Sony fights decline with frontal attack on consumers
Sony's position of the past few years has been on the decline. Its once-supreme gadget-making electronics division has been badly trounced by Apple in the area of mp3 music players, and it's had three straight years of losses. Its movie division has had disappointing and irregular earnings. And the merger of Sony and BMG's music businesses can't paper over the steady erosion of profits in the music recording industry, thanks to a combination of piracy and indifference. And its famous Trinitron screen becomes more and more irrelevant in an age of flat-screen monitors and televisions. Even its Play Station game machine faces increasing competition from Microsoft's Xbox.
The decline is bad enough that the company announced yet another major restructuring a few months ago, with the cutting of 10,000 jobs (over 6% of their workforce), closing of scores of factories, and a new effort to catch up with Apple. This is after they promoted the first Westerner ever to run the company. Many critics have noted hat the once-great innovator has lost direction.
There is one area where Sony is becoming a pioneer, much to the regret of consumers. That is in the area of Digital Rights Management (DRM), elaborate copy protection schemes for the music and DVDs they produce. Protecting those rights against rampant piracy is perfectly understandable, but the methods Sony has implemented are backfiring in a big way.
When consumers buy new music CDs from Sony BMG Music and put the CD in their computer's CD drive, Sony stealthily installs a piece of odious spyware, what is called in security circles a "rootkit." The software ostensibly controls the amount of copying of tracks you can do from the CD. But it also has other deleterious effects. It causes a number of programs to crash including beta versions of the next Windows operating system, it is nearly impossible to de-install, and it also makes it impossible to transfer the tracks to an Apple iPod player. Furthermore, evidence is coming out that the software opens up a back door to hackers. (See here or here for more.)
Needles to say, the computer community is up in arms. A boycott of Sony CDs has been called for, and Sony is getting lots of negative press. The steps will not stop a smart and aggressive pirate (they've already cracked the protection code), but it does punish users who want to make legitimate, personal copies (as for the iPod). As one expert noted in the Washington Post (11/3/05) "Sony is just hurting people who obtain their products legally, and many of these same people are now going to think twice about doing so."
The worst is that Sony is using what has widely called a "sneak attack" and emulating the same methods that Trojan horses and other spyware. That point is made in an InfoWorld article ("Does Sony Own Your PC?", 11/3/05):
That a media giant like Sony would so blithely put its customers at risk for all manner of security and performance problems, punishing those who actually bought their CDs while not hurting the P2P pirates one bit, seems almost incomprehensibly stupid. That is until you realize that, as always seems to be the case with DRM, the vendor's goal isn't really stopping piracy but gaining control over their customers.
The next big issue is the adoption of a new DVD standard, in which race Sony's Blu-Ray technology is in the race. Blu-Ray is already loaded to the gills with DRM technology, and the same problems are anticipated for that new technology. Add to that a move by Microsoft in its new operating system technology to embed some of these same "protections."
Sony is a unique company, creating and selling both the media products consumed and the hardware on which they are played. But the attempt to control a legitimate problem with an overreaching solution looks likely to bring us one step closer to a world in which we rent the use of media every time we read, watch, or hear anything. Sony and its allies have been gaining major ground in influencing government copyright laws and enforcement and in colluding together to discourage smaller competitors. The question is whether the consuming public will refuse to go along.
