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Net Prophet - by Dylan Tweney

April 26, 1999

Online music David has industry Goliaths quaking in their boots

MP3 has a lot of big companies running scared. In fact, they're so scared that they've agreed to stop bashing each other in the head long enough to try and quash the grassroots threat presented by this digital audio compression format.

The Secure Digital Music Initiative (SDMI), formed earlier this year, aims to create an audio compression and distribution standard that protects copyrights, not to mention the helpless major record labels, from rapacious consumers and ruthless independent musicians. Companies as diverse as Microsoft, IBM, AT&T, Sony, and BMI Music have put aside their differences long enough to pony up the SDMI membership fee of $10,000 apiece.

But it's too late to put the genie back in the bottle.

MP3 is the current de facto standard for downloading music files, and RealMedia is the de facto streaming audio standard. Portable devices for playing MP3 files -- such as Creative Technologies' recently announced Nomad and the Diamond Rio -- are already widely available. (Creative is also an SDMI signer as well as an MP3 vendor.) SDMI, by contrast, doesn't even have a standard yet, let alone compatible players.

What's most frightening to the big record labels is not that consumers can use MP3 to copy audio files. Like homemade audio tapes, MP3 files are essentially free marketing for the record companies. Record companies' real concern is that MP3 makes it possible for musicians to sell directly to their fans.

I got a taste of how hot the online music argument is at the Internet World trade show in Los Angeles earlier this month. Microsoft trotted out aging rocker Mick Fleetwood to help launch Windows Media 4.0, the company's latest standard for streaming audio and video files via the Web. AT&T announced Version 2.0 of its a2B Music Player, a client-side plug-in that plays proprietary-format audio files available on the a2B site at www.a2bmusic.com. And IBM announced partnerships with Sony and with RealNetworks, bolstering its own Electronic Music Management Strategy.

When I suggested to some AT&T and a2B Music representatives that the fragmented online music market might be confusing for consumers, they bristled. The representatives told me in no uncertain terms that they felt the standard that had the backing of all the major record labels (namely, their own) would be the one to succeed.

Obviously, I touched a nerve. But the fact is, consumers would have to be fools to bet on any of these corporate standards now, even if compatible devices were available.

On the MP3 side, Creative Technology (www.soundblaster.com) was demonstrating the Nomad on the Internet World show floor. The $250 Nomad is smaller than a deck of cards, sports a shiny magnesium surface, and weighs just a few ounces. You can download 2 hours of "near-CD-quality" MP3 files to the device, Creative officials claim. What's more, you can use the Nomad to record and upload 4 hours of voice recording.

I bought one for myself on the spot -- a rare act for a jaded technology journalist. The last time I did something like that was when I saw the first PalmPilot model, in early 1996.

Like Linux, MP3 owes its success to the grass roots on the Internet. And, like Linux, MP3 is now too big for established industry giants to ignore. But does MP3 have enough momentum to keep it from getting squashed by behemoths such as Sony, IBM, and Microsoft? Write to me at dylan@infoworld.com.

Dylan Tweney is the content development manager for InfoWorld Electric. He has been writing about the Internet since 1993.

Previous columns by Dylan Tweney

Consumers, unite! Use the Net to drive down prices of goods
April 19, 1999

Companies get a clue about the Net: It's not just business as usual
April 12, 1999

A swarm of WASPs will add to the buzz on the business Net
April 5, 1999

Don't be a slow poke: Keep your site up to speed or lose visitors
March 22, 1999

Every column since August, 1997

Please direct your comments to InfoWorld Electric.

Copyright © 1999 InfoWorld Media Group Inc.

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