To: IRVINESULLY who wrote (68 ) 12/15/1998 8:38:00 AM From: sandstuff Respond to of 1431
Record Industry Leaders Eye Digital Standard By Sue Zeidler Reuters LOS ANGELES (Dec. 15) - Leaders of the $40 billion global music market are expected to announce on Tuesday a plan to seek a standard for downloading music from the Internet in a move to ward off digital piracy, industry sources said. The initiative comes as a battle rages between the industry's giant conglomerates and Diamond Multimedia Systems Inc. over a device called the Rio PMP300, which uses a controversial new format called MP3 that allows computer users to download free CD-quality songs quickly from the Internet. In many cases, however, the technology is used to make pirate copies of CDs. Diamond Multimedia this month countersued the RIAA, which had earlier sued Diamond alleging the RIO violated the 1992 Audio Home Recording Act as it allowed music to be replayed without paying artist royalties. At issue in the controversy is a desire by record companies to retain their control over global music distribution as new technologies threaten to shake the foundation of the business. The Recording Industry Association of America, a trade association for the music industry, said it would hold a news conference in New York on Tuesday, featuring the chiefs of five of the world's biggest record companies. The association said on Monday it was planning to announce a precedent-setting, worldwide initiative to address new digital music opportunities, but gave no further details. ''They're going to explore downloading systems to determine which is going to be the industry standard for secure downloading,'' said one industry executive requesting anonymity. While the MP3 format is clearly not expected to emerge as the conglomerates' choice for a safe and secure standard, other candidates include encrypted technology created by Redwood City, Calif.-based Liquid Audio and AT&T Corp., which has a technology known as a2b, which help battle piracy because the files cannot be copied. ''The fact they're looking into it is interesting, but it's like rearranging deck chairs on the Titanic,'' said Bruce Haring, author of ''Off the Charts,'' a book on the music business, adding that MP3 is currently the most popular downloading system on the Internet. ''Just because certain companies agree there's a standard, it doesn't mean that artists and consumers will agree,'' Haring said. In fact today, punk-pop star Billy Idol announced he would use the MP3.com Web site to reach his fans with two new singles. ''I'm delighted we could facilitate this for Billy Idol. Projects like these validate Internet-focused music marketing and further validate the ability MP3 has for an artist to reach their audience directly,'' said Michael Robertson, the CEO of the MP3.com Web site. ''The majors may not like MP3, but any system they are likely to select will be vulnerable to hacking,'' Haring also noted. Many industry experts believe that MP3 could well be one of the biggest changes in the music business, a prospect that is causing fear throughout record industry executive suites. According to industry experts, the MP3.com Web site is visited by about 150,000 visitors daily, about half of which download a free song with each visit. The site also touts new products like Diamond Multimedia's Rio player. The press conference on Tuesday will feature all the big hitters, including Strauss Zelnick, president and CEO of Bertelsmann AG's BMG Entertainment; Ken Berry, president of EMI Group Plc's EMI Recorded Music; Thomas Mottola, CEO of Sony Corp's Sony Music Entertainment; Doug Morris, CEO of Seagram Co. Ltd.'s Universal Music Group; and Bob Daly and Terry Semel, chairmen and and co-CEOs of Time Warner Inc.'s Warner Bros. and Warner Music Group. REUTERS Reut19:53 12-14-98