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Technology Stocks : Liquid Audio Inc - (Nasdaq- LQID) -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (491)	11/3/1999 9:38:00 PM
From: craig crawford	Respond to of 674

>> Are you trying to tell us that we will never have to pay for music again? << Hi Mary, Well, in a perfect world everyone would pay for their music. I'm not saying everyone will download music illegally, there will always be honest people who pay for their entertainment. But it is possible (even easy) to download music for free. I'm not talking about no-name bands that no one's ever heard of, I am saying you can go download the latest Britney Spears, Backstreet Boys, Mariah Carey, etc. right now. It is virtually impossible to get caught--the only thing that music pirates must face is their conscience. So I think that is something to consider when evaluating this company's prospects. >> Or are you just saying that Liquid Audio's technology is not up to par - not able to do what it is intended to do? << The audio compression technology, (licensed from Fraunhofer) is top-notch. It is superior to MP3 at similar bitrates. (i.e. smaller files to download, better sound). The copy protection side of their technology is kind of esoteric to get into, (with digital watermarks and all that), but basically it is designed to prevent people from purchasing a Liquid Audio track and then giving it away to all their friends for free. The copy protection will make it more difficult to pirate, but it won't be able to completely prevent it. People will more likely take CD's that have been purchased, and encode their own Liquid Audio tracks without any copy-protection just the way MP3's are done now. Then they will pass them around as freely as they please. Some of the analogies people make are not valid. People try to use the argument that people pirate Microsoft software, yet it doesn't seem to be hurting too much financially. Well, there are several differences. First of all, Microsoft derives a large portion of their software sales from OEM sales. Companies like DELL and CPQ pay Microsoft a license fee for every machine they ship with Windows on it. It is passed on to the consumer--incorporated into the price of the PC you buy from them. Furthermore, a lot of the off-the-shelf software sold by MSFT and others is purchased by businesses. I think businesses are far more likely to pay for the use of their software, they don't have much choice. It's not worth the risk to license one copy of Windows and illegally install it on all of the machines in your company. All it takes is one disgruntled employee to turn you in and your business is in some serious hot water. Not only that, some software counterfeiters/pirates are discouraged by having to print up stacks of CD's and risk being caught with a whole warehouse full of illegal stuff. Lots of software is large and unwieldy to send over the net. Music pirates don't have to deal with any of this. They are consumers for the most part, not businesses. They don't face the same scrutiny and repercussions that businesses must face. You can illegally download a song in the privacy of your home in about a minute or two with a cable modem or DSL. No one can catch you. People that post MP3's on a website can be caught, but smart MP3 traders don't use things like the web to download MP3's.