MP3 Format

V

Other Digital Formats

MP3 has become somewhat of a generic term for referring to compressed audio (music) recordings of many formats, and is the most commonly used compression format today. However, it is but one of many compressed media files. These files are both “lossy” and “lossless” formats.

Lossless files such as AIFF and WAV do not alter the original file’s size or content. The Apple Lossless Encoder (ALE) creates files that are 30 to 70 percent of the size of uncompressed WAV or AIFF files, depending on the material. It does so without compromising the quality.

The Advanced Audio Coding (AAC) format represents an improvement of approximately 30 percent over MP3 in signal quality. Like the MP3 it is a “lossy” format, meaning that some information of the original file is eliminated.

Other formats exist. Among them are RealAudio from RealNetworks, which is used frequently for streaming audio on Web sites; QDesign, which is used in QuickTime functioning at low bitrates; MPC (an outcome of MP2); and AC-3, which is used in Dolby Digital and DVD.

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Marketplace issues, however, often restrict what devices can play which types of files. Music files provided by one company may only function on that company’s players. The files may also be coded with a digital rights management (DRM) system to protect the music from theft; this coding restricts how the files can be transferred from one device (or person) to the next.

VI

History of MP3 Format

In 1991 the groundwork was set for the MP3 format by the Moving Picture Experts Group (MPEG) Audio Group, which sets international standards for coding audio information in compressed digital formats. Their work came out of the European Union as part of the EUREKA research program, which helps develop new technologies with agreed-upon intellectual property rights. Proposals being considered included Digital Audio Broadcast (DAB); MUSICAM (Masking pattern adapted Universal Sub-band Integrated Coding And Multiplexing); and the ASPEC (Adaptive Spectral Perceptual Entropy Coding) system, which was designed for compressing audio for transmission on ISDN (Integrated Services Digital Network) .

As a result of tests, qualities of each were combined to create a standard for digital audio that would have three levels of complexity and performance. These three different levels became known as layers, and were needed because of the large number of possible applications. It was apparent to the MPEG experts group that stereo music recordings would require different quality criteria for a digital audio format than for single-channel speech.

The concept of standardizing bitstream content and decoder format emerged, compression algorithms for encoders soon became proprietary—their contents a secret of the company—and competition between companies began.

In 1995 the MP3 player Winplay3 was released as software that could be loaded on to a personal computer. Computer owners could then encode and play back MP3 files. Files began to be shared on the Internet, and software made it very easy to play back, create, share, and collect MP3s. Napster and other Web sites vastly increased the sharing of MP3 files by providing special software and forums for exchanging files. The music industry started legal actions for alleged theft of recordings and music.

The first portable MP3 player appeared in 1998 and used a flash memory to store files. About a year later, the first MP3 player that had a small hard drive was released, providing much more storage capacity. The true popularity of portable MP3 players began in the fall of 2001 when Apple introduced the iPod, also with a small hard drive to store files.

The iPod's considerable storage capacity, ease of use, and simple design made it successful immediately. The device can play MP3 encoded files and AAC files as well as iTunes. The iPod has continued its popularity as new versions are offered to consumers, including the iPod nano and iPod shuffle, which both use flash memory rather than a hard drive to store files. The iPod video has a hard drive and plays video files on a small display screen. Many other manufacturers also make MP3 players, with different features such as video and radio. Microsoft entered the MP3 player market in 2006 with Zune, which has a hard drive and wireless capabilities that allow users to share photos and other media.

VII

Copyright and Intellectual Property Issues

In recent decades, technology has provided consumers with a range of electronic devices that can make copies of commercially produced songs and other recordings, of radio or television broadcasts, or of motion pictures. Beginning with audiocassette tapes and videotapes in the 1970s, the legal owners of the copyrights on recordings, broadcasts, or motion pictures have attempted to restrict how consumers can make or use copies of such media. The claim is that making such copies is a form of copyright infringement. Sharing or selling copies of such media also is said to deprive the legal owners of revenue that could otherwise come from sales of commercially manufactured or distributed products. The introduction of digital technology such as CDs and home computers beginning in the 1980s meant that much higher quality copies of music or other media could be made and shared. The rise of the Internet and the introduction of the MP3 format in the 1990s made sharing copied media much easier.

Major court cases have addressed the issue of “fair use” and copyright infringement. An important early case was Universal City Studios, Inc., et al. v. Sony Corporation of America Inc., et al., the so-called Betamax case, filed in 1974 and decided by the U.S. Supreme Court in 1984. The decision allowed consumers to make videotape copies of programs and movies broadcast on television for personal use but not for sale. This decision established what could be considered fair use of copies of copyrighted media material. The U.S. Congress has also passed laws such as the Audio Home Recording Act (AHRA) of 1992 and the Digital Millennium Copyright Act (DMCA) of 1998 to place restrictions on the copying and distribution of intellectual property in digital formats.

The best-known legal case involving the MP3 format has been A&M Records v. Napster, filed in 2000 and decided in 2001. Napster began as an Internet company that provided a free music-swapping service, with software and a Web site that allowed users to post MP3 files of music that other users could download. Napster was sued for facilitating copyright infringement by its users. Napster users were allegedly engaging in illegal copying and distribution of copyrighted property, referred to as “music piracy.” Napster was fined and the company was forced to shut down in its original form.

Current copyright law allows a consumer to make a copy of a commercial CD for personal use. The contents of the CD can be encoded as MP3 files to be listened to on a computer, or copied to the consumer’s own MP3 player, but only for personal or at-home use. It is not legal for the person who purchased a CD to give a copy of a copyrighted song or CD content to another person. Violations are considered to occur even when the copy of the music or CD is not sold—money does not need to exchange hands for the law to be violated. In simple terms, the unauthorized copying or distribution of commercial music is illegal.

Sharing of MP3 files on the Internet continues, however. The files on some P2P (peer-to-peer) networks violate copyright law if the material being shared is copyrighted. Dedicated download Web sites and other places where file sharing readily occurs readily run the risk of such violations.

The music industry has tried to counter such file sharing by suing individuals involved and by offering legal download sites that comply with copyright laws. A number of subscription services are now available that offer MP3 music files. However, the music files on some services are designed to expire or cannot be recopied or burned to a CD. The files offered may also only be compatible with particular types of MP3 players.

VIII

Impact on Marketing of Music

MP3 players, especially the iPod, have transformed how consumers purchase, listen to, collect, organize, and transport music collections. The popularity of MP3 files has had a major impact on the sales of recorded CDs, until recently the most popular format for purchasing music.

In recent years, online stores have sold billions of individual songs worldwide. These songs were purchased as MP3- or AAC- formatted data files--sales of the songs without the CD that the songs were originally issued on. The range of businesses involved in the production of CDs such as replication plants, printers of artwork, and manufacturers of discs and jewel cases did not contribute their products and thus did not receive revenue from these sales. The “hardcopy” side of the industry is seeing large shifts and changes.

Online music stores have a different view of finances than do traditional stores selling CDs. For example, Apple’s iTunes store is profitable to the company, but Apple is more concerned with promoting sales of its iPod players, which are a much more significant source of revenue. Making particular music available to iPod owners through iTunes encourages consumers to buy Apple’s players.

The relative ease of making digital recordings at home or in private studios with computers and affordable hardware, along with the ability to make music available in MP3 format over the Internet, has had an impact on the marketing of music. The Internet allows independence for upcoming artists. Musicians or music groups no longer need the backing of a major record label to make their music available to a wide public. Artists need only marketing and visibility. Web-based forums such as MySpace, YouTube, and others offer opportunities to get songs heard and for people to respond to them. Publicity through conversations in blogs, chat groups, newsgroups, and forums can spread quickly for the artists who have grabbed the attention of the people who listen to and buy music—as opposed to the corporations that decide if they will invest in an artist.

While the MP3 format may someday be replaced by a different file format, buying music, listening to music, sharing music, and storing music collections have changed forever. Record labels (the creators of the recordings) and the music industry in general are still trying to cope with a market that is moving toward providing music as data files rather than as playable hardware in the form of CDs, or earlier, vinyl records and magnetic tape. At the same time that consumers have more choices than ever and greater access to music through the Internet—sometimes at little or no cost—record labels and other music-related businesses will need to find viable ways to derive revenue from recorded music. Artists and songwriters will also need to find ways to be fairly compensated for their work.

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