BMG to Test Protected CDs on Industry Insiders

NEW YORK (Reuters) - A new batch of compact discs designed to defeat Napster-style piracy is coming soon to record-industry insiders.BMG, one of the world's

NEW YORK (Reuters) - A new batch of compact discs designed todefeat Napster-style piracy is coming soon to record-industryinsiders.

BMG, one of the world's five major labels, said on Monday
it would start issuing promotional CDs -- the free discsdistributed to critics, retailers and other insiders weeks beforethe official release -- with technological countermeasures toprevent copying.

The major labels, which include Vivendi Universal (EAUG.PA),Sony (6758.T) Music, EMI Group (EMI.L), AOL Time Warner's (AOL.N)Warner Music and Bertelsmann AG's (BTGGga.D) BMG, hope that copyprotection measures will prevent users from "ripping," or copyingthe music into the easily traded MP3 format.

"The first benefit of doing promos and advances is to getfeedback on the technology," said Kevin Clement, BMG's seniordirector of new media. "And we would hope this technology will stopthe records from leaking early to the public."

Popular records like Outkast's "Stankonia" and D'Angelo's"Voodoo" were freely available to the public weeks before theirrelease dates via Napster, the currently shuttered music-tradingservice that spawned a online music swapping revolution and is nowpartially owned by Bertelsmann.

The label said most of its protected discs would contain twoversions of the album, one for use in consumer CD players andanother encoded in Microsoft Corp's (MSFT.O) encrypted WMA format,for playback on PCs and compatible portable music players.

None of the major labels have committed to a full-scale roll-outof protected CDs, in part because of backlash in Europe afteraltered discs did not play on some CD players.

BMG's release of Natalie Imbruglia's "White Lilies" in theUnited Kingdom last year, for example, prompted numerous returns ofthe disc to retailers. And Sony's Celene Dion CD released in Europelast month, "A New Day Has Come," reportedly caused some computersto crash.

BMG said in a statement it eventually hopes "to arrive at a copymanagement solution that offers consumers the experience theartists create and deserve reward for."

The company declined to say which companies it was working withto provide the promotional CDs' technological countermeasures, butClement said the label hoped the promotional discs would work withvirtually all compact disc players when they launch later thismonth.

"One hundred percent, that's our goal and that's what we'vecharged the technology companies to hit," he said.

Asked if that goal was reachable, given the current state of thetechnology, he said, "We'll soon find out."