In a move that undoubtedly will confound people who want to play by the rules, music consumers will be paying twice if they want to listen to their music on their stereo and on their computer.
On Tuesday, Universal Music Group becomes the first label to sell copy-protected CDs in the United States with the release of its soundtrack Fast & Furious -- More Music. This comes at a time when the recording industry is asking consumers to pay for music that can only be listened to on the PC.
The newly released CD will keep people from listening to their music on the computer, game consoles and other digital devices. If they wanted to go through the major labels to buy the same music for their computer, the only way would be to sign up for Pressplay, one of the major label subscription services, when it launches later this month.
Essentially, consumers would be required to pay once for a physical CD and once for the digital music file. The restrictions for online subscription services and physical CDs are part of a music industry-wide attempt to stop online music piracy.
Fear of piracy cutting into retail sales is the major record labels' justification for adding digital rights management that restricts how people can listen to the music they buy. The goal is to keep people from turning individual songs into the MP3 format.
MP3s allow people to crunch the large music files stored on CDs into tiny, bite-sized morsels that can be transferred to anyone else on the Internet through popular file-trading networks such as Napster, Kazaa and Limewire.
The recording industry has cited those services -- which facilitated as many as 3 billion files traded a month since February -- as the primary reason for declining album sales.
In August, the Recording Industry Association of America announced that music labels shipped fewer CDs to outlet stores in the last year, totaling $5.9 billion worth of albums.
The recording industry's trade organization cited an increase in CD-Rs -- blank compact disks that people can use to burn their own digital music -- as one of the main reasons for the decline in shipments.
"Many in the music community are concerned about the continued use of CD-Rs, and we believe this issue deserves further analysis," said Hilary Rosen, RIAA CEO. "A preliminary survey of tech-savvy online music enthusiasts, recently conducted by the RIAA, showed that nearly one out of two consumers surveyed downloaded in the past month and nearly 70 percent burned the music they downloaded."
So, record companies are using digital rights management systems to restrict where people can listen to their music.
Ironically, the day before the Fast CD hit the stores, the RIAA found that 79 percent of consumers still want to receive an album as a holiday gift. That number climbed to 87 percent among people between the ages of 10 and 27, the age group most often associated with digital piracy.
The study was conducted before the release of the restrictive CD, which a spokesman for Universal Music Group said would be the first of several domestic releases.
"Universal Music Group has been undergoing extensive exploration and technical evaluation of a variety of technologies designed to prevent the growing problem of CD copying and duplication," said a spokesman in a written release. "We will be implementing copy protection on a number of releases in the fourth quarter."
For those consumers who want to listen to their music online, there is only one service being offered right now. MusicNet, a subscription service being offered both by RealNetworks and America Online, launched two weeks ago.
MusicNet -- a joint venture between major labels EMI, BMG, Warner Music and Internet media company RealNetworks -- retails for $10 per month but limits consumers to 100 downloads and 100 streams. The downloads can't be transferred to portable music devices or burned to CDs, and if the subscription lapses, the files will no longer play.
Pressplay, an alternative service offered by the Universal Music Group and Sony Music, is expected out before the end of the year.
There are free alternative music sources for consumers, although those don't offer people the ability to listen to music in their personal collections.
America Online and Yahoo are developing streaming music services that will have Internet radio and genre-based stations. The services will give people a choice of music style but won't allow anyone to chose specific songs and artists.
Launch Your Yahoo, a free streaming music service, has the Internet's largest video library, promotional downloads and streaming radio channels, said David Goldberg, Yahoo Music's general manager.
The new service is free right now, although Goldberg said the company would probably offer a premium service with on-demand capabilities next year.
"We do think there are some services people will pay for, but from our business standpoint, there is a very good business in being free and advertising supported," Goldberg said. "Giving consumers music for free and supporting it with advertising like radio (is) very lucrative."
Ironically, digital music supporters helped foster the new wedge being driven between the CD and the PC by continually blaming the record labels for many of the problems experienced online.
Songs on CDs are digitally encoded. For years, that wasn't a problem for the major labels, and the corporations continued to produce unprotected music on CDs.
Then many people began using the Web and unprotected music was suddenly unbundled from the CD using the MP3 format.
As companies such as MP3.com and Napster offered people services that facilitated use of those digital music files, the recording industry responded with a series of high-profile lawsuits.
While the lawsuits filtered through the courts, the industry began to experiment with new technologies that would lock music on the CD and the computer.
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