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This week we focus on a complete analysis of the
music industry
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Let the good times roll 

 
Listeners can’t get enough of music available on the Net in MP3 format.

By Pankaj Joshi

The biggest innovation since the cassette player is what many in the music industry term the MP3 technology. The concept -- MPEG Audio Layer 3 or simply MP3 -- is turning all accepted ideas of music production and distribution upside down.

It works towards compressing digital audio files. It has been attempted before but the MP3 technology makes the compression ratio incredibly high and flexible. Based on needs, a file can be compressed to as much as a twelfth of its original size.

There is a price of course. Compression is based on the logic that since human hearing cannot grasp certain audio frequencies, the latter are redundant. So, in the compression process, those frequencies are bypassed and there is some deterioration in quality. But the payoffs are tremendous.

Hard impact
The impact of the downsizing when transposed into real life means that CDs can now contain songs in excess of a hundred, very often even over 150. A buyer can now access over 12 hours of audio content from just a single CD. A song can also be transmitted ever so easily across the Web.

An idea of the possibilities that the MP3 technology throws up can be gauged from a simple example. Each music minute on a CD is worth around 10 MB of storage space. Given a 28.8 KBPS modem, experts say an hour is needed to download the same. Hence, a one-hour CD would take around 2.5 days. With the new technology, however, the downloading time has come down to five hours.

More importantly, music can be downloaded in chunks or streamed, which is a technical term. Also, while the process of downloading is at an advanced stage, the software can start playing the audio downloaded at the start.

Foot on the accelerator
With the Pentium progressing to P-II and P-III levels in the last two years, downloads became faster and faster. Encoding and playing software was already available for free. Overnight college students and amateur musicians proliferated. The latter put up their own music files on sites, while the former went for encoding those of their favourite musicians. The leading site was MP3.com. Set up in 1996 by Michael Robertson, it promoted unknown talents with free samples. Shows were organised and brands created. Fans had instant access. Genres were demarcated and searches were cut short. They could get music at economical rates, paying neither for hardware nor for distribution.

But such systematic stories were few. By and large, the Net became a free-for-all. Since MP3 files can be copied and distributed without paying royalties, the Net promised all the music of one's liking free to anyone. What was required was the patience to sit and run a couple of simple queries and hunt through a few dozen sites.

Outside support
All this had a constraint -- to enjoy the benefit of MP3 music, a computer was needed. But in the last three years, the kind of enthusiasm and public support that the MP3 technology generated saw many support systems remove this bottleneck.

The biggest such support system was the MP3 player. These are small pager-sized gadgets which can be carried anywhere like a Walkman, in the palm or in pocket. One can easily download music from a CD source or from the Internet using MP3 compression and encoding technology. It can also be stored on the hard disk of a PC and transferred later. No movable parts mean no wear and tear and no skipping, despite vibration. Standard function controls and four pre-set equalisers afford the sound quality of a CD player. Power usage is standard.

Work is also on in the area of digital automatic music which means that a CD will soon be compatible with both traditional CD players and the MP3-enabled computers.

Another innovative support product that has evolved is the TeamCom's MP3 and Internet Audio Handbook, to initiate users into MP3 technology. This CD-ROM, which includes popular software, books, and dozens of songs in the MP3 format, will be distributed to over 300,000 retail customers in the first quarter of 2000.

Impact on the economics of music

  • Music cost is lowered, particularly where distribution is concerned. There are no storage, transportation and delivery schedule constraints.

  • Upcoming musicians and artistes, via well-designed sites, can now get their first break. The road to recognition is that much shorter and smoother. Support is also there from sites like MP3.com, where a visitor can view various genres marked and new artistes identified.

    So, a fan of Bruce Springsteen or Leonard Cohen can easily find out singers inspired by them, download samples of their music and listen to them. A focused target audience is made available. The artiste gets a good deal, retaining ownership of the song and 50 per cent of the profits.

  • Accessibility is multifold. Geographical constraints no longer apply. And the advantages hold good for fans across continents. International credibility is now just a few clicks away for good-quality, hitherto-obscure musicians.

  • The MP3 technology has de-mystified mixing and reduced budget sizes for musicians. Properly handled, it performs most of the functions of a recording studio.

    Since the extreme frequency sounds are deleted, MP3 works best for loud music, like rock. This means that the youth market is under threat. There are reports that CD purchases by teenagers in the age group 15-24 have been dropping heavily in the USA.

    Today...
    Permeability of MP3 is massive. In mathematical terms, an entirely new branch of geometry, with theories and corollaries, has opened up. Software is available for encoding music into the MP3 format, playing it, decoding it (transferring to a CD) and even searching for it on the Web.

    The Web has now been taken over, say MP3 enthusiasts. They point out that MP3 is the most widely used phrase on search engines, and how all major search sites offer MP3 Web portals to make location and access easier. The technology makes its presence felt in a number of ways.

    Retail sites: E-commerce sites like amazon.com and cdnow.com, in partnership with record producers, offer song files.

    Portals: MP3.com of course is at the top. Altavista.com and Broadcast.com, among a host of others, gather highly popular audio (as well as video) content from hundreds of sources. Downloading and streaming both are facilitated. In the case of MP3.com, other features include managing and marketing tours of artistes.

    Artiste sites: Taking courage from the success of MP3.com, sites like beastieboys.com have established a presence on the Net. Visitors can hear samples of the musicians' work to influence their decision to purchase entire CDs or single tracks in digital form. Convenience of software formats other than MP3 -- RealAudio, a2b or MS Audio -- is also provided.

    Company sites: Record companies offer memberships. On paying a fee, a member can download software to be played on PCs or to be burned (recorded onto a CD). Technology helps limit the number of times a song can be copied from the purchase source after it has been paid for.

    Tomorrow
    While all this is good, what is not such healthy thinking is whether the proliferation of this technology will kill traditional revenue streams. MP3 has been controversial within the recording industry, with multiple complaints of users violating copyright protections. There are estimates that of every 100 downloads of audio software files, 99 are illegal and not paid for. The ethical debate over free downloading of MP3 formats continues, even as policing initiatives and other formats are breathing down MP3's neck. For now, the concept has the advantages which all first movers have -- a strong market position, courtesy a headstart in penetration, and instant recall.

    The format has created a new model, based on innovation, which is here to stay. Whether further innovations will see a reinforcement of its position, or the Apple Macintosh story will be played out again, is what the future will unfold.

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