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MP3 Rocks the Web
Today's Headlines
2:00 a.m. June 8, 2002 PDT

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 Fans: Music Should Rock, Not Lock
2:00 a.m. June 6, 2002 PDT

(page 2)

Despite the doomsday predictions, the entertainment industry is doing just fine. The movie industry, after a stellar summer, is on pace to shatter last year's box office record by 16 percent, reaching $9 billion in revenues despite the rise in piracy.

The music industry presents a much more murky picture. Worldwide sales dipped this year, prompting a rash of finger-pointing among executives. Some claim online piracy has killed sales, others look to sagging sales from its major stars, while others blame the economic downturn. Some point to all three.

The piracy bit took a hit when rapper Eminem's latest release, The Eminem Show, was rushed up a week after tracks began appearing on file-trading services. The album climbed to the top of the chart in four days.

"I absolutely believe that the bootlegs and downloads have a huge negative effect on sales," said Steve Berman, head of sales at Interscope, a division of the Universal Music Group.

Berman's attitude, which is prevalent within Hollywood and the music industries, has forced the entertainment industry to begin looking for ways to attract Dividian and other consumers to buy products that are so secure they offer little incentive to use them.

Centerspan Communications, which runs the multimedia-sharing network Scour, distributes a limited number of songs and movies from Vivendi Universal. The catch is that the content comes with DRM, a stark difference from the mega-popular services that allow people to exchange files without restrictions.

Even Kazaa, the single largest sharing community, has decided to get into the security business. While Davidian can still download any song he wants on that network, soon he will receive a different type of file. Kazaa will be distributing Altnet, a new service that allows entertainment companies to deliver secure content to users ahead of the free files.

"Altnet ... allows us to deliver files from content creators and owners and enables them to establish direct relationships with their end users," said Kevin Bermeister, CEO of Altnet.

The question Centerspan and Altnet -- and the entertainment industry -- is about to have answered is how willing consumers will be to use DRM. If Dividian is any gauge, the answer won't be pleasant for Hollywood.

On recent visits to the House of Blues and Liquid Audio, two sites that offer music in encrypted formats, he found much more frustration than fascination.

"Score minus one for HOB.com (for) not making it clear to downloaders that they may render music downloaded from their site unplayable at any time," Davidian wrote in an e-mail. "Score minus one for not even giving listeners an option to purchase said music to continue listening to it."

AP contributed to this report.

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May 10, 2002





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