Firm Buys Supplier of Anti-Pirate Software

Boosting its bid in the nascent market for copy-protected CDs, Macrovision Corp. of Santa Clara, Calif., has acquired a leading supplier of software for preventing songs on a CD from being copied onto a computer.

The deal, announced Tuesday, calls for Macrovision to pay about $25 million for the assets and operations of Midbar Tech Ltd., a privately held company in Tel Aviv.

Macrovision also announced that it is acquiring music copy protection and rights-management technology developed by Israeli firm TTR Technologies Inc. for about $5 million.

Macrovision dominates the market for copy-protected videotapes, and its technology is used to block VCRs and digital recorders from copying DVDs, premium cable and satellite TV broadcasts. Working with TTR, it has been developing technology for “secure” CDs that deter online piracy while still enabling consumers to copy songs from the discs onto their computers.

Midbar has been developing similar technology, while also offering versions designed not to allow any copying. The company says that its technology has been used on more than 30 million CDs.

The vast majority of those releases have been in Europe and Asia. Few secure CDs have been issued in the U.S., in part because the major record labels are waiting for technology that lets consumers copy songs and burn them onto a limited number of homemade CDs.

The label with the most secure CDs on the market appears to be Vivendi Universal subsidiary Universal Music Group, which has released four secure CDs. Two have sold more than 200,000 copies each: movie soundtracks “More Fast and Furious” and “Brown Sugar.”

Adam Sexton, vice president of marketing at Macrovision, said the acquisitions will accelerate development of technology enabling consumers to make a limited number of disc copies that cannot be duplicated further. That technology should be available by mid-2003, he said.