New disc--is it the end of the music CD?

Summary:InterTrust Technologies and DataPlay join forces to produce a digital disc--about the size of a quarter--that holds 11hours of music and that is designed to thwart piracy. They're betting it will replace the CD.

InterTrust Technologies, a maker of digital rights management software, said Monday it has partnered with start-up DataPlay to provide secure digital media in a move to thwart music piracy by replacing the compact disc.

Santa Clara, Calif.-based InterTrust said it will place DRM formats on DataPlay-enabled devices, including blank and prerecorded discs. Such DataPlay discs can hold 11 hours of compressed music, or seven to 10 albums.

Both companies are betting that DataPlay's discs are eventually going to replace the compact disc, which has been considered to be the source of music piracy on the Web.

"This whole music piracy problem isn't going to go away until the CD dies," said Talal Shamoon, senior vice president at InterTrust. "A lot of these music subscription services and download services that have been put together...are great, but they're not an effective replacement for a new entertainment experience because CDs are still here, and CDs define the path."

The announcement comes as record labels are beefing up their efforts to provide online subscription services amid reports that the Justice Department has launched an antitrust investigation into such services. RealNetworks, BMG Entertainment, Warner Music Group and EMI Recorded Music have created MusicNet. Meanwhile, Sony and Vivendi Universal Group have formed Pressplay and will use MP3.com to create its backbone technology.

Some music labels are working with DRM providers to test methods to thwart music piracy. Last month, BMG Entertainment said it will work with security technology provider SunnComm to test copy-protected CDs.

Bryan Ma, senior analyst at IDC, said that what DataPlay is bringing to the table are small and portable discs--about the size of a quarter--that have a 500MB capacity. He added that the discs provide more files and more hours stored on one piece of media--compared with a CD that only offers one hour of music.

Ma said that while the partnership is a step in the right direction for both companies, the concept that DataPlay discs are going to replace CDs is not going to be something that will happen right away. "It's certainly a great idea, and if they've got a win with InterTrust, that certainly helps move to that end," he said. But, he added, even though it presents a solution to the labels, DataPlay and InterTrust face hurdles ahead of them.

"The problem is that we're still looking at an incredibly large installed base of CD players out there," Ma said. "You're talking about a new format trying to overtake something that is incredibly well-established today."

Ma said while InterTrust's technology has not gained widespread usage, DataPlay's devices have yet to hit the consumer market.

DataPlay expects to release its products this fall. The Boulder, Colo.-based company said its blank discs will cost between $5 and $10, and its prerecorded discs will be similar to the price of CDs.

Todd Oseth, senior vice president at DataPlay, said while consumers will need to buy a player--which will run between $199 and $299--to play the discs, the player will also play any other digital content, including videos and e-books. People can download music on the discs as well as purchase DataPlay content from retail stores.

Oseth said the benefit the discs have over CDs is that not only do they prevent piracy, but the discs also have prerecordable and writeable features. Music fans, for instance, will be able to purchase an album and record their voices as they sing along with songs on the same discs. In addition, he said, the portability of the discs will enable people to jog with them, compared with CDs that are not as mobile.

"The idea here is to make sure that the consumer has a good experience by adopting the content while protecting the content owner," Oseth said. "We try to make it so that the consumer's experience is the same as they have (had) traditionally but not dealing with stolen content."

In June, DataPlay signed a deal with data storage company Imation to be the first U.S.-based manufacturer of blank and prerecorded discs in the company's new media format.

Topics: Tech Industry

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