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New Recording Format To Challenge Music CDs
By Ed Sutherland, www.NewsFactor.com
Tuesday August 07 01:08 PM EDT
http://dailynews.yahoo.com/h/nf/20010807/tc/12587_1.html

Blaming the familiar compact disc format for many of the music industry's piracy headaches, a partnership has formed to replace the ubiquitous CD with recorded media the size of a U.S. 25-cent piece.

A new format "is the only way to conclusively halt music piracy, while giving consumers the rich experience they want," said Talal Shamoon, senior vice president of InterTrust (Nasdaq: ITRU - news).

The Santa Clara, California-based digital rights management (DRM) software firm will use a new format from start-up DataPlay to secure both prerecorded and blank music audio discs, according to statements released late Monday.

Trying to Preserve the Past

Eric Scheier, a Forrester Research analyst, told NewsFactor Network that Monday's announcement is another indication that the music industry is trying to retain a distribution method that can't be preserved.

While the move makes business sense for InterTrust and DataPlay, any notion that the CD "will soon be replaced is unlikely," Scheier told NewsFactor. He said it would take another 20 years to replace CDs.

Lee Black, an analyst for music research firm WebNoize, told NewsFactor that he believes any push to replace CDs "faces an uphill climb."

Eleven Hours of Tunes

The new media can hold up to 11 hours worth of MP3s or nearly a dozen prerecorded albums with a 500 MB capacity for each disc, according to reports. Consumers will need to buy new devices, projected to cost between US$199 and $299, to play the audio discs, say sources.

The new discs -- both blank and prerecorded -- are expected to be released this fall, say DataPlay officials. Blank discs should cost between $5 and $10, with prerecorded prices on a par with CDs.

Samsung, Toshiba and SONICblue (Nasdaq: SBLU - news), which makes the Diamond Rio MP3 player, are developing devices using DataPlay's discs.

Music Labels Partner

Music labels Vivendi Universal (NYSE: V - news), EMI and BMG are partners with DataPlay.

"We are pleased to see InterTrust and DataPlay working together to create a flexible specification for delivering our artists' music and enhanced content," said Albhy Galuten, senior vice president of Universal Music Group's eLabs.

InterTrust announced on July 23rd that it would extend its rights management software to portable devices. Other players in the digital rights management arena, such as Microsoft (Nasdaq: MSFT - news), remain bound to the PC, according to published reports.

Portable Features

"Users can play their InterTrust-protected content in any DataPlay-enabled device," said a statement from InterTrust. "Users will be able to move the content to their desktop computers and portable devices."

Officials of the Boulder, Colorado-based DataPlay say the new discs go beyond protecting the recording labels. Consumers can record new downloaded music and even create a sort of karaoke, blending a listener's voice with a prerecorded album, said Todd Oseth, senior vice president at DataPlay.

DataPlay in June inked an agreement with data storage firm Imation (NYSE: IMN - news). The deal makes Imation the first U.S. maker of blank and prerecorded discs to adopt the new format. Imation also gained non-exclusive worldwide distribution rights for the disc.