LATEST ADDITIONS

The Secure Digital Music Initiative (SDMI) appears to be the antidote to many a record executive's worst audio poison: legions of young music fans downloading digital audio files off the Internet and passing them around with no regard to copyright restrictions. But what might be the answer to some companies' prayers could prove to be the Big Brother nightmare feared by others.

Yet another major music company has joined the digital downloading stampede, in the wake of the Secure Digital Music Initiative's (SDMI) recent progress toward formulating copyright standards. On July 19, Universal Music Group announced its intention to make its titles available for downloading to the coming generation of portable audio players. New devices from Diamond Multimedia, Toshiba, and Panasonic—all expected to hit the market by the winter holiday season—will play encrypted tunes from Universal and other big labels.

According to a report released last week by Cahners In-Stat Group, a high-tech market research firm, the market for personal digital music players using audio compression technologies will experience a tremendous increase in growth through the next several years. Nearly $800 million in player sales are expected in 2003, spurred largely by widespread Internet access. The report also states that products in this segment will initially focus on downloading technologies like MP3, and over the next 12 months consumers should expect to see more features integrated into the players such as FM tuners, increased storage capacity, and security systems like Secure Digital Music Initiative (SDMI).

Internet music retailer CDnow has formed a partnership with Sony Corporation and Time Warner to build a music and video retailing behemoth. The July 13 announcement came in the wake of online bookseller Amazon.com's recent move into the music market. With the backing of corporate giants Sony and Time Warner, CDnow could be able to mount a challenge to the growing presence of Amazon, which is also expanding into toy sales and consumer electronics.