2.3 MP3

From the introduction of CD-ROM players in personal computers it was a wish of the users to convert CD-audio tracks to computer-readable audio files. Jim McLaughlin composed a program called CDDA (CD to digital audio), originally titled AD2WAV (audio digital to WAV-files), that opened the curtain for the process of "ripping", the transforming of audio-tracks to computer files.[33]

The Moving Picture Experts Group (MPEG) was established in January 1988 with the mandate to develop standards for coded representation of moving pictures, audio and their combination. It operates under the joint direction of the International Standards Organization (ISO) and the International Electro-Technical Commission (IEC).[34]

In 1991 the Erlanger "Fraunhofer Institut für Integrierte Schaltungen" (IIS) in Germany invented together with Thomson Electronics the MP3-format. This MPEG-1 Layer 3 uses the digital audio compression technology used in all MPEG-1 files, which includes the standard for CD-ROM and DVD, but is limited only to the audio files of these media.[35]

By taking away frequencies not heard by the human ear the format reduces WAV-files with a factor of 12 without a serious (but still noticable) decrease in quality. A five minute song takes up around 5 MB of disk space in MP3 format, while in WAV format the same song would take up more than 50 MB.[36]

With the use of "rip"-software and Fraunhofer's L3encode-software it became possible to transfer music in high quality through computer networks, and in 1995 the first MP3-audio groups formed a small scene with FTP-sites and search options.[37] In the beginning of 1998 the format was available on the Internet for free with encoding and decoding software, and every Internet user could put up own MP3-files on own webpages, and with CD-burning-machines everyone was enabled to produce own CDs of downloaded music.

The music industry realized the threat of MP3: since it lacks any systems of copyright protection, they feared piracy could potentially go unmonitored with the success of such programs and in the end have an impact on record sales.

In October 1998 the corporation Diamond Multimedia presented a portable MP3-player called "Rio" on the market. It is smaller than a walkman and the disks used allow up to sixty minutes of digital-quality music. Because of its computer like nature it does not skip and contains little to no moving parts. New music can be taken directly from the Internet to the player.

A technology mostly used by college students, hobbyists and music enthusiasts became over night publicly known because of the lawsuit faught by the Recording Industry Association of America (RIAA) against Diamond Multimedia's Rio-player and the following media coverage. The RIAA sued them in efforts to saying the new medium would violate the Audio Home Recording Act on its "prohibition" that devices capable of making many digital copies of recordings. The U.S. Courts ruled in favor of Daimond Multimedia, and the media coverage of this case was followed by a boom of MP3-technology on the Internet. Cary Sherman of the RIAA comments: "If MP3 devices without protection proliferate, then I think it retards the entire market for digital distribution, because it is going to be very hard for companies that protect the content to compete with the free music that will be available online."[38] But in times of technological innovation, there has always been a chance for new companies to enter the market, and the majors are also aware of this fact. Samsung and Pontis have developed their own portable MP3-players, there are different encoding-programs and playing software that try to rule out each other by better quality and service. The number of MP3-files on the Internet is estimated with more than 200.000[39], and special search engines for songs in the new format are provided for example by Lycos.com.

With computer and digital recording equipment prices both on steady decline, more and more people will have access to this technology, and without better alternatives and further regulation illegal use of the MP3 format will not cease. But the development of a mass market for digital distributed music bears also chances for the record companies, to enter new markets and distribute easier, and the threat for the major labels that if they do not adjust to the new market they will lose their position. MP3 forces the music industry to make moves on the Internet scene.

[part 3: reaction of the music business]