In online ventures, record labels aren't singing digital players' tune

Monday, December 3rd 2001, 12:00 am

By: News On 6

SAN FRANCISCO (AP) _ With only days to go before the top music companies start selling music online, they appear unwilling, at least initially, to support most of the digital music players currently sold.

Analysts have dim expectations for the new ventures because their music will remain largely chained for now to the computer desktop _ and only for as long as subscribers pay to ``rent'' it.

``What's the use if I'm going to have it on my desktop and I can't take it with me?'' says Jackie DeLeon, 26, a student housing coordinator at the University of Illinois-Chicago who uses her portable MP3 player in her car.

An estimated 1.4 million portable MP3 players have been sold in the United States. Music fans who own them transfer MP3s downloaded from the Internet or copied from CDs into the devices and go mobile.

But the record labels appear determined to avoid the popular MP3 format, favoring instead the industry-backed, copyright-protecting formats of Real Audio and Windows Media Audio, which allow them to control the conditions of music use.

It will be up to MusicNet and pressplay _ the labels' joint online ventures _ to decide how well their song downloads play with others _ and they're not divulging the details yet.

From what has been made public, the services look as if they will fall short of the expanded online marketplace for legitimately sold music that the recording industry promised when it forced Napster Inc. offline.

Pressplay, the partnership of Sony and Universal, says it will start slow and offer music streams and downloads from its Web site strictly for the desktop and in Microsoft Corp.'s secure Windows Media Audio format.

Other details will emerge after the service launches in late December.

``Pressplay has made a strategic decision not to announce what the specific features or price points will be, for competitive reasons, until we launch the service,'' said pressplay spokesman Seth Oster. ``We recognize that portability is a key to success and we intend to offer portability as soon as possible after launch.''

MusicNet, which launches Tuesday, is a joint venture of BMG, EMI and Warner and RealNetworks, whose Real Audio digital format is Microsoft's main competitor. The venture provides the technology for third parties to license and sell their music in protected Real Audio files.

MusicNet users can expect to pay about $10 to $15 a month for downloads, RealNetworks said Thursday. The company said it wouldn't reveal until the service launches just how many songs that will include _ or for how long they'll remain playable.

As is stands, supporting the secure formats of MusicNet and pressplay would require components not found in current players _ such as an internal system clock to make songs expire if subscribers don't keep paying.

Real Audio files currently don't work in Apple's new iPod, Creative Labs' Nomad Jukebox or SONICblue's family of Rio players.

The iPod plays MP3 music files only but Apple says its can be upgraded to support future audio formats.

Some players, like Rios and Nomads, currently support Windows Media Audio as well as MP3s. Pressplay could tweak WMA downloads to limit sharing, copying and other things fans commonly do with MP3 files.

While copyright-protected formats can ensure payment to content owners and prevent unauthorized copying, MP3 has become the de facto standard for most portable digital music devices.

The format offers little in the way of piracy protections, however, and Lee Black, an analyst for Webnoize, says the major music labels have been unwilling to support it because ``they're afraid of loss of control.''

Leslie Grandy, who manages RealNetworks' consumer division, says consumers who portable digital music will have to wait for manufacturers to catch up to copyright protections.

``Most of the current MP3 players are not secure devices,'' Grandy said. ``Consumer expectations have been set on months of working with downloadable music that was not rights controlled.''

Such demands for control prompted the Justice Department to investigate whether MusicNet and pressplay will stifle competition among smaller companies.

Both companies have been subpoenaed for documents detailing their business plans and licensing arrangements.

Even once the services launch, there's no guarantee consumers will bite.

The Chicago music aficionado, DeLeon, has been sharing MP3s online using a program called WinMX since Napster went offline in July.

She said it would take an added incentive, like the ability to burn legitimate downloaded music to blank CDs, to get her to use one of the new services.

DeLeon is not alone. A Webnoize survey of college students this year found 84 percent favored the easy-to-use MP3 format over other file types, Black said.

Though the Windows Media Audio format is technically superior to MP3 in its smaller footprint and higher quality, Black said, it's ``very protected and has lots of rules around it.''

``Security,'' said Black. ``flies in the face of usability.''