Over the last two weeks we’ve chronicled the music and movie industries’ inexorable march toward “digitization”. Digital music and movies on CD and DVD are great for consumers. They offer superior sound and image quality, improved portability, and lower production costs for the labels and studios (which, theoretically, translate into lower prices and expanded catalogs from “niche” artists in both music and film). The downside of digitization is the relative ease with which a song or movie can be copied and distributed over the rapidly expanding broadband internet. “Sharing” has progressed far beyond friends and neighbors, or dorm floor buddies – it’s global, and it’s costing the labels and studios big bucks. What can they do to stem the tide? Let’s focus on the music industry first, as its situation is more evolved.

A quick review: a three-minute song on a CD takes up about 30 MB of space in its high audio quality format. However, through the use of compression/decompression (codec) technology, you can reduce that same three-minute song’s file size down to about 3 MB, without a significant reduction in sound quality. With today’s fast home and office internet connections, a 3 MB download only takes a minute or so, if that long. Mix advanced audio codecs with broadband internet, and you have the recipe for the music industry’s worst nightmare. For a while, the nightmare had a name: Napster.

Napster was launched in 2000 by a 19-year-old college student, from the back room of his uncle’s garage. At the height of its popularity, more than 100 million users were “sharing” free music via a vast network of linked computers. It’s called peer-to-peer (P2P) file sharing, and the concept is quite simple. Johnny copies a song (or an entire CD, or collection of CDs) onto his computer, in a format like MP3. He tells his P2P software to share that music with anyone who asks for it. Jane uses her P2P software to search the other P2P participants, finding the music Johnny is offering. One click, and Jane is downloading the music from Johnny’s computer. Once Jane has the music on her computer, if she chooses to allow it to be shared, others can download it from her.

Napster, under huge legal pressure from the RIAA (Recording Industry Association of America), closed its doors in 2002. However, newer P2P applications, like Kazaa, LimeWire, and BitTorrent, which actually coordinate the simultaneous uploading and downloading of material from multiple sources, have taken Napster’s place - both over the web and in the courtrooms. The RIAA has gone after Kazaa, as well as filing lawsuits against small-time P2P users (yes, even high school, and younger, students) – anything to stop the bleeding.

But, by now you’ve got to be asking, “Why don’t the record companies sell music online?” An excellent question, dear reader. The answer is: they do, but there’ve been some growing pains. For example, how do you prevent someone from buying a song online, then distributing it to the world via P2P? The first online solution to this problem was to have people “rent” their music. For the duration of your subscription, you could listen to your hearts content to music streamed from a web server. This concept had some serious flaws and inconveniences. You had to be logged onto the internet to listen, and you couldn’t listen to the music you were renting on anything but your computer – no portable players allowed.

What jump-started the online music industry was DRM. What does DRM stand for? Only time (and next week’s installment) will tell.

© 2004 Peter F. Zimowski