June 30, 1999

Questions Abound on Downloading Digital Music

By MATT RICHTEL

ALO ALTO, Calif. -- Although members of the music and electronics industries described standards announced on Monday as a watershed for distributing music over the Internet, numerous obstacles could very well prevent the personal computer from becoming the jukebox and record store of the future.

Related Article Taming the Free-for-All of Online Music (June 30, 1999)

Still outstanding are meaty questions about what technology will be used to deliver and protect copyrights of music sold online. And while the consortium that is creating the standards, the Secure Digital Music Initiative, represents the music, consumer electronics and computer industries, it is not at all certain that the makers of portable music players will comply with standards that are being dictated largely by the interests of record labels.

All of which is likely to leave consumers bewildered in the coming months, even as electronics companies ramp up production of the new players -- solid-state equivalents of today's portable cassette and CD players -- in the hopes of making the coming holiday season the first digital-music Christmas.

What is certain is that with the preliminary release of new standards for distributing music electronically -- -- music companies are ramping up for online sales of their recordings, as evidenced by two disclosures on Tuesday from Bertelsmann, the parent company of BMG Entertainment.

A Bertelsmann subsidiary, BMG Storage Media, based in Guetersloh, Germany, that records audio CD's and video DVD's, today announced a partnership with Intertrust and Reciprocal, two American companies that make technology for distributing music in digital form while preserving its copyrights.

Issues of copyright, antitrust laws and technology remain to be addressed.

Officials from BMG Storage Media said that starting next quarter, the partners would test technology to print new CD's that are compliant with the S.D.M.I. standard, which means the music cannot be played on portable devices if the device's owner has not paid for the music.

This is not simple to accomplish. First, future CD's have to be playable on existing CD players, which tend to be highly sensitive to the way data are organized on a CD. Second, because the Home Recording Act of 1992 allows anyone who purchases a CD to make a copy for personal use, the protection technology will have to distinguish between a recording device owned by the purchaser of the CD and a device owned by someone else. As the Intel and Microsoft Corporations discovered this year, machines that attempt to identify themselves or their owners on a network provoke angry outcries from privacy advocates.

On a different front, BMG, among the biggest of the record companies, announced today that it would begin selling music over the Internet in the fall. But, as is the case with other major record labels planning online sales, BMG has yet to decide which artists it will sell online, whether it will sell just singles or entire albums, what prices it will charge and what technology it will use to prevent illegal copying.

"These are all good questions," said J. Scott Dinsdale, a spokesman for BMG. "We're going through that process right now."

Also, today marked the start of a project in which the five major record labels are testing the sale of music over the Internet using I.B.M. technology. Trial participants in 1,000 homes in San Diego equipped with cable modems can order music online, pay for it with a credit card, download it onto their PC and record into homemde CD's.

Further, it remains to be seen how soon consumers will buy into the online music revolution, given that it takes 10 minutes to download a single song (more than 3 hours for a typical album) using a standard dial-up modem, and the downloading process is often fraught with technical difficulties.

Digital Music Related Articles Ongoing Coverage of Music on the Internet Forum Join a Discussion on Internet Music

The preliminary S.D.M.I. standards -- set to be finalized within the next month -- are meant to dictate the technical specifications for portable digital players, hand-held devices that record and play music on silicon circuitry called flash memory. The new players are the center of a shift in musical products that many recording industry veterans see as revolutionary because they enable people to download music from the Net, organize it, easily erase it and listen to it portably in CD-quality form.

Not surprisingly, the players are generating deep-seated fears within the music industry of widespread piracy because the music they record and play can be taken from commercial CD's or the Internet and copied illegally. Under the standards announced on Monday, these players eventually -- S.D.M.I estimates about 18 months -- should not be allowed to play illegally copied music.

Theoretically, what will happen is that the portable players will read a piece of software code embedded in the digital version of each song that tells the player whether making a copy is permissible. Record labels have said they will start to encode each song sold over the Internet with copyright protection information. Within 18 months, the companies also intend to start encoding each CD sold in a store with similar technology, known generically as a digital watermark.

But this technology is not yet perfected; numerous companies have submitted proposals to the S.D.M.I., but none has yet been chosen, and it is unclear whether any single solution will accomplish the task.

Some critics assert that consumers who have already amassed a sizable library of digital music cannot yet be sure that in the future digital players will be capable of playing recordings that are not S.D.M.I. compliant. Howard A. Tullman, chief executive of Tunes.com, a Chicago-based Web site that publishes thousands of songs from unsigned artists and independent record labels, says he worries that S.D.M.I. standards will lead to players that will play only music that meets big record labels' stamp of approval. "People have invested hours and hours or days taking own music collection and making it portable," he said. "You can't tell the person no, that's no good."

Meanwhile, Tara L. Lemmey, president of the Electronic Frontier Foundation, an online civil liberties group, said the organization was exploring whether the S.D.M.I. standards might represent a violation of antitrust laws or "fair use" policies that permit the use of music and other media for education or aesthetic criticism.

Representatives of S.D.M.I said portable devices would be permitted to play existing digital recordings -- most notably the thousands of MP3 files now on the Net. They have said that even when portable devices are in full compliance -- when the final rules come into play -- the devices will play all music unless the music itself contains the protection software permitting it to be played only by a copyright holder.

That said, even S.D.M.I. officials -- and some of the 150 or so technology, music and electronics companies in the consortium -- say many of the questions cannot be answered until the final specifications are approved.

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Matt Richtel at mrichtel@nytimes.com welcomes your comments and suggestions.

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