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Top of the Pops

“WE DON’T like their sound and guitar music is on the way out,” read a 1962
memo from Decca Records. As errors of judgment go, they don’t come much bigger.
The unknown Liverpudlians about whom the memo was written called themselves The
Beatles.

Today, a similar blunder is unfolding, but this time it is not a single
record company that seems hell bent on a monumental mistake, but the whole music
industry. At the centre of events is a digital music technology that’s been
making ever bigger waves over the past year, called MP3.

MP3 files store near CD-quality music and are small enough to be downloaded
from the Internet with ordinary modems in a reasonable time. This means that
bands can sell singles to their fans directly, bypassing traditional music
distribution channels completely. It also means that those who believe
“information wants to be free” or who just want free music—regardless of
what the copyright owners desire—have the perfect tool for making and
disseminating bootleg copies of songs. No wonder, then, that in the face of this
duet of legal and illegal MP3 activities, record companies are doing their
utmost to throttle the revolution.

But it’s too late. The genie is out of the bottle, and can’t be put back. As
a result, the music industry is about to undergo its biggest upheaval since the
transition from vinyl to CDs. Mike Cane of Cambridge Design Partnership, a
company that makes MP3 players, sees changes galore on the way. Top of the list,
he puts “instant access to music produced anywhere in the world, more
specialised labels, lower marketing costs on the Web leading to more variety and
more artists, blurring between amateur and professional artists, new ways to
buy—or rent—tracks”.

Downloading digital music from the Net isn’t a new idea, but until the MP3
standard became popular there was always a big trade-off between sound quality
and download time. A three-minute CD track fills about 30 megabytes of memory
(about 20 floppies), and would take around 90 minutes to download even with
today’s fastest modems. MP3 compresses those 30 megabytes to less than 3
megabytes, which can take as little as 10 minutes to download. And what makes
MP3 so special is that it achieves this feat while leaving the sound quality
virtually unchanged.

MP3 is the baby of the Moving Pictures Expert Group of the International
Organization for Standardization and stands for MPEG-1 Audio Layer 3. It
achieves its miraculous task using what is called psychoacoustic masking. “The
parts of the sound that are most perceptible are represented most correctly,
while the parts that are least perceptible are represented least accurately,”
says Eric Scheirer, an expert on MPEG audio at the Media Lab at the
Massachusetts Institute of Technology. Put simply, the compression technique
takes account of how we hear music (see Diagram below).

Compressing music files for MP3 format

Yet, however clever, technology on its own is not enough to drive a
revolution. What people need is products. MP3 use is increasing dramatically
because the Internet provides a ready medium for exchange as well as a wide
range of MP3 tools—many for no charge. These include rippers and encoders,
programs that respectively extract the digital data from audio CDs and convert
them into MP3 files by compressing them. Encoding and decoding are
computationally-intensive tasks, which is one reason why MP3 has taken off only
recently, even though the standard was published in 1993. “About two years ago,
typical home computers began to have the [processor] power to decode MP3 in real
time,” says Robert Lord of the MP3 software company Nullsoft.

Player power

Just as important as rippers and encoders are MP3 players, which let people
play the MP3 files they’ve downloaded from the Net or “ripped” from a CD. One in
particular, Nullsoft’s Winamp, a $10 shareware program, dominates this
field. The scale of MP3 activity can be judged from the number of people using
Winamp. Every day, there are 160 000 downloads of the software from Nullsoft’s
website, and more from third-party sites. “We estimate that there are 10 million
active users,” says Lord.

You can play MP3 files with Microsoft’s Media Player, which comes as standard
with Windows, though the company keeps quiet about this because it has plans of
its own for sending music over the Net. Microsoft’s main rival in the field of
online multimedia, RealNetworks, has released RealJukebox, a free program that
not only plays MP3 files, but lets people create them from CDs.

Even if, as seems likely, the number of people listening to MP3 files can be
numbered in the millions, record companies might not have worried. After all,
making and playing MP3 files needed powerful computers, which restricted where
and when they could be played. But that all changed late last year when Diamond
Multimedia launched a $200 product called Rio, the first mass-market
portable MP3 player. It is smaller than a pack of cards and weighs just 70 grams
(This Week, 7 November 1998, p 23).

The Recording Industry Association of America, the main industry body in the
US, was quick to spot its significance. Once Rio’s 32 megabytes of memory chips
are charged with MP3 files from a computer, the music can be listened to in the
living room, on the train or even while out jogging. The RIAA tried and failed
to obtain an injunction to stop sales of the Rio, and today several other
companies have launched players or are about to. The British company Empeg has
even designed a MP3 player for cars that uses a hard disc in place of costly
memory chips. Its top model can hold a whopping 476 hours of music.

All these players still need a computer to encode MP3 files from a CD or to
download them from the Internet. But this is not the case with MP3-GO, made by
the Memory Corporation (This Week, 27 March, p 6). MP3-GO lets people convert
CDs to MP3 files or download files from the Net, and then transfer them to a
portable player, all without the need for a separate computer or technical
knowledge. Other companies are working on MP3 units that will form part of a
standard hi-fi system. Steve Sanders of Empeg foresees MP3-formatted CDs that
would hold 10 hours of music. With the next-generation DVD format, a disc
could store a staggering 100 hours.

Even without these developments, the established music industry believes that
the availability of MP3 files on the Net, particularly illegal copies of tracks,
is already affecting sales. The latest annual survey of music buyers in the US
by the RIAA revealed that purchases by the critical 15 to 24-year-old age group
dropped from 32 per cent in 1996 to 31 per cent of the total market in 1997 and
28 per cent last year. “The rise of the Internet as a free entertainment centre,
and the accompanying availability of free MP3 music files, could be contributing
factors,” says the RIAA. The fact that the search engine Lycos finds more than
500 000 MP3 files on the Net lends credence to this.

Even though the RIAA’s injunction against Rio failed, it is not letting up.
As well as trying to shut down websites offering MP3 files of pirated music, the
RIAA through its members is forbidding well-known artists such as Billy Idol
from offering songs to their fans in the MP3 format. Idol and other artists such
as Public Enemy and Tom Petty “want to do it”, says Bill Paige of the
independent record company Platinum Entertainment, “but their record companies
fight them on it tooth and nail”. A few heavy hitters, such as the Beastie Boys,
have released specially written MP3 tracks, but at present it is mainly unsigned
artists, or those with independent labels, who are experimenting with MP3.

Fightback

Most importantly, the RIAA has created the Secure Digital Music Initiative
(SDMI) to “bring together the worldwide music community in an open forum with
technology companies to develop an open interoperable architecture and
specification for digital music security”. In other words, it’s trying to create
an alternative to MP3—and one that prevents people making illegal copies.
This is critical for record companies, argues Michael Yosowitz of the American
music technology company Digital On-Demand. “If the SDMI doesn’t fill the void
with a format, many believe that MP3 will become even more of a de facto
standard than today,” he says. “MP3 is still a four-letter word to many
participants of the SDMI.”

So the SDMI is faced with the tough task of bringing music, software and
hardware companies together to agree a strategy with unprecedented speed, as
every day the MP3 world goes from strength to strength. Last month, it announced
an outline plan to stop unauthorised copying. It wants all the paraphernalia
used to process compressed music to come with a hardware or software “sentinel”.
This will let people rip tracks from CDs and download compressed music from
SDMI-compliant sources, and play them on their own computer and portable player.
But it will stop them playing those tracks on other people’s machines or
downloading pirated music (This Week, 15 May, p 21).

To complicate matters further, Microsoft has announced its own secure music
approach, called Windows Media Technologies 4. This uses a compression scheme
that Microsoft claims gives the same sound quality as MP3 from smaller files,
and includes a security system that will conform to the SDMI. Given Microsoft’s
enormous clout on the desktop, it is likely that Windows Media Technology 4 will
overwhelm anything the SDMI produces. Already, the record giant Sony Music
Entertainment has signed up to use it.

While the music industry and Microsoft sing their own songs, others are
persevering with MP3 by trying to make it acceptable to record companies. There
are two camps: those that believe users are essentially honest and will pay for
MP3 music if it is cheap enough, and those that see every Net user as a
potential pirate whose actions must be constrained by technological chains.

Leading the former camp is the company MP3.com. Its website offers a huge
repertoire of legal MP3 songs from thousands of artists for free, and it claims
that more than 18 million files have been downloaded from the site. A measure of
MP3.com’s success is the $11 million that venture capitalists invested in
the company in January.

In March, another MP3 company, EMusic.com, formerly GoodNoise, attracted even
more money—$31 million. EMusic.com sells MP3 songs, for 99 cents
each, and entire CDs for $8.99. Just as important as this financial vote
of confidence was the agreement the company reached with the Harry Fox Agency to
pay standard royalties to songwriters and music publishers for downloaded songs.
Despite its rather unassuming name, HFA is the main representative of the
American music publishing industry for granting rights. Its president, Edward
Murphy, says the agreement with EMusic.com represents “a model for licensing
musical compositions in downloadable formats”, something that has been missing
from the MP3 world.

EMusic.com sells music licensed mainly from independent labels; the big
record companies are still unhappy that downloaded music can be easily copied.
The company does plan to add digital signatures, small files sent along with the
music that prove the track comes from a legitimate source, but it does not
prevent copying or wider distribution of files. The assumption is that most
users are law abiding and would prefer to stay that way.

Others are not so sure, and aim to help listeners to keep on the straight and
narrow with extra technology. For example, Audio Explosion reckons MP3 files
should be encrypted before being sent over the Net. This puts extra burdens on
music lovers to download and install the special software to decrypt the
files.

But there is a serious drawback with encryption. Even when encryption schemes
cannot be broken, they can be circumvented. To hear MP3 files, they must
inevitably be converted into an audio signal—initially a digital stream of
bits and eventually an analogue signal—and it is simple to convert either
of these into an unprotected digital format. Freely available programs can
convert the bitstream, while the analogue signal can be redigitised from the
soundcard.

Indelible

For this reason, Audio Explosion also employs a security system that appears
to be more difficult to outwit: the digital watermark. Files marked in this way
may make MP3 more acceptable to record companies. Unlike a digital signature,
which is a separate file, the watermark is a series of small, inaudible codes
embedded within the sound file that identify a file’s origin. “Human listeners
cannot distinguish content with the watermark from content without it,” claims
Joseph Winograd of the company ARIS Technologies, one of the leaders in this
area. “The watermark data can still be read from the content even after radio or
TV broadcast, data-rate compression, speed changes, analogue recording [and]
editing.” This is possible thanks to the same psychoacoustic masking that
underpins MP3.

Despite the major record labels’ participation in the SDMI, it is not clear
that they understand what the MP3 revolution is really about. In a trial in San
Diego to test music distribution over the Net, IBM and the top five labels, BMG,
EMI, Sony, Universal and Warner, are letting users download complete,
uncompressed CD albums—all 600 megabytes of them. To cope with the huge
amount of data, the trial uses fast cable modems in place of ordinary ones. This
makes the approach useful for only a tiny percentage of consumers.

The trial also seems to miss another key point about the MP3 world: it has
evolved so that people can download just the tracks they want, not a whole CD
whose contents are decided by record companies. “The current furore around MP3
is an indication of the consumer desire for new flexible distribution of digital
music content,” notes Scheirer at the Media Lab.

Issues such as who controls music distribution and what consumers are allowed
to do with music they’ve purchased didn’t start with MP3, says Scheirer. Similar
debates went on with digital audio tape and the digital compact cassette,
technologies that were confined to specialist niches by an industry worried by
the threat of perfect copies. There is one crucial difference this time though.
“MP3, for the first time, brings the new technology of the Internet into the
debate,” Scheirer notes, a technology that has already empowered users in other
areas.

At Creation Records, Andy Saunders believes the Net’s key role in the MP3
saga is one more irritation for the ageing heads of the mainstream recording
industry. “[They] particularly hate the idea of the Internet,” he says, “because
not only does it represent change but they also don’t understand it and it is
being developed by young people who they despise.” But the Net is not going
away, nor will MP3 and the desires of its users. For this reason, any attempt by
the music industry to simply transfer its practices onto the Net without making
any changes seems likely to fail.

Even though MP3 is undoubtedly the catalyst for the impending upheaval in the
music business, it may not be the ultimate winner. “Technology is moving so fast
that I can see MP3 being replaced by a new format,” says Saunders. But MP3 has
already weathered the arrival of newer compression technologies, such as MPEG-2
Advanced Audio Coding. Because AAC’s licensing terms are more restrictive, it
lacks MP3’s array of software for encoding and decoding, storing and playing
files. It will be difficult for any other format to match MP3 on this score.

“It’s a really difficult time to make any coherent predictions about the
particular technology that’s going to win,” argues Scheirer. “The market is
likely to fracture into two parts—a `hobbyist’ side that uses MP3, and a
`serious’ side that uses Windows Media Technologies 4.” This is because
Microsoft’s version will conform to the SDMI’s requirements and will come as
standard on the Windows platform.

If he’s right, digital music could well mirror the continuing battle between
the renegade open source software movement and the corporate might of Microsoft
and its partners
(see “The Wild Bunch”, żìĂš¶ÌÊÓÆ”, 12 December 1998, p 42).
As in the world of software, the fact that people are even
considering the possibility of the user-driven MP3 movement taking on the
established giants of today’s music industry is in itself a revolution.

  • Further reading:
    The MPEG homepage is at http://drogo.cselt.stet.it/mpeg/
  • Other relevant addresses are:
    www.winamp.com
  • www.riaa.com
  • www.real.com/realjukebox/index.html
  • www.diamondmm.com
  • www.empeg.com
  • www.mp3-go.com
  • www.sdmi.org
  • www.microsoft.com/windows/windowsmedia
  • www.mp3.com
  • www.emusic.com
  • www.aristech.com

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