Call it a mix-and-match approach to music retailing.
Sony BMG's Platinum MusicPass
Sony BMG Music Entertainment, one of the top four music labels, is the latest to meld an offline-online sales strategy. The record company said in a press release it will soon offer gift cards through brick-and-mortar stores that can be used to redeem music from the Web.
The best part of the offering is that the music is available in unprotected MP3s, more proof that Sony BMG is easing away from copy-protection software. Citing unnamed sources, BusinessWeek reported last week that the label is preparing to strip digital rights management software from at least part of its catalog. The other three large record companies have already begun dropping DRM.
The gift cards, called Platinum MusicPass, can be purchased at Best Buy, Target, and other retail stores starting Jan. 15. The way they work is this: fans of Alicia Keys, Bruce Springsteen, or other Sony artists can purchase the cards, scratch the back off to reveal a PIN and then punch that number into Musicpass.com to retrieve full-length albums. Initially, 37 titles will be offered.
It's important to note that the music is "anonymously watermarked," which means that it can't be used to identify users or where the music was purchased, according to the company. The watermarking is intended to help the label learn whether songs are being shared on peer-to-peer networks.
Considering Sony's history with privacy, it's likely that some users might get spooked.
Sony ignited a major controversy two years ago when it was discovered that the company had used "rootkit" technology to embed copy protection software in its CDs.
The gift cards feature artist images and album information and represent the latest effort by a record company to spur people to buy complete digital albums. The Internet has rung the death knell for albums but the labels continue to look for ways to boost sales.
Other efforts by some of the company's competitors include music-loaded USB drives. Warner Music Group, which recently reported that it's the only major record company to grow unit sales in 2007, released an album by the band Matchbox Twenty on a USB drive fitted into a bracelet.
A nice idea, but the public has yet to show much interest in buying digital music attached to physical packages. Why not just buy a CD and rip the music later?
Editors' note: This blog initially misspelled the name of a writer from Wired. The writer is Eliot Van Buskirk.
Watermarking has been in the news twice in the past week. First, Wired's Eliot Van Buskirk revealed that Universal will insert watermarks in the DRM-free files it's distributing through Rhapsody, Amazon.com and other online stores.
Then, Wednesday, Microsoft announced that it's licensing audio watermarking technology developed by its research division to a company called Activated Content. (Microsoft Research used to be devoted entirely to building technology that would later be incorporated into Microsoft products, but a couple of years ago it began to license technology through its IP Ventures program.)
So what's watermarking? It's the insertion of extra data into an audio stream that can help identify where that audio came from. It's not enough to attach data to a digital audio file--users can just burn that file to a CD and then re-rip it, changing the file format and stripping off all the data associated with the original file. (This is also the classic way users get around DRM.) Instead, the data is inserted into the audio track itself. It's inaudible to human ears, but detectible by various other tools.
In the case of Universal, the watermarking data won't identify each individual file--a method that would allow the company to trace pirated files back to their first purchaser. Instead, it will only identify the particular song. Eventually, Universal will look at popular file-trading networks, and see which of the DRM-free songs released through its experimental program ended up on these networks. Universal can then use this data to help decide whether the risk of piracy outweighs the increased sales from DRM-free MP3 files, segmenting this decision by particular markets. For example, it might find that new Top 40 singles are more likely to find their way onto file-trading networks than classic rock from the 1970s.
Activated Content hasn't explained exactly how it'll use the Microsoft technology, but the company's Web site promotes a very interesting service called ActiveNow. The idea: whenever a watermarked file is played on an ActiveNow-enabled device, the service could dynamically insert some sort of advertising--presumably audio, but perhaps video or text depending on the device being used. (This service sounds a little like techno-voodoo to me, and the Web site doesn't really explain how it works. However it does have some interesting white papers on watermarking and why Activated Content believes its watermarks are superior.)
I could see watermarking eventually taking the place of DRM, which is both ineffective and alienating to consumers. Instead of trying to prevent users from copying and sharing audio files, content owners could simply trace the paths of these files, then establish some sort of remuneration system. Activated Content's idea of dynamic advertising is interesting, but it seems more reasonable to me to build some sort of pooled payment system (for instance, a blanket charge on Internet service and audio software), then distribute the money from these pooled payments to copyright owners based on usage.
Microsoft said Wednesday that it has signed a deal to license audio watermarking technology from its research labs to Seattle-based Activated Content.
While watermarking technology is often used as an antipiracy measure, Microsoft said its technology allows companies to add-in other types of content and services into the watermarked audio. One of the big potential applications is adding advertising to streaming media, according to a report on MediaPost.
"We are excited about this agreement with Activated Content because they are uniquely positioned to extend this audio watermarking technology to new emerging applications and we feel great about supporting the development of a company based in our own backyard," said Louis Carbonneau, general manager for the Intellectual Property Licensing Group of Microsoft, in a statement.
The deal is the latest in Microsoft's ongoing effort to license more of its intellectual property. Microsoft cracked open its research labs for tech licensing in 2005.
- prev
- 1
- next
