If there's one thing that stood out at the CMJ conference this year, it was that the music industry as we know it is an endangered species. Amid the false nostalgia for vinyl albums and ring tees were booth after booth of companies looking to replace your stereo system (if you're one of those people who still actually have one) with a CPU. The MP3 format and its heirs have signaled nothing less than a paradigm shift in how music is distributed, consumed, and ultimately, created. But instead of embracing this not-so-new technology (the MP3 codec was born in 1987), the major record companies have resisted the push to distribute music online, afraid to provoke their relationships with the retail world. The traditional model of a record company signing an artist and distributing product to retail outlets has been turned on its head by online distribution. Whether by selling CDs over a website or offering actual digital music for download, the record store is largely becoming irrelevant. Or so the online music players would have you believe. While there is great promise to digital distribution, the death of both record companies and traditional modes of distribution is still some ways off. Neither animal will go quietly into the night. All about the Benjamins Let's not forget that the furor over digital music distribution has very little to do with music. It's about drawing people onto the Internet to make purchases. If anything will draw people online across boundaries of race, geography and class, it's music. Online music sales are expected to account for fully 8 percent of industry revenues within the next three years, according to online consulting firm Jupiter Communications. But the question that has been plaguing music execs for the past year-and-a-half is, "Why are people going to pay for music online when they can get it for free?" The MP3 revolution has taken an already outmoded technology and made it an industry-wide standard. Why? Because it's an open system. MP3s can be copied and duplicated by anyone with a few clicks of the computer mouse. What the record companies want to do is put the genie back in the bottle and create a new hodgepodge of competing digital music formats. Their answer? Another acronym, called SDMI. SDMI? What the Hell's That? The Secure Digital Music Initiative aims to create a set of industry standards for protecting music content online. Representatives from a coalition of companies are working on a set of rules for digitally downloadable music and portable digital music players. All the major music and technology companies are on board and the group aims to make sure that audio devices and different file formats are compatible (which even the SMDI group admits won't happen for some time to come). This is necessary because record companies want to use formats they can control, unlike MP3, which can be used and manipulated by anyone. Some formats competing with MP3 include: a2b, from AT&T, which offers better quality than MP3, but can limit playback devices and number of plays. Emblaze is a player that's actually a java applet, but it lacks the speed and compression of MP3. Liquid Audio supplies high-quality playback along with the ability to encrypt and watermark files. Windows Media Technologies combines video and audio into one codec that offers numerous ways to restrict file usage by the end-user. If you think all this seems at best, creepily Big Brotherish, you're not alone. Many see it almost as an invasion of personal space. How dare a technology allow outside control of an item I've already got on my hard drive! And yet, the record companies have a legitimate interest in protecting their music. next>>