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Folk wisdom has it that it's wiser not to lock the gate after the horses have escaped. The Secure Digital Music Initiative, a consortium of 140 music, software, and hardware companies, has taken that adage to heart. In a significant departure from its original intent to block the distribution of free music on the Internet, the Secure Digital Music Initiative announced in the last week of June that its forthcoming specification for music software and hardware will accommodate the "legacy content" already in existence. There are reportedly as many as 500,000 songs available in the MP3 format, and they will continue to be available even as new, robustly encrypted music comes onto the market.

The MP3 phenomenon, which enables the quick and easy transfer of highly compressed music over the Internet, arose last year like a storm out of nowhere. The development was a wake-up call for the complacent music industry. The Secure Digital Music Initiative arose after the Recording Industry Association of America lost its legal battle against the upstart format. The consensus at SDMI is that MP3 music files are of such low resolution---despite claims of "CD quality"---that SDMI's efforts are instead best directed toward copyright security for future, higher-fidelity digital formats.

Leonardo Chiariglione, a Telecom Italia SpA engineer who was a key developer of MP3, was recruited to oversee the development of the SDMI specifications, due to be released soon. "Record companies realized that past is past," he said. "There is virtually no means to protect past content already out on the Web. This way, future content will be screened."

MP3 will therefore be "grandfathered in" to the industry's next generation of digital audio products. A two-phase strategy described on Monday, June 28 will allow portable devices to play songs with or without copyright protection. Later versions of players will be required to block pirated versions of protected music. Diamond MultiMedia's original Rio player,the PMP 300, still available at discounted prices, does not recognize encryption code. Diamond, an SDMI member, is bringing out a new player that will recognize encryption---and will not allow unauthorized play.

Backers of the compromise solution include major music labels Universal Music, Bertelsmann Music Group (BMG), EMI, Sony Music Entertainment, and Warner Music (a division of Time Warner Inc.). Standards for a screening technology that will let next-generation devices know when an illegal version of a song is being loaded are still under discussion. BMG recently announced its intention to sell music over the Internet, and many companies are rushing into the digital download market with software and hardware, including Microsoft Corp., IBM, Thomson SA, Samsung, Creative Labs, and others.

The last hat thrown into the digital download ring was that of Iomega Corporation, which on June 30 announced a three-way agreement with Liquid Audio and Internet music site Rock.com to develop technology that will turn the company's popular Zip, Jaz, and Clik! drives into portable, copyright-secure music devices. "Iomega is excited to be a part of this groundbreaking solution to offer secure and portable storage for digital music," said David Henry, an Iomega vice president. "With unique serialization on all 150 million Zip, Jaz, and Clik! disks in the marketplace, Iomega provides an excellent solution for devices requiring SDMI-compliant portable media." 100MB Zip disks, which retail at about $15 each, can hold up to 20 songs, according to the announcement.

There is no doubt that the market for digital music is enormous, with billions of dollars in future business at stake. Some observers note, however, that the proliferation of formats and devices could backfire by creating confusion among consumers.