.comment-link {margin-left:.6em;} Making Sense: e-Digest of Brand Thinking

Thursday, December 08, 2005

Deny everything

To a non-techie like me, the story of Sony BMG and its XCP content protection technology isn’t really a story about copy protection. Nor is it a story about a global entertainment giant invading our hard drives and depositing unsecure code. To me, it’s a story about denial and an almost great moment in corporate humility.

First, some facts. To protect its content, Sony BMG added content protection software on 52 CD titles. They used XCP software, provided by a third-party vendor, London-based First4Internet. The software was designed to prevent unlimited copying and unauthorized redistribution of the music on the disc. Unfortunately, it did more than that. It acted like a Trojan horse, burrowing deep within the computer’s hard disc, potentially opening it up to attack by viruses.

When the problem was first detected, Sony BMG said there was no problem. But don’t give Sony bad marks for that. They were just employing a proven management tool for business (and politics, too): denial. It used to be that only criminals denied guilt. Now everyone does it.

Our story has a somewhat happy conclusion. After a prolonged, angry outcry by music fans, Sony BMG admitted that XCP had flaws. Said in an open letter to consumers: “We deeply regret any inconvenience this may cause our customers and we are committed to making this situation right.” Sony BMG, announced a recall of some 4.7 million CDs with the software from consumers and retailers. Any consumer who purchased an XCP-protected compact disc can receive a replacement without copy protection, plus an MP3 file of the titles.

No—this is not the Tylenol model. But you have to give Sony BMG some credit for stepping up to the plate. Of course, it would have been better if they had done it from the start. They ended up doing what they should have done in the first place, but they got far less value for their actions. Such is business today.

"Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter - and getting smarter faster than most companies."
- The Cluetrain Manifesto

I wondered from the second I heard about Sony's latest (on the TWiT podcast, I might add) what they were thinking. Companies can't get away with things like that anymore; those who try lose their credibility faster than a speeding T3 line.

I wonder if Sony will take this as an indicator that they need to get a clue...
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