Perhaps some of us would do well to read the following article from
webnoize again. It is useful to gain a perspective on what is going
on and what may happen in the near future. Personally, I think EPAC
will be a big winner.
April 28, 1999
Feature . industry . formats . delivery . trade
Bottling Digital Music: To MP3 or Not MP3
Within the next 60 days, the digital distribution strategies of the five major music companies -- Bertelsmann AG's BMG Entertainment, EMI Group PLC's EMI Music, Sony Corp.'s Sony Music Entertainment, Seagram Co.'s Universal Music Group and Time Warner Inc.'s Warner Music Group -- will have solidified. What follows is a Webnoize Special Report, providing news about, and analysis of, the public and private maneuvers that will define the music industry's future. [See also Part One of this report, Working At the Speed of Sound: SDMI and the Majors.]
Part Two: The Final Format
Despite the momentum behind the MP3 (MPEG-1 Audio Layer 3) format, the audio format the major labels shall use for secure Internet music distribution will not be MP3. Rather, the MPEG-2 Advanced Audio Coding standard (AAC), another open standard governed by the Moving Picture Experts Group, and the Perceptual Audio Coding format (EPAC), originally from Bell Labs, now owned by Lucent Technologies, are the front runners.
Bottled Water and Tap Water
In all likelihood, the major labels, major consumer electronics companies and major high-tech companies will have adopted the AAC codec (compression/decompression) as the "legitimate" format for saleable, high-quality downloadable music by year's end, relegating its older, more controversial MPEG cousin, MP3, to the role of a promotion-only format.
AAC will establish the "bottled water" of digital music, a certifiably legitimate format that users can purchase as secure, high-fidelity digital music.
Thus, MP3 will earn "tap water" status, used as a promotion-only format. Had MP3 not gained so much ground over the past six months, the major labels would have almost certainly cast MP3 as an illegitimate format, consequently treating major label music files created using the codec (compression/decompression scheme) as pirated music across the board. Such a move might have made it easier to identify the many pirated MP3 files circulating the Internet, and slow the underground movement theoretically stealing thunder from the major labels' own online efforts.
Nonetheless, MP3 continues to gather momentum among Internet users, with the media, and with artists (note recent major label artist defections: Public Enemy signing to Atomic Pop [see 4.16.99 Public Enemy Marketing Downloadable Album Through Atomic Pop]; Alanis Morissette accepting tour support and music promotion from MP3.com [see 4.27.99 MP3.com Partners With Management Company; Sponsoring Morissette/Amos Concert Tour]).
MP3 offers tremendous promotional value, both in the form of unprotected files for the vast user base of Nullsoft's Winamp MP3 software player, or through promotional partnerships with companies like RealNetworks, which is moving quickly into the MP3 space [see 4.12.99 Is April 13 D-Day For RealNetworks? and 4.13.99 RealNetworks Acquires MP3 Software Developer Xing Technology].
By using MP3 as a vehicle for lower-quality promotional releases, the labels can capitalize on the format's growing consumer appeal and avoid the sort of public relations headaches that originally put the Recording Industry Association of America (RIAA) on the defensive with respect to MP3, most notably in its dealings with Diamond Multimedia and MP3.com, two strong advocates of the MP3 format [see 10.27.98 RIAA Denied Preliminary Injunction Against Rio MP3 Player].
AAC or EPAC?
The majors' decision to limit their own MP3 distribution to noncommercial purposes could inspire companies invested in the ecommerce prospects of MP3 to accuse the major labels of trying to snuff out the format. But while the majors will likely enjoy the happy by-product of leaving MP3 by the wayside as a commercial music standard, the truth is that though MP3's near-CD quality is impressive, it is not the best codec available for digital music. Compared to the MPEG-2 technology involved in AAC, MPEG-1 Layer 3 is an old, unsophisticated format.
"Audio researchers have been working on the next new technology for almost ten years, since MP3 was written. Now multiple new solutions -- AAC, Lucent's EPAC, and apparently MS-Audio 4 -- have reached the next level at the same time," says Webnoize technology correspondent Eric Scheirer, an M.I.T. researcher and an editor of the MPEG-4 standard.
"Of these new solutions, only AAC is open. It is a pure MPEG standard; MPEG designed it, did all the testing and it's published by MPEG" [see 1.25.99 Getting the Standard: The Political Side to MPEG Audio].
In 1997, MPEG completed the AAC standard, a method of audio coding that is officially part of the MPEG-2 family, and is incompatible with previous MPEG-1 technology. More recently, AAC has also been integrated into the just-completed MPEG-4 standard, a standard for object-based coding [see MPEG-4: The New Standard]. AAC includes five-channel surround sound coding, and according to Scheirer, produces much better sound than MPEG-1 and MPEG-2 backward compatible coders.
With AAC the majors will have selected a codec that offers not just higher sound quality, but smaller file sizes and versatility in its cross-platform reach. On the production side, most studios are AAC-equipped. On the delivery side, just about any major Internet-based audio delivery system -- RealNetworks' RealPlayer, Microsoft's Windows Media Technologies, Apple's QuickTime, even those currently optimized for MP3 -- can support interchangeablility when it comes to audio codecs. Thus, these solutions can easily be modified to support AAC. One company, AT&T's a2b music, already supports AAC, having built its music delivery system around the format [see 5.98 Webnoize Report (Digitally) Delivering the Goods].
Another selling point for AAC is the relative ease with which it may be licensed.
"A lot of companies have their fingers in the AAC technology pie, and there are marketplace issues that come to play," Scheirer says. "Yet these huge companies -- AT&T, Dolby, Fraunhofer and others -- have agreed to let the AAC Licensing Authority, which is managed by Dolby, handle their patent rights pertaining to AAC. While neither the companies nor the patents are merged, management of the patents is.
"The idea is that it's supposed to be 'one-stop shopping' for licensing, so that one doesn't have to run around and license from 30 different companies," Scheirer adds.
Potential licensees -- namely the major record companies -- could feel quite comfortable dealing with Dolby Corp. as the central licensing authority because the company has a familiar face in the audio world. And since AAC is much more tightly held compared to MP3 -- AAC is more expensive to license, and the rules governing access to AAC encoders and decoders are considerably more stringent -- both the content rights holders and the technology rights holders would stay happy (Dolby has already started cracking down on folks possessing unlicensed AAC encoders). Greater control means more focused points of demand for players and encoders, which translates into greater protection of both content and profits.
In contrast, record company executives have both publicly and privately voiced concern with using closed standards held by individual companies, particularly in the case of Microsoft, which unveiled its MS-Audio format earlier this month [see 4.14.99 Microsoft Unveils MS-Audio Proprietary Music Delivery Format and 4.12.99 Is April 13 D-Day for RealNetworks?].
SDMI Executive Director Dr. Leonardo Chiariglione, who organized the Motion Picture Experts Group (MPEG) in 1988 and is passionate about the need for public testing, also expressed skepticism over proprietary technologies, such as Microsoft's MS-Audio 4 and Lucent's EPAC.
"Whoever produces new coding schemes, if they want to be credible, should carry out the same objective tests and publish them," Chiariglione said. "[Not doing so] does not serve the needs of the consumers, and does not serve the needs of people putting content on the Web."
Vying for industry attention, Lucent began making its mark with EPAC earlier this year. In January, the company announced its audio format would be supported by RealNetworks' RealSystem G2. This announcement is significant given Real's upcoming entry into the digital downloading arena, as well as its recently announced collaboration with IBM on IBM's Electronic Music Management System, part of a total delivery solution developed by a corporate entity called "4C" [RealNetworks, IBM Digital Delivery Provides Hint of May Product Launch and RealNetworks Acquires MP3 Software Developer Xing Technology].
4C teams International Business Machines Corp. (IBM), Intel Corp., Matsushita Electric Industrial Co. and Toshiba Corp., and is the most likely solution for secure Internet music delivery to be adopted by the major labels [see 4.27.99 Part One: Working At the Speed of Sound: SDMI and the Majors].
Lucent licensed EPAC to a Netherlands-based venture, Music on Demand International BV, for use in an Internet music distribution system around the same time as the RealNetworks deal. The company also began promoting its technology as a royalty-free format for digital radio [see 1.14.99 Lucent's EPAC Impacting RealNetworks G2, Digital Radio, Overseas Music Venture]
In addition to these maneuvers, Lucent has been working with e.Digital Corporation to create a solid-state, CD-quality music player that uses EPAC alongside e.Digital's patented MicroOS Audio file management system [see 4.21.99 Lucent, e.Digital Advancing PAC-Compliant Portable Device and 2.19.99 Lucent, e.Digital Developing Solid-State Music Player].
Lucent's public and private jockeying, combined with the quality of EPAC, could put the format in the running with AAC as the primary, legitimate codec of choice by the major record companies.
But technically speaking, what are the major differences between AAC and EPAC? Both offer exceptional sound quality for lossy compression formats. EPAC encodes much faster than AAC, decodes slower than AAC, and has a compression ratio of 13:1, while offing very good sound quality. AAC decodes very quickly, has a compression ratio of 22:1, and offers exceptional sound quality, but the encoding process takes significantly longer -- hours to encode a 5-minute song.
In the interests of the majors, an encoding process that takes so long is not necessarily a bad thing. What better way to deter piracy? Not only would encoding tools be hard to acquire, but the time-intensive process would likely deter all but the most aggressive, AAC-dedicated digital pirates.
Given AAC's advantages -- an open standard with impressive sound quality and compression rates -- it seems unlikely Lucent could supplant AAC with EPAC as the labels' first choice. (It is worth mentioning that, since the architecture for secure digital music solution being used will be interoperable, both AAC and EPAC could be used; however, a situation where two premiere formats are supported seems far less likely from a logistic standpoint).
MP3's Ultimate Fate.
Assuming the major labels could, in fact, dictate the fate of MP3, they would most likely allow one of two scenarios: let MP3 become the online music industry's version of the cassette single, or write off the codec as an out-and-out illegitimate format for major label music, to be hunted down and killed.
But the Internet is not a medium that can be molded to a commercial agenda. This is why MP3 continues to proliferate. The freely available, near-CD quality codec has gained a foothold among legitimate audio delivery industry players, in addition to a loyal consumer base. These factors guarantee that the MP3 format will never truly die, and the MP3 movement will continue to apply pressure to the music marketplace, ultimately acting as a contributing factor to the R&D forces of competition, and more crucially, in the evolution of the label-artist relationship.
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