Jon Iverson

It's no secret that the music industry has added watermarking to its arsenal in an effort to restrict how audio content is used. With SACD, DVD-Audio, and now CD, audio watermarking has been used mainly for digitally stored content. But the music business also has problems with live concert bootlegs as well as bootlegs surfacing after special broadcast events.

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?

In some ways, entrepreneurs resemble the folks who fix your roof: When they see a hole somewhere, their job is to find a way to fill it. Long-time high-end audio veterans Mel and Howard Schilling and Doug Goldberg say they have spotted a hole in the audio market and are getting ready to launch a new company to fill it.

One of the most significant trends in audio, witnessed at the recent Consumer Electronics Show (CES) in Las Vegas, is the emergence of the music server market. Pioneer, Panasonic, Marantz, Meridian, Onkyo, Rotel, Philips, Linn, and others have emphasized audio products that can be networked with each other and the Internet, and are able to share content throughout a home. Pioneer even suggests that networks will not necessarily involve a PC, but instead consist of dedicated music-server-like components.