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Thomson Consumer Electronics backs MP3

Consumer electronics giant buys into MP3 software specialist, plans family of MP3 players

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French state-owned consumer electronics giant Thomson Multimedia has taken a 20 per cent stake in MusicMatch, the company that develops MP3 playback, encoding and management software for Diamond Multimedia's Rio and Creative Technologies' Nomad players. The deal gives Thomson access to MusicMatch's Jukebox software, and it's clear the company is looking keenly at the opportunities to offer a range of hardware systems based on Jukebox. "MP3-playing car audio, stereos and TV set-tops are all possibilities," said a spokesman for Thomson's US subsidiary, which offers kit under the RCA and General Electric brands as well as its own. The support of well-known consumer electronics brands, along with the major record labels, is widely seen as an essential pre-requisite if the online music market is to attract music buyers beyond its current computer user niche. The success of portable players like Diamond's Rio has placed online music on consumer electronics companies' radar screens, but most of them appear to be waiting for the music industry to come to a consensus on file formats and anti-piracy measures before voicing their support. So far, only Sony, Samsung and now Thomson have admitted to planning entries into the digital music arena. Sony president Nobuyuki Idei recently said the company was developing a Walkman-style digital music player, provisionally dubbed the Netman, and Samsung yesterday said it is to offer its Yepp MP3 player worldwide. Still, Thomson's decision to back MP3 as its format of choice is interesting given its connections with Microsoft, which owns a 7.5 per cent stake in the French company. Microsoft was granted the stake by the French government back in November 1998 (see French government publishes details of Thomson stakes) in return for an agreement that the two companies would co-operate on interactive TV and Internet TV-related products. The move saw Thomson standardise on Windows CE for set-top boxes and market the Microsoft-owned WinTV system under its various brands. Microsoft, of course, has its own digital audio format (MS Audio 4.0) and digital music management system (Windows Media Technologies 4.0), so clearly Thomson, for one, reckons MP3 will win out in end, for all Microsoft's power and claims that MS Audio is technologically superior. With the Secure Digital Music Initiative preparing a broad specification for anti-piracy systems, into which MP3 could easily be slotted, and MP3 companies developing their own copyright-protection measures, MP3 is becoming less of a threat to the recording industry's major players. That allows MP3 to join the battle now being fought between the numerous file formats for record label and hardware vendor support, and as more companies like Thomson come on board, MP3's rivals are going to find life a lot tougher. ®

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