AP Wirestory Points Out The Obvious [4:59 pm]
Factor in lawsuits that Sony BMG could face, and it’s worth wondering whether the costs of XCP and its aftermath might even exceed whatever piracy losses the company would have suffered without it.
That’s not even accounting for the huge public relations backlash that hit Sony BMG, the second-largest music label, half-owned by Sony Corp (NYSE:SNE - news). and half by Bertelsmann AG.
“I think they’ve set back audio CD protection by years,” said Richard M. Smith, an Internet privacy and security consultant. “Nobody will want to pull a `Sony’ now.”
Phil Leigh, analyst for Inside Digital Media, said the debacle shows just how reluctant the labels are to change their business model to reflect the distribution powers — good and bad — of the Internet. He believes that rather than adopting technological methods to try to stop unauthorized copying of music, record companies need to do more to remove the incentive for piracy.
“The biggest mistake the labels are making is, they’re letting their lawyers make technical decisions. Lawyers don’t have any better understanding of technology than a cow does algebra,” Leigh said. “They insist on chasing this white whale.”
Slashdot’s Music Industry Backlash Against Sony Rootkit