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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Savant who wrote (3639)	5/4/1999 3:57:00 PM
From: R. Bond	Read Replies (1) \| Respond to of 18366

Savant, There's a rumor going around that next year's federal budget will include hand-held Internet music downloading devices under Medicare!! Back up the truck, man!! <<ggg>> Cheers, Bond P.S. Check out the Lawrence Welk website - www.bubblemachine.com.

To: Savant who wrote (3639)	5/4/1999 8:29:00 PM
From: chris431	Read Replies (2) \| Respond to of 18366

First, it's long, but it's relevant....maybe not toward the end (AAC) "I remember not too many months ago, that the young people I spoke to hadn't even heard of MP3. Now, of course, it's the buzz." I have current friends who hadn't heard of MP3 even a couple of weeks ago (23-27). These include educated individuals that link into a nice network almost everyday, download email & browse the web. While MP3 may be the buzz, the buzz captures the very market you listed...."young people" with time to find illegal material. While I find it convenient, my friends simply don't care to take the time to find the music, even if it is free. Why is MP3 now the buzz (although I'd argue MP3 has been popular among techies for well over a year)? Because it's free! I love reading the articles which cover the students who are either connected b/c of school or are connected b/c of university networks. Most demonstrate that MP3 is the buzz b/c these people no longer buy new CDs. Why? It's free. (yes, I'm reiterating my opinions this evening....I made a longer post about this topic before EDIG started the run). Me, you, & all my friends....let's each by a CD & trade via MP3....wooohhooo....it's free. Blatant piracy is why MP3 is popular and will be the major reason why introducing new secure formats will be difficult. So as to save words: 1. People who like MP3 like it b/c it allows easy piracy & access 2. People who have made MP3 a success are usually relatively young 3. Relatively young people love Piracy (as a person ages, they lose time to find pirated material & can earn incomes where buying a $40 game is no longer a big deal vs. a younger person flipping burgers at McDonalds) CONCLUSION: 4. Audience most likely to make online distribution a success in the NEAR TERM are those most likely to avoid formats which require the user to purchase the music & formats which prevent piracy thereafter. Why would I choose to buy a single for $1 via EPAC when I can download that same MP3 for free? One reason....I don't have time to find illegal material. This is significant b/c those who have pushed MP3 to make it what it is are young (high school & undergrad college). Young people have time on their hands. As such, those people who are most likely to push a format are able to spend the time to go around a legitimate format and opt for the cheaper illegal alternative. Secondly, who is AAC kidding. Did that article say that limiting the access to the encoder & taking a long duration to encoding would help make AAC attractive? I sure hope that the market has billions of dollars to sit around while they await adoption of AAC all the while buying out all the competition that will certainly be more attractive. Part of this market is not just the ability to download music but also the ability to archive the music we enjoy. An important aspect of this "digital" revolution is our ability to transport what we already own to the new format. The consumer has never enjoyed having to buy their favorites on a new format. Yet, they have. The likely reason though is that their is an increase in quality. As we all know, the current digital formats do not offer this increase in quality. Rather, they tell you to go out & buy an expensive device so that you can buy lower quality material & wait 45 minutes to download it. And with AAC, it sound as though they are telling the consumer that they cannot enjoy the first time in which the consumer can readily port over their current CDs to a new format (although it's not better in quality, the conversion is free) rather than having to buy anew. This is not a good signal. People are more likely to stick to DVD Audio if that is the case. The attractiveness of the new delivery mechanism is not just delivery, but our ability to port over what we already have and then store it on one device (ie. 500 cd collection on a cheap HD). I was actually appalled & the best way for you to lose a customer is to thumb your nose at them....which is exactly what AAC may be attempting to do. Notwithstanding the AAC discussion above, this can & likely will be overcome. While the "busier" group of individuals may not be likely to be the ones to push an up-coming technology, they are likely to adopt a technology once it has been implemented & is mainstream. And, they are a huge market. It is thus important that the format war be short in duration. The "busier" group of people are less likely to adopt a format which is derived from an item which they may already be to "busy" to care to deal with when they just want to kick back and listen or purchase music (the PC). Why spend your scarce time widdling through many online formats which take a long time to download, which are not compatible and which are inferior to that $12 CD that you can pick up on the way to work? But, if they can be insured of uniformity & efficient access, they will adopt as the pipeline increases. Wading through formats is always for those very interested in such (ie. audiophiles with new mediums, VCR/BETA war, etc.) And, in this medium that means younger techies (or the youth in general since they tend to be more computer literate)....the same ones described above who are likely to go with the piratable format. If a format can be solidified or if it can presented in an intelligible manner (very unlikely given the introduction of DVD/DIVX suggests) not confusing customers, unsecure MP3 will fall to the wayside just as the WAREZ scene has. This aspect would be different if we were a computer literate world, but unfortunately I don't think we are. Of course, computer access is an issue but one which will not be addressed. We've got a long way to go. Chris