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Thursday, 04/12/2001 2:23:01 PM

Thursday, April 12, 2001 2:23:01 PM

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wall street journal
Technology industry aims
to render MP3 obsolete

Consumers urged to download music using other formats
By Ted Bridis
THE WALL STREET JOURNAL

April 12 MP3, a popular format for
downloading music from the Web, is
encountering competitive pressure as leading technology companies such as
Microsoft Corp. work to subtly wean consumers away from the technology

THESE
COMPANIES, which have the music industrys blessing, are encouraging
those who download music to use new proprietary software formats that make
the audio sound significantly better but also make it harder to share
copyright-protected songs.
(MSNBC is a Microsoft-NBC joint venture.)
Microsoft, for example, plans to severely limit the quality of music that
can be recorded as an MP3 file using software built into the next version of
its personal-computer operating system, Windows XP. But music recorded in
the Redmond, Wash., software companys own format, called Windows Media
Audio, will sound clearer and require far less storage space on a computer.
RealNetworks Inc. of Seattle also is encouraging consumers to use
proprietary software formats, such as its Real Audio 8, though RealNetworks
listening software can accommodate a variety of different formats, including
MP3 and Microsofts. Other formats gaining popularity are based on the
relatively new Advanced Audio Codec created by AT&T Corp. of New York, Dolby
Laboratories Inc. of San Francisco, Sony Corp. of Japan, and the Fraunhofer
Institut Integrierte Schaltungen in Germany.

Why the eagerness to move
consumers away from MP3, a format many people know
from using Napster, the controversial Internet music-sharing service?
All the
new music-software formats include technology known as digital-rights
management, which can lock copyright-protected songs and make it harder for
consumers to share that music illegally. As the largest recording labels
begin selling music online, they generally have shunned MP3, which has been
commonly regarded as an unprotected format, says Cary Sherman, senior vice
president and general counsel of the Recording Industry Association of
America.
The industry doesnt want [MP3] pushed, and Microsoft and RealNetworks
dont
want it pushed. The consumer is going to eat what hes given, says David
Farber, the former chief technologist at the Federal Communications
Commission.
It isnt clear how successful the industry will be in its efforts to
make MP3
files as obsolete as eight-track tapes, because of the sheer volume of music
already available on the Internet as MP3 files much of which is available
illegally. All the major software and hardware devices support
MP3 music, even
as vendors try to popularize rival formats.
Its not an easy job, says Andrea
Cook Fleming, a vice president at Liquid
Audio Inc., a Redwood City, Calif., company that offers music via the Web in
a different format. This is a big mess to clean up. Its going to have to be
attacked on many fronts.
Even Mr. Sherman of the recording association, which
has fought a pitched
battle against Napster Inc.s sharing of MP3 files, concedes that he expects
the format to be around for some time.
Still, experts said Microsofts
increasingly aggressive efforts to popularize
its proprietary audio format along with legal difficulties facing Napster
could stem MP3s popularity. They cite Microsofts vast resources and the
broad reach of its Windows operating system. Microsoft, for example, has
been giving away free licenses to other companies to use its audio
technology, which now is supported along with MP3 by major hand-held music
players.

Certainly, when Microsoft decides to put something in their
operating-system
support, it becomes the standard, says Mr. Farber, who testified for the
government during the Microsoft antitrust trial. The average consumer will
use what comes on the disc when he buys the machine. Theyre very effective
in that way.
Under Microsofts new restrictions which prevent its built-in
software from
recording MP3 files at fidelity rates higher than 56 kilobits per second
MP3 music sounds like somebody in a phone booth underwater, says P.J.
McNealy, an analyst who researches Internet audio issues for Gartner Inc. in
Stamford, Conn. (Existing versions of Microsofts audio software dont allow
consumers to record music as MP3 files of any quality.)
The new restrictions in
Windows XP wont prevent other vendors software
applications from recording MP3 music at a higher fidelity, but early
testers of beta versions of Windows XP already complain that the most
popular MP3 recording applications which compete with Microsofts format
dont seem to function properly, apparently because of changes Microsoft made
to how data are written on CD-ROMs under Windows XP. Microsoft says that
while other software vendors products may not be optimized to run with
Windows XP, those products should run acceptably with the operating system.
Microsoft said its decision not to include built-in support for recording
better-sounding MP3 music also avoids it having to pay license fees required
by Thomson Multimedia SA and the Fraunhofer Institut, which collect at least
$2.50 from software vendors for each copy of recording software based on
their MP3 technology.
We think at the end of the day, consumers dont really
care what format they
[record] in, said Dave Fester, a general manager in Microsofts Digital Media
Division. He maintains that despite the new restrictions, Microsoft will
make sure its software does a great job of making sure our player will play
back MP3, or put it on a CD. But for new content that users might want to
create, he says there are clear advantages to not using MP3.
Still, even MP3s
critics concede it might be here to stay. Its a little like
the VHS tape, says Steve Banfield, general manager at RealNetworks. DVD is
great, but VHS is ubiquitous and it isnt going away anytime soon.
Copyright ©
2001 Dow Jones & Company, Inc.


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