Labels target ‘casual’ pirates

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 burn a copy that you play in your car or a copy that your son plays in his bedroom or make a personal mix,” said Thomas Hesse, Sony BMG’s president of global digital business. “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.

“They do not play on iPods simply because Apple has this proprietary approach,” said Hesse of Sony BMG’s copy-protected CDs.

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 disks.

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 UK that began this week.

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.