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NET MUSIC

As anyone with a passing familiarity with the internet will agree, those who underestimate its potential to change the way we produce and consume culture do so at their peril. And digital distribution of music via the internet – in which you pay money to download and then play an audio file (to put it at its most simple) is a revolution waiting to happen.


The trouble with revolutions, whether they’re technical, cultural, or social, is that you can’t be sure quite what will emerge at the end of the process. What you can be certain of is that all manner of relationships between the consumers and producers of music will change – and also that the best way to influence the outcome is to get involved as early as possible. Which is why it’s good news for artists and other rights holders that MCPS and PRS have just launched a three-month pilot scheme, MusicTrial.com, to test the waters of digital distribution. But more of that later.


The potential of digital distribution has seized the imagination of some big players in the music industry. George Michael recently commented: “I can’t help but believe that music will become one of the first things that the public will buy online simply because there are very few products that can be transported down a telephone line. It’s that simple. So if the shopping revolution that we have heard about actually happens, music retail stores will probably be one of its first victims.” As a result, the website of his Aegean label (www.aegean.net) is one of the few sites that has offered paid-for downloads of copyright material, enabled by software from Liquid Audio (www.liquidaudio.com). On the other hand, still more big players, notably major labels and retailers, are wary of something that they perceive as a threat to their positions. But a realisation is growing that denial is not the answer, and that active support of suitable technologies is the way to go. Several companies are now offering technical solutions for online music delivery, and they are finding it easier to interest record companies and rights agencies in their products. Unfortunately it is piracy, in the form of the proliferation of MP3 (MPEG Layer-3 encoded) audio files, that has been as big a factor as any in prompting this interest. “It’s the fire under the record companies’ asses,” notes John Stone, Liquid Audio’s Business Development Manager.


Digital distribution
At its simplest, digital distribution means the downloading, via the internet, of some form of digital audio file to your desktop computer in order that you can play it, or perhaps transfer it to another medium such as CD-R. In order for digital distribution to be any kind of rival to other forms of music delivery (CD, cassette, broadcast radio), it must meet several criteria. The quality of the audio must be high – very close to CD-quality – but download times should not be unduly long. There should be a simple means of paying for the music that you download, and the rights of those who have an interest in the music must be protected. All of these areas are problematic, but the advantages of digital distribution are such that they will be solved. It’s just a question of when and by whom.


Few observers expect things to move particularly fast, however. US-based media researchers Jupiter Communications have predicted that while online sales of music in the US (including both online CD sales and digital distribution) will grow to a $1.6 billion industry by 2002, digital distribution will account for only $30m, or 2.2% of the total. The UK’s internet development is reckoned to be 18 months to two years behind the US, so it may be a few years before we see the business grow to a significant size over here.
Ironically, one of the pioneers in the field has been the UK’s own Cerberus Central Limited, which went online in August 1995. Having realised from the start that dealing properly with copyright would be essential to the success of any digital distribution system, Cerberus (and their founder Ricky Adar) came up with the right software tools, and sought agreements with the PRS and MCPS, the bodies concerned with collecting royalties in the UK.


The system works as follows: the first time you want to buy a song, you visit the Cerberus website, and having selected a title, you send the Cerberus Digital Jukebox your credit card details via Cercure ATM, Cerberus’ own credit card transaction software. The Jukebox then creates a unique Cerberus Audio Player for you. Every time you want a a song, you send details of your Player to the Jukebox, and the Jukebox then allows you to download a song which has been encoded for your Player. If anyone obtains a Cerberus Player and illegally publishes .CBR Audio files (the proprietary Cerberus audio file format) on the internet, they can be traced from personal details embedded in their Player. The Player also contains banking details, so that if you give away your Player, you are giving people access to your bank account. A good way to discourage piracy…


There are several other systems in existence now – from AudioSoft and A2B, to the aforementioned Liquid Audio – but the elements remain essentially the same. A software player that runs on your computer accepts only a proprietary audio file format. When you download a song as a file, the server accepts payment in some form, logs the sale, and offers some means of ensuring that anyone who has in interest in the recording (the composer, the performer, and so on) receives correct payment. The audio file format supports both compression, in order to reduce file size and download time, and encryption, such that only a single player is allowed to play the downloaded file.


The right stuff
One of the interesting things about digital distribution is that it makes it very obvious what we pay for when we buy music. When you buy a CD, you may think you’re paying for the disc, the case, and the booklet – but what you are actually paying for is the right to play the music that the CD contains. The disc is merely a carrier. When music is distributed via the internet, there’s no carrier, and the different nature of the distribution raises questions for the rights agencies.


“There may be many different ways to pay for music,” says Gavin Robertson, New Media R&D Manager at MCPS and PRS. “The bottom line is that people buy CDs, a physical product, in the way that they do because it’s the only way they can buy music, and the purchasing structure has evolved around that technology. It’s very naive of the industry to assume that the purchasing structure will be the same when the technology is fundamentally different.” When you buy a CD, you buy the right to listen to it until the end of time. But with a downloaded file? “Other types of uses are possible. Why not pay for a limited number of plays only, or the right to listen to a track for only the next 6 months? If the copyright holders and collection agencies are prepared to offer these types of uses of music, this is what we may be offered in the future.”


Reality check
But getting back to the present, what’s on offer today? If you have a computer, a modem. and access to the internet, you’ll find that you can download a good many songs for free. Record companies are finding that the internet is a great way to promote their artists, and Liquid Audio or A2B Music technology is allowing many American labels to put clips and whole tracks up on their websites.


On the other hand, there are plenty of copyright-busting MP3 files around, mainly on US-based academic servers, it seems. “Whilst the consumer market in digital distribution is very small right now, where digital distribution is happening it’s probably mostly university-based, and mostly illegal,” agrees Mark Mooradian of Jupiter Communications. This is presumably why so many providers of free web space, such as GeoCities, refuse to allow MP3 files in customer web space – which is a bummer if you’re a musician who wants to showcase your own copyright material.


The players
Of the four companies currently leading the way in producing the tools for secure and rights-friendly music delivery via the internet, two are American (Liquid Audio and A2B Music) and two are European (Cerberus and AudioSoft). Only Liquid Audio currently offers both Mac and Windows player software; the other three are Windows-only.


AudioSoft, based in France, offers both broad-band (i.e. cable and satellite) and internet-based distribution of audio through third parties. Cable companies in France, Germany, Switzerland and several other European countries supply their City Music service, which allows customers with a PC and a cable modem to browse and download titles from over 70 record labels – few that you’d recognise, however. But major labels did climb on board for an interactive TV trial that AudioSoft ran towards the end of 1997. A study of the use of the system showed that while most customers looked for big-name artists at first – WEA, Sony and Polygram were among the companies to get involved – 90% of them discovered and bought music as a result of access to online purchasing.


AudioSoft’s player software is based on MP3 encoding, and among planned updates are the addition of support for CD burning, so users can burn their own CDs after downloading songs. The system allows, along with other information such as lyrics and copyright information, encoding of the number of copies of a song that may be made – though as with all such copy-inhibit mechanisms, they only work until the user steps outside of the digital signal chain.


AudioSoft also offers City Music (www.citymusic.com) via the internet, though it is concentrating more on broadband channels to consumers, where long download times are not an issue – they are also, significantly, channels that are essentially local, and therefore easier to deal with in terms of national rights agencies.


A2B Music, a subsidiary of AT&T, has developed technology that major labels are using to promote artists such as Bonnie Raitt, Alabama and Tori Amos – indeed, Atlantic Records were keen to use the internet to promote Tori’s last album, making a bonus track available as a download only to fans who pre-ordered the CD via the web. A recent visit to the A2B site (www.a2bmusic.com) revealed another twist on mixed media marketing – a special CD-ROM available only with a limited edition of Bonnie Raitt’s latest CD, the CD-ROM containing bonus tracks that can only be played with the A2B Music system.


A2B’s approach seems to be to get involved with the labels, and wait for the time when the commercial side of music distribution takes off. Although you won’t notice it if you download one of the free tracks on, or linked to, A2B’s site, the A2B system includes a proprietary PolicyMaker element that can control the use of the music in accordance with whatever licensing terms may apply – one-time play, song rental or purchase are all possible. The AT&T compression algorithms allow up to 20:1 compression without perceptual loss of quality, allowing a 5-minute song to be downloaded over a 28.8k modem in 16 minutes.


Which brings us to California-based Liquid Audio (www.liquidaudio.com), formed in 1996 mainly by ex-music and audio industry professionals, and the partner in the aforementioned MusicTrial.com scheme launched by MCPS and PRS at the start of September.

Their player software supports streaming preview audio as well as download of CD-quality tracks (Dolby’s AC3 compression technology is employed), and with the other elements of the Liquid system, provides full rights reporting. Launching the scheme, Mark Isherwood, Director of New Technology at the MCPS-PRS Alliance, commented: “Until now, rights organisations’ dealings with the new technologies have been focused on preventing the use of unlicensed music without addressing the need to find a user-friendly licensing solution for those wishing to operate legally. This trial is our attempt to do just that, and by working with Liquid Audio – whose views on copyright protection remain consistent with our own – we will be producing valuable information which will enable us to continue developing an online licensing system. We are demonstrating how music copyright holders can continue to receive royalty payments for their work in an electronic trading environment, thus allowing them to take full advantage of the new opportunities of the Digital Age.”
Until the end of November, anyone, anywhere in the world can download tracks made available by MCPS and PRS members – it’s not a huge selection, but does include offerings from Cornershop and the Cocteau Twins, and a few tracks from Ninja Tunes (ex-Coldcut Jonathan More and Matt Black’s label), and Gary Numan, amongst others. For this trial, the downloads are free, and this is how the system works:


As with the Cerberus system, you first need to download the proprietary Liquid Player software (Mac or Windows). But before you download any tracks, you first have to register your player with the Liquid Operations Centre – via the web, of course. Once the player is registered, it can receive and decrypt Liquid Audio files, and your player is uniquely identified and identifiable.


Each time you download a track (and, in a commercial operation, pay for it), you are issued with a Music Passport, a digital key that unlocks the encrypted audio file and allows it to be played by the Liquid player, and also allows the player to burn a track to CD.


Pinocchio’s nose Everyone agrees that the market for downloaded music is, at the moment, tiny. The question is: when will it grow? Well, in the first place, we need to take a good few steps beyond 28.8k modems before download times become really tolerable – especially when we have to pay for local phone calls, unlike our Stateside counterparts. But that will happen. Record companies and collection societies need to get on board – that is happening.


In order for all the buying to actually happen, we will need to get a lot more comfortable with spending money on the internet. While many people will quite happily send their credit card details via the web – it’s not really any riskier than giving it to a strange waiter, after all – many more will not. Especially if small-value transactions are required, as will be the case if people are downloading single tracks rather than albums, it may take the widespread acceptance of e-cash to enable digital distribution to take off.


There is yet another factor, however: most of us spend enough time sitting in front of our computers without having to sit at them to listen to music as well, so we need some means of taking the music away from our computers. John Stone, Liquid Audio’s Manager of Business Development, agrees that the computer is a poor entertainment centre, but suggests that when the standard PC comes with an internal CD-R or DVD-RAM drive, this will be less of an issue – you’ll simply download a song and burn it to CD. “We’re also talking to multiple manufacturers of handheld devices – whether they’re flash memory, MiniDisc, DAT or whatever, isn’t really important,” he says. “What is important is that people like to have and hold something, and we will be announcing partnerships with manufacturers of portable players in the next few months.”


David Johnson, Commercial Director of Virgin Net, who are also supporting MusicTrial, sees the revolution coming sooner rather than later, though he sees no danger to high street music retailers. “I don’t think we’re going to see them close down. I think people will still want to go and look around, go to a store and have the physical experience, though they may buy stuff online. At the same time, I do think we’ll see a many-fold expansion of online sales in the next year or two. We haven’t seen electronic commerce take off in the way people were expecting, but people are still expecting it to happen. Music – CDs – are one of the things that sell well over the internet already, so the infrastructure is already there.


“On-line distribution of music product is happening already. The fact is that a lot of musicians and rights societies are trying to stop it because they don’t have control over it and the payments, but I believe these issues will be resolved – and that they have to be resolved, because it’s happening already in an unauthorised manner, and it will continue to happen. So everyone has to get their act together. That’s why we’re working with the Music Alliance on this.”
But sounding a more pessimistic note is Ricky Adar, founder of the pioneering Cerberus. “At the moment we are not having many songs purchased through our website,” he admits, and as a result the company have recently concentrated on developing Virtual Record Store Kiosks – kiosks that let you burn your own compilation CDs – for installation in Levi Strauss stores across Europe. “That’s growing, and starting to make money.” But the advantages of digital distribution will make it a reality – what kind of a reality remains to be seen. As Gavin Robertson of the Music Alliance puts it: “I really don’t know what it’ll be like in five or ten years’ time, and anyone who says they do is kidding themselves. The one thing that is clear is that the current ways of receiving music – within a premises as background music, from a broadcast, or from physical media – are going to be immensely expanded through all kinds of technologies. Perhaps through agent technologies that make decisions on your behalf – in the future, software could recommend music, or just choose stuff for you, on the basis of what you choose to listen to from your current selection. Is that replacing a jukebox, or a radio station?”


If we download single tracks rather than whole albums, perhaps recording contracts will change to reflect this. The record company of the future might be all about marketing and A&R – which is all that’s left after you take away production and distribution. More, smaller record companies? More music? More power to the creators? Or more power to those who are already empowered? We’ll be finding out in a few years’ time.
That's how the guns are doing it. In the second part we'll look at how you can use the net to take your own music to the world....Coming soon!


 

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