Disk biz drops digital guard

RIAA to help secure music rights online

If you can’t beat ’em, join ’em.

That is what the Recording Industry Assn. of America has apparently decided after realizing it has lost the battle to control the digital delivery of music on the Internet.

The trade org, faced with a growing number of consumers downloading music from Web sites onto hard drives or portable playback devices, is expected to announce Tuesday the formation of a coalition of major record conglom chiefs and technology execs who will be charged with developing a music delivery technology that will become the industry standard.

Dubbed the Secure Digital Music Initiative (SDMI), according to documents obtained by Daily Variety, the plan is to “bring together the worldwide music community in an open forum with technology companies to develop a standard for digital music security through the creation of a new music security architecture and specifications for digital music.”

In addition to major and independent record labels, many technology and consumer electronics companies are being asked to participate in the initiative, including AOL, AT&T, IBM, Intel, Lucent, Microsoft, Sony and Toshiba.

Clear goal

The goal is to “answer consumer demand for convenient accessibility to quality digital music, ensure copyright protection for artists’ work and enable technology and music companies to build successful businesses.”

In short, the RIAA is asking record companies and digital music enthusiasts not to embrace the popular technologies such as MP3 — which the trade org claims is used primarily by consumers to unlawfully download copyrighted music — but to help develop a new technology that can become widely used and will enable the collection of royalties for artists whose music is downloaded.

Insiders view the move to bow SDMI as little more than a surrender by the music industry, which has been unable to come up with a technology on its own and is faced with adopting whatever technology the marketplace embraces. The concern is that it may not be the most profitable for the labels or one that effectively protects copyrighted works.

Congloms slow to get it

Many of the major record congloms have been slow to recognize the role digital music delivery will play in the future of the business and how it can become a potential profit center.

Currently, the MP3 compression technology is being used by Internet users to download CD-quality music, free of cost, from music-based Web sites onto computer hard drives and to handheld devices like the Rio. (The RIAA recently lost its attempt to stop sales of the device by filing a lawsuit against its manufacturer, Diamond Multimedia.)

And while many record companies use digital technology as a promotional tool — such as BMG, which uses AT&T’s A2B format to e-mail song snippets to interested consumers — its application to download albums is nonexistent, as major labels are fearful to encroach on the entrenched turf of music retailers who generate the industry’s sales and profits.

Creative concepts

“In the past year, a number of companies have come to us with creative ideas involving digital music, inquiring about how those ideas can become reality,” RIAA prexy-CEO Hilary Rosen is quoted in a draft press release. “By creating an open standard that will ensure compatibility and interoperability among products and services, the SDMI provides the vehicle for these companies to pursue specific business models so that a legitimate digital marketplace can emerge.”

Many music companies are already exploring technological advancements in the digital arena. But the industry lacks a widely accepted format, like the CD or audio DVD, where the specs have been agreed upon by the RIAA’s membership.

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