We are getting very close now. It is unfolding right before our eyes. This is a great article.
Mark
Posted at 9:18 p.m. PDT Thursday, April 6, 2000
BMG to become the first major label selling music online
BY JON HEALEY AND SARA ROBINSON
Mercury News Staff Writers
A leading U.S. record label announced Thursday that it will begin selling music digitally over the Internet this summer, betting that consumers will pay for downloads they've been accustomed to getting for free.
BMG Entertainment, one of the four largest labels, said it will make a ``meaningful' but unspecified portion of its catalog available in June, with much more to come by year's end. The announcement makes BMG, the parent company of Arista, RCA and other labels, the first major label to say when it would begin digital distribution.
Since the introduction of MP3, a compression format that allows bulky music files to be stored and swapped over the Internet, music enthusiasts have been downloading free samples from lesser-known artists and building libraries of digital songs pirated from other listeners' collections. Yet except for some limited promotions, the hottest artists and tracks have not been made legally available over the Internet. The major labels' absence from the digital-music scene hasn't stopped consumers from making their own MP3s of top acts' songs. Instead, they ``rip' music from friends' CDs or use MP3-swapping software, such as the popular Napster program, to fill their PC jukeboxes and portable MP3 players -- typically in violation of the song's copyright.
Last summer, recording industry executives acknowledged the inevitable and signaled their intention to make their catalogs available in protected formats for digital downloads by Christmas. But that deadline came and went.
The record companies have been reluctant to release their prime content because the existing copyright-protection technologies have yet to be tested on a wide scale. Moreover, the companies want to make sure they go with a technology that will be widely supported in software and portable music playing devices.
BMG skirted these issues by announcing that it would try out copyright protection technologies from three different companies: IBM, Santa Clara-based start-up InterTrust and Microsoft, which has made a late charge into the digital-music field. Eventually, company officials said, the response from consumers would help them whittle down the playing field.
``The reality is that we need to start someplace,' said Kevin Conroy, senior vice president of worldwide marketing and new technology for BMG.
``The biggest problem for the record labels,' said analyst Mark Mooradian at Jupiter Communications, ``is that they need to get their stuff out there. BMG is saying that we can't wait for the coronation day. We have to make it work now and making it work is making a number of different solutions available.'
The BMG announcement may signify that the major labels are about to open the floodgates. ``I think what you'll see is a build-up by the majors of all their digital music capabilities, which will build to a crescendo in the Christmas season,' said Talal Shamoon, vice president of corporate development at InterTrust. For consumers, all of the copyright-protection technologies mean the same thing: Those songs will be much harder to pirate than the MP3 files freely traded today. The technologies also could make it awkward to move music collections from computer to computer or to a portable music player.
BMG's decision to play along with multiple technologies has at least one unfortunate consequence for consumers: There is not widespread inter-operability among them, so for now, consumers may have to have to use different software or devices to play different songs.
``We will work toward inter-operability,' Conroy said, ``but to suggest that it will be here in the near term is unrealistic.' [Not in portable devices it isn't unrealistic, e.Digital to the rescue and hopefully they will solve the problem with autos as well. ]
Universal Music Group, the second-largest label, also plans to release a significant amount of digital music by June, a spokesman said. Unlike BMG, Universal plans for now to use just one technology, InterTrust's, to protect copyright.
The two other leading record labels -- Sony and EMI -- are also likely to adopt a single copyright-protection technology. Sony has its own secure digital format, while EMI has announced a relationship with Supertracks to develop a digital-distribution system.
BMG won't use every available tool for protecting copyrights -- for example, it won't employ AT&T's A2B technology. Nor will it use the ``digital rights management' software from Liquid Audio of Redwood City, an early entrant in the field -- instead, it is giving Liquid Audio the task of putting all the various pieces from other companies into one system.
Since copyright protection involves managing complex payment systems and tracking usage, the industry has moved toward using third-party ``clearinghouse' companies to handle the administrative work. |
