March 12, 2002 12:50 PM PST

AOL searches for copy-protection leader

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Universal copy-protected CD shuns players

December 18, 2001
AOL Time Warner is beginning efforts to add copy protection to CDs, underscoring the company's desire to limit unsanctioned digital distribution of its musical works.

The media giant is searching for a senior project manager to lead a software initiative that the company calls "AOL Time Warner's answer to prevention of illegal CD copying/burning," according to a posting on job listing site Monster.com.

The notice added that the company has partnered with others in the industry to create a standard and to "develop the first of its kind player."

AOL Time Warner--owner of major record label Warner Music Group and America Online, the world's largest Internet service--confirmed the posting is authentic but declined to comment on its plans.

CDs present a daunting security problem for the record labels. Created before the advent of the Internet and the MP3 file format, CDs can be easily copied, or "ripped," onto computers and subsequently traded on file-swapping networks such as Morpheus, Kazaa and LimeWire--a practice that the recording industry blames for declining sales.

A handful of companies provide software that aims to prevent CD ripping, including SunnComm, Midbar Tech and Macrovision. But attempts to embed copy protection in commercial CDs have run into a host of difficulties. Record label BMG Entertainment recalled hundreds of thousands of copy-protected CDs sold in Europe after people complained that the discs were not compatible with some CD players.

In an attempt to sidestep consumer discontent, some labels have begun experimenting with a compromise: special PC-compatible tracks on CDs that include limits on the number of times they can be copied.

Vivendi Universal's Universal Music Group has been the most outspoken proponent of CD protection from the Big Five labels. Last December, Universal released its first copy-protected CD, using software from Midbar's Cactus Data Shield to lock up audio tracks. The release, a soundtrack based on the movie "The Fast and the Furious," included digital files that could be played through proprietary audio software but not copied.

AOL Time Warner's foray into CD copy protection would mark its biggest step yet into the arena known as digital rights management (DRM)--a broad label that covers a variety of technology aimed at preventing unauthorized copying.

DRM has become a key selling point for digital media players--a market in which AOL's own Winamp product competes with similar products from RealNetworks, Microsoft and Apple Computer. To date, AOL has turned to third-party DRM providers for products sold over the Internet, including RealNetworks, Microsoft and InterTrust.

Analysts said a major DRM push by AOL Time Warner could give Winamp a boost.

"My guess is (AOL Time Warner's) trying to leverage its own ready-to-play files on CDs to get people to download AOL's player software," said Aram Sinnreich, an analyst at research firm Jupiter Media Metrix.

 

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