As promised earlier in January, Warner Music Group has announced a major restructuring that it hopes will put it in better shape to compete in the "challenging business environment of today's music industry." The move comes after the recent closing of WMG's $2.6 billion acquisition by Edgar Bronfman, Jr. and a group of investors.
Many people remember the 1990 Milli Vanilli scandal, in which Rob Pilatus and Fabrice Morvan were stripped of their Best New Artist Grammy award when it was revealed they hadn't actually performed on the disc. Of course, "borrowing" has long been a part of the pop music world, as George Harrison's "My Sweet Lord," Led Zeppelin's "Whole Lotta Love," and almost any sampled recording can attest; however, most listeners have probably assumed things are a lot more straightforward in the world of classical performance and recording.
The Telecommunications Act of 1996 loosened many long-established constraints on the ownership and operation of radio and television stations in the United States. The regulatory changes launched waves of mergers and acquisitions through the nation's broadcasting industry, consolidating what had been many regional companies into a few large conglomerates in just a few years. Backed by vice president Al Gore and the then chairman of the Federal Communications Commission (FCC), William Kennard, the changes were intended to make the broadcasting industry more responsive to the "free market."
There appears to be nothing more important to the music business today than controlling the distribution and use of digital content on the web and in the home. Proprietary schemes to prevent or control the use of audio files have become hot commodities and valuable assets for many companies. Liquid Audio recently announced that the US Patent Office has awarded the company a patent (#6,219,634) for its watermark technique used for distributing secure digital music files.
Record labels have found that CDs with built-in restriction technologies have not worked in all CD players, have been incompatible with some computers, and have engendered considerable backlash from irate consumers. But why should that stop them?
Can pirate chasers attend to business while accusing each other of piracy? Digimarc and Verance Corporation, two competitors in the digital watermarking race, have been swapping accusations over patent infringements.
As digitally recorded music moves through the recording and production chain, it can be handed off to a variety of studios, musicians, producers, record label executives, and mastering engineers. Sometimes this is done with a recordable CD or DVD, sometimes with a portable hard disk, and sometimes via a high-bandwidth Internet connection. Somewhere along the way, a good percentage of those files (some estimate up to 80%) get copied in an unauthorized manner and quickly end up on the Internet or on the street as pirated CDs before any official discs are released.
For the 109th convention of the Audio Engineering Society, the main floor of the L.A. Convention Center was transformed into a bazaar of new tools for audio professionals—but the panel discussions upstairs were where the real action took place. On Friday, September 22—just an hour before researchers Dr. Stanley Lipshitz and John Vanderkooy of Ontario's University of Waterloo presented a paper offering a mathematical proof for the "imperfectability" of one-bit delta-sigma recording systems—Sony Corporation issued a clarification of the technical standards for its Direct Stream Digital technology, the basis of the Super Audio Compact Disc. DSD, it now appears, is a one-bit technique as it applies to consumer playback systems, but uses a multi-bit PCM quantizer [presumably within a delta-sigma converter negative-feedback loop; see an article on this subject in the forthcoming November issue of Stereophile—Ed.] at the recording and mastering ends of the business. (The Lipshitz/Vanderkooy paper is available as AES preprint #5188.)
In December, after months of conducting listening tests with audio professionals in the US, the Secure Digital Music Initiative (SDMI) choose a watermarking technology from Verance Corporation for DVD-Audio copyright protection. Test results had indicated that Verance's system was the least detectable of the contenders under consideration.
Amid news that its watermark technology for DVD-Audio may have been compromised, Verance nonetheless announced last week the launch of its "ConfirMedia" watermarking service. The company says that ConfirMedia will monitor and report the airplay of encoded commercials, music, and programs broadcast by television, cable and radio stations in the 100 top US markets and on the national feeds of major broadcast and cable television networks in the US.
This may come as no surprise to Stereophile's website audience, but a report released last week finds that the heaviest users of the World Wide Web are also avid consumers of traditional media, listening to CDs and radio and watching television as they point their browsers to e-commerce, informational, and recreational sites.
When I submitted my Records 2 Die 4 selections this past winter, it seemed inevitable that I include a web radio station. Not only had I enjoyed listening to www.techwebsound.com more than anything else last year, but it had exposed me to more new music and led to more music purchases than any other source—by a wide margin.
A long-running dispute between the music industry and small webcasters may have come to an amicable conclusion. Over the weekend of October 5-6, representatives from both sides agreed on a system of royalties to be paid to record labels and artists based on a percentage of webcaster revenue or expenses, rather than on a per song basis. Last summer, Librarian of Congress James Billington decreed that all webcasters should pay a royalty rate of 0.07¢ per song per 1000 listeners. Many small webcasters, including many college radio stations, chose to go offline rather than face fees they couldn't afford.