Drop That Marker!

Want to play that new CD on your computer? You may need a black felt-tip pen.

Sony says it will soon begin U.S. tests of its Key2Audio technology, which is already frustrating Celine Dion fans in Europe. Aimed at preventing digital copying of CDs, Key2Audio uses a decoy track to keep your computer occupied with bogus data, so it never gets around to playing the music. But it turns out that you can cover up the tricky track by blackening the outer edge of the CD's shiny side with a marker.

I'm not advising you to do that, however. I wouldn't want to be implicated in a violation of federal law.

The Digital Millenium Copyright Act prohibits circumvention of copyright protection technology with the intent of gaining unauthorized access. Since Sony clearly does not want people to play CDs incorporating Key2Audio on their CD-ROM drives, taking a Sharpie to them presumably would qualify as illegal circumvention.

What's less clear is whether this creative application of markers would trigger the law's criminal penalties, which include prison terms of up to 10 years and fines of up to $1 million for repeat offenders. According to the U.S. Copyright Office, these apply only to circumvention "for purposes of commercial advantage or private financial gain."

Still, something is wrong when music buyers need to worry about whether they could go to prison for trying to play a CD on their computers. In their desperation to prevent unauthorized reproduction, record companies are turning their customers into enemies.

Having shelled out $15 to $20 for a CD, people expect it to play on their computers, and they want the convenience of being able to transfer the music to a portable MP3 player. From the perspective of consumers, Sony's copy protection feature is a bug that impedes their enjoyment and diminishes the value of their purchase.

Worse, both PC and Macintosh users have reported that the European version of Celine Dion's latest CD made their computers crash. Fortunately, it does not have the same effect on cars, although Reuters reports that it may not be compatible with their CD players.

The covers of copy-protected CDs do warn that they will not play on computers, and Sony certainly has the right to build limitations into its products, so long as it discloses them. To fight piracy, it could even produce CDs that self-destructed after being played once. The question is whether anyone would buy them.

Taking away features without giving anything in return is a sure way to antagonize customers. In a recent Cato Institute paper, University of Texas economist Stan Liebowitz points the way to a wiser approach.

Unlike defenders of Napster and the file sharing services that succeeded it, Liebowitz does not take the recording industry's concerns lightly. Although copyright holders' fears about photocopiers, audio recorders, and VCRs all turned out to be overblown, he says, there is reason to believe that digital reproduction and distribution represent a more serious threat.

"The digitizing of works and the ubiquity of the Internet have brought with them an increasing potential to organize what otherwise would be unorganized," Liebowitz writes, "making pirating cheaper, easier, and more widespread than ever before. This is what makes the current copying crisis more significant than the earlier 'crises' involving videotaping and audiotaping."

Liebowitz argues that trying to control copyright infringement by tracking and prosecuting computer users is a hopeless task. "Because there is no centralized location, firm, individual, or server that can be monitored and controlled by legal authorities," he writes, "copyright enforcement is going to be very messy at best, and impossible at worst."

These are the realities that have led companies such as Sony to experiment with "digital rights management" (DRM) techniques, including the computer-crashing Key2Audio. But Liebowitz advocates a more customer-friendly DRM model, in which record companies (and other copyright holders) would charge people based on how much use they got out of a product.

Instead of fighting digital distribution, record companies would embrace it, making their music readily available online. Instead of charging the same price for less convenience, they would charge less and provide more. You could buy just one track from a CD, for example, or a single playing of the whole thing.

As Liebowitz notes, critics of such a micropayment system worry that it would give copyright holders more power. Fortunately, it's power they would use to meet the demands of consumers.