Copy-Protection: Nudging a Buyer Towards Digital Substitution?

David Card | August 14, 2005, 10:56 AM

I came close to making to making the digital switch for the first time this weekend. But I gritted my teeth, and bought a copy-protected CD that was on sale for $9.99. I knew I'd like it because it has been in my listening heavy rotation via my on-demand music service subscriptions.

Check out the vitriol on the Amazon reviews. Ouch. The label-sponsored band site has an explainer above the fold that, as I write this, features a helpful broken link. When it works, it takes you here.

Apple's proprietary technology doesn't support secure music formats other than their own, and therefore the secure music file formats on this disc can't be directly imported into iTunes or iPods.

While these discs aren't currently compatible with iTunes or iPod, we are actively working on an acceptable solution, and have reached out to Apple in hopes of addressing this issue. To help speed this effort, we ask that you use the following link to contact Apple and ask them to provide a solution that would easily allow you to move content from protected CDs into iTunes or onto your iPod: http://www.apple.com/feedback/ipod.html

Even though there is no direct support on the disc for iTunes or iPod, SONY BMG has worked out a way for consumers to move content into these environments, despite the challenges noted above.

If you want to know the solution to the mystery, you have to give Sony BMG an email address. I did, and got a response within minutes. It told me how to rip the songs into protected format, burn a standard CD, then re-import to iTunes.

All else being equal, I'm happy to pay a $2 to $4 premium over the digital price to buy a CD. I don't think I'm unusual in this -- even file-sharers think a physical CD is worth more than a digital copy (see Figure 5), and over 60% of music Aficionados do. I qualify as a music Aficionado by research definitions - I'm a digital music user and I spent more than $45 on music last quarter. I buy digital downloads regularly, but I buy a lot more CDs.

But I don't think making it difficult to get a song onto a preferred - and market-leading - portable device qualifies as "equal." We did a study a while ago that suggested demand for CDs drops by up to 76 percent, depending on pricing, when copy restrictions are added.

I'm sympathetic with the industry's attempt to curtail casual piracy. (Nothing but enforcement can stop serious piracy; technology won't do it.) But I wonder if copy-protection will give music buyers an extra impetus to move to digital stores with their $9.99 albums and 99-cent singles?

Oh, and one more thing. If you pop that protected Dead 60s CD in a Mac - rather than a Windows PC - you can rip it to iTunes without the import, burn, re-import nonsense.