1. Online Music Standards
Presented by Team: “We see each other more than we see our spouses”
Heather Muir
John Mullinax
Ginny Strang
Nancy Uy

2. Agenda Purpose: Frame the Battle for Online Music Standards
Traditional Industry Value Chain
The New Value Chain
Forces for Change
Online Distribution Process: The Categories & Players
Standards: One or Many?
What does it take to be a standards leader?
Framing the Game: The moves by the players
Evolving Issues

3. Traditional Music Industry Value Chain
Artist
Record
Labels
Distributors
Wholesalers
Retailers
Consumer

4. Driving Forces for Change
Music Content Record Labels Artists Copyrights
Distribution Music Sites Retailers
Search
Technology Bandwidth Devices Standards
Audience Behavior Soft/Hard-ware

5. New Value Chain ? Internet Artist Site beastieboys.com
Artists Can Go Direct...
Artist Site beastieboys.com
publicenemy.com
Retail Site Amazon.Com
Cdnow Tower Records
Download Sites mp3.com GoodNoise
a2b music
Liquid Audio
Through traditional label...
Record Labels
Consumers
...Or through a new web virtual label
Virtual Labels ?

6. Online Technical Distribution Process Categories and Players
Step 1: Standards-Encoding into Digital Format
MP3, ATRAC3 (Sony)
Step 2: Distribution-Digital Rights Mgmt. Sys.
Liquid Audio, a2bmusic, Loudeye, MP3
Watermark encoding prevents copy (Secure Music Digital Initiative - SDMI)
Step 3: Delivery-To Customer on Computer
Real Jukebox, Microsoft Media Player
Step 4: Listening Devices
Diamond Rio, Creative Labs, Dynamic Naked Audio

7. Standards: One or Many? Verdict is still out
MP3 vs SDMI: Philosophical Differences
Possibility multiple formats will coexist
Cell Phones: GSM, TDMA and CDMA all interact
Consumer may not have to make a choice

8. Players Taking Sides MP3 SDMI Winamp (Nullsoft) a2b music (AT&T)
RCA Thompson (Nomad)*
Diamond Multimedia (Rio)*
Creative Labs
Internet Underground
SpinArt Records
Liquid Audio*
Microsoft (Media Player)
Recording Industry Association of America
Matsushita Electronics
Deutsche Telecom
Dolby Laboratories
AOL
Toshiba

9. The Matrix: Being a Standards Leader

10. Growth of MP3.Com

11. ? ? ? ? ? Moves in the Game MSFT Supports SDMI MP3 Invented
MP3.Com IPO
San Disk
w/ SDMI
Diamond’s Rio
Labels Deal
w/ Loudeye ?
Tom Petty
Allows Free
Song
Real Juke Box
SDMI
CompuServe Sued ?
MSFT MediaPlayer ?

12. Evolving Issues Interesting shifts in distribution power:
Was labels, retail, MTV
Now technology providers/standard creators
Who will regain power? Who will establish new brands?
Where will value lie in this New Marketplace for Music?
Consumer vs Labels vs Artists
So who will the winners be? Who will decide? Are we entering a new era in Online Music?
Piracy, Promotion, Commerce

13. Questions? ? ? ? ? ?

14. Sources and Interviews
Mergers of Music Giants. New York Times, January 26, 2000.
Protection for Internet Music. The Seattle Post-Intelligencer, January 21, 2000.
Playing Cards. Business 2.0, November 1999.
MP3.com, Now What. Business 2.0, November 1999.
Musical Discord. Business 2.0, September 1999.
Prodigal Song. Business 2.0, June 1999.
Virtual Music Rocks. The Forrester Report, March 1999.
Real Networks. Kotha & Johnston 1998.
Information Rules. Shapiro and Varian, 1998
Net Gain: Expanding Markets Through Virtual Communities, Hagel and Armstrong. C1997 by McKinsey & Co. Inc.
Interview with M.Y. Jaisimha, Group Program Manager, Music Group, Real Networks.
Interview with Kim Harris, Owner, Easy Street CD's & Tapes and former promoter for Queensryche

15. The Categories and the Players
Standard Makers
MP3
SDMI
Others
Distributors
Liquid Audio
Loudeye
MP3.com
a2b Music
Music Juice
Delivery
Real Network Jukebox
Microsoft Media Players
Listening Devices
Diamond Rio
Creative Labs
RCA/Thomson
Dynamic Naked Audio