After Napster, Dataplay discs a security measure

After Napster, Dataplay discs a security measure

NEW YORK (Reuters): If you buy a new album from Elton John later this year, it may be on a matchbook-sized disc so spacious that it contains not only Sir Elton's latest work, but five or six albums from his past as well.

The extra albums on small, high-capacity discs from Boulder, Colo.-based DataPlay Inc., will be locked up tight by ContentKey, the company's copy control software. To listen to earlier work, or access a music video or interview, you'll have to buy a software key from the artist's record company via a Web site or an in-store kiosk.

At the Consumer Electronics Show in Las Vegas in January, DataPlay unveiled a host of prototype digital devices that use its micro-optical drive -- digital cameras, personal digital assistants, e-books -- but portable music players may be in the best position to benefit first from the technology.

The company said it expects to sell prerecorded music at retailers by the end of the year, including top hits from the Billboard charts and popular back-catalog titles, at about the same price as CDs.

For consumers, the 500 MB DataPlay discs are vastly cheaper at US$5 to $10 than solid-state memory like CompactFlash or SmartMedia, which cost more than $100 for 128 MB. And 500 MB goes a long way -- in an MP3 player it's good for some 11 hours of music. MP3 is a compression format that turns music on compact discs into small digital files.

DataPlay -- which counts media giant Vivendi Universal among its investors -- offers powerful copy protection and the ability to sell back-catalog albums all over again. It has been nearly 20 years since the last major music format shift, to compact discs.

"DataPlay allows the music industry to sell music in places they could never penetrate before," said DataPlay Chief Executive Officer Steve Volk, citing handheld devices known as personal digital assistants and mobile phones as prime examples.

The company has deals Universal and several other major labels, and electronics manufacturers including Toshiba Corp., Samsung Electronics Co. and SONICblue Inc., which makes Rio MP3 players.

But some say DataPlay has some serious hurdles to overcome that have nothing to do with the little disc's technological merits.

"The conversion to CDs took the entire marketing capacity of the industry to make it palatable to consumers," said Forrester Research analyst Eric Scheirer.

And DataPlay's most unique attribute -- the ability to offer multiple content-protected albums on a single disc -- may be extremely confusing for customers, he said.

"It's not clear the consumer understands the proposition," Scheirer said. "You're buying something but not really buying it; having it but not really having it."