Record Labels Beware

One would think the last thing the music industry needs right now is to further alienate its customers who are still buying discs. But that is just what the record labels are doing by secretly experimenting with technology that restricts how discs are used, says a new report.

Stereophile's John Atkinson wrote in his October "As We See It," Selling the Benefits, that, if the record labels feel compelled to remove the "fair use" and "portability" benefits that music buyers currently enjoy, then those same customers may no longer feel compelled to buy new discs.

GartnerG2's new report, "Copy-Protected CDs Without Warning Labels Are A Bad Idea," adds credence to JA's assertion, finding that consumers expect to be able to make copies of their CDs for personal backup use or for other household members. The reports finds that 82% of respondents said they think it is legal to make copies of CDs for personal backup purposes, 77% of respondents think they should be able to copy the CD for personal use in another device, and 60% of the consumers said they should be able to give another member of the household a copy.

The researchers suggest that, if the music industry wants to experiment with selling copy-protected CDs, "there [must] be mandatory warning labels on the CDs or the industry risks seriously alienating consumers." The study also reports that there have been complaints by consumers that copy-protected CDs are not universally playable in all CD players, noting that it is currently optional for the music industry to put labels on the CDs notifying consumers these are restricted discs.

GarnerG2 says the current report is part of an ongoing research initiative to "examine the consumer's perspective on digital rights management and 'fair-use' behaviors with digital content." The latest survey finds that 74% of respondents strongly agreed that if the music industry sells copy-protected CDs (that won't play on some units or that couldn't be ripped by a PC), the industry should be required to label them as restricted.

GartnerG2's P. J. McNealy warns, "Until technology standards are tweaked and universally implemented, mandatory labeling must be required. Consumers will balk if they bring home a CD and find it won't play on every CD player they own. Since it's clear consumers perceive they have the right to make some copies, the lack of labeling will only contribute to declining revenue for the music industry as those who are still buying CDs become frustrated."

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