Sony issues recall for DRM crippled CDs

Sony totally caved on the DRM debacle:  They issued a recall of about 5 million CDs. I am pleased to have made a contribution to this debate. Kudos to Mark Russinovich for all his good work.

I bring an investor’s perspective to all this: Is the company tech savvy? Are they astute to their customer’s wants? Are they spending limited time and capital on worthwhile projects? With larger firms, how coordionated are the various divisions — is every group working well together, or is it a disparate colelction of parts working at cross purposes? 

From a bigger macro perspective, I want to key in on the emerging trends. What’s going on beneath the surface?

For example, consider the ongoing decline in dead tree circulation and the rise of online advertising. How are different elements of the media industry responding? The WSJ, the NYT, and Time Warner have each brought a seperate approach.

Then there is Forbes. One of the more ironic elements of this was how ass backwards they got this one. It wasn’t even a week after their shrill and embarrassing screed before they were shown up by the amateurs:

1. DRM restrictions were put on CDs without artists knowledge or permission
2. The copy protection scheme makes it difficult to put CDs on an iPod but does not stop piracy
3. Sunncomm, the DRM firm,will send you info how to circumvent the DRM upon request
4. Sony/BMG are using their consumers as pawns to fight against Apple’s iPod
5. The Rootkit infection was discovered by a blogger
6. Malicious virus writers had already taken advantage of Sony’s "ineptware"
7.   Sony’s Web-based XCP Uninstaller iopened up an even bigger security hole
8. The Sony EULA contained sone of the mose ridiculous (and unenforceable) legal restrictions ever seen
9. Correctly predicted the class action suits


How totally embarrassing is that?

So the question I have for Forbes is this:  Was Sony "blog bashed?"  Or, did they engage in some very bad business behavior that 1) alienated their customers; b) put PCs at risk; iii)  cost the firm alot of money to fix; D)  all of the above?

Bloggers keep finding things the mainstream media misses. Is it any surprise that newspapers and magazine circulation keeps sliding? Instead of whining about Blogs, outfits like Forbes should figure out what they are offering that dead tree magazines are not, and adapt. Better do it soon, too.

Here’s the key excerpt from today’s NYT:

The global music giant Sony BMG yesterday announced plans to recall millions of CD’s by at least 20 artists – from the crooners Celine Dion and Neil Diamond to the country-rock act Van Zant – because they contain copy restriction software that poses risks to the computers of consumers.

The move, more commonly associated with collapsing baby strollers, exploding batteries, or cars with faulty brakes, is expected to cost the company tens of millions of dollars. Sony BMG said that all CD’s containing the software would be removed from retail outlets and that exchanges would be offered to consumers who had bought any of them.

A toll-free number and e-mail message inquiry system will also be set up on the Sony BMG Web site,

"We deeply regret any inconvenience this may cause our customers," the company said in a letter that it said it would post on its Web site, "and are committed to making this situation right." Neither representatives of Sony BMG nor the British company First 4 Internet, which developed the copy protection software, would comment further.

Sony BMG estimated last week that about five million discs – some 49 different titles – had been shipped with the problematic software, and about two million had been sold.

Amazing . . .

UPDATE: November 17, 2005 5:46am PST

There’s a complete Sony rootkit roundup over at boing boing.

CD’s Recalled for Posing Risk to PC’s
NYT, November 16, 2005

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