News

Music buyers will find a new report issued by Parks Associates both interesting and disturbing. Interesting in what it purports to reveal about consumers, and, as we shall see, disturbing in how the music industry is being urged to interpret the data.

The researchers claim that "contrary to widely held industry beliefs, US consumers are not overwhelmingly antagonistic toward the concept of copy-restricted music CDs, provided these CDs come with the proper incentives." This conclusion is drawn in a forthcoming report called "Digital Rights: Content Ownership and Distribution."

"Proper incentives" is the key phrase here. Parks says that, when given a choice between a normal music CD (priced at $20) and a "copy-once" CD priced $5 less (at $15), 33% of those who do not rip CDs and 27% who rip CDs preferred the copy-once CDs. Of course, this also suggests that at least two-thirds of those surveyed won't take the restricted CD bait even at far cheaper prices—even if they never plan to rip that CD.

Parks' conclusion: The glass is one-third full, not two-thirds empty. Parks' Harry Wang notes, "The music industry proceeded with the idea of copy-protected CDs very cautiously last year, releasing only 10 million in the US. They were slow to deploy out of the concern that consumers would reject such a product. But our research indicates that it might be time for the industry to promote copy-protected CDs more aggressively, provided they can find the right price points, or other incentives that will attract consumers."

Wang goes on to say, "CD piracy has been a serious problem for record labels. The music industry has long been looking for a solution to balance content owners' interest to protect copyrights and consumers' need to enjoy music in the ways that they want. The copy-restricted CD is one such move. Our findings might indicate the start of a transition for consumers to embrace the concept of copy-restriction in music consumption."

But does all of this really make sense? Let's start with the first part of this last statement: "CD piracy has been a serious problem for record labels." Nobody will disagree that expertly manufactured fake copies of the latest Usher CD, smuggled in from, say, Russia, are hurting legitimate sales of product. However, organized pirates who directly threaten legitimate sales at retail will never be slowed down by restricted CDs. And the evidence is mixed as to whether online piracy actually hurts or helps CD sales.

So where is the connection between stopping these scalawag pressing plants and adding restrictions to discs which only prevent paying customers from exercising their fair-use rights? The pirates will go on selling CDs, and consumers will be roped into a tighter circle of options, against the will of the vast majority of music buyers. The nascent media server market will skid to a halt, and more music lovers will be forced to learn how to circumvent restricted discs.

Note to the music industry: Yes, piracy is a concern and we support your fight when it directly addresses the issue. But it may not be a good idea to brandish data like this in an effort to continue punishing your honest customers in the process.