Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo

 

Unsupported browser: Your browser does not meet modern web standards. See how it scores »

{ action.text }

Schoolyard Piracy
Demand for digital “content” (a feeble but convenient jargon word for everything from poetry to podcasts) is greater than ever. Sales of downloadable music worldwide nearly tripled between 2004 and 2005, from $380 million to $1.1 billion, and now represent about 6 percent of all music sales. As of March 2004, Apple’s iTunes music store was selling songs at a pace of about 2.5 million per week. According to the U.K. version of Macworld magazine, it now sells three million songs every day.

One might expect content producers and distributors to be thrilled by digital’s takeoff. But in reality, they are often preoccupied with the ever present threat of rampant copying. And for good reason: in a one-month period in 2005, 3.8 million U.S. households downloaded music using the free peer-to-peer file-sharing services WinMX and Limewire, while only 1.7 million households purchased files from iTunes, according to market research firm NPD Group. The Recording Industry Association of America puts the lost retail revenues from digital music piracy at $4.2 billion per year, and it has fought illegal downloads aggressively: in February, it announced that it had launched 750 new lawsuits against users of peer-to-peer file-sharing networks, bringing the total since 2003 to more than 18,000.

Preceding almost every illegal download, however, is a much more innocent act: ripping compressed computer files, such as MP3s, from a legitimately purchased CD. Ripping and burning CDs for personal use is perfectly legal in the United States. But Thomas Hesse, president of global digital business for Sony BMG, says it accounts for two-thirds of all piracy. “The casual piracy, the schoolyard piracy, is a huge issue for us,” he told the Reuters news service last year.

So recording companies like Sony BMG are naturally attracted to technologies that promise to thwart wayward fans. Enter digital rights management, an industry that emerged in the late 1990s to help publishers and studios maintain control over the contents of DVDs, software, and the like. For DRM companies and their clients, “control” means barring customers from opening digital files unless they have paid to do so. It means preventing the copying, printing, backing up, or replication of a work except when expressly permitted by the work’s license agreement.

For years the recording industry didn’t need this level of control, since consumer-grade CD players (introduced in 1982 by Philips and Sony) were designed exclusively to play music, not to export it in digital form. But by 1996, when PC manufacturers began to include CD-ROM drives as a standard feature in home computers, the threat of “casual piracy” had emerged; and when it debuted in 1999, Napster, the first popular Internet music-sharing system, made good on that threat. Recording companies began to lobby in Washington for greater legal penalties against those caught sharing files – and also began looking for ways to make copying and sharing more daunting for the average user.

This isn’t a straightforward matter. Protected discs must include DRM software to limit copying; yet at the same time, they must be playable on ordinary CD players. One way to meet both needs is to make CDs more like CD-ROMs, which often contain multiple “sessions” similar to the cuts on old vinyl LPs. The first session of a multi-session CD, starting at the center of the disc, contains music, and the outer sessions contain software. Normal CD players read only the first session and ignore the rest, while a Windows PC with its “autorun” feature turned on looks first for programs in the outer sessions that it can execute. (Luckily for DRM developers, autorun is activated by default in Windows XP, and most users never change this setting.)

When Sony BMG undertook the industry’s first large rollout of copy-protected CDs in 2005, it used the multisession method. On 52 Sony BMG albums released between January and November, the outer sessions included a Windows copy protection program called XCP (eXtended Copy Protection), which Sony licensed from a U.K. company called First 4 Internet, and a dual Macintosh/Windows program called MediaMax, from Phoenix, AZ-based SunnComm. This wasn’t the first time a label had attempted to sell CDs with anticopying software; Arista Records, a Sony BMG subsidi-ary, marketed a disc carrying MediaMax in late 2003, and rival Macrovision’s DRM software appeared on thousands of CDs from other labels beginning in 2002. What was unusual about the new Sony BMG discs, however, was the technique First 4 Internet had chosen to make XCP invisible.

7 comments. Share your thoughts »

Tagged: Business

Reprints and Permissions | Send feedback to the editor

From the Archives

Close

Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me