MP3 rolls on, music industry tries late scramble to catch up

MP3 rolls on, music industry tries late scramble to catch up

Robert A. Starrett

Commentators generally say of ascendant Internet-to-CD music format MP3 that the genie is out of the bottle and shows no signs of going back in. MP3 is quickly becoming the music distribution model of the future. With millions of PCs connected to the Internet, and tens of thousands of songs available, both legitimate and not, MP3 (MPEG-1, Layer 3 Audio), has spawned an industry in itself. Players are available for free, as are thousands of legitimate tunes from artists and bands with no association with record labels. Some record labels are signing on, too, with Rykodisc inking an agreement with Goodnoise.com to allow GoodNoise to sell music from the Rykodisc catalog on its site. Rykodisc artists include Frank Zappa, Bruce Cockburn, Morphine, and Richard Thompson. Rykodisc is so far the largest music label to adopt the MP3 format.

This announcement followed shortly the news that Harry Fox Agency granted GoodNoise the first Digital Phonorecord Delivery License for delivering songs in MP3 format and a technology and marketing alliance with Adaptec, Inc. to promote the growth of down-loadable music sales in MP3 format. GoodNoise and Adaptec will jointly sell and promote each other’s products and services. Presumably, Adaptec will build MP3-to-WAV conversion into its line of recording products, which include Easy CD Creator and Toast. These announcements sent GoodNoise stock soaring, moving from $7 to $18 before settling in at about $12 a share.

Meanwhile, SightSound.com sent letters to four Internet music companies asking them to pay one percent of all revenues received from the downloading of music, a process on which they claim to hold a patent. Those contacted, including GoodNoise, mp3.com, Platinum Entertainment and Amplified.com have not voiced their opinion formally about U.S. patent number 5,675,734, which purports to patent a method by which one can download digital audio or digital video files from the Internet. Filed in 1996 and granted in 1997, the patent is likely to be disallowed, much like Compton’s 1994 claimed patent on multimedia.

Mp3.com, which regularly posts these types of letters on the Web, also posted a portion of a letter that the company received from National Academy of Recording Arts & Sciences (NARAS) rejecting an ad that they had paid for in the quarterly Grammy Magazine. The letter says that the ad had been rejected due to “the limited number of advertising positions available in the magazine in conjunction with the somewhat controversial nature of your product.”

In an attempt to gain ground where they are significantly behind, the “Big Five” music labels (BMG, EMI, Sony Music, Universal Music, and Warner Music) announced the impending implementation of the first test of the Madison Project, a digital music distribution scheme developed by 1SM. The goal is to make more than 2,000 albums available for download this spring to a limited number of users in San Diego. The system apparently includes software and a CD recorder and allows users to download singles, CDs, and cover art and then record the material to disc. Some type of watermarking or encryption technology is used, but it is unclear just how it will work.

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