"...TTR Technologies, a little-known company whose stock trades on the Nasdaq but is headquartered in Israel, expects to be a major beneficiary of piracy. Far from being a bootlegger has developed antipiracy technologies -- digital solutions that prevent illegal copying of audio content onto optical media, such as CD-ROMs or digital video disks (DVDs). The need for such technology is urgent: In the music industry alone, some analysts estimate that piracy cost some $5 billion in 1998.

One big investor close to TTR says at least one of these big studios is poised to sign a licensing agreement with the Israeli company to integrate its antipiracy technology into its music CDs and audio products. Thadhani believes that adoption of TTR's technology by any one of these major companies could prompt the others to follow suit, since recording artists will tend to favor a label that protects their royalty fees.

So what is TTR's solution? Its chief product, called MusicGuard, inhibits illegal replication of CDs without affecting music quality, and it doesn't require any changes in the recording studio. The basic patented technology is embedded on the glass master in CD production facilities. Simple modifications to an encoder, explains Thadhani, allow insertion of subtle distortions across CD tracks that render copies unusable.

So attempts to duplicate a MusicGuard-protected CD either abort or produce unacceptable audio quality, says Thadhani. Any attempt to produce MP3 files from protected CDs also fail, he adds. Another plus, he says, is that the TTR technology isn't vulnerable to attacks by hackers, unlike software-based techniques that seek to protect music..."