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

To: Frank Brisebois who wrote (3851)	5/7/1999 9:03:00 PM
From: bob	Read Replies (3) \| Respond to of 18366

BMG Chief Says Digital Cards to Begin Replacing CDs in 2 Years New York, May 7 (Bloomberg) -- Compact discs will soon go the way of the eight-track tape as small digital cards become the next big thing for distributing music, said Strauss Zelnick, chief of BMG Entertainment, one of the five big record companies. In about two to three years, these ''flash memory'' devices, smaller than a credit card, will be sold to consumers for use in portable players, computers and other devices that play music, Zelnick told the Bloomberg Forum. The cards will be able to store as much music as a conventional CD. The music could be prerecorded onto the card or downloaded to it digitally by the owner, said Zelnick, chief executive of the music division owned by Germany's Bertelsmann AG, the world's third-largest media company. ''They will be a new format much the same way CDs were a new format,'' said Zelnick, who doesn't foresee CDs disappearing altogether for at least 15 or 20 years. BMG, through its online alliance with Seagram Co.'s Universal Music Group, may begin digital distribution of music over the Internet ''in the next year or so,'' Zelnick said. ''I think, assuming there are (secure) standards in place, it could be soon,'' he said. The executive made his comments as the five major music distributors -- BMG, Universal, Time Warner Inc.'s Warner Music Group, Sony Corp.'s Sony Music Entertainment and EMI Group Plc -- are rushing to develop software to distribute music online that will protect their copyrights and royalties. The industry has been working to counter piracy on the Internet, where existing technology, notably a software format known as MP3, lets people download CD-quality music for free. 'Ideal Next Step' ''Flash cards are the ideal next step in music. Consumers will be able to carry something around that's the size of a postage stamp,'' Forrester Research Inc. analyst Mark Hardie said. ''The audio CD has outlived its useful life.'' In the near term, there will be huge growth in the online sales of compact discs, said Zelnick, who cited analysts' estimates that the market will grow to several billion dollars in the next couple years from about $200 million in 1998. Still, traditional ''retail isn't going away. People like to go out and shop,'' Zelnick said. He also repeated that the Secure Digital Music Initiative, a group of about 150 companies from the music and technology industries, is likely to develop a secure standard by next month. The group hopes the standard will be incorporated in portable music players that hit the market by the year-end holiday season.