Recording companies are cautiously eyeing a new generation of smart CDs that promise to stifle fans' ability to use file-swapping networks while still allowing some freedom to make copies and share music.
Recent advancements in copy-protection technology have made such a strategy more palatable to music companies reluctant to make any drastic changes to the 20-year-old CD format, particularly in the United States.
Next week, BMG Entertainment's new album by hip-hop singer Anthony Hamilton will be the first commercial release to use a technology that lets buyers play protected CDs on computers and burn copies onto blank CDs. Fans can even send copies to friends over the Internet.
The music industry blames a three-year decline in CD sales on burners and peer-to-peer, file-swapping networks like Kazaa. The new technology could complement the recording companies' legal efforts against operators of file-swapping networks and their users.
So far, the top five recording companies, concerned about the technology's effectiveness and a backlash from fans, have largely released copy-protected CDs only outside the United States.
Early copy-proofing efforts prompted complaints that in some cases users could no longer play legally bought CDs on computers, a way of listening the companies now recognize many fans have come to prefer.
BMG is seizing on the new copy-protection advancements by embedding "Comin' From Where I'm From" with MediaMax CD-3 technology from Phoenix-based SunnComm Technologies Inc.
With MediaMax CD-3, each song is written onto the CD twice - once in a format readable by standard CD players and the other as a Windows media file playable on a computer.
BMG has set up the CD so fans can burn each track three times per computer. Songs can also be E-mailed to a limited number of people, who can then listen to the song up to 10 times apiece.
SunnComm says that most people, unless they are hackers or truly determined, won't be able to circumvent the limits, including one that keeps songs locked so they can't be played even if they circulate over file-sharing networks.
BMG, which signed a one-year deal with SunnComm in June, was still evaluating future releases with copy protection.
Meanwhile, SunnComm rival Macrovision Inc., based in Santa Clara, has developed technology that also allows CD burning and listening on computers. The CDS-300, however, blocks other attempts to make copies or share music online.
Several labels have collectively shipped in overseas markets more than 150 million CDs with an earlier version of Macrovision's copy protection system.
Macrovision is talking with several major labels about using the new technology in the United States.
Some recording industry executives wonder if the latest copy-protection technology is good enough yet. One past effort faltered when someone defeated it simply by blotting out part of the CD with a marker.