If only the fledgling digital music industry could condense its arguments surrounding upcoming regulations as well as it compresses music files.
Then maybe a wider variety of new portable players that protect those files from being pirated could be out in time for the holidays.
That most players won't include industry-sanctioned anti-piracy technology before gift-giving time is only adding to the tension in the struggle to agree on the long-awaited regulations.
And with so much money at stake in this new age of recorded and recordable music, the bickering among artists, Net music businesses, hardware makers, and the recording industry has become deafening, not to mention long-winded.
The latest volley came Wednesday between a manufacturer and the lobbying group for the Big 5 record labels. Thomson Multimedia, which makes the Lyra portable digital music player, accused the recording industry of trying pass blame for consumers' potential illegal usage onto the player makers.
The Recording Industry Association of America wasted no time in trying to debunk Thomson's claims.
"The recording industry wants to hold [device manufacturers] liable for things that consumers do," Thomson spokesman Dave Arland said. "So if a consumer could override security functions, [the recording industry] would like to be able to sue somebody. Obviously it's easier to sue the consumer electronics manufacturer.
"This is not something that strikes us as fair or appropriate."
Replied RIAA senior executive vice president Cary Sherman: "This is a gross misunderstanding. There is no situation in which a record company has held a manufacturer responsible for consumer hacking."
And so the wheels of the Secure Digital Music Initiative -- launched by the RIAA late last year to figure out how to fight digital music piracy while keeping all the sides reasonably happy -- continue to turn more slowly than the participants had originally hoped.
In fact, Sony and Diamond Multimedia have reportedly distributed emails complaining about the slowness of the process.
An SDMI representative declined to comment on this latest jab.
Thomson's latest complaint is part of the larger hand-wringing over digital music piracy.
The underlying argument that's really being played out is "whether you can continue a business with copyrights as a cornerstone" on the Internet, said Mark Hardie, analyst at Forrester Research. "I don't see a way the music business can base their business model on protecting copyrights. They need to look at other models."
The majority of online digital music -- mainly in the MP3 format, which compresses music files to allow for easy Internet transfer -- is pirated. Nevertheless, its popularity has spawned a plethora of businesses based around the format.
SDMI was initiated in the hopes of creating a voluntary security framework that will enable content owners to make their rightful buck.
Ironically, Thomson's Lyra is the first player to ship with a pre-SDMI anti-piracy system. It encrypts files on its flash memory cards so they cannot be copied or played on other devices.
Thomson's Arland said his company -- one of the largest audio-electronics sellers in America -- has an interest in MP3's success because its parent company co-owns the technology's patents. He added that Thomson has "serious concerns" about some SDMI issues that need to be resolved before it adopts the specifications.
Thomson will have the ability to offer a downloadable software upgrade for the Lyra that is SDMI compliant. But if that means including complicated measures for consumers, "then we won't offer it. We don't answer to record companies, we answer to consumers," Arland said.
SDMI's current proposal would restrict to four the number of times a consumer can record from a single recording session, he said. "That’s a big change for people," Arland said. "Who gets to explain that to the average Joe? It ain't the recording industry. It’s the manufacturer."
But SDMI executive director Leonardo Chiariglione provided another scenario that involved the offering of innovative, price-cutting marketing schemes.
"Many people say, 'I'd like to listen to this four or five times. Then I don't care.' It's interesting to say, '[Then] pay 30 percent less.'"
Chiariglione defended the SDMI discussions, saying they were moving along more quickly than other similar negotiations related to industry standards. He also promised that a consensus would be reached.
When SDMI launched in December 1998, it aimed to get its security into music players by this holiday season. The so-called Phase 1 -- which includes a watermark trigger informing the user of the Phase 2 SDMI-compliant software availability -- came out for portable devices last July.
The watermarking technology was developed by Aris Technologies, which announced in a 27 September press release that it would begin shipping software development kits.
Another contentious issue involves the possibility of content owners paying for the watermarking of every song they would make available, even if none ended up being downloaded or sold, a source involved in the SDMI discussions said.
But an SDMI proponent insisted the two sides are trying to come up with an equitable way to work out the licensing fees and satisfy all parties.
Aris' president David Leibowitz said that people would have to pay for every song they encode, but said the encoding is voluntary.
He added, "We're trying to set up a system that would not impose an unreasonable financial burden" on any of the players, especially the smaller ones.
Leibowitz said Thursday he hoped to get the final licensing terms worked out at next week's SDMI meeting in Kyoto, Japan. He also mentioned that some music-player manufacturers whom he declined to name were still "hopeful" to produce Phase 1 players by the holidays.
Neither Diamond nor Thomson said they would offer players with Phase 1 technology before January.
"There's as much SDMI in [the Rio 500] as we can build today," Diamond official Mike Reed said.
The Rio 500 is upgradeable and its next incarnation will support Liquid Audio and Microsoft's Windows Media format in addition to MP3, he said.
Creative Labs executive Chris Smith said the company hopes to ship its second-generation Nomad with watermarking by the end of the year. "I wouldn't want to make a strong statement [because] there's some possibility that the technology won't come together," he said. "Our retail partners usually need a lot more lead time."
Sony also expressed minor frustration with SDMI's progress. "Would anyone like to be sooner?" asked Sony executive Rich Armstrong. "Yes, but given there are 120 people [participating] in SDMI, things are going well. These are minor hiccups in the road."
Still, he added, "we're on schedule," referring to the January release of its memory stick Walkman.
The Walkman -- like the Rio and the Lyra -- is ready to accept any changes via a software download. The device will initially support MP3 and ATRAC3 -- Sony's own format, and will support others as they become popular.
Meanwhile, the recording industry awaits the meeting of the SDMI minds; a Sony official said the company wouldn't release many new tracks until SDMI compliant devices are ready.
Until now, the major labels have resisted putting very much popular content on the Internet, but when they do, it's likely to become wildly popular.
Obviously, some observers saw the holiday goal as a chance for the big labels to gain market share in an industry that remains wide open.
According to PC Data, fewer than 30,000 Rios and Nomads -- about US$4.79 million worth -- were sold from December through August.
Still, SDMI's Chiariglione said the holiday deadline is "more symbolic. I don't think it's really an issue."
Besides, he added, the portable specification has been out since last July, and that device makers could have designed their product so that the watermarking technology could be added when the Phase 2 kit became available.
But Forrester's Hardie argues that there's no need to panic because the player market is still in its infancy. "The overriding effort is to get a device that works," he said. "The market is embryonic."
