WSJ weighs in on MSFT v. RNWK in the MP3 "Holy War"
Thanks to SI poster Nicholas Thompson for the article.
Note on RNWK's acquisition of Xing: In acquiring Xing for $75mm, RNWK's buying Xing's proprietary technology and utilities for content creators; Xing performs *file conversion* to MP3 format. Its claim to fame is that it does this *quickly*. On the other hand, it does not apparently create a full-resolution (let's say, truly CD-quality) MP3 file. Some of my elves are saying Xing's MP3 implementation is fairly crude and doesn't really do justice to the MP3 format. MSFT may have a point. More on this in future posts.
Comments?
BAM
P.S. To Chris B.: What do you know about any of this?
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Microsoft, RealNetworks Raise Stakes
In Battle for Digital Delivery of Music
By DAVID BANK and NICK WINGFIELD
Staff Reporters of THE WALL STREET JOURNAL
Microsoft Corp. and RealNetworks Inc. raised the stakes Tuesday in the growing battle to dominate the market for digital delivery of music.
RealNetworks, which has a commanding share of the market for "streaming" media technology, embraced the popular MP3 technology for distributing high-fidelity music on the Internet by agreeing to acquire closely held Xing Technology Corp. (www.xingtech.com) for as much as $75 million in stock.
RealNetworks, IBM to Deliver Music on Internet (April 12)
Company Profile: Microsoft
Microsoft, which is mounting an aggressive challenge to RealNetworks, announced its own alternative to MP3, which it said will offer both higher quality sound and faster downloads. But the software giant, frustrated in its efforts to attract recording stars and major labels to its new format, mustered only a few independent artists and labels for its launch event in Los Angeles Tuesday night.
Streaming technology enables Internet users to listen to sound files as they are downloading. That saves time, because the user doesn't have to wait for the complete download to hear the song, but it limits audio quality. MP3, in contrast, is being used by millions of fans on the Internet to download and store music of near-compact-disk quality on their computers. Much of the traffic in MP3 files has been in violation of copyright protections, generating concern among many recording industry executives.
Indeed, Microsoft and RealNetworks are waging the digital delivery battle on two fronts: courting the millions of Internet users who are embracing the new music technology while trying to appease music-industry concerns over piracy.
Microsoft said the new version of its Media Player, which is available in a beta, or test version, will include a "rights manager" to ensure people have permission to use the digital content. When a music file is opened, the software checks a database or related Web site to determine whether the user has the right to play it. At that point, the publisher can charge for the cut, require registration, or impose other conditions.
Will Poole, director of business development in Microsoft's streaming media division, said neither Microsoft's nor other systems are foolproof in preventing copying. But, he said, "People inherently want to be honest. If they are offered good solutions, and we make it easy, people will do it."
RealNetworks this week agreed to share technology with International Business Machines Corp., which has received high marks from media executives for its sensitivity to concerns about protecting copyrighted material. Rob Glaser, chief executive of RealNetworks, said his company is well-prepared to protect its lead over Microsoft.
"A fundamental competitive advantage we have is that everything we do is focused on digital delivery," Mr. Glaser said in an interview. "They see it as an adjunct to the personal computer and they're missing the boat."
Mr. Poole said hundreds of music cuts will be available in the company's new format within a few months. Microsoft announced deals with more than a dozen music Web sites and independent record producers, but no major labels.
"Neither we nor anybody else who is doing Internet delivery have major labels committed," Mr. Poole said. "They have very large and complex businesses and it's taking them longer to figure out how to integrate these new opportunities and new risks into their business."
Jim Allchin, a Microsoft senior vice president and amateur guitar player who was scheduled to join blues legend Buddy Guy during Microsoft's launch party Tuesday night, said Microsoft's new format will use improved performance to lure consumers to a format more acceptable to the music industry. Microsoft claims MSAudio will deliver MP3-level quality in half the download time.
"Every time there's a huge advance perceptible to the ear, it takes off," Mr. Allchin said.
Some analysts believe the rival audio technologies will lead to a format battle with only one or two winners, possibly resulting in a showdown similar to the one in VCRs in the 1980s. "There will be a VHS-Beta war," said Robert Martin, an analyst at Friedman, Billings, Ramsey & Co. "A couple formats will survive, maybe a couple will combine." |
