Music giants to enlist high-tech in MP3 battle

By MICHAEL FOREMAN

Internet site Napster may have won a reprieve from closure but the recording industry is preparing to enlist technology in its fight against what it perceives as the MP3 threat.

According to Wired magazine, 20 million MP3 files are now downloaded every day but the major record companies have so far been left out of the party.

Internet market research firm Jupiter Communications reckons that revenue received in the United States from digital-delivered music last year was zero, and will reach only a measly $US9 million ($19 million) this year.

Last year, the Recording Industry Association of America decided to act.

At the same time as it launched a series of lawsuits against MP3 sites such as Napster, the association also helped to establish the Secure Digital Music Initiative (SDMI). This is a grand alliance of 200 companies, including IT names such as IBM, Microsoft and Compaq, and consumer electronics manufacturers such as Sony, Philips, and Samsung as well as the big five record companies.

SDMI's stated goal is "to develop a voluntary, open framework for playing, storing, and distributing digital music in a protected form."

In practice this means developing encryption technology that will prevent unauthorised users from playing digital music files, and introducing screening software into MP3 players to filter out pirated files obtained from sites such as Napster.

Eventually, SDMI expects that compliant players will be able to recognise legitimate music files by embedded digital watermarks, which will contain usage rights. Users will be limited to making no more than three copies of legally obtained tracks for their personal use, and record companies will be able to create files that will play only from a certain date or for a fixed period.

But SDMI's strategy must first overcome a couple of snags.

The first problem is that in the absence of suitable encryption and filtering technology, SDMI has been forced to launch its scheme in two phases.

Current Phase 1 SDMI software, as incorporated into recently launched players such as Philips' Rush or the Sony "Memory Stick" Walkman, is simply a trigger for Phase 2 software.

The idea is that as users download SDMI-protected music (as and when the record companies release it), compliant MP3 player systems will request to be upgraded to Phase 2 screening. If the user elects not to upgrade, the player will continue to function as before, but it will not play SDMI music.

The SDMI is still assessing offers to supply the Phase 2 software. But when it arrives, and record companies begin to make content available, SDMI will face its acid test. Will consumers be willing to play the game and upgrade, or will they show resistance to SDMI-compliant players in the first place?

Meanwhile, at least two SDMI members have already launched their own, alternative proprietary music protection systems.

Sony, for example, has already incorporated OpenMG copyright protection technology into its MP3 player systems, which allows recording and playback of digital music data on a personal computer but prevents files from being distributed on the internet.

While Sony says OpenMG supports SDMI Phase 1, this seems a somewhat hollow statement as OpenMG already provides several functions Phase 2 promises.

Sony is developing OpenMG in collaboration with IBM, which announced its own Electronic Media Management System (EMMS) last year.

While OpenMG files are compatible with EMMS, IBM has its eye fixed on the e-commerce potential of digital music, and will concentrate on the sale and secure downloading of music at the record company end.

Microsoft is another SDMI member that is also steering its own course with Windows Media Manager 7, launched last month. Described as an "end-to-end digital rights management system," Media Manager 7 will protect videos as well as music files in an encrypted file format. Each file may contain a URL where a user may obtain a digital "key" to play the file. Microsoft says that the advantage of this approach is that music files can be distributed freely over the net, for example sent to friends by e-mail, but played only by those authorised to do so.

Microsoft's system has obvious appeal to content providers and the company says the Windows Media Manager has already been adopted by four of the big five record companies.

For consumers, Microsoft says its compression technology will allow twice the music to be stored on the same disk space as MP3 files, and argues that record companies will make more content available if they know it is secure.

Whether this will provide enough of a carrot to draw music lovers from the likes of Napster and Gnutella remains to be seen.