Consumers in crossfire of labels' war on piracy

When Karen DeLise bought a compact disc by country singer Charley Pride last year, she was unhappy to discover that the CD wouldn't play in the CD drive in her computer.

That meant that the songs on the album couldn't be converted into computer files to listen to on her portable MP3 music player, either.

But the CD Ms. DeLise bought wasn't defective. It didn't play because of high-tech restrictions imposed by the disc's recording label, Music City Records of Nashville.

Using sophisticated encryption technology, record companies like Music City can now manufacture CDs that prevent consumers from making easily transferable computer music files, whether for legal personal use or illegal distribution on the Internet.

And, to make matters worse, the copy-protection techniques can render a disc unplayable in DVD players, car stereos, and other high-end audio equipment.

It's part of a war on piracy that some consumers say puts them in the crossfire.

All of the major record labels are quietly beginning to test several kinds of restricted CDs.

The major impetus: Unit sales of CDs dropped 6.4 percent in 2001, according to the Recording Industry Association of America, at a cost of nearly $13 billion.

Universal Music Group, the biggest record label, released the soundtrack to the movie "The Fast and The Furious" in December with anticopying technology while admitting that the disc might not play in many kinds of CD players.

Windows computer users could play special music files included on the CD - files that can't be copied - but Macintosh and Linux users were left out. The CD had a warning label on the back, and Universal offered a full refund to anyone who wanted to return the disc.

People trading songs on the Internet and burning copies of CDs at home are depriving artists and publishers of their ability to make living, says Universal spokesman Bob Bernstein, echoing a widely held viewpoint.

"This is impacting the entire music business, and unless solutions are found, the incentive to create will diminish," he says.

Not every label is so forthcoming. Midbar, an Israeli company that makes copy-protection software, says more than 10 million albums that use its technology have been sold under a variety of major labels. The company says it recommends that record companies disclose the use of copy protection, but concedes that obviously not all have done so.

Music City's Pride CD had a small warning label. DeLise thought it didn't go far enough. And she was particularly annoyed that computer files of the songs on the album could be downloaded from a special website only if consumers gave their name and e-mail addresses, which could then be sold to marketers.

So she sued Music City and Sunncomm, maker of the copy protection, under California's Unfair Business Practices Act.

On Feb. 21, the two sides settled. Music City agreed to put a more complete warning label on the discs and to stop collecting personal information from people wanting to download songs from their website. But the company is free to include copy protection on future releases.

None of the copy-protection techniques being tested can distinguish between a consumer who wants to make a single copy of a song to play on a portable MP3 player and a person who wants to distribute free copies to all of his or her friends.

Copyright law bars copying that harms the commercial interests of a copyright owner, but allows copying in some situations for personal use.

Whether the planned use is fair and legal or not, so-called "ripping" is blocked by all of the copy-protection schemes.

With little information from the record labels about which CDs are copy-protected, music fans have started their own efforts on the Internet to warn of crippled discs. Chuck Heffner of Cincinnati, Ohio, has been posting reports on his web site (www.fatchucks.com) of copy-protected discs from consumers since he first heard about the Charley Pride CD.

Mr. Heffner says hackers will be able to evade the protection, but ordinary folks won't be able to make MP3 recordings for legal uses.

"Why are their fair-use rights being thrown away when it's quite legal to buy a computer and stand-alone CD recorders, MP3 conversion software, and other fair-use technology?" he asks.

He urges consumers to boycott copy-protected CDs.

At the same time, the compatibility problems have drawn criticism from the electronics industry, which wants consumers to buy the latest audio equipment without fear that some CDs will be unplayable.

Philips Electronics, co-inventor of the CD format along with Sony, has made its concerns known to the record companies. Copy-protected discs should carry clear warnings and not use the CD logo that implies compatibility with all CD players, says spokeswoman Jeannet Harpe.

"The issue is not so much one of copy protection but more of playability," Ms. Harpe says.

The issue is also starting to get some attention in Washington. Rep. Rick Boucher, a Democrat from Virginia and co-chair of the Congressional Internet Caucus, has demanded that the recording industry explain its actions.

The congressman is particularly concerned that some copy-protection schemes may violate the Audio Home Recording Act of 1992, which required that audio devices prevent mass copying but allow consumers the right to make single copies.

A spokesman for the Federal Trade Commission, which oversees marketing and advertising to consumers, says the agency is just now beginning to learn about the copy-protection issue.

So for now, with record companies determined to protect more discs, consumers will have to shop a bit more carefully if they want to get full use out of the albums they purchase.

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