Your music, differing formats
No file standard yet in the digital music world
By Douglas S. Wood
CNN
(CNN) -- Goodbye CD, we barely knew you.
Well, not really. But the CD -- short for compact disc -- faces competition as the main source of recorded music for consumers of music available online that has its own acronyms such as MP3, AAC, WMA and DRM.
The acronyms represent some of the common file formats of digital music found on the Internet. And like just about anything new in the computer industry, compatibility issues exist as businesses battle over what will become the marketplace standard.
It was a different story when the CD came into the market. Philips Electronics and Sony co-invented the CD and the technology was set as a standard in 1982. CDs were introduced in the United States in 1983.By 1988, more CDs were sold than records, consigning vinyl to a small niche market.
For consumers, that allowed them to buy a CD knowing it would work seamlessly with any number of CD players sold by a variety of companies.
Managing digital rights
But in the online world, things are different. There are at least three major file formats and the main one -- MP3 -- is the one closest to CDs in terms of popularity.
The file formats take a digital song file, which is a large, multimegabyte file, and compress it to roughly 1 MB while retaining near-CD sound quality. The smaller file size makes it far easier to transmit music online.
But the MP3 format lacks digital rights management (DRM) software. DRM software is technology that protects a piece of intellectual property, such as a song, from being illegally copied, usually by placing restrictions on how it is used.
Since MP3s have no DRM, users can easily convert their CD collections into MP3s and then make copies, transfer to portable devices and generally use them without restriction. No DRM also means that most MP3s on the Internet are available illegally on file-sharing networks, meaning that the copyright holders are not paid when a song is downloaded.
DRM technology is needed to protect the rights of copyright holders, said Todd Chanko, the DRM analyst at Jupiter Research. But he also said that consumers are used to having total control over what they do with the music they purchase.
Copyright holders -- in this case, record companies and artists -- should tread "really, really carefully" when considering how restrictive DRM technology should be, Chanko said.
"Consumers want flexibility in what they do with the electronic music or other forms of entertainment that they purchase online," he said.
That lack of DRM means that MP3 is not the format used on the major legal download sites. The most popular legal site is Apple Computer's iTunes Music Store, which Apple says is responsible for 70 percent of all legal online downloads. Songs are 99 cents apiece while albums are $9.95.
Apple uses the Advanced Audio Coding (AAC) format, which is an extension of MP3. But to protect copyright holders, Apple -- like other legal download sites -- incorporated into AAC its own DRM software to protect copyright holder.
Apple's FairPlay DRM allows users to play their purchases on five computers using Apple's iTunes software and any playlist of purchased songs can be burned to CD seven times. If you want to transfer music to a portable player, you must use Apple's iPod as the store only sells music in the AAC format, which is only compatible with the iPod.
The reason Apple's iPod and iTunes Music Store are successful is that its DRM restrictions are liberal enough for the average user, said Walt Mossberg, the technology columnist for the Wall Street Journal.
"These rules really aren't going to curb anybody's usage," he said.
Contrast Apple's approach with Napster, the former file-sharing network revised into a legal download site. It uses Windows Media Audio (WMA), Microsoft's proprietary audio format combined with Microsoft's own DRM software.
Napster allows users to burn purchased songs to CD, play them on up to three PCs and transfer to a portable player that is WMA-compatible. But Napster also offers a subscription service in which users pay a $9.95 monthly fee to receive unlimited access to streaming music and can download songs to their hard drive for future listening.
But if users let their subscriptions lapse, they lose the rights to listen to those songs. To fully own the songs, they must purchase them in addition to paying the monthly subscription fee.
Regarding the various formats, Chanko said price and selection are more important for consumers than audio quality.
"For your average consumer, if you did a taste test, I don't think they would be able to tell the difference between the various file formats," he said.
For Apple, the iTunes Music Store is more a way to sell iPods than sell music. Apple makes more money on the sales of iPods than it does on the sale of music from the iTunes Music Store. And since files from the iTunes Music Store are only AAC-formatted, the iPod is the only compatible portable player.
Criticism of Apple
RealNetworks CEO Rob Glaser criticized the approach taken by Apple CEO Steve Jobs with the iTunes music service in a recent speech to the National Association of Broadcasters.
"In Jobs' world, you can go to any store you want, so long as it's iTunes. That's not going to fly in mainstream markets and will ultimately cause a morass of incompatibility. The entire industry will bleed if Apple doesn't work with open standards," Glaser said.
RealNetworks operates the RealPlayer Music Store, selling songs in the AAC format using Real's proprietary Helix DRM software. Real's format is supported directly only by one portable player, the Creative Nomad Jukebox Zen Xtra, and by four personal digital assistant devices from PalmOne.
But Real also developed its Harmony software, which it says will allow users to play songs purchased at Real's store on their iPods. Apple reacted negatively, saying that future iPod software would probably not work with Harmony.
"We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions," Apple said in a statement.
RealNetworks defended its actions, saying "We remain fully committed to Harmony and to giving millions of consumers who own portable music devices, including the Apple iPod, choice and compatibility."
The other major music sites -- Napster, Wal-Mart and MusicMatch -- all use the WMA format, which is compatible with most digital music players. Most of those players are cheaper than the iPod but the iPod remains the most popular model sold.
Another new service is coming from Microsoft, which is launching its service on the company's MSN Web site using a new version of its WMA format.
Mossberg says the company is doing this to push the WMA format.
"Their motive is to promote the format, which is a big profit center for them through licensing fees," he said.
