Bush Administration to Sony: It's your intellectual property -- it's not your computer.

By Richard Menta 11/12/05

Sony knew they were dead in the water when the Department of Homeland Security (DHS) admonished them on the CD rootkit scandal - at a Chamber of Commerce event on combating intellectual-property theft. According to Brian Krebs of the Washington Post the Department of Homeland Security's assistant secretary for policy, Stewart Baker, made at the event "a remark clearly aimed directly at Sony and other labels":

"It's very important to remember that it's your intellectual property -- it's not your computer. And in the pursuit of protection of intellectual property, it's important not to defeat or undermine the security measures that people need to adopt in these days.

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The Recording Industry Association of America's CEO Mitch Bainwol was in attendance and you knew that these words had to run a shiver down his spine. He is spending quite a bit of time on the beltway these days pushing several new bills to give Hollywood control of how consumers use future electronic products. But, it is hard to call certain consumer activities illegal when one of your members spreads what security pundits called malicious code to millions of home computers. It just undermines his argument, especially when a senior Bush official looks him straight in the eye and says he agrees with the pundits.

Bainwol has another big worry. The controversy from the Sony scandal has the potential to go beyond Sony by tainting the CD format itself in the eyes of consumers. This could kill the format, though it is not clear yet what effect, if any, this will have on record sales. The word-of-mouth building on the Net looks ominous right now. The industry is now looking to lay low and hope this passes.

That's why Sony backed down yesterday and declared that they would remove this particular DRM from all of their products...temporarily. Sony and the industry as a whole are in damage control mode. So far they have not done a very good job as recent comments by senior Sony exec Thomas Hesse only inflamed animosity on the blogosphere. Sony is also unapologetic about their tactic, which in itself is playing very badly in the press.

One thing is for sure, the industry will not give up on installing DRM tools on their wares. In the end, as more artists continue to use file sharing as a promotional tool, DRM may just become a costly solution looking for a problem.

Other MP3 stories:
Post Sony CD Sales Hold Steady - SoundScan
Will The DOJ Investigate Sony?
Devaluing the Product Part II - Sony CDs

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