Copy-protected CDs iPod-incompatible but sell well

LOS ANGELES (Reuters) - Recent CDs by Foo Fighters and Dave Matthews Band containing new anti-piracy technology are selling well despite a backlash among some fans angry that the discs are incompatible with iPods, experts said on Thursday.

Aiming to curb piracy, labels like Sony BMG, which released both records, are rolling out copy-protected albums in the United States, which let users make three exact duplicates of a CD, and store files on a PC in Microsoft Corp.'s Windows Media format.

But the copy-protection bars users from importing music onto iPods since Apple's Fairplay software is incompatible with Windows.

"This (Foo Fighters) CD has a copy protection scheme that makes it totally useless to 30 million iPod owners," wrote C. Anderson of Plano, Texas on Amazon.com's customer review link. "How could a band be so stupid as to alienate such a huge percentage of their fans?"

About one-third of the 252 customer reviews of the Foo Fighter CD this week on Amazon, which prominently displays the fact the album is a copy-protected CD, complained about the copy protection.

Record executives said they were continuing talks with Apple Computer Inc. to make these CDs compatible with iPods. In the meantime, Sony BMG also released versions of each album to Apple's iTunes service.

That appeased some iPod users, but others are still angry because they like to physically own a disc before importing it to iPods.

American Technology Research analyst Shaw Wu said it would benefit both Apple and record labels to resolve the issue.

"Apple's the leader in digital music. It doesn't make sense to release too many copy-protected CDs if they're incompatible with iPods. But Apple could also be at risk if these CDs keep selling well," he said.

"It's up to Apple to flip the switch," said one record label executive.

Apple declined to comment on such talks. "We have not announced any plans to license Fairplay technology," said Apple spokeswoman Natalie Kerris.

Meanwhile, record industry officials said the Dave Matthews and Foo Fighters CDs are selling well. "I haven't noticed them selling off par with their past albums. In fact the Foo Fighters' first week was the best week they've ever had," said Geoff Mayfield, director of charts at Billboard.

Since its mid-June release, the Foo Fighters' "In Your Honor, has sold more than 736,000 units, including 23,000 digital copies, consistently ranking at the top of the charts, according to Nielsen SoundScan.

Dave Matthews' "Stand Up" has sold 1.1 million units since its May release, including 56,000 digitally.

Other copy-protected albums recently released in the United States include EMI's latest Jermaine Dupri album.

EMI Group spokeswoman Jeanne Meyer cited success with earlier such efforts overseas. "Out of 127 million copy protected CDs we've shipped into the market outside of the U.S. and U.K., we've had 0.02 percent inquiries of any kind," she said.

Sony BMG, a joint venture between Japan's Sony Corp. <6758.T> and Germany's Bertelsmann , said users can get the music onto iPods by transferring files to a PC, burning them to a CD, ripping those and transferring them into iTunes.