Mp3

The research compiled here will attempt primarily to answer the following questions for the layman: "What is digital music distribution and why is it significant?" "Who are the stakeholders in digital music distribution?" and "What are the primary drivers of the imminent changes in the music industry?" Formal reference material on this subject is in short supply. As a result, opinions, facts, and statements made by stakeholders and industry observers have been gathered from various articles published both in print and on the Internet will be quoted as sources.

What's at Stake?

Traditionally, music has been recorded to physical media, like CD or cassette now or like vinyl in the past, and distributed to music consumers through retail stores. "Digital music distribution" simply involves the transport of the product, recorded music, to the consumer via a non-physical, digital method

According to Mark Hardie, a senior analyst at Forrester Research, "consumers want a digital music format that allows a great deal more control of the content they choose...it is inevitable that we will have a music industry that distributes it products digitally."

Music recording industry - annual worldwide revenues of $65 billion In 1998, nearly 20 million Americans visited music-related sites3 In 1999, Americans will spend $35 million on CDs; $1.6 billion by 2002 In 1999, piracy cost $10 billion in lost sales, according to the International Federation of the Phonographic Industry. The future of the industry Economic fortunes

Source RIAA 2000

Ten year record sales Source RIAA 2002

MP3 (MPEG Audio, Layer 3)

Fifteen years ago, in 1987, the Fraunhofer Institut Integrierte Schaltungen (Fraunhofer Institute for Integrated Circuits), a developer of microelectronics circuits and systems, began a project known as "EUREKA project EU147, Digital Audio Broadcasting". The institute worked in conjunction with Professor Dieter Seitzer of the University of Erlangen at Nuremberg to produce the powerful audio signal compression algorithm that would eventually become known as "MP3".

Without data reduction, digital audio signals typically consist of 16 bit samples recorded at a sampling rate more than twice the actual audio bandwidth (e.g. 44.1 kHz for Compact Disks). So you end up with more than 1.400 Megabit to represent just one second of stereo music in CD quality. By using MPEG audio coding, you may shrink down the original sound data from a CD by a factor of 12, without losing sound quality. Factors of 24 and even more still maintain a sound quality that is significantly better than what you get by just reducing the sampling rate and the resolution of your samples. Basically, this is realized by perceptual coding techniques addressing the perception of sound waves by the human ear.

A year later, in 1988, the Moving Pictures Experts Group (MPEG) was formed as a working group of the ISO/IEC [International Standards Organization/International Electrotechnical Commission]. MPEG is charged with the development of international standards for compression, decompression, processing, and coded representation of moving pictures, audio, and their combination, in order to satisfy a wide variety of applications. The membership of MPEG consists mainly of individuals involved in academics or research.

In 1989, Fraunhofer IIS patented its compression algorithm in Germany. In 1992, the algorithm was included into the specification produced by MPEG for its standards for "coding of moving pictures and associated audio for digital storage media at up to about 1.5 Mbit/sec". In 1993, the specification was published as "ISO-MPEG Audio Layer 3", thus "MP3". In late 1996, after having applied in early 1995, Fraunhofer IIS was granted patent protection (US5579430) in the United States for its "digital encoding process". In 1998, Fraunhofer began to contact companies and individuals that were developing utilities based on its source code. Fraunhofer informed the developers about the technology's patent protection and offered to discuss licensing the technology. The encoding and decoding utilities are commonly known as "rippers" and "players". You "rip" tracks from pre-recorded CDs and translate them into the MP3 file format by using an encoding utility. The resulting MP3 files can be "played" with an MP3 decoding utility.

Diamond Multimedia v. RIAA

The MP3 digital music format was developed in an open, non-proprietary environment an international standard, really as a basis for the development of storing and playing audio and audio in conjunction with video. It could easily be compared to the Internet-enabling Transmission Control Protocol/Internet Protocol (TCP/IP) by its intent. These technologies, as well as others, grow out of cooperation among stakeholders for the purpose of elevating a technological field. As such, it offers no inherent protections, such as protections against the duplication of copyrighted material.

MP3's open nature has attracted it a large and growing audience among music lovers. Individual and small-time developers using the standards to create freeware or shareware "rippers" and "players" enabled the availability and increasing demand for music in the MP3 format. These utilities and music files' easy accessibility to audiophiles and the growing word-of-mouth on the Internet have contributed to a growing commercial market. Among the products that attempt to satisfy the increasing consumer demand for access to digital music is the portable MP3 player.

In the fall of 1998, Diamond Multimedia Systems, Inc, a developer and manufacturer of multimedia hardware and software for the personal computer, introduced its Rio PMP300 portable MP3 player. The device would allow, via a parallel connection with a computer, the storage of 32 megabytes of MP3 files. This is the equivalent of 60 minutes of high-quality digital music. From the device, the owner can play back the files via headphones, a configuration that draws comparisons to Sony's WalkMan. The Rio, as introduced by Diamand, would be very simple to use and affordable at under $200.

The Recording Industry Association of America and the Alliance of Artists and Recording Companies, two trade organizations that represent various creators, manufacturers, and distributors of sound recordings filed in the District Court for the Central District of California in October