Livechain Inc (LICH)

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By DAWN C. CHMIELEWSKI

Knight Ridder Newspapers

The record labels are in pursuit of a new class of music pirates -- not the millions who download bootlegged songs over the Internet but those who copy music CDs for their friends.

The music industry considers the seemingly innocuous act of duplicating a music CD for someone else "casual piracy," a practice that surpasses Internet file-sharing as the single largest source of unauthorized music distribution. After fits and starts, the industry's largest players are taking measures to place curbs on copying.

Sony BMG Music Entertainment, home to some of the music industry's biggest acts, including Bruce Springsteen, System of a Down and Shakira, plans to copy-protect all music CDs sold in the United States by the end of the year. Another major label, EMI, whose artist roster includes Coldplay and Norah Jones, will introduce copy-protected CDs in its two largest markets -- the U.S. and the United Kingdom -- in the coming weeks.

For consumers, it signals an abrupt change to the rip, mix, burn mania embodied by the 2001 Apple Computer ad campaign promoting the first iMac computer with a CD-burner and software for creating custom music CDs. These new copy-protected disks limit the number of times people can create copies of music CDs or add individual songs to music mixes.

"You can do with the CD you bought what you do with it if you're within the realm of personal use," said Thomas Hesse, Sony BMG's president of global digital business. "You can burn a copy that you play in your car or a copy that your son plays in his bedroom or make a personal mix. That's fine. That's the way people listen to music these days. If you attempt to burn 20 copies and distribute them to the kids who come to your son's birthday party, that's not possible."

Copy protection raises an even bigger problem for the millions of people who own Apple's iPod digital music player and use its iTunes software to organize their music and create custom CDs. Apple has refused to license its FairPlay rights-management software -- even to the labels. That means certain copy-protected CDs won't work with iTunes or the iPod without employing time-consuming workarounds.

"They do not play on iPods simply because Apple has this proprietary approach," said Hesse of Sony BMG's copy-protected CDs. "We would be willing and able to put FairPlay on CDs in an instant if Steve Jobs would flick the switch and allow us to do that."

Apple refused to comment. However, well-placed sources within the music industry said the computer maker is still in active discussions with the labels to find a solution.

"We're working with all the major digital portable music players out there and our goal this year is to make them 100 percent compatible, so that when you put your disk into your computer, what opens up is your standard portable player interface," said Peter Jacobs, president and chief executive of SunnComm International, whose technology protects Sony BMG discs.

The music labels have been experimenting with various forms of copy protection since 2001. But early attempts yielded embarrassing results: the CDs didn't play in all stereos or computers.

The labels say such technical glitches are a thing of the past. EMI has distributed more than 127 million copy-protected disks in 48 countries with few customer complaints.

"The technologies we're testing have matured to the point where consumers can play, rip, burn and in some cases share their music with others while still protecting the intellectual property of EMI's artists," wrote Richard Cottrell, the label's head of anti-piracy in an instant message.

The industry has been emboldened by Sony BMG's success with the first copy-protected release from a major act. Velvet Revolver's June 2004 release of "Contraband" topped the Billboard charts and ended up selling more than 7 million copies worldwide. It suggested consumers were willing to accept copying curbs that mirrored those of the digital download stores.

Now, half of Sony BMG's new releases -- including the Dave Matthews Band's million-selling "Stand Up" -- are protected. All new CDs will be copy-protected by year's end.

EMI will test various copy-protection technologies in different parts of the world, starting with trials in the U.K. that began this week.

The copy protection technologies from SunnComm, Macrovision and Sony DADC differ in subtle ways. There are, however, some similarities. Many come with two sets of recorded music -- songs in the unprotected format that plays whenever the disc is inserted into a CD or DVD player, and a separate "session" of compressed, copy-protected files that open when the disc is inserted into a computer.

SunnComm's newest technology doesn't require two recording sessions on a disc. It adds the copy protection to the music on the fly, in whatever format the labels choose: Windows Media or Sony's ATRAC. SunnComm discs will also play on Macs. That's not true for the Macrovision technology behind EMI's copy protection.

On the PC, a message appears that asks the buyer for permission to install a piece of software on the desktop. Answer no, and the disc is ejected. It won't play. Once installed, the software regulates how often people can rip a full copy of the CD to the computer, burn individual tracks or make full copies of each album. EMI, for example, will permit the consumer to upload an album once per computer, burn individual tracks seven times and make up to three full copies of each CD.

This not only prevents people from making endless dubs of CDs for friends, it potentially dries up the leading source of unprotected MP3s music files that feed the Internet file-sharing networks.

The move to embrace copy protection could boost Apple's online music rivals, such as Napster or Yahoo Music, which are based on Microsoft's technology, according to Paul-Jon McNealy, an analyst with American Technology Research in San Francisco.

Apple has three choices: do nothing and gamble that consumers will be so annoyed with copy protection, they'll stop buying music CDs; license its FairPlay technology; or embrace the technology of its longstanding rival, Microsoft, said McNealy.

http://www.montereyherald.com/mld/montereyherald/living/11919371.htm