Devaluing the Product - Copyright-protected CDs.

By Richard Menta- 10/08/01

Technology brings progress, but it can also be used to impede it. That is what the addition of copy protection to the music we buy at the record store is attempting to do. In an effort to prevent consumers from ripping and trading MP3 files the record industry is embracing technology that will allow a CD to be played on a standard CD player, but not the CD player on our PCs.

Two weeks ago Vivendi Universal announced their products will use this technology and it looks like the other major labels will soon follow. Our question is this, is it really good for business?

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We have already started to see some protest on this issue from consumers. Karen DeLise encountered such technology when she realized her Charlie Pride CD would not work on her PC unless she registered personal information on a web site. She brought independent label Fahrenheit Entertainment to court last month for failing to provide an adequate identification of those CDs.

Last weekend, a UK group called the Campaign for Digital Rights (CDR) protested outside nine large HMV and Virgin stores throughout Great Britain over these protection measures. In a CDR press release the group stated "If the record industries want to experiment with copy protection, let them do so in their laboratories, and not at the expense of the general public. And if they want to sell these CDs, let them make the warning labels prominent and truthful."

These protests will probably not stop the implementation of this technology directly, at best they may only improve the labeling of such impeded products. Where their efforts are trying to achieve their greatest effect is in creating awareness within the general buying public that the record industry actions have created a devalued product.

As we spend more time in front of the computer, especially at work, the PC has evolved into a convenient place to listen to our music collection. By developing and selling CDs that cannot play on the computer, the record industry is in essence violating consumer expectations of that product. The effect can devalue it in the eyes of consumers who, now encumbered with restrictions on when and where they can use it, may think twice before consummating that $18.99 impulse buy.

CDs are superior to MP3s, which is why even the most hard core file traders continue to buy them. Not only is the sound better, but there are more CD players in the hands of consumers. That gives the form a greater mobility and flexibility in terms of convenient listening than digital music files that, for the most part, are tethered to the computer. Take away the ability to listen to the CDs on computers and the competitive advantages of CDs are reduced, leveling the playing field between CDs and MP3 files.

If the CD a fan pays good money for won't play on their computer, the MP3 files they download from the ever-growing Napster clones will, giving them more reason to download, not less.

The folly of all this technology is that it is not necessary for some hacker to break through the added encryption to defeat it. Any consumer can circumvent it by playing that CD on a standard CD player, taking a feed from that player into the line-in jack on their computer, and record each track into a WAV file. Once a WAV the song can easily be converted to an MP3 using a myriad of programs freely available on the Net. It's considerably more time consuming compared with using a ripper, but it works.

Of course, few consumers will actually bother to go through this trouble, which is why the music industry may not view this as a threat. If that is the case, here is the flaw in industry logic - the average fan doesn't have to. You only need one person to go through that effort, making it available on Napster clones where the files quickly multiply as users copy and trade them. The music of the recent artist tribute to those victimized by the World Trade tragedy were on all the Napster clones the next morning. One or several fans literally took the audio feed from the Television broadcast itself, compressed it and put it online where it was freely available to all (some tracks may also have been leaked by label marketing, an interesting twist).

Removing the PC accessibility of CDs creates two camps, material that plays on the computer and material that doesn't. Such a scenario only plays into the favor of Napster clones by making PC accessibility another competitive advantage for them, increasing their value in the eyes of frustrated consumers.

What could be worse for the record industry than these two consumer attitudes several years from now; 1) CDs are for stereos, MP3s are for computers and 2) MP3s are still free.

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