Piracy, Value, and Unrippable CDs

Last year the headlines read, "Napster's Bad." This year it's, "The Unrippable CD: Good for Consumers."

What's the deal here?

Well I do not believe the recent buzz in the CD world is good marketing. The recording industry is upset with all the MP3s popping up on the Net, so they start making unrippable CDs!

I assumed that the MP3 uprising would make the recording industry look at what they have been doing wrong for that last decade and find a way to win back the consumers trust. In 1983 I bought my first CD for $16.50 and my first CD player for $325. Today my CDs cost $18 and my CD player costs $49. We all know that new technology is expensive, but once it's accepted and has saturated the market, prices take a nosedive.

That's not the case with recorded media; we all know that the artist deserves his or her cut for their hard work and talent. However, when you consider that it costs around 50¢ for a CD and its packaging today, its insulting to charge the consumer $18 (on average). What's more insulting is to spend $18 for a CD and get only two or three good songs.

Consumer Rights

Now on to my next point: It has been a law that a consumer may make copies of music for backup purposes, so let's define backup.

Do we backup? Rarely! We make copies of our CDs on cassette for our cars, MP3s for our computers and MP3 players, and CD copies so we don't damage the original.

As for making a CD from a CD, it's a good idea! Since the introduction of the CD, every CD I have bought or seen has the reflective surface on the label side of the CD, not sandwiched between plastic, which makes the CD subject to failure if mishandled or dropped. They say take care of the blank side of the CD, never mentioning the label side, but over the years a number of my CDs have gotten dings or scratches on the label side that makes the CD skip no matter if the bank side is like new.

Once the reflective surface has been damaged, that's it - no scratch remover can fix it. So backups CDs are a good idea for rough environments. Better to spend 50¢ for a blank CD-R than $18 for a replacement because someone forgot to put the CD back in the case and the dog stepped on it.

But what happens when the unrippable CD gets damaged? Refund? I think not.

Ripping the Unrippable CD

Are unrippable CDs copyable? Yes, but not via the conventional load and rip.

Let's assume that some hack doesn't make some code to defeat the protection. We can still duplicate in the analog realm via plain ol' patch cords and two pieces of equipment. So when my favorite artist releases a copy protected CD that I must have, I will play the CD in a conventional CD player hooked via patch cords to my computer's line input and record it in real time. Once I have raw AIFF files on my computer, I then burn a CD and or rip to MP3s.

If I have figured this out, I don't think that the unrippable CD will stop the determined computer hacker. But I feel it will increase the cost of the CD when people start returning these CDs thinking they are defective because they won't play in their computers or older CD players. Restocking, repacking, shipping, and employee time costs money; either the consumers or the recording industry will foot the bill, and I feel we don't have the upper hand here.

Price and Value

Yes, free distribution of music is illegal, but preventing us from making copies of music we pay for is also wrong. The unrippable CD is combating the MP3 (equated with piracy in the Recording Industry and Metallica circles), but they have gone about this wrong - MP3s are not going away until a better space-saving codec is released, and then we'll still be dealing with the same problems. Breaking down barriers is human nature; until value exceeds price, piracy will never go away.

Now lets look at some examples of good and bad marketing ideas to battle piracy.

DVD, currently taking the market by storm, is a great example of value exceeding price. You cant make a backup unless you're very determined, but at $25 average, I don't mind replacing a damaged DVD, unlike the VHS tape it's replacing.

Laserdisc, which was ousted by the DVD, kept piracy down by being a format for which blank media was not available. The only way to copy was to the low quality VHS format, but media price kept Laserdisc consumer acceptance low.

DirecTV - need I say more? Piracy is huge on the DirecTV system due to its programming costs and unavailability in Canada and Mexico, where its signals are retrievable. Piracy on the system started in Canada and has its roots there, but since DirecTV can't push its weight in Canada, combating piracy there will be an uphill battle. As far as the USA, piracy is on the rise due to the price of programming. If they used a creative brain cell, they might see that offering ala carte might drop piracy numbers. Who wants to pay $35 for 105 basic channels when they only watch 20. Price exceeds value.

Dish Network, similar to above, but they are a little more creative with their programming choices.

C-band Analog, once a haven for piracy, is now virtually clear of piracy thanks to the large numbers of customers switching to the minidish. Programming costs and multiple programmers have helped keep this system free of piracy. Unfortunately this system's days are numbered, as minidish companies are buying programming companies and hiking prices, then offering customers free minidish systems.

4DTV (Digital C-band), although its consumer base is low, its numerous channels for the dollar are high. Its equipment costs are high, which result in a more loyal consumer. Value far exceeds price here.

NPG Music Club, backed by Prince. Prince was not treated so well by Warner Bros. and now has his own record label and an online member service which gives its members exclusive songs, videos, discount tickets, and limited edition CDs. Now here's a guy who's got it together, and he sees all the profits from his sales and has free will when it comes to marketing and expression. This club is different from record label clubs in the fact that this artist can directly address his fans' wants and demands. Keeping consumers (members in this case) happy with their purchase will keep them more loyal and less likely to give away what they paid for. Yet another example of value exceeding price.

So which way will the unrippable CD go? It's hard to predict, but with all the silent market testing it looks like it's yet another cheap shot at the consumer and another chapter in Spy vs. Spy.

That's my two cents.