UNIVERSAL TO DISTRIBUTE
COPY-PROTECTED CDS

Vivendi Universal Tuesday (9/25) reported that its Universal Music Group plans to start issuing CDs in October with anti-piracy software that will prevent the copying of music into computer files.

Universal Music Group—home of such labels as Interscope, Island Def Jam and DreamWorks—is aiming to have the protection software on all CDs toward the end of the first quarter of 2002, said Vivendi vice chairman Edgar Bronfman Jr.

While fighting online music-swapping websites such as the industry’s favorite bad guy, Napster, pirated CDs have taken hundreds of millions of dollars out of record labels revenues, the labels say. Meanwhile, CD-R sales are expected to hit 1.5 billion this year (hitsdailydouble.com, 7/25).

"With the extent of piracy and the extent of CD (copying) that's going on, we have no choice but to protect our artists and our rights holders," Bronfman said.

Universal isn’t the only label searching for an anti-piracy solution. Warner Music Group is currently considering its options, while BMG plans to test anti-piracy software on promotional CDs in the U.S.

Sony Music Entertainment has no plans to use anti-piracy technology on American-distributed CDs, though it recently placed protective software on Michael Jackson's new Epic single, "You Rock My World" before distributing to European radio stations, after the track was found on the Internet.

"As responsible copyright holders, Sony Music Entertainment has long been a strong proponent of protecting its artists and copyrights from piracy," the label said. "We continue to test available copy protection technologies, and our goal is to implement copy protection on a broader basis to deter digital piracy."

But will an aggressive anti-piracy alienate consumers who make digital copies for personal use? An anonymous label executive quoted by Reuters believes that the industry will continue to tolerate such copying, but adds, "The problem is that technology has advanced to a point where you can make many copies in a short period of time that it amounts almost to mass distribution. People can make a dozen copies faster than HITS’ Roy Trakin eats lunch."

The label exec envisioned CD protection software that allowed cassette copying, as well as restricted digital copying. He also suggested software that includes interactive features for consumers.

"We're not trying to create a quid pro quo situation," he said. "But at the same time, if you're going to place restrictions on your customers, you have to offer them something of value that will make the product attractive."