DSNY - Financial Post Article Today:
Musicians get a cut out of MP3
By Shannon Sutherland
Financial Post
Making sure MP3s make money for the right people is big business. Musicians, record labels and distributors all want their fair share of the digital music dollar, and a Vancouver company is cashing in on this market.
Destiny Media Technologies Inc.'s MPE technology is a media distribution system with built-in digital rights management, e-commerce and visual display.
MPE files track which Web sites were used to distribute them, ensuring the distributor gets paid for any sales, even if files are shared, since MPE files are keyed to each user's individual hard drive.
"We have created a solution and a set of tools to distribute music that will ensure everybody gets paid and gets protection from unauthorized duplication," says Ed Kolic, chief operating officer for Destiny Multimedia. "This gives the industry the power to securely distribute music on the Internet."
Finding a way to harness digital music is becoming increasingly important as the public warms to the technology.
An Angus Reid Group Inc. poll earlier this year found that almost 40% of online Canadian households had downloaded MP3 files in the previous six months.
"This [survey] demonstrates that MP3 is not going to go away, contrary to what record labels and people in the recording industry might hope," says Steve Mossop, senior vice-president of Angus Reid. "[Those in the recording industry] are going to have to find a way to make it work."
The Angus Reid survey says only 7% of Canadians have uploaded MP3 files to the Internet to share with others -- infringing on copyright laws in the process. But that low number could be misleading, says Mr. Mossop.
He says when people say they use it mostly for legitimate purposes, they are probably not being entirely honest, since many people do not want to admit to any wrongdoing, even to a pollster.
The statistics seem to bode well for Destiny Multimedia, although the company has a way to go to corner the digital music market. Major U.S. players such as InterTrust Technologies Corp. and Liquid Audio Inc. are carving out a significant niche in the market, too.
What could give Destiny an edge is its embedded players. MPE files do not rely on an external player, which means they automatically play when they are opened.
"We think it is extremely important that if the digital music distribution industry is going to be successful, it has to be easy for the customers," says Mr. Kolic.
"The more steps you put in front of someone, the more frustrated they're going to get. We don't make you download the player, and that removes a potential barrier."
That is what attracted the attention of ChoiceRadio.com, a San Francisco-based digital music distribution company with more than 700,000 monthly user sessions a month.
"It's a dynamic solution that allows us to distribute music in an open format and earn revenue that we would otherwise be unable to capture," says Val Starr, president of ChoiceRadio.com
Although the music industry is the target market for Destiny right now, MPE could be used in the film, digital publishing and corporate communications industries.
Financial Post |
