For the first time, the No. 1 album in the United States is loaded with anticopying protections, marking a clear step into the mainstream for the controversial technology.

According to figures released by Nielsen SoundScan, Velvet Revolver’s “Contraband” was the top-selling album in America last week, despite being prominently labeled on its cover as being “protected against unauthorized duplication.”

The success of the album is likely to prompt more experiments from BMG, the band’s label, and other record companies, industry watchers said.

“It’s too soon to tell whether the rest of the industry is going to be heartened by this,” said Mike McGuire, an analyst at GartnerG2. “But clearly, there are going to be a lot of people who are very encouraged by the fact it is out on the marketplace.”

The step forward is part of a slow increase in the flow of copy-protected compact discs into the American market, after several years of stalled progress. If the pace increases without substantial consumer backlash, the technology could become as commonplace as the antipiracy technology on DVDs, ultimately changing the way that consumers use their purchased music.

For several years, the big record labels have experimented with various versions of the technology, worried by the explosive popularity of CD burners and online file trading.

However, they have been wary of releasing the technology in the U.S. market on a wide scale. Early versions of copy-protected CDs had problems playing in some CD players and computers, prompting customer complaints and even recalls.

A vocal segment of the online population has been intensely critical of the copy protection plans, leading record label executives to worry about potential consumer reaction. Some artists, such as Virgin Records singer Ben Harper, have been bitterly angry at their labels’ decision to include the technology without their approval.

The test with Velvet Revolver, a group made of alumni from Stone Temple Pilots, Guns N’ Roses and others, was the largest yet for BMG. The test uses MediaMax copy protection from BMG partner SunnComm International. The label says it does plan a growing number of protected releases over the course of this year, but is still choosing which CDs will include the technology on a case-by-case basis.

“We’re thrilled with the results we’ve seen and the apparent consumer acceptance,” said Jordan Katz, an executive vice president in BMG’s distribution arm. The company has released a total of 12 “copy managed” discs, with more than 2.5 million units now in the market, he said.

iPods still a problem
Like other recent copy-protected albums, the Velvet Revolver disc includes technology that blocks direct copying or ripping of the CD tracks to MP3 format. It also comes preloaded with songs in Microsoft’s Windows Media Audio (WMA) format, which can be transferred to a computer or to many portable digital music players.

As in earlier tests by BMG and SunnComm, the copy protection on the Velvet Revolver disc can be simply disabled by pushing the “Shift” key on a computer while the CD is loading, which blocks the SunnComm software from being installed. The companies say they have long been aware of the work-around but that they were not trying to create an unhackable protection.

According to SunnComm, few purchasers have complained about the anticopying tools, although angry postings on sites such as are common. The sticker on the front of the Velvet Revolver CD and a link inside the software that loads automatically on a computer, once a user has given permission, points to SunnComm’s Web site.

“We hear from less than half of one percent of people who have the Velvet Revolver disc,” SunnComm CEO Peter Jacobs said. “Most of those questions are related to getting the songs onto an iPod.”

However, the inability to move songs to Apple’s popular digital music player, as well as to other devices that don’t support Microsoft’s Windows Media digital rights management services, is a serious shortcoming. Jacobs says SunnComm recognizes that–and that the company’s next version will go beyond the Microsoft files and be able to create multiple kinds of digital files that will be compatible with the iPod.

But for now, iPod-owning Velvet Revolver fans don’t have a direct alternative.

“We are actively working with Apple to provide a long-term solution to this issue,” a posting on SunnComm’s Web site reads. “We encourage you to provide feedback to Apple, requesting they implement a solution that will enable the iPod to support other secure music formats.”

Also on Thursday, SunnComm announced that EMI Music would begin using its technology on advance and promotional releases. That marks the second major label, following BMG, to adopt SunnComm’s tools officially, although others are also testing them.

EMI Music has “been encouraged by the success that SunnComm’s MediaMax product has enjoyed,” Richard Cottrell, global head of antipiracy for the record label, said in a statement. “We are pleased that SunnComm is developing a product that improves our ability to protect our artists’ works, especially during the prerelease phase.”

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For the first time in the United States, BMG Music will release a music CD that’s loaded with anticopying protection, a move that opens a new round of technological experimentation for record labels.

BMG division Arista Records will include “copy management” protections produced by SunnComm Technologies on soul artist Anthony Hamilton’s new album, the company said Friday. Although the label has previously released promotional copies of various CDs with copy protection, this will be the first major test of consumers’ reaction to the latest generation of the anticopying technology.

“The consumer experience is BMG’s top priority,” BMG Chief Strategic Officer Thomas Hesse said. “Because of improvements in the?technology, it is now possible to offer consumers the level of flexibility to which they have become accustomed, while beginning to better protect our artists’ rights.”

Though unlikely to signal an immediate flood of similar releases, BMGs actions do open a new chapter for the United States labels’ flirtation with copy-proof CDs.

Most major labels have said they are deeply interested in technologies from companies such as SunnComm and rival Macrovision, but they’ve been concerned enough about compatibility problems with various computers and consumer electronics, along with consumer backlash issues, to refrain from many releases in the United States.

By contrast, Macrovision says elsewhere in the world–primarily Europe and Japan–more than 150 million discs have been manufactured with its copy-protection technology.

The new generation of anticopying techniques is more sophisticated than early methods. Along with simple locks that prevent CD ripping and copying, the Hamilton disc includes computer-ready files that can be transferred to a PC, a Macintosh computer and many MP3 players.

Unlike the MP3 files traditionally created from unprotected CDs, these “pre-ripped” files will be wrapped in their own digital rights management protections that keep them from being swapped online and restrict some other actions. Buyers will be able to burn three copies of these songs onto their own CDs, however. The disc will also provide a link that can be shared with other people, who can download copies of the album’s music and then listen to it for 10 days.

Analysts said the news did signal a more advanced round of experimentation but that it would likely be some time before large numbers of copy-protected albums were released in the United States.

“I would think the industry would not want to do a major rollout now, given what’s happening with the (recording industry’s) lawsuits,” said independent digital media analyst Phil Leigh, citing the Recording Industry Association of America’s legal push against file swappers earlier this week. “That would be a second major aggressive action. I would think they would do these things one at a time.”

The Anthony Hamilton album, called “Comin’ From Where I’m From,” will be released Sept. 23.

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