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New anti-piracy technology irks consumers

BLOOMBERG, WASHINGTON
Thursday, Mar 07, 2002, Page 19

Karen DeLise, a Californian who runs a secretarial service, ran into a problem with her new Charley Pride CD. Software on the disc prevented her from using a computer to copy songs to a portable MP3 player.

Frustrated, DeLise filed suit. Last month, she won a settlement in which the album's producers agreed to label the CD as copy-protected and incompatible with some devices, and to refund the purchase price to unsatisfied customers, DeLise's attorney Ira Rothken said.

While many buyers won't sue over copy protections that Vivendi Universal SA and other record companies are introducing, the music industry risks a backlash from listeners or even a boycott of aggressive labels, consumer advocates said. They said the technology violates home-use rights that music fans have enjoyed for decades.

"There are powerful tools on my desk right now that allow me to make music available to myself that I bought," said Steve Self, a Web designer in Durango, Colorado, who is urging a boycott of Universal. "They are thwarting that. It's an unimaginative solution that's doomed to failure." The copy protections include blocking consumers from digitally copying individual songs and preventing playback on some computers and DVD players. Companies intend to protect their US$40 billion worldwide business from piracy, which already costs more than US$4 billion a year, according to the Recording Industry Association of America.

"The very thing that the record labels are trying to do to protect the artist and their investment is going to backfire on them," said Bill Evans, who runs the Web site boycott-RIAA.com.

"It doesn't leave the consumer really any choices, other than not to buy the CD." Evans can't play copy-protected CDs on his DVD player, the only entertainment in his home office in Roanoke, Virginia. His friends reported trouble playing them in car stereos and portable CD players.

The Internet music file-sharing service Napster Inc alerted companies to the potential damage that digital copies of songs may do to CD sales. While an analog copy such as a tape cassette is a degraded version of the original, a CD can be copied digitally on the Internet an unlimited number of times without losing clarity.

Few people will buy music when high-quality versions are available for free, industry executives said.

The new copy-protection systems attempt to limit consumers to listening to a disc on traditional CD players and through software that ensures copyright protections.

Vivendi's Universal Music Group has been the most public of the major record companies in testing technology to prevent unauthorized duplication.

Universal said its More Fast & Furious, released in December, might be unplayable on some DVD players, game consoles and Macintosh computers. Universal urged music stores to accept returns if listeners had playback difficulties.

"Universal Music Group is evaluating emerging technologies to assess their viability in controlling the growing problem of unauthorized copying, duplication and dissemination," spokesman Bob Bernstein said.

Larry Kenswil, president of Universal's E-Labs division, said the company has received few returns and is still perfecting the technology.

Consumers have responded. Web sites like fatchucks.com collect reports on CDs that listeners suspect are copy-protected.

Sony Corp has released about 70 titles with copy protection in Europe, spokeswoman Laurie Jakobsen said. AOL Time Warner Inc has sold two albums in Europe clearly labeled as copy-protected, spokesman Will Tanous said. Bertelsmann AG released a number of protected CDs in Europe, spokesman Nathaniel Brown said.

None of the three has sold the CDs in the US.

"We will not release CDs with copy-protection technology unless we are confident that consumers will be able to play the discs in their existing CD players," Tanous said.

One problem for consumers is that not all copy-protected CDs are clearly labeled, so people don't understand what they're buying, Evans said. That concerns Philips Electronics NV and other makers of CD and DVD players, who don't want consumers wrongly to blame their equipment.

"The consumer becomes confused and frustrated about this CD's failure to work in a wide variety of products that they've become accustomed to CDs working in," said Tom Patton, vice president for government relations at Philips. "We hope very much that this practice will not continue by record labels." Philips helped develop the CD technology and licenses it to other companies that makes CDs. The company says copy-protected discs shouldn't use the CD logo or be marketed as a compact disc.

Representative Rick Boucher, a Virginia Democrat, supports legislation to clarify that the same rights consumers enjoy with physical books, music tapes and videocassettes carry over into the digital world.

In response to a request from Boucher, RIAA President Hilary Rosen last week said the industry is suffering from piracy, with record sales last year falling 10 percent from the previous year.

"Mass copying, free distribution and piracy are causing significant damage to those who create and market music," she wrote. "If technology can be used to pirate copyrighted content, shouldn't technology likewise be used to protect copyrighted content?"
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