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Hoist by their own petard 14 January 2004 Edition
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The music industry's steadfast refusal to accept that we're now living in the 21st century and that their medieval business and marketing models no longer apply appears to have ankle-tapped moves to copy-protect CDs.

Yes, their burning desire to prevent customers from using CDs on their PCs or transcoding the content to MP3 for use on portable media players looks set to cost them a small fortune.

They have indeed been hoist by their own petard!

I refer to the way in which a new generation of "enhanced audio discs" are configured to deliver two copies of the music they contain. One copy is in regular CD format, the other is in a computer-readable (usually Windows Media Audio WMA) format with built in strong Digital Rights Management (DRM).


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Yes, at last, this feature has been updated again! (31 Mar 2003)

Here in NZ, the music industry has made it very clear that they don't want people copying their CDs to tape or ripping them to MP3 for use on their portable music player. In fact, to do this is against NZ copyright law and could be punishable by some stiff penalties.

In countries such as Canada, the music industry have decided to allow this media-shifting activity to take place -- but they have convinced government to slap a massive levy on recordable media such as CDRs. This levy is to offset the "losses" that the industry faces when someone simply makes a backup copy of a CD for use in the car -- rather than buying a second copy of a disc they already own.

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Well here's the irony...

Artists are now demanding that if the recording companies are going to deliver two copies of their work to customers, they ought to get paid twice for each of these "enhanced audio discs".

Suddenly the recording companies are on the back foot for a change and all those artists they've allegedly been screwing for years now hold the upper hand.

So what are the options here?

The most likely outcome is that the Industry will negotiate a compromise deal with artists that sees them get just a little more than they used to.

However, this does represent a great opportunity for popular artists to get tough and play hardball -- at the Industry's expense.

Unfortunately, I suspect that the contracts between artists and recording companies have been carefully crafted in such a way that any musicians who don't agree to the industry's demands will simply be left in the unenviable position of being bound by a contract but having the publishers refuse to release their new albums.

One thing's for sure -- negotiating a new royalty rate with artists, along with paying for all this new copy-protection technology, will push the costs associated with CD production up. With any luck, this will speed up the industry's acceptance of the inevitable -- that they'll have to embrace the electronic distribution of their product through the net.

But even doing this is now proving to be problematic...

Two standards have appeared on the Net for music sales/downloads.

In one corner we have Apple and its very successful iTunes system. In the other we have Microsoft plugging its own standards.

I'm pretty certain this is going to be a real format war -- just like the VHS/Beta battle of the 1980s -- and ultimately there will be only one real winner.

Right now, in terms of functionality, flexibility and "cool factor", Apple has a huge lead over Microsoft. The iPod is a cool little box (although the iTunes service also works with Windows PCs) and iTunes offers users much more flexibility in what customers can do with their music once they've bought it - and this includes burning to CD.

Microsoft is (for once) on the back foot and if there's one company that has repeatedly shown itself as being able to stand its ground against Bill's bullying juggernaut -- it's Apple.

So, who's your money on?

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