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Net to bring major labels, HMV and co under fire

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Anyone with shares in music stores and the music industry's biggest players should seriously consider getting out -- that's the message at the heart of the latest report on the state of Internet-based music from the Internet Underground Music Association (IUMA). The report, Music's Online Future, predicts a shift in power away from the major labels and toward artists and independent labels as digital distribution becomes commonplace. While the big labels will continue to concentrate on volume marketing and promoting well-known bands, the Internet will take over their role as discoverer of new talent, said Andrew Atherton, IUMA VP and primary author of the report. That puts independent labels, operating across the Internet, in a position to start building ever more popular rosters of artists. Some will clearly later sign up with the majors, but the economics of digital delivery will make sticking with the Net specialists or going their own way more attractive to artists, whatever their stature. So far, so predictable. You would expect the IUMA, as an offshoot of indie Net music label and repository, the Internet Underground Music Archive (our italics), to come out with a prognosis that favours the independents. And, while the report was based on a survey of over 45 industry executives, its conclusions almost certainly don't take into account recent developments such as IBM's Madison Project, an experimental digital music delivery system designed for and supported by most of the major labels (see Major labels join IBM on Net music sales trial). Where the report does move away from the norm, is in its prediction that MP3, the MPEG-based music encoding format much loved by Nethead music lovers and copyright pirates, will only kick-start the digital distribution market (which it already has) but have little other effect. "MP3 is like dumping gas on the fire," said Atherton. "It's an accelerant but not the solution. It's going to speed up the adoption of distribution and e-commerce." In its place, Atherton said he expected a pan-media compression and protection format to emerge in 2000. That's a reasonable prediction, and it's not hard to image a new release of the MPEG specification that takes in serial number and certification in addition to the compression it already covers. A limited level of that kind of thing is already present in the MPEG-based DVD spec to prevent discs being used in different territories. ®

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