protected music CD will likely hit U.S. shelves early next year, as record label Sony BMG Music Entertainment experiments with a technology created by British developer First 4 Internet, according to sources familiar with the companies.

Several major music labels have already used a version of the British company's technology on prerelease compact discs distributed for review and other early-listening purposes, including on recent albums from Eminem and U2.

The releases for the retail market, expected early in 2005, will be the first time the Sony music label issues copy-protected CDs in the U.S. market, although the company's other divisions have done so in other regions. BMG, Sony's new corporate sibling, has been more aggressive, with a handful of protected CDs released last year.

"We have always focused on a high level of protection, but we've waited until there aren't any playability issues."
--Mathew Gilliat-Smith,
CEO, First 4 Internet

A Sony BMG representative declined to comment on the plans. First 4 Internet Chief Executive Officer Mathew Gilliat-Smith confirmed that

Gilliat-Smith said his company has been waiting to improve its technology. Better-known companies Macrovision and Sunncomm have seen sporadic--and sometimes controversial--use of their products on CDs released around the world.

"We're not keen to rush," Gilliat-Smith said. "We have always focused on a high level of protection, but we've waited until there aren't any playability issues."

The new Sony BMG experiments are a further sign that copy protection on music CDs may be moving closer to the mainstream U.S. market. The practice is much more common in European and Asian markets.

For several years, the major record labels have sought a way to protect CDs against unrestricted copying and "ripping," or transforming songs into files such as MP3s that can be swapped widely online. Early experiments proved unpopular, prompting reports that the discs could not play in certain kind of stereos, or might even damage computers.

The past year has seen resurgent signs of interest from the major labels, however. A watershed moment in the United States came when the BMG-released Velvet Revolver album reached the top of the industry's sales charts, despite being clearly marked as copy-protected. Industry insiders said that helped assuage some boardroom concerns about potential consumer backlash.

Questions remain about the appropriate technology to use, however. The copy protection from Sunncomm, used by BMG in the United States, could be fairly easily disabled simply by pressing a computer's Shift key while the CD was loading, for example. That issue has been fixed in the company's most recent

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