Recording association rallies industry around digital-music plan

Thursday, December 17, 1998

Attempting to stave off music piracy on the Internet, the world's largest recording companies, some major technology firms and the Recording Industry Association of America have banded together this week in hopes of creating a standard digital format to protect music copyrights online.

Recording officials contend that current digital formats allow rampant unauthorized copying, thus depriving musicians and companies of royalties from the music. They hope to create a new technology in which music files could be encrypted for use only with systems designed to play the format.

Work on the proposed Secure Digital Music Initiative is to begin early next year. The coalition, which includes representatives from BMG Entertainment, EMI Recorded Music and Sony Music Entertainment, hopes to have a digital-music standard in place before the 1999 holiday season.

“This initiative is about the technology community developing an open security system that promotes compatible products in a competitive marketplace,” said RIAA President Hilary Rosen during a news conference on Tuesday.

“It's not about the recording industry imposing a standard on technology companies,” Rosen said. “We'll simply provide guidance on the needs of our industry and its customers.”

But some technology companies and online music sites contend the industry already has a digital music standard in the popular MP3, a format that compresses and stores audio files so they can be played on computers or on newly developed hand-held players.

With the Secure Digital Music Initiative, RIAA and leading recording companies hope to develop a computer format that rivals MP3, which also allows computer users to download music from the Internet.

Rosen said: “It will encourage artists, producers, songwriters, publishers, recording companies and others in the music industry to make their music available in new ways, knowing that it will be more secure.”

Although RIAA officials say they don't consider the MP3 format itself to be illegal, they claim many people misuse the technology by selling pirated versions of popular songs.

RIAA filed a lawsuit against Diamond Multimedia last October to halt sales of the Rio, a hand-held device that enables users to play music in the MP3 format without a computer.

But Diamond Multimedia and owners of MP3 Web sites defend the use of the music player, saying it gives listeners more freedom to enjoy the music they want. They add that most MP3 sites offer legally obtained music.

In a countersuit, Diamond Multimedia argued that RIAA engaged in antitrust and illegal business practices “by conspiring to restrain trade and restrict competition.” The claim accuses RIAA of securing deals from other manufacturers to halt sales of digital-music players.

Diamond Multimedia also sued RIAA for claiming that the company was linked with illegal uses of the MP3 format.

Despite its court battle with RIAA, Diamond Multimedia officials say they will be among the companies supporting the initiative.

“Diamond's goal is to support the digital delivery of popular music, and we're pleased to see the industry working together,” spokesman Ken Wirt said. We want “to support an industry standard that allows all musicians, independent as well as major acts, to participate on the Internet as an exciting new medium for distributing their music.”

But some say the industry already has a standard — the embattled MP3 format.

“MP3 is the second-most popular search word next to sex,” said Steve Grady, spokesman for GoodNoise, an online music distributor. “We know the demand is there.”

Grady said the announcement was an attempt by the five major record companies to stake a claim in the digital-music market with a promise to offer an alternative standard by the end of 1999.

“The Internet moves faster than that,” Grady said. “These guys don't have a year to get a spec. The cat is really out of the bag on this and there's not really anything they can do to get it back in.”

Michael Robertson, founder of, another site containing thousands of digital-music files, says this week's news marks the first real effort on the part of the recording industry to recognize the vitality and importance of digital music.

Robertson says the MP3 format is supported by thousands of legitimate software, hardware and content vendors today. He says he hopes that the recording industry will consider the views of online vendors and technology companies before it develops another digital format.

“We're confident Ms. Rosen will save us a spot at the table so we can add our perspective on those issues as well,” he said.