Copy-Protection Companies Merge

May speed implementation, but consumers still don’t want it:

Macrovision, a Santa Clara, Calif.-based company, said it will acquire Israeli company Midbar Tech, with the intention of joining the rival anti-copying technologies from the two companies. Both companies’ products have met resistance from consumers and record labels, and together they hope to overcome market skepticism, they say.

Analysts said the deal would likely help smooth some of the bumps in the path toward general acceptance of anti-piracy technology for music CDs, although the consolidation fell far short of a guarantee of success for the industry sector.

“One of the major hurdles…has been the lack of digital rights management standards,” said P.J. McNealy, research director with GartnerG2, a division of the Gartner research firm. “I think this will accelerate some of the experiments that are currently going on.” To date, each of the major labels has tested rival copy protection technologies internally, and most have released a few trial discs into retail markets.

The merger is one sign of maturation in a technology niche that has struggled to date for acceptance even among record labels, which are itching to keep consumers from making unrestricted copies of their CDs.

Over the last two years, at least four companies–Macrovision, Midbar Tech, Sony and start-up SunnComm–have tried to persuade record labels to add various flavors of anti-copying technology onto ordinary CDs. But after an initial flurry of excitement, consumer backlash and stories of technological incompatibilities with some CD players and computers have kept sightings of copy-protected discs few and far between.

Record labels haven’t abandoned the idea, however. In recent interviews, executives from several music companies have said they’re still experimenting with the technology, but remain concerned about the technological glitches and consumer worries.