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Diamond to add Liquid Audio to Rio

Deal suggests Diamond is caving in to the music industry

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Diamond Multimedia and Internet music specialist Liquid Audio have agreed to work together to promote "secure downloadable music" to the mainstream. In essence, the deal is all about incorporating Liquid Audio's music encryption technology into Diamond's Rio digital music player. Both companies are portraying the agreement as a way of extendeding the range of formats the device supports, but it actually represents a major change of mind on Diamond's part. As reported previously by The Register, Diamond found itself in a whole heap of trouble with the Recording Industry Association of America (RIAA), which objected to Rio's use of the MP3 digital audio standard and the scope it provides for the mass illegal copying of copyright music tracks. For the time being Diamond has been permitted to sell Rio (see Diamond wins right to ship Rio music player). However, the RIAA remains hostile to Rio and is continuing its attempts to get the device changed to bring it into line with US copyright protection law. Diamond's move on Monday to form the MP3 Association (see Diamond forms MP3 lobby body), a body tasked with promoting MP3 as a valid foundation for a digital music market, seemed to suggest the company was set to clash with the music industry again, but the Liquid Audio deal changes that. Liquid Audio's system provides for tightly encrypted downloadable music tracks which can only be played on the user's personalised software. It also provides a robust royalty payment mechanism. In short, it does exactly what the RIAA would like Rio to do: ensure the industry gets paid and make illegal duplication practically impossible. So by adding Liquid Audio technology to Rio, Diamond is effectively saying the RIAA was right after all, and it will now be a good boy. Presumably the company hopes that will keep it safe from future costly legal action -- even with the backing of its fellow MP3 Association members, Diamond doesn't possess a fraction of the resources the music industry can bring to bear. However, Diamond hasn't yet gone so far as to abandon support for MP3, so the RIAA's opposition to Rio continues, said a spokesman. But it's not hard to foresee the company de-emphasising the MP3 side of Rio, though whether the rest of the MP3 Association, most of whose members sell MP3-encoded music, will be quite so keen on the plan remains to be seen. ® Click for more stories Click for story index

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