X-SciTech

More Digital Music Sales Sought

December 14, 1998 / 9:58 PM EST / AP

The biggest names in records and technology are banding together to kick music bootleggers off the Internet, but their task won't be easy because the music thieves have gotten a head start.

BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group and Warner Music Group pledged Tuesday to join with big technology firms to develop standards that will allow more widespread digital music sales by next year while protecting copyrights.

But the music industry, which is relatively inexperienced in delivering products online, will likely find that maintaining Internet security is difficult with technology developing so rapidly, analysts said.

"Microsoft's been dealing with these same exact issues for a decade. Their content, digital as it is, is stolen all the time and redistributed," said Mark Hardie, an analyst who follows the entertainment industry for technology consulting firm Forrester Research.

The record industry's effort, dubbed the Secure Digital Music Initiative, comes as a technology called MP3 is gaining popularity as a way to more easily compress, store and distribute audio files on the Internet.

Web sites offering MP3 songs for free have sprung up online and caused headaches for the record industry. While some MP3 songs being distributed on the Internet are legal and endorsed by record labels, there is a boom in bootlegged tracks.

"New technology is going to have an enormous impact on our future and I think protection is absolutely of paramount importance," said Ken Berry, president of EMI, whose artists include the Spice Girls and Paul McCartney.

The Recording Industry Association of America, which works to protect artist rights and royalties, said it does not have hard figures on the effect of online piracy on music sales.

Hilary Rosen, president and chief executive of the trade group, said the record companies' digital music offerings will be of such high quality that they would be able to pull consumers away from bootlegged material.

"MP3 does have a kind of a problem in that not every file sounds great and I think you'll probably see the industry work to exploit that," said Mark Mooradian, senior analyst at technology research firm Jupiter Communications.

Domestic digital music sales this year will be less than $1 million, just a fraction of the estimated $12 billion in total U.S. music sales, according to Jupiter's projections.

The record companies hope to have the new security standards in place by next fall, which will allow them to roll out broader digital offerings by the 1999 holiday season.

The record companies are being joined an array of high-tech and consumer electronics giants including America Online Inc., Microsoft Corp., IBM Corp., AT&T Corp. Matsushita and Toshiba Corp. in trying to develop its security standards.