Digital challengers to MP3 format face high hurdles

DENVER (Billboard) - Much like the Dvorak keyboard, new digital music formats pose a challenge even as they offer solutions.

Visitors look at a JoyTone U820 MP3 player in the Power Quotient International Co. Ltd. booth, during the last day of the annual 2007 Computex, the world's second-largest computer trade show, in Taipei June 9, 2007. REUTERS/ Pichi Chuang

The Dvorak is an alternative to the standard QWERTY keyboard that rearranges the keys so that typing on it is much quicker and more efficient. Yet few outside of hardcore computer programmers use it because replacing the existing QWERTY standard would be too costly and difficult. For much the same reasons, alternative digital music formats face an uphill battle replacing the tried-and-true MP3.

The Motion Pictures Experts Group, otherwise known as MPEG, will meet this month in Germany to consider making a new digital audio format called MT9 an international standard.

Developed by the South Korean company Audizen, the MT9 format -- commercially known as Music 2.0 -- splits an audio file into six channels, such as vocals, guitar, bass and so on. Users playing the track can then raise or lower the volume on the different channels like a producer on a mixing board, to the point of isolating a single item.

According to the Korea Times, its inventors say the new format will replace MP3 as the standard for all digital music. But certain music industry realities stand in the way of their goal.

From a technical perspective, replacing MP3 with a new digital music standard would be rather easy. Digital retailers in a matter of months could refresh their entire database with music containing the new format -- just as Napster and Wal-Mart quickly switched from digital rights management to non-DRM formats.

But to do so, these retailers would need their label partners to provide them with music encoded in the new format, meaning that all the major labels and the host of independents would need to one day agree to start using a new technology to sell their music.

Then they would need audio manufacturers -- in particular, Apple -- to start making products that support the format and its capabilities. The average life span of today’s MP3 player is about eight to 12 months, so it would take time to re-seed the market with new devices.

Implementing a new digital music format would require an unprecedented level of cooperation among the labels, digital retailers and manufacturers.


It’s possible to attempt a staged rollout, where only a computer could access the full features of the new format while portable devices slowly caught up, but that setup would be far less interesting to the music fan.

“The value proposition to the consumer is linked to the functionality,” says Napster COO Christopher Allen, who oversaw the company’s format change to MP3. “So if I can do something on my PC with a client player but I can’t do it on the Web or my device, the value to the consumer of that format is not as exciting as if there were a whole ecosystem that could take advantage of the new format’s capabilities.”

These issues have combined to thwart new music formats in the past. In 2001, Coding Technologies created the mp3PRO format and licensed it through Thompson, which administers the original MP3 technology. It featured an advanced compression system that allowed encoded files to take up half the storage space of a traditional MP3, with improved sound quality to boot.

But only the Thompson-owned RCA made products that used the format, and as such failed to achieve any traction. Thompson eventually discontinued support for it.

Thompson tried again in 2005 with MP3 Surround, which, as the name indicates, added a surround-sound element to playback on compatible devices. This one was much less restrictive, working with any surround-sound device that also supported the original MP3 format. What’s more, it was free to any company already licensing the original MP3. Still, it remains largely marginalized.

Yet despite the difficulties, a new digital music format is exactly what the music industry needs to kick-start digital sales. The incumbent MP3 format doesn’t offer digital retailers enough of a differentiated product than what fans get just ripping their CDs. The only benefit to buying an MP3 online is a slightly higher-quality digital file, and that has not yet proven enough to lure customers away from the CD.