German CD Protection Fails
Thurs feb.03 - 1:45pm
At risk of sounding like we're saying "we told 'em so," we'd like to take a moment to draw your attention to this little item we found over at Wired news. It seems that copy protection has finally, albeit abortively, made it to the music CD market — and much to nobody's surprise, it failed. The culprit here is BMG, who ran a test of CD protection technology in Germany. Out of about 100,000 protected CDs sold, between three and four thousand of them were returned by angry customers who said they simply didn't work.
It's not as if the problems were limited to a particular brand or type of CD player; the playback issues occurred, according to the article, on several different kinds of car- and home-theatre based CD players. BMG said they tested the technology (developed in Israel by a company called Midbar) on more than 1,000 players. Apparently that wasn't enough, but Midbar is hard at work on another revision of the technology, which is supposed to allow playback in stereos and computers but prevent saving or converting of the tracks to a digital format that can be manipulated or copied on a computer.
Controlling digital music has been a hot topic since the explosion in popularity of downloadable digital music, but this is the first time a company has taken direct action. BMG says it was triggered by a 9.8% slump in sales for the first half of 1999 over the same period in 1998; BMG's new media head Matthias Immel says the "more or less obvious reason for the shrinking market is the CD burner issue," but declined to cite specific research that led him to that particular conclusion.
All of which begs the obvious question: is the slump in German CD sales solely attributable to piracy? Gene Hoffman, founder and CEO of EMusic.com, isn't so sure. "The ability to copy CDs has been around for at least a year," he says. "What is the true underlying cause of that decrease in sales?" Hoffman thinks that securing the format from copying isn't the answer; instead he favors enforcement (rather than lipservice) of anti-piracy laws and fairer pricing for music. Protection schemes drive up failure rates (the recent German experiment offers corroboration of that) which in turn drives customer satisfaction down.
And if slow sales are the problem, frustrating customers is not the solution.
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