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1 million copy-protected CDs released
By Gwendolyn Mariano CNET

Israeli security company Midbar said Wednesday that it released one million copy-protected CDs in the European market and plans are in discussion for entry in the U.S. market.

Midbar said the CDs are protected by its technology, dubbed Cactus Data Shield, which prevents potential copyright pirates from illegally reproducing the content.

The company said its CDs can play on all types of machines without any alterations to the quality of the recording or the abilities of the playback machinery itself.

The announcement is the latest sign that companies are pushing forward with copy-protection schemes even though attempts to date have proven to be difficult. Last year, Midbar worked with BMG Germany to test secure CDs. The effort failed, however, and the company abandoned the project after finding that the CDs could not play on many ordinary CD players.

BMG Entertainment has higher hopes. Last month the company said it will work with security technology provider SunnComm to create copy-protected CDs. BMG is also testing technologies from Midbar, Macrovision and a handful of other companies. In addition, for the last several months, Macrovision has been quietly testing copy-protected CDs on unwitting consumers to ensure unbiased feedback, according to the company.

"I'm very skeptical that (copy-protected CDs) will work," said Aram Sinnreich, an analyst with Jupiter Research. "In terms of implementation, it's very difficult to do in a way that will allow the CD to play on all's a very tetchy technology."

A huge installed base of CD players out there are not security-enabled, Sinnreich said, so it would be difficult to find engineering solutions that would fit all those machines.

Midbar, however, said it is continuing to upgrade and renew its technology.

"The industry has made a decision, opting to utilize technology to combat this problem," Ran Alcalay, chief executive of Midbar, said in a statement. "We are focused on achieving the highest level of both security and playability without compromising one at the expense of the other."

Sinnreich said that even if the copy-protected CDs do work, companies will need to offer something to consumers to compensate for not letting them copy songs. He said that as soon as there are a significant number of products on the market that don't allow consumers to rip or listen to CDs on any machine "there's going to be a critical mass of consumer pushback against this."

"Historically, when an industry is trying to move from one format to another, the successful way to do it is not to remove value from an old format, but rather to add value to a new format," Sinnreich said. "You've got to give something to get something."

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