There they go again.
According to a story in today's New York Times, Sony BMG -- a joint venture between Sony (NYSE:SNE) and Bertelsmann -- is testing U.S. waters with software that would limit the ability of music buyers to make more than three copies of a CD they've purchased. Along with other music industry big boys, the company is apparently leaning on Apple Computer (NASDAQ:AAPL) to make its software play nice with this technology.
Good luck to you, fellas. In the past, such software has been ridiculously easy to crack -- in one case, by simply holding down the Shift key as the CD loaded. The bigger-picture story here, though, is that the era of the CD is over -- or at least it will be soon.
Music subscription services, after all, are sprouting up everywhere. Yahoo! (NASDAQ:YHOO) recently unveiled its dirt-cheap Music Unlimited, while RealNetworks (NASDAQ:RNWK) gave its well-regarded Rhapsody service a slick form-and-function makeover. Meanwhile, the too-legit-to-quit version of Napster (NASDAQ:NAPS), while struggling, keeps on keeping on, generating nearly $50 million in revenue during the 2005 fiscal year that ended in March.
Pshaw, you can almost hear the suits at Sony BMG say. We paper the walls in our corporate suites with that kind of money.
Current economics aside, though, these services represent the future of the music biz. And if Sony BMG -- whose corporate parent operates a so-so online music store called Connect -- isn't inclined to learn from the likes of these upstarts, perhaps it'll take a hint from Warner Music Group (NYSE:WMG). Yesterday, that newly public company reported $4 million in net income thanks, in part, to $31 million in digital music revenue that offset a similar-sized decline in CD sales.
Hmm. Could it be that the future is now?
Other Foolishness:
Shannon Zimmerman, lead analyst of The Motley Fool's Champion Funds newsletter, just bought a portable record player and a backup copy of the first Peter Gabriel solo album. Shannon subscribes to Rhapsody, but he doesn't own any of the securities mentioned above. The Fool has a strict disclosure policy .
