Music biz struggles with MP3

Indie label embraces Net

While the major record labels debate the best way to transmit songs over the Internet, forward-thinking smaller outfits are already reaching consumers with sites that preview tracks from the next wave of recording artists, allow the creation of custom CDs or offer entire albums for downloading.

The lion’s share of musical web traffic is being sent through the MP3 format, which, despite its widespread acceptance throughout the industry, still remains largely associated with pirated music.

  • Next to sex, MP3 is the most widely entered word on the Internet.

The prevalence of MP3 forced the recording industry to create the Secure Digital Music Initiative (SDMI), whose purpose is to get the recording, electronics and computer industries to adopt a unified standard for the secure digital distribution of music. In short — develop a technology that will ensure copyright and anti-piracy protection for every copy sold, regardless of the format or how it is delivered.

Aiming for a cease-fire

The move is aimed at shortcircuiting a format war that could impede the development of the marketplace, much like the VHS and Beta dispute.

More than 200 music industry reps recently met in Los Angeles to set the timetable for developing a technology that can be adopted and put into use by Christmas.

“A market for legitimate digital distribution will soon emerge,” says Kevin Conroy, senior veep of BMG Entertainment and the con-glom’s new media czar working with the SDMI. “But in order for it to be successful, copyright protection must exist on a global basis.”

As a result of the recent entry of Lycos into the MP3 fray and recording artist Tom Petty getting his label, Warner Bros., to allow the downloading of the first single off his new album, the format’s legitimate role in the marketplace is growing.

“New technology presents a major challenge to the existing music distribution infrastructure,” says Kenneth Hertz, senior music partner at law firm Hansen Jacobson Teller Hoberman Newman Warren Hertz & Goldring.

Perhaps no site has sparked the ire of major record labels more than the MP3 site created by Michael Robertson. It has also become a rallying point for those who feel the major labels have too much control over the marketplace.

“For too many years the power of distribution, promotion, marketing, media and sales has been controlled by a few select conglomerates,” Robertson says. “While these companies have made it extremely difficult for new and emerging companies to secure visibility and sales of products, the Internet is empowering musicians and consumers.”

Forming alliances

The race to create the industry’s next widely used technology has also prompted major electronics firms to either announce alliances with growing technology firms, such as Texas Instruments’ recent link with Liquid Audio (another delivery format), or develop new formats.

Sony recently disclosed that it has developed two new technologies, OpenMG and MagicGate, that will both fulfill the industry’s concerns of copyright protection and offer secure delivery.

In the interim, sites like MP3.com and UBL.com, among others, will continue to provide consumers with the latest digitally delivered music.

UBL, an acronym for Ultimate Band List and the Internet’s largest independent music site, recently bowed “MP3 on UBL” with a mandate to expose new music enthusiasts to bands and artists in a variety of formats. Each week the site will highlight two to three artist-authorized MP3 tracks from up-and-coming bands and solo artists.

  • UBL’s exclusive one-day-only MP3 download of “Kittens,” a track off the forthcoming album “Beaucoup Fish” by English electronica band Underworld, spurred heavy traffic to the site as nearly 2,000 music fans attempted to hear the track. In just eight hours, the page logged 100,000 views.

    The legitimacy of MP3 was recently given a boost when Lycos became the first major portal to recognize and attempt to serve the MP3 constituency.

    And the reluctance of major labels to offer their artists’ works online has not discouraged independent labels from doing so.

  • Sub Pop Records, the Seattle-based label that brought the world Nirvana, Soundgarden and Afghan Whigs, has begun making the music of its acts available online.

    The label will release on MP3 tracks from Pigeonhed, Eric Matthews, Reverend Horton Heat and Sebadoh, as well as the Murder City Devils, Combustible Edison and others.

  • Platinum Entertainment, the largest independent music label in the nation, recently pacted with Musicmaker.com, one of the leading custom compilation music sites on the Internet, to create one of the largest music download sites on the Internet.

    The alliance offers a new generation of legal, copyright-protected MP3 music files, using new technology called Secure MP3.

  • Under a five-year agreement, Platinum has licensed its entire music catalog to Musicmaker.com for digital downloading using Secure MP3 and will also allow downloads of a select group of full albums, complete with artwork

    “The consumer has spoken loudly and MP3 has emerged as the most important grass roots movement in music since FM radio,” says Steve Devick, prexy/CEO of Platinum, who notes that more than 10 million MP3 players have been downloaded.

    Beginning April 1, consumers will be able to purchase and download individual tracks for $1.00 per song from such artists as Roger Daltrey, Taylor Dayne, Peter Cetera, Crystal Gayle, Jefferson Starship, the Band, the Yardbirds with Eric Clapton, the Beach Boys, Kansas and KC & the Sunshine Band, among others.

  • Rykodisc and GoodNoise Corp. will bow the next album from They Might Be Giants, one of the most popular bands among Internet music fans, in the MP3 format.

  • Known for thinking outside the box in the marketing of its artists’ releases, DreamWorks Records pacted with JAMTV, the Web’s leading music hub, to promote online newcomers Buckcherry.

    The disc’s first single, “Lit Up,” was made available last month in the MP3 format. The label expects to use the format to tout other upcoming releases where the band’s fan base matches the Web demographic: 15- to 24-year-old males with computers.

    “MP3 is an effective means of reaching those music fans and exposing them to new bands,” Adam Somers, new media chief at DreamWorks, says.

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