Online Music Industry: Battle for Standards Diane Anderson Tereasa Gandhi Mike Hutchings Talgat Imangaliev BPOL 541 YA Suresh Kotha

Introduction Background - Music & the Internet Importance & Expectations of Standards Why No Standards Today The Players & Their Strategies External Forces, Namely the “ RIAA” Conclusion

Music [Middle English from Old French musique, from Latin musica, from Greek (he ) mousike (tekhne ), (art) of the Muses, , feminine of mousikos, of the Muses from Mousa, Muse; see men-1 in Indo-European Roots.] What is Music? Probably one of the oldest hobbies on the earth What else is Music? Arguable one of the most widely accepted things among humans But really, what is Music? “An aesthetically pleasing or harmonious sound or combination of sounds” – from Dictionary.com

Internet What is the Internet? “The Internet, sometimes called simply "the Net," is a worldwide system of computer networks - a network of networks in which users at any one computer can, if they have permission, get information from any other computer (and sometimes talk directly to users at other computers).” – from Whatis.com Flow of data and information

Online Music What is Online Music? Music + Internet = Music, in the form of data, available online Different standards of audio files (data) available for both download and streaming.

Standards: Importance & Expectations Importance of Standards Creates Network Externalities through positive feedback & interoperability Lucrative to the Victor Expectations of Standards Nearly invisible Fast & Usable Widely used by music artists & recording labels

Why No Standards Today? Nascent Industry; Innovation abounds Technology emerged and accepted by consumers Limited Standards Established Only focused on downstreaming technology Not include codec, container for digital media or security structure Not endorsed by Microsoft

The Players & Their Strategies RealNetworks Alliance with Microsoft Interoperability with other technology Emphasis shifting toward content provider Microsoft Alliance with software vendors, recording artists, ISPs, OEMs etc… Pricing pressure Apple & MP3 Open source code

External Forces: Big Five Record Companies (80% of all music sold)

RIAA to MP3: Drop dead! To many musicians, the MP3 trading software isn't a revolution -- it's a rip-off. RIAA: “No one is off our radar screen.”

Record Industry Solutions EMI: Liquid Audio Sony: Microsoft Media Technologies 4.0 Universal: AT&T a2b

Secure Digital Music Initiative (SDMI) What is SDMI? What is the relationship between RIAA and SDMI? Is SDMI trying to squelch Internet music distribution? How is SDMI trying to set standard for online music?

Questions? Comments? (Just do not ask to sing, please!) Diane Anderson Tereasa Gandhi Mike Hutchings Talgat Imangaliev BPOL 541 YA Suresh Kotha