Realnetworks, Thomson Products Open Mainstream Door To Mp3

LOS ANGELES-The unprotected MP3 format, which is already the most widely searched word on many Internet search engines (see Sites + Sounds, page 71), is likely to leap further into the mainstream, following significant product announcements from RealNetworks and Thomson Multimedia.
RealNetworks has moved aggressively into the MP3 space with the digital-download and CD-copying software RealJukebox, which is being promoted to 60 million registered users of streaming multimedia software RealPlayer.
Consumer electronics giant Thomson Multimedia is entering the portable download music player market with the LYRA, which will be marketed under the RCA brand in the U.S. and Canada and the Thomson brand in Europe.
RealJukebox, which was announced May 3 at the RealNetworks Conference in San Francisco, enables consumers to copy their CDs to either MP3 or RealNetworks' G2 digital music format, which was previously used only for streaming (Billboard, May 8). While RealJukebox is not the first CD-copying software, the wide reach of RealNetworks is expected to bring CD copying to a larger audience, including computer users who might not normally copy their CDs.
RealJukebox copies CDs while users are listening, but the software is able to finish copying the entire disc at a speed three to five times faster than it would take to hear the entire disc.
The product also allows consumers to download music via a "Get Music" button that serves as a portal to legally downloaded music from participating labels and artists. Users are able to organize CD-copied music alongside digitally downloaded music into customized playlists, which can then be played back from a computer hard drive or transferred to a portable music device.
RealNetworks is also integrating full MP3 compatibility into an upgraded version of RealPlayer G2. The software company's anticipated move to embrace MP3 was based on strong demand from users, according to RealNetworks senior VP Phil Barrett.
Barrett acknowledges that RealNetworks' support of MP3 has become a "competitive necessity," following recent moves by Microsoft and Apple to integrate MP3 compatibility into their music players.
Still, with the exception of the major-affiliated DreamWorks, no major music companies are supporting RealJukebox at its launch. The situation is similar to the challenge faced by Microsoft, which found major-label opposition to its Windows Media Technologies 4.0. That technology was shunned because its security features are optional to end users. In addition, Microsoft is continuing to support MP3 in its player, despite concerns from some in the music industry (Billboard, April 17).
To address such concerns, RealJukebox contains a Serial Copyright Management System that is automatically enabled when installed. The feature limits distribution of the initial music recording by limiting playback to the original hard drive that the software is installed on. Consumers who choose to disable the security feature are shown a pop-up window informing them that they might violate copyright laws.
In response to RealJukebox, Sony Music issued the stern statement: "We do not support any application that enables music to be distributed in an unsecured format."
Some major-label new-media execs say that they were unaware of the CD-copying functionality of the RealJukebox prior to its debut.
"We were shocked by that," says one such executive. "They didn't inform our label heads about it, which is a sign that they knew it would be controversial."
LABEL SUPPORTERS
However, the product also has supporters in the music industry, including indies Rykodisc and Sub Pop.
"This is an important product that pushes forward the digital music experience," says Lars Murray, director of new media for Rykodisc. "Any CD-copying tool is a concern, but this is not the first product to do that. What is significant is that this also contains built-in links to legitimate digital-download offerings."
Other companies supporting the launch include CDuctive, Goodnoise, and Sputnik7.
One major-label new-media executive says RealJukebox's "Get Music" area may hasten the mainstreaming of digitally downloadable music.
A recent Amazon.com promotion for Sarah McLachlan's new album, "Mirrorball," which offers two free digital downloads, is also credited by the executive as an influential milestone in the mainstreaming of digital downloading (Billboard, April 17).
Amazon approached McLachlan directly. Similarly, in the absence of major-label approval, RealNetworks is approaching some artists and managers directly for music to support the product's launch. Downloaded content from Public Enemy and the Offspring was coordinated through a2b Music, which offers a download music plug-in for RealJukebox.
"We wanted to do something that allowed us to directly interact with our audience," says Dexter Holland, lead singer of the Offspring. "MP3 and the Internet have been a real eye-opener for us . . . I guess we really decided to do this after reading that we were the No. 1 most-pirated band on the Internet. It's almost as if there is a new global radio station called the Internet. This is just a good way to get our music across to kids who want to hear it."
THOMSON'S LYRA
To assist those kids in playing back the music, Thomson Multimedia will offer two models of the LYRA in the third quarter. The lowest-price model will sell for less than $200, according to Thomson spokesman Dave Arland. A price has not yet been determined for the higher-end model, which will contain a memory card with more storage space and other extras.
Both models support the MP3 format, as well as RealNetworks' G2. In addition, both will be bundled with RealJukebox.
The product will compete with existing portable players, such as Diamond Multimedia's Rio.
As competition grows among the portable digital music players, the average price continues to drop. For example, the Rio can now be found for sale as low as $118, following a price reduction and a $50 rebate from Diamond.