Sony Music said it plans to introduce new CD technology in Germany that prevents users from copying songs to file-sharing sites, but allows them to make copies for their personal use.
The record industry blames its recent sales slump on file-sharing services like KaZaa, which it says are havens for piracy. Last year, major labels issued "copy-protected" CDs that prevent them from being played on computers.
The copy-protected discs faced a backlash from customers and music fans, and several lawsuits emerged from some customers that complained these CDs caused their computers and other devices to malfunction.
But Sony thinks it has an appealing approach: Give customers added incentives to buy copy-protected CDs.
Sony will release rhythm & blues group Naturally Seven's new CD in Germany with a so-called "second session." The disc can be played on almost any device conventionally, said Sony Music Chief Technology Officer Phil Wiser.
It also contains a compressed digital copy of the music that can be quickly copied onto any computer. From the computer, users can copy that music onto Sony portable digital music players.
The CD's also allow users to connect to Web sites with exclusive features such as bonus songs and concert tickets. The features are only available if you have the original CD.
Such features are already available with Sony artists like Tori Amos (news) and AC/DC. But the new discs combine the "second session" copy protection with the bonus features, which Sony has dubbed "ConnecteD."
Sony will evaluate customers' reaction to the new technology before introducing it in other countries. Wiser declined to specify a timetable for which the technology will be available in the United States.
"We believe we can deliver more value by delivering more immediate content, an interactive experience, a better experience. Even if you could go to a (file-sharing) site and download a single song, you won't get the kind of content that we can deliver."
A label on the disc will say it includes the new copy protection software features.
There are several limitations. The digital files will only play on Sony-licensed digital music players. Wiser said Sony is working on "plug-in's" that will allow the files to be played on more popular players like Microsoft's Windows Media. He expects the plug-ins to be available early next year.
To copy the music to the Sony portable player, the technology requires an extra step to copy the files to a separate program to transfer the music to the portable player.
At this point, music can be transferred only to Sony portable players, although Sony executives note that Apple Computer's popular iTunes service works the same way with the Apple-branded iPod.
Earlier this year, BMG introduced similar technology with its hip-hop performer Anthony Hamilton.
BMG, which announced plans to merge with Sony Music last week, is using software from SunnComm Technologies to restrict the amount of copies that could be made of Hamilton's music. The software, however, did not work on some operating systems and was quickly hacked.
"All copy-protections can be hacked," Wiser said. "But if give people what they are asking for in terms of value, they won't go out and steal it. It's called trusting the consumer."