Sony debate could clarify digital-music rights issue

The controversy over Sony BMG's malware-enabled CDs has brought attention to digital rights, making a technical issue more accessible to consumers.

The controversy over Sony BMG's malware-enabled CDs has brought attention to digital rights, making a technical issue more accessible to consumers.

As Sony faces criticism for anti-piracy software, music industry critics seize the spotlight for a larger discussion. And it began as most crises do today: online.

On October 31, Mark Russinovich discovered a rootkit, a cloaking technology capable of hiding files from detection by security software, on his computer. Rootkits are usually the tool of hackers and viruses, designed to hide evidence of malicious software on a computer. Through a complicated process painstakingly detailed on his weblog - and completely indecipherable to a non-techie - he discovered that the rootkit culprit was Sony BMG, which delivered the technology via a Van Zant CD Russinovich had purchased and placed on his computer.

Sony asserts that the software was only intended to make it difficult to make more than three copies of the CD, and that its end-user licensing agreement [EULA] was transparent about the software's inclusion. But First 4 Internet, a third-party software company contracted by Sony BMG, cloaked the software, thus making computers susceptible to hackers. This information spread throughout the internet, emboldening music industry critics and proponents of a fairer use of digital rights management (DRM) alike.

Sony BMG first officially addressed the issue with a security patch on November 3. On November 18, it rolled out its completed rebate plan and promised to work with retail partners to expedite removal of all CDs with that copy-protection software.

"When the company became aware [of the] issue, it offered a software update, addressed the issue of potential virus [exposure], announced that it was ceasing manufacture, and embarked on an ambitious exchange campaign," says John McKay, Sony BMG spokesman. "We're doing whatever it will take to make it right."

Sony BMG is clearly roiling from the media attention. Compounding its woes, the Texas attorney general and the Electronic Frontier Foundation (EFF) have filed a suit against Sony BMG for allegedly violating Texas' anti-spyware laws. As much as Sony BMG will remain in the spotlight for its misstep, DRM opponents and organizations calling for a fairer digital-music distribution system are using this event as a springboard for a more robust and prolonged discussion about DRM and the music label's role in limiting consumer's rights.

Expanding the debate

Russinovich highlighted what was at stake after Sony BMG officially addressed the controversy: "Attention now needs to turn to the broader issues that go beyond DRM to software in general. They include acceptable behavior of commercial software, from both legal and ethical standpoints, and appropriate disclosure of software behavior. We've been living in a world of hazy laws surrounding EULAs. Ideally, this case will lead to more clearly defined laws and standard judicial principles."

"Most industry observers recognize this debacle will broadly set back the cause of DRM products," says Fred von Lohman, senior staff attorney at the EFF. "This is more important than the payola" scandal, referring to record labels and radio conglomerates who were recently fined millions for complicity in paying for radio play.

When asked about how Sony BMG's incident would affect the music industry, Mitch Bainwol, chairman and CEO of the Recording Industry Association of America (RIAA), reiterates that DRM policies were important for not only the music business, but all content industries.

In a statement e-mailed to PRWeek, he says, "DRM and copy protection remain an important part of the creative process, serving to protect the work of musicians and labels and promote responsible personal use by fans. DRM is a key piece of the digital future, not just for music companies, but also for movie studios, software companies, and countless other intellectual property industries."

"We, as the EFF - joined by many others in the tech/digerati space - have been talking about the risks DRM posed to consumers for some time," von Lohman says. "The difficulty for a lot of the issues we handle is that, for many regular consumers, these discussions are academic or difficult to follow."

Michael Bracy, director of government relations for the Future of Music Coalition (FMC), concurs: "DRM is a very tough issue, but consumers will understand [the debate] when they buy a CD, it messes up their computer, and it's done in secret."

Though the FMC and the EFF have different missions, they both see this as an opportunity to renew discussion about the role of DRM in the industry.

The FMC's mission is to "address pressing music technology issues and to serve as a voice for musicians in DC." It is not anti-DRM, but rather concerned about how labels and the RIAA go about implementing it.

"The FMC would like to see an evolution of the digital marketplace," Bracy says.

The EFF's core message in this instance, however, is that DRM technology endangers consumers, say von Lohman. He sees the opportunity to ramp up discourse. "This is an important moment to talk to a wider audience because many people now appreciate that DRM poses risks to them," von Lohman says. "They can't say this is necessary for the artists' rights. They can't don the mantel of the artist or victim of piracy. This is unique in the recent copy-fight stories."

Before the Sony BMG incident, Bracy says, "The recording industry has, from a rhetorical standpoint, been able to carry the moral high ground."

"It's harder for the industry to go to Capital Hill and cry 'piracy,'" Bracy says. "Claiming these 'tech companies' are being irresponsible now becomes a much harder sell. What about Sony?"

Von Lohman says that most stories about DRM were simple "he said, she said" stories, where labels, movie studios, and the RIAA argued DRM was necessary for protecting intellectual property, artists' rights, and safeguarding against piracy, while the advocacy groups argued for consumers' rights.

Music artists have always had a mixed reaction to file-sharing and DRM. When Napster came to the fore, artists took different sides based upon their personal opinions and how record sales factored into their revenues. But the reaction so far from artists - and managers - affected by the rootkit hasn't been positive. One of Sony BMG's artists affected was Trey Anastasio, formerly of Phish, a band that encouraged swapping of its live shows.

Patrick Jordan, marketing director for Anastasio's management firm, Red Light Management, told BusinessWeek, "It's been damaging. We're going to discuss that with the label."

Evolving coverage

The media had focused on Sony BMG's situation initially, but are starting to branch out to the issue of DRM as a whole. As a result, von Lohman says, the EFF has been barraged with calls.

"This is the biggest story since Grokster," von Lohman says. "The number of press calls we fielded definitely ranks among the top five events of the year."

More important, he's receiving the questions he wants to answer from journalists.

One reporter asked him, "How will a suburban mom in tennis shoes encounter [DRM] in a concrete way?"

While von Lohman has lauded the media coverage, he says a lot of work remains to be done.

"This story was a boon to reporters who cover our beat - digital business - but consumer-orientated reporters have also covered it," von Lohman says, pointing to an LA Times editorial that ran last Monday. "It's not just this XTP software; it's more than just Sony."

He adds that this is an opportune time for discussion, as many more non-techies are playing CDs on computers and downloading songs from online music stores than two years ago.

"I'll be very interested to read Time, Newsweek, and Forbes to see their take," von Lohman says. "Those are folks that have longer lead times; they can't afford to write about it unless they have a scoop. They must write about the broader issue and will likely tie this to the broader DRM issue."

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