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

To: Walter Morton who wrote (621)	6/9/2000 10:34:00 AM
From: R Hamilton	Read Replies (1) \| Respond to of 674

interesting article, fwiw Source: Angry Coffee angrycoffee.com Liquid Audio Player 5.0 Preview (May 18, 2000) I have to confess that I'm a little surprised. After all this time, among all the names in the music downloading derby, I didn't expect that the Liquid Audio 5.0 beta would make as much sense as it does. It wasn't that long ago that Liquid Audio was trying to sell servers to record companies and its software didn't support mp3-compressed files. After a resounding, "buh?" from the music world, a year or so ago Liquid steered their boat into a digital music service that is at least making an attempt to be neutral -- and perhaps most importantly they're trying to make a technology that provides useful e-commerce answers for people who put music on the Net. So let's take a look at the player first. And then we'll get into the really geeky stuff: retail. Simply put, if you download the Liquid Player 5.0 Preview, you should be able to open all kinds of music files and listen to them from that player and you won't be stealing from anybody. The big idea is that Liquid will be interoperable in two important ways. It will eventually support all sorts of codecs -- including mp3, Windows Media, in addition to Dolby Digital AC-3 and AAC; and the company will support a whole end-to-end digital music distribution system. It's the neutrality horse in an exceedingly wacky horserace, and it's in the lead...It's only the far-turn, mind you, but it's in the lead. If downloadable digital music evolves into a real industry and consumers get used to buying music online, the latest Liquid player has some compelling features. The tracklist lets you arrange lists of Liquid files and mp3 files niftily. And yes, Liquid's done a deal so that there's a plug-in dowloadable from the RealNetworks site for the G2. There are also clever ways of downloading artwork and album notes and the like. By far the most handy is the fact that you can give the files real names that make sense to you instead of the bizarre filenames affixed to the files when you downloaded them. Besides the latest iteration's little extras like keeping your files organized, you will also be able to save Liquid files on a bunch of hardware devices. You can already download music to your portable mp3 player, but Liquid has a pretty good idea of an easy way for you to pay for it, too, and the industry as a whole is eager to distribute music and keep track of it. Whatever you think of distributed music networks, like Napster and Gnutella and the like, the technology behind Liquid Audio's strategic position within the heavily-consolidated music industry is actually pretty novel. If you have never been a big fan of digital certificates (or you've been utterly baffled by them, for that matter), Liquid Player has a one user, one machine deal that is pretty easy. If you choose the lightweight "FastTrack Security" option, Liquid binds one song to one machine; if you download a bunch of music on a bunch of different machines, you can use their "Passport" option. I suppose the Passport will allow you to buy music on your mp3 belt device at the mall, on your PC at work, and on your machine at home, and all the while organize your playlists no matter in what formats or codecs the music comes in. I'm guessing the goal is that some day in the future we'll look back on these crazy, mixed-up days and shake our heads with mirth at how retail music was distributed -- kind of the same way we feel when we watch old film of telephone operators on rollerskates plugging and unplugging phone exchanges. Hey, don't laugh. At the time, the rollerskates were a damn fine strategy. Behind the scenes, and very rapidly, a bunch of companies have developed a bunch of ways to protect security for upcoming digital music distribution. There are companies that provide something called Digital Rights Management, or DRMs, who are roughly analogous to current publishing rights organizations like BMI or ASCAP. These companies (InterTrust is one) report to other companies called Clearinghouses Reciprical is one), who -- yeah, I know -- act as clearinghouses, keeping track of all the songs that are sold and making sure everybody gets paid. Liquid Audio seems to be in a smart spot. Liquid has positioned themselves in such a way that they provide a good way for people to buy music, and they provide an overall service to the record companies and retailers, neither of whom want to deal with some potentially painful and costly e-commerce logistics. Liquid will integrate the alphabet soup of the DRMs and the clearinghouses in this future digital music space -- and remember: it is alphabet soup to a big and important chunk of folks in the music industry. There's been a lot written (rightly so) about the moral and legal issues around the commerce side of digital music distribution. But another thing that could be slowing online music distribution could really be boring old logistics. Keeping track of song downloads is complicated, it's complicated for consumers and it's complicated for record companies. In a strictly logistical sense, piracy is simple; there's no paper trail of publishing royalties or mechanicals and whatnot for songwriters or record companies or publishers to keep track of; you aren't paying anybody, so you can pretty much toss the spreadsheets of who wrote what...and by the way what's the current mailing address for your third drummer, again? By focusing on the logistical problems in the digital music space race, Liquid Audio's back-end strategy as it's executed in the company's new player might just give it the lead.