June 28, 1999

Coalition Sets Plan to Block Internet Music Piracy

A coalition of music and technology companies seeking to stop Internet music piracy on Monday said it would work to develop a screening technology that would block the playing of pirated songs in future versions of increasingly popular digital music players.

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The announcement by the coalition, the Secure Digital Music Initiative (SDMI), appeared to be a compromise between technology companies eager to sell the devices now and the music labels, who want to insure they are paid royalties, industry sources said.

The plan would give electronics makers a framework to design new digital devices to play music downloaded from the Internet.

Such devices, like the popular Rio MP3 player, are just starting to break into the market and need support from major music labels, which control most of the popular songs.

Under the two-phase strategy laid down Monday, portable devices initially would be allowed to play songs with or without copyright protection, but later versions would be required to block pirated versions of protected music.

The initiative is backed by the big labels like Seagram Co. Ltd. unit Universal, Germany's Bertelsmann AG's BMG, EMI Group Plc's EMI, Sony Corp.'s Sony Music Entertainment and Time Warner Inc.'s Warner Music.

"The future holds the promise that consumers will have access to vast amounts of exciting new content with a new level of portability," SDMI's director, Leonardo Chiariglione, said in a statement.

The SDMI, made up of about 140 music and technology companies, plans further meetings to work out standards for a screening technology that would let later devices know when an illegal version of a song was being loaded.

The group was formed late last year by the Recording Industry Association of America, which represents major music labels, to try to find a way to protect against unauthorized copying over the Internet.

The effort was sparked by the introduction of the Rio player by Diamond Multimedia Systems Inc., which lets users listen to files encoded with the popular MP3 format, which has no copyright protection.

MP3 and other so-called compression technologies squash music down to a fraction of its original size, enabling songs to be sent more quickly over the Internet and to be easily stored on a hard drive or memory chip.

The Rio triggered a gold rush by software and hardware companies, who have hurried to create alternative encoding formats and playback devices that offer different degrees of sound quality and copyright protection.

Microsoft Corp. , AT&T Corp. and International Business Machines Corp. all have competing encoding formats,while companies like Creative Technology Ltd. and Thomson Multimedia's RCA unit are launching playback devices.

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