What do Falco and Flock of Seagulls have in common?
Aside from chronic bad hair, both group's singles--in addition to 500,000 other music favorites--
can now be downloaded off the Internet using the MP3 format. For early MP3 adopters this means
"free music ". That's right, free. For the big record labels it means "piracy "; which, ultimately,
spells trouble all around (the kind of trouble depends on which side of the industry you're on).
But one thing is clear -- the music industry is about to change.
I got the (MP3) Blues
Buying a used car can be tough: to start , you have a limited budget. Then there are concerns about
prior owners, choosing the right color, the right model -- you know, one that has enough space for your
MP3 player.
Enough space for WHAT, you say?
Short for Motion Picture Experts Group-audio layer 3, MP3 is a technology standard that enables
compact storage of sound and music. Because MP3 compresses sound files at near CD quality--you can
store 10 hours of compressed music on one CD--it has also become a popular way to distribute music
over the Internet. Users can download MP3 files directly from their computers and listen to music
without the aid of a stereo system. Add a $300 CD writer, and you can create your own custom, portable CDs.
Big deal, you say?
No, actually, it's not a big deal. It’s a huge deal: one that is set to transform the way we create,
market, distribute, purchase and listen to music. Not to mention, it's driving the record industry up
the wall.
Second only to sex
The acronym-- MP3 -- is the second most popular search term in search engines on the Net according to
Searchterms.com, a popular resource for webmasters. With over 500,000 music files available for free
download from the Internet today, it is hard to see how the MP3 phenomenon will be stopped. Not to say
the Recording Industry Association of America (RIAA) isn't trying.
RIAA has identified the music industry--inclusive of record labels and artists --
as "the biggest victims" of the MP3 explosion, and has accused "the Internet culture of
unlicensed use" . The organization is vehemently fighting the illegal use of MP3 for music
distribution and is launching a major effort to stop it.
Piracy is indeed a serious issue for the music industry long before the debut of the MP3 format.
According to the International Federation of the Phonographic Industry (IFPI), 1997 Global sales of
pre-recorded music were valued at over $38 billion. Sales of pirate pre-recorded music that year
were estimated at over $5 billion.
In October of last year, RIAA sued Diamond Multimedia, the makers of Rio, a popular portable MP3
player that can play files downloaded off of the Internet. And when Lycos, one of the Internet's
top search engines, launched its MP3 search site, RIAA reacted fast . They asked Lycos to "develop
procedures to eliminate infringing sites from their directory". Additionally, when the popular MP3.com
paid to run an ad in Grammy magazine (owned by the National Academy of Recording Arts and Sciences)
the website’s founder, Michael Robertson, received a letter of notification that his ad was being
pulled from the magazine. The letter stated, "The Recording Academy has asked me to steer you away
from this vehicle," citing that MP3.com's ad was "too controversial".
No Public Enemy
Indeed, the possibility of an easy, direct global distribution channel from artist to consumer appears to be a challenge not
only for the record companies, but also for music artists, though some groups,
such as the Beastie Boys
and Public Enemy, see this as an opportunity to expand into new territories, rather than as a threat:
"Maybe I'll get into merchandising--maybe I’ll do more live shows--maybe I can't depend on MTV showing
my video and me selling 722,000 units," said Public Enemy's Chuck D in a recent conference in New York.
"Now what is going to happen is that the marketplace will be diluted. Now you're going to see as many
as 100,000 labels. Why send my... demo to a... label and depend on them picking me up when I can just
put my...[music] out myself."
While MP3 clearly appears to be winning, the big five record labels, (Sony Music Entertainment,
Warner Bros., Universal Music Group, BMG Entertainment and EMI), who control 80% of the market, are trying to come up with a secure
format of their own. In December of last year, the RIAA announced its Secure Digital Music Initiative,
scheduled for deployment by Fall, 1999.
"This initiative is about the technology community developing
an open security system that promotes compatible products in a competitive marketplace," said Hilary
Rosen, President and CEO of the RIAA. "It's not about the recording industry imposing a standard on
technology companies."
Show me the money
Aided by open standards such as MP3, the Internet provides an ideal platform for streamlining various
processes that comprise the value chain of a given industry, eventually lowering prices for consumers.
Consider the fact that online music delivery eliminates the need for manufacturing, packaging and shipping CDs, a portion of the value chain that normally
accounts for some 10% of the price we have to pay when we purchase a CD. That said, it seems the record industry
may be more concerned with maintaining good relationships with increasingly powerful retailers than
with providing better value to its customer base through the use of innovative technology. Besides,
if you give the stuff away for free, where's the business model?
The possibilities, in fact, are impressive. Companies have only begun exploring the
potential of one-to-one customer relationships online. Through a quick search on the Net you'll find
several hundred online communities focused on music and artists. Search eBay for "Celine Dion", and you come up with over
270 memorabilia items. Type "Madonna" on Yahoo and you get
more than 50 sites dedicated to that artist alone. But how many of those
sites are run by Madonna's label, Time-Warner? Only one.
Live performances are another example. Currently, fans are confined by the geographical location of
a concert. If I live in Berlin, and ABBA is reuniting for a one-time event in Stockholm, there is
simply no way I can light a candle to the tunes of "Fernando". But you can be sure that an hour after
the show an MP3 recording of the concert will be online. Would I pay to watch the show online? Sure.
Does ABBA's record label offer that service? No; but it's guaranteed someone in the MP3 community will.
One thing is sure: while the record labels are hesitating to create new products and services,
the MP3 community is not. The MP3 explosion has grabbed the attention of numerous entrepreneurs who
are developing a new industry around this "de facto" standard:
- Last year, much to the dismay of the RIAA, Diamond Technologies introduced its Rio portable MP3
player that holds 60 minutes of music. The player was an overnight success.
- The Internet music label "GoodNoise" is working with Adaptec, a designer of computer components,
to develop software that enables CD players and car stereos to read MP3 files from CDs.
- Cambridge Design Partners are developing, and are near ready to ship, the world's smallest
portable MP3 player that is roughly half the size of a credit card.
"Empeg Inside"
Which brings us back to Ryan Veety and his used 1993 Eagle Vision. After a long search for a car
that could house his Linux-based MP3 player (Linux is an Open Source, free operating system that runs
on the same computer chips as Microsoft Windows), the 19 year-old college student settled for the
Eagle to house his in-car player.
"I originally wanted to fit it inside my glove compartment, which it did, but once I put the cards
in it was too tall and wouldn't fit." says Veety on his website. "There was a very simple solution to this...remove
the glove compartment. Once it was removed, it fit perfectly mounted upside-down... I was having a
problem with the video card falling out while driving, so for now I have a rubber band holding them
in place... For now, I have the power supply, inverter, and hard drive rubber banded together on the
floor. At least now people can sit in my front seat again. I will mount them also, when I get a chance,
so they don't get kicked around on the floor."
What is most amazing about the home-made MP3 car-player movement is that Ryan Veety,
and others like him, are not simply interested in
"showing off" their technical prowess. Instead, their intention is to collaborate with others by
posting "how-to" instructions for building these devices from scratch, including the software code
that is needed to run the systems.
But it doesn’t stop here: MP3 is also making its way into the commercial market. For professional
MP3 "audiophiles", Empeg.com makes the "empeg-car", a digital music player, installed in your dashboard,
that stores and plays up to 7,000 singles (over 500 albums) at CD-quality. And for those that subscribe
to the mantra, "bigger is better", there is always the 28Gb version: three weeks of non-stop music
enjoyment (500 albums), with no repeats.
While the record industry is figuring out the best way to combat MP3, you can’t help but wonder:
What are the car stereo manufacturers doing? It will be a clear sign of "Internet times" the day a
car stereo manufacturer, such as Alpine, wakes up to realize its biggest competition is not from
Panasonic or Pioneer, but from a computer firm that didn't even exist 2 years prior.
As William Gibson once said: "The future is here; it's just not evenly distributed."
Links:
MP3 was developed by the Moving Picture Coding Experts Group (MPEG). Established in January,
1988 by the International Organization for Standardization (ISO), MPEG has grown
to include some 350 experts, largely working in research and academia at 200 companies and
organizations around the world.
Ryan Veety is not the only person who has ventured to build an MP3 player that works in a car.
In Virginia, late 1996, Jeremy Briggs
built a player for about $1,000 in his 1993 Toyota Camry. Briggs now claims copyright ownership for
the keyboard plug-in he built and sells a $20 package of plans, software, and cases from his website.
MP3Now maintains a list and ranking of the top MP3 search engines.
Most of the search engines offer information detailing how to download MP3 files, as well as where to
find the components needed to create and play MP3 files.