The challenges and controversy over music and copyright continue with recent word of a new copyright protection technology that severely limits what CD buyers can do with their music. This news might make some of us wonder if the recording industry is going too far in its war on illegal downloads -- and hurting its prospects in the process.

A Washington Post article over the weekend described a new technology that will only allow users to play their new music CDs. No burning copies for friends, and no loading the songs into their Apple (NASDAQ:AAPL) iPods, or, obviously, any other music player. (Another, less intrusive variation on the same theme: CDs that permit users to make only three digital copies apiece.)

I understand the recording industry's angst over piracy; the rise of digital music may have contributed to the ongoing decline in CD sales. Indeed, I recognize the irony of writing for a site that examines shareholder matters while questioning the recording industry's decisions on digital music. (I've done it before.) I just have to wonder if the dogged pursuit of short-term revenues ultimately shrinks long-term sales possibilities. As the Post article pointed out, the industry also risks alienating the same music lovers whose dollars it depends on.

On one hand, I'd argue that the recording industry's high-profile blitzkrieg against piracy (and of course, file-sharing sites) has definitely begun a major shift in consumers' perception. I've increasingly noticed changing attitudes toward copying music -- I've heard people discussing the offer of a burned CD copy as a moral issue, and I think that will be an even more common question in the future. Maybe the industry should pause for a while to see if its other efforts -- such as lawsuits that sue, among others, children and grandmothers -- have persuaded consumers to change their naughty ways.

On the other hand, though, I believe that small-scale music copying, whether it's the mix tape you made back in high school or a CD you burn for a friend today, is actually one of music's best forms of marketing. I'm an iTunes junkie, and I've recently been purchasing a lot of albums that I had years ago on cassette -- including some copied tapes. I'm sure that a mix tape or copied CD also inspired many of you to buy music from artists you might otherwise have missed.

In the long run -- in cases like mine, the very long run -- I have to wonder if record companies underestimate the free advertising and exposure fans generate through copies, mix tapes and so forth.

I can't say I like massive P2P services like Kazaa and the previous incarnation of Napster (NASDAQ:NAPS), of course. But former Napster head Shawn Fanning is building a service called Snocap that aims to address some of those services' nagging copyright issues. Snocap promises to seamlessly identify and tag all music files users upload to its service. Users will pay a fee to download those files, and the money will be routed to the proper record companies and artists.

The record companies' new play-only CDs hardly seem like a stroke of genius, though. It appears they'll only tick off music buyers -- indeed, a young man quoted in the article deemed the play-only CD he bought "worthless." Is there going to be some rage against the industry machine?

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Alyce Lomax does not own shares of any of the companies mentioned.