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The Solution to CD Piracy 4 September 2002 Edition
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Previously I've written a number of columns about the issue of music piracy, the general dullardry of the recording industry, the lameness of shonky CD-based copy-protection schemes, etc, and most of these have been fairly negative.

Today I'm going to offer a positive suggestion to the industry that could well be a way to address the CD piracy problem.

According to the industry itself, the cost of CD piracy has been estimated at around US$5 billion a year and it's claimed that $95 million of that unauthorised copying takes place here in NZ (ref: NZ Herald story).

Locally, that represents about $23.75 for every man woman and child in NZ -- or perhaps $100 per household.

Coincidentally there was a news story on the wires this week which reported how a number of major music labels were getting behind DataPlay, a new disc-based music format with built in digital rights management (DRM) controls that would make the pirate's job much harder.

Even though the industry's spin-doctors have been hard at work, prompting news stories like this, there is still a big problem -- how do you convince the public to forego the traditional music CD for this new format?

After all -- we all have CD players (some of us have several) and chances are we've got several hundred (or thousand) dollars worth of music in standard Compact Disk format already.

Readers Say
(updated irregularly)
  • my stance on CD piracy... - Anon
  • DataPlay... - Grant
  • xbox and world domination... - Robert
  • Subsidising Dataplay... - Matt
  • missing the point!... - Robert
  • Have Your Say

    Okay, so the new media is smaller and has several other advantages from a consumer's perspective -- but it's more expensive and the players/recorders are also nearly four times as pricey as your average CD player or CDR/RW drive.

    Let's face it -- this bird isn't going to fly and poses about as much of a threat to the regular CD as the Sony MindiDisc does -- ie: next to none.

    Of course the music industry could try and force us into this new format by only releasing new albums on it and not CD -- but that would likely cause a massive decline in total sales and it would only encourage pirates to invest more time, money and effort in cracking the DRM so that these new disks could be transferred to CDR.

    But what about this for an idea...

    Why not use the same business model that Microsoft are using for the Xbox?

    Yes, that's right -- sell the players at well below the cost of manufacture and make the money from the software (in this case -- the music).

    If, as the recording industry claims, they're losing around $100 worth of sales per year per Kiwi household to piracy -- why not invest that much money in subsidising the cost of these new players?

    On a global scale, US$5 billion would subsidise a hell of a lot of DataPlay hardware wouldn't it?

    Imagine if a DataPlay player/recorder was cheaper than a a CD player or CDR/RW drive -- wouldn't that, along with the other benefits of the DataPlay format, encourage you to consider buying one?

    Of course it would also help if albums released on DataPlay disks was somewhat cheaper than the same music on CD, and it would be even better if people could swap their old CD-based album collection for the same titles on DataPlay disks for just a nominal sum to cover the media and handling costs ($2-$5 per disk?)

    Instead of cowering in fear and shouting about the sky falling, maybe it's time that the recording industry took a look at the marketing tactics of Gillette, inkjet printer makers, Microsoft and a raft of other very successful companies who long ago realised that it's often worth subsidising the initial purchase in order to tie your customers to a new platform. Once you've hooked them then you can bleed them dry by selling the high-margin component of the product.

    So there you have it folks -- a proven marketing model that could easily be applied to the recording industry's problem and which would effectively cost them nothing to implement.

    If we don't see heavily subsidised DataPlay hardware and titles appearing soon then all I can think is that the industry's claims in respect to the sales lost to piracy have been greatly exagerated -- and nobody likes a liar do they?

    Have your say.

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