Making Copies Of CDs For Your Friends, Or Your Car? Those Days Could Be Over

Designed to cripple bootlegging, copy-protected CDs will soon hit U.S. market.

Bootleggers — and occasional burners of CDs — beware.

More Fast and Furious, the second soundtrack from the summer
blockbuster “The Fast and the Furious,” will make history when it hits stores
next month as the first major-label release with built-in copy-protection
technology.

Already spreading overseas, copy-protected CDs are mainly designed to cripple the illegal practice of selling bootlegged CDs on the streets, though they will also affect anyone who makes mix CDs or burns extra copies of their favorites for their car or their friends. Naturally, record labels, retail stores and many artists strongly support the technology.

“All the bootlegging, it definitely hurts the labels, it definitely hurts
the artists,” Naughty by Nature rapper Vinnie Brown said. “The copy-
protected CDs are definitely a good thing. The consumers can buy one CD and
get an unlimited amount for free [right now]. If they want one for their home stereo and
laptop and their car, they’ll need to buy that many.”

Stan Goman, senior vice president and general manager of Tower Records, said bootlegging has grown so much since the advent of low-cost CD-burning equipment that it has the potential to seriously damage the record business. He pointed out that in some countries, such as the Netherlands, bootlegging has already put several labels and retailers out of business.

“We’re selling a digital master,” Goman said. “That’s what
those things are. I don’t think it’s right to be able to copy that thing as
many times as you want and give it to all your friends and have the poor artist
who spent 10 years writing, recording and performing those songs get
absolutely zilch. I don’t think that’s right at all.”

Universal Music Group, which said earlier this year it hoped to have all of
its new releases copy-protected by fall (see “Universal Announces Plan To
Copy-Protect CDs”
), will have the eyes of the music industry on it when
it releases More Fast and Furious on December 18.

“In response to the problems that CD burning and piracy have caused in the
marketplace, Universal is taking the first important step to help protect
artists by launching the best copy-protection technology available today,”
Jim Weatherson, Universal’s executive vice president of music and video
distribution, said in a letter to retailers. “We have heard the strong voice
from the retail community concerning the substantial financial impact that
illegal copying of compact discs is causing to business. We share in your
concerns and in response are pleased to be the first company to launch a
campaign to confront this explosive and damaging trend.”

Just how damaging is CD burning? According to the International Federation
of the Phonographic Industry, global music pirating cost the music industry
about $4.2 billion in 2000, up $100 million from the previous year. Sales of
illegal music CDs were up 25 percent in 2000, to an estimated 640 million units.

Bob Higgins, chairman of record retail chain Transworld Music, said more than 60 million blank CD-Rs used for copying music (meaning CD-Rs that are at least 76 minutes in length and advertised as being “for copying CDs”) are sold in the U.S. on a monthly basis. Miao Chuang, the spokesperson for copy protection software company Macrovision, said their research shows the volume of blank-CD sales now exceeds the volume of prerecorded CDs sold.

“It is a problem,” added Higgins. “[Copy protection] is something that is needed within the industry to protect the rights of the product and I’m glad to see UMG take the first step.”

Not everyone is sold on copy-protected CDs, however. The technology behind
them is hardly perfect, and some consumers are concerned the industry is
jumping the gun to protect copyrighted music and releasing CDs with flawed
devices that diminish sound quality and prohibit CDs from playing on some
components.

Stereophile magazine writer Jon Iverson said the specially formulated distortions used in copy-protected CDs to throw off recording machines damage the quality of the music. “The record companies have declared war on their most devoted customers,” Iverson said. “It is a shame to see, and will be regarded as a grave mistake.”

The labels deny the alleged diminished sound quality, though they have acknowledged the playback flaws. Universal is including disclaimer
stickers on the More Fast and Furious packaging notifying consumers of
possible playback difficulties on DVD players, game consoles and Macintosh
computers. They have also asked retailers to offer a full refund to those
who have trouble playing the CD and have added inserts in the CDs that
direct the consumer to a customer care center or Web site for assistance.

But that doesn’t excuse their actions, said Jim Peters, the coordinator of a
European crusade against copy protection that is part of the broader
Campaign for Digital Rights (http://uk.eurorights.org/).

“The whole idea of copy protection for CDs is nonsense,” Peters said. “CDs
were simply not designed for this. They were designed to be as compatible as
possible, to work equally well on any CD-playing device. The only way to
stop a CD from playing in a computer is by creating an intentionally faulty
CD. They have distorted the CD format in certain ways that cause problems
for most computers, but don’t cause problems for most normal CD players.
However, as you might guess, this isn’t a very precise art.”

Universal Music Group is using the Cactus Data Shield created by Israel-based Midbar Tech Ltd. on More Fast and Furious, though the company said in a statement “they are undergoing extensive exploration and technical evaluation of a variety of technologies.”

The label has not called the soundtrack, which features music from lower-tier rock and electronic acts like BT, Saliva and Machine Head, an experiment, but the relatively small amount of copies the CD is expected to sell indicates so, Higgins said. “It’s probably a smart approach not to put something out that’s going to
sell 700,000 copies a week,” he said. “[The goal is] to learn from it and correct mistakes
on a larger-selling album.”

Earlier this year, the independent label Music City Records released a copy-
protected CD by country artist Charley Pride — the only known copy-protected
CD on U.S. shelves today, according to the sources in this article. It
included a device designed by Phoenix-based software company SunnComm called
MediaCloQ that allows the consumer to download the songs on the CD to their
computer only after registering the CD online.

The label’s president, Bob Heatherly, announced at the time of the release
that he was elated with the technology, noting that it “has been very well-received by the consumer” and “opens the door for future artists to join the
battle against piracy.”

Shortly after the CD hit shelves, however, a consumer filed a lawsuit in
California Superior Court in Marin County alleging that the disclaimer
sticker on the CD misled consumers. Music City Records made it clear the CD
was not intended for play in DVD players, but failed to warn that the CD
would not play in computers. That case is still pending.

In the U.K., BMG Entertainment set up a hotline last month last week for consumers who
are having trouble playing Natalie Imbruglia’s new White Lilies
Island
in some CD and DVD players. Unlike Pride’s album or More Fast
and Furious,
it did not include a disclaimer sticker. A spokesperson for
BMG said only about one of every 1,000 consumers has reported a problem. “That
return rate is very, very minor,” Higgins said.

Imbruglia’s album is also protected by the Cactus Data Shield from Midbar Tech Ltd., which has released 6 million copy-protected CDs into the European market, according to company spokesperson Marjie Hadad. “Which titles and if they are marked are decisions of each respective recording company,” she added.

Midbar has commercial agreements with several major record labels and is in
discussion with many independent labels, Hadad said. The company is planning to
enter the U.S. market in the near future.

Macrovision, Midbar’s chief competitor, said it has already released
copy-protected CDs in test markets in the U.S., though a spokesperson would not
reveal titles. Peters’ Campaign for Digital Rights has a list of copy-protected albums on its Web site (http://uk.eurorights.org/), though it
is mostly culled from complaints in European countries.

SunnComm, Midbar and Macrovision all take quite different approaches to copy-
protecting. Macrovision’s SafeAudio Version 3 offers multi-level security
and can insert digital distortion that is inaudible when a CD is played
through a CD player, but creates clicks and pops when a song is copied into
digital format on a PC’s hard drive. Midbar’s Cactus Data Shield prohibits
digital replication (burning CDs into MP3 format) altogether, but enables
the consumer to make analog copies.

“These are not just slight modifications, these are major corruptions to the
data,” Peters said. “On several of these formats the audio data itself is corrupted by either
distorting the error-correction codes on the CD, or inserting bad chunks of
data into the audio stream. The error-correction codes are designed to help
a CD player cope with scratches on the disc, so by
corrupting these, they are effectively degrading the CD’s
scratch-resistance.”

Peters and the Campaign for Digital Rights recruited a BBC engineer to test
a copy-protected CD on a special CD player that shows the level of errors on
a CD. On a scale from 0 to 9, a new, unscratched CD should score 0, and
a very badly scratched CD should score 9. The copy-protected CD scored
between 5 and 7 on the scale, according to Peters.

“You can see that in this case, the corruption on the disc was about as high
as it could possibly get without causing problems on normal CD players,”
Peters said. “But what if you scratched one of these? CD players are very
clever. Even if they can’t fully correct a scratch, they’ll do everything
they can to avoid skipping or going silent, filling in the gap with a guess
at what should be there. So a scratched CD won’t go wrong in an obvious way
to begin with, it will just start sounding a little bit worse, as the CD
player has to work harder to invent parts of the sound which it can’t fix
from the error correction codes.”

Peters and the music industry do agree on one thing: copy-protected CDs are not going to stop street sales or home copiers entirely, only slow them.

“Even if the record companies find a way to corrupt the CDs in a way that
makes them impossible to copy digitally, people can still make analog
copies through the audio inputs of
their PCs,” Peters said. “If you think that the inconvenience would put
people off, think again. People have been making analog copies onto tape
for years. Bootleggers put many times more work than that into doing a
bootleg MP3 of a concert.”

Added Transworld’s Higgins, “The system can be beat. I don’t know that
somebody today can make a copy-protected CD that the system cannot beat.
This will make it much more difficult, which will bring the copying to the
minimum.”

Naughty by Nature’s Brown said his engineer recently showed him a simple way
to get around copy protection technology. “With all the techies and hackers
out there, you will always be able to get around it,” he said. “But just to
make it not so simple is worth it. The labels should put up a front to show
that, yes, we are doing something to begin to combat the bootlegging thing.”