Secure Digital Music Initiative Formally Announced by the RIAA

As expected, the Recording Industry Association of America held a press conference last week to announce the formation of the Secure Digital Music Initiative (SDMI), with which they hope to develop Internet downloading technologies for music. The move comes after a rough year for the music business, which has seen thousands of unauthorized websites offer copyrighted material for free using the MP3 audio format.

Joining technology firms including AOL, Sony, and Microsoft are several major labels, including BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group, and Warner Music Group. The consortium hopes to have a set of standards in place by next fall in order to capture the 1999 end-of-year shopping season.

Hilary Rosen, president and CEO of the RIAA, stated at the press conference that "This initiative is about the technology community developing an open security system that promotes compatible products in a competitive marketplace. It's not about the recording industry imposing a standard on technology companies."

Critics abound, however. In a report from Bloomberg News, David Charles, spokesman for Audioliner.com, which operates a music downloading service that pays royalties to artists, says, "It's a lot of smoke. It's not so much about copyright issues as it is about commerce. They want to ensure that people can't get what they are selling for free." Charles added that "we haven't heard much feedback from artists so far. Only executivespeak, and that's a problem." Others feel that the MP3 download cat is already out of the bag, with industry efforts only a diversion for the next several years. "They'll create the next Betamax no one will want," said Gene Hoffman, CEO of online record label GoodNoise. "Between now and next fall, MP3 will just get bigger." One analyst also claims that, regardless of what is eventually implemented, the cost of buying music will remain the same.

The new initiative is creating some surprising alliances. RIAA foe Diamond Multimedia immediately announced that it intends to join the SDMI. "Diamond's goal is to support the digital delivery of popular music, and we're pleased to see the industry working together on a solution," said Ken Wirt of Diamond. "There is huge consumer demand for digital music which is evident in the success of our Rio PMP300 portable music player. It is Diamond's intention to support an industry standard that allows all musicians, independents as well as major acts, to participate on the Internet as an exciting new medium for distributing their music." Diamond and the RIAA are currently in court wrangling over Diamond's MP3 player.

How will the new group turn folks away from the popular MP3 format? The RIAA claims that they will be developing better-sounding audio downloads. During the press conference, AT&T said it plans to have a major part in future technology, and will be sharing its knowledge with the rest of the industry. IBM has also been furtively working with several major labels on its own download system, referred to as the Madison Project. The plan is to create technology that allows only authorized downloads that cannot then be copied.

According to the RIAA's Hilary Rosen, the SDMI does not intend to select a specific technology for future downloading, but rather would like to implement a set of open standards that all companies will comply with. Alex Alben of RealNetworks commented, "This is a first step. Getting the right people at the table is the first accomplishment. Now we will sit down and determine the standards that can be implemented."

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