Jupiter Communications LLC has again urged the music industry to adopt a less defensive attitude towards the digital audio compression format, MP3. Two weeks ago the research company urged record labels to embrace MP3 as a promotional vehicle. But the music industry fears that the lack of any copyright protection mechanism in MP3 encourages users to pirate intellectual property. The Recording Industry Association of America (RIAA) is hard at work on the Secure Digital Music Initiative (SDMI), which will add copyright controls to digital music playback devices.
Nevertheless, on the eve of its Plug.In music forum in New York, Jupiter has renewed its calls to the industry to accept the fact that MP3 is winning the digital music battle. Industry players have been so eager to dampen any momentum that MP3 had as a format that the greater benefits of digital distribution, including use of MP3, remain vastly under-exploited, said senior analyst Mark Mooradian.
Instead of fighting MP3, record labels should look at alternative revenue streams. Jupiter predicts that music publishers will have to gather consumer data about bands’ audiences in order to build new business models, raising money from merchandising and touring as well as from simply shifting CDs. The record labels will have to adopt a direct-marketing mindset. Control of customer data stands to be the single greatest issue of contention between artist management and labels in the next two years, Mooradian concluded.
Meanwhile, AT&T chose the Plug.In forum to announce that its a2b music format – a secure alternative to MP3 – will now support Apple Computer Inc’s QuickTime 4. AT&T says it will develop an a2b music plug-in for QuickTime for both the Macintosh and Windows platforms. In a stroke, a2b gains access to the millions of existing users of Apple’s multimedia software, while QuickTime gains credibility and adds a new format to its arsenal.
