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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology
EDIG 0.00010000.0%Mar 20 5:00 PM EST
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To: cAPSLOCK who wrote (10162)1/27/2000 3:15:00 PM
From: JimC1997  Read Replies (2) of 18366
 
cAPSLOCK,

It's just supply and demand operating. MP3 files are free, so the demand is high. Secure encoded music will not be free so the demand may be less, but enough will pay to generate huge profits for the music companies. The price point of maximum profit for a monopoly is not the point that maximizes revenues, it is a higher price that maximizes profits (where marginal cost equals marginal demand).

The music labels effectively have that monopoly, so they will take whatever action they deem appropriate to maximize profits.

This bodes well for e.Digital.

MP3 files (and various free successors to that Codec) will always exist and will be supported by the e.Digital music player. But the reason that the music labels will ultimately be the strongest supporters of e.Digital is that the player will accommodate their digital rights management systems. As Kerry has often pointed out, without the ability to process both multiple Codecs and multiple DRMs competitors do not stand a chance of surviving.

And since the cost of access to that technology is relatively low (in the form of licensing and royalty fees to e.Digital), I expect that essentially all consumer electronics manufacturers will adopt the e.Digital MicroOS as the standard which enables that multi-Codec/Multi-DRM capability.

JimC
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