Universal Music Takes Digital Distribution Plunge

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.

Copyright security has been a major focus in the music industry since the advent of MP3, the free, unencrypted, but low-resolution digital audio format popularized by students and computer hobbyists last year. Universal is said to be developing its own software to make its catalog SDMI-compliant.

"This is an important first step in recognizing the tremendous potential of the digital music market," said Larry Kenswil, Universal Music's head of advanced technology. "Portability is essential for acceptance of new digital forms of music."

The SDMI has been working overtime developing a plan to encrypt digital music files to thwart online pirates, and announcements such as Universal's are good indications that the industry is beginning to feel comfortable with what will undoubtedly be the dominant form of distribution in the next century. The organization has also been conducting listening tests of encrypted high-resolution recordings in New York, Los Angeles, and Nashville, using music-industry professionals as test subjects. The purpose of these tests is to develop an unobtrusive system for preventing mass piracy of copyrighted material that will not compromise the quality of recordings—a stiff challenge.

This year's legal victory for MP3, in which Diamond's Rio player was determined to be a "space shifting" device rather than an instrument for violating copyrights, was the wake-up call for the music business.

Labels under the Universal Music Group umbrella include A&M, Decca, Def Jam, Geffen, Impulse!, Interscope, MCA, MCA Nashville, Mercury, Motown, and Verve. Universal executive Bob Bernstein said his company is the first major record company to make its catalog available specifically for SDMI-compliant portable music devices.