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Brian Livingston
Will the new standard for the music industry signal big changes for PC software makers?

THERE HAVE BEEN many words written about the recording industryOs new digital music standard, which was released on July 13. But I havenOt seen much about the implications for the computer industry itself. Could this new music standard be a precursor of big changes for PC software?

The new spec was developed by the Secure Digital Music Initiative, or SDMI, a group of more than 100 companies. It's a standard for digital music that protects against most forms of unauthorized copying.

The influence on the PC industry could be significant. After all, PC software makers haven't been able to come up with a widely accepted form of copyright protection in 20 years. By contrast, the SDMI standard was developed in just about six months.

A little history may put this in perspective. Back in the 1980s, some software products -- notably Lotus 1-2-3 for DOS -- used "hidden files" for copy protection. The hidden files were transferred from the original product's diskettes to a user's hard drive. Without the hidden files, the product couldn't be installed again.

But copy protection was soon abandoned by most U.S. software makers, partly because the hidden files couldn't be easily backed up and restored by network administrators. Other methods -- such as dongle extensions on printer ports -- were clumsy and hard to network, so they didn't widely catch on. (Copy protection, though, is still common in some parts of the world outside the United States.)

The recording industry, faced with its own concerns, felt an urgent need to protect the copyright of digital music. With the introduction of Diamond Multimedia's Rio player, which I described on Dec. 7, 14, and 21, 1998, music could easily be played in a digital MP3 format. (See Because MP3 files contain no security against unauthorized copying, the recording industry feared that pirate Web sites would distribute the contents of entire CD collections for free.

Of course, many people have strongly argued a case for free distribution of both digital music and PC software. Thanks to Hollywood accounting, musicians may have to sell more than half a million CDs before seeing any royalties from their recording company. A less-than-platinum band's real money is made from tours and sales of products to fans. As a result, some musicians say free distribution of their music is a better way to build a fan base than signing a contract with a major label.

In the PC software field, meanwhile, it's estimated that at least one unauthorized copy of software is made for each paid-for copy. Some software users have argued that this widens the base for software, which is eventually paid for when upgrades are needed. But the lack of copyright controls may work against smaller developers.

Whatever the merits of free distribution, SDMI is said to allow both free and copyright-protected music to be distributed.

SDMI-compliant portable players that will be on sale for this year's Christmas season -- called Phase 1 devices -- will play both MP3 files and new recordings embedded with Phase 1 codes.

SDMI will support a more secure Phase 2 standard by the spring of 2000. A user can convert a Phase 1 device into a Phase 2 device simply by playing a Phase 2-encoded song and responding to a prompt. A Phase 2 device will still play MP3 files, but will not play Phase 2-encoded songs that have been copied without authorization. All big-label music may soon be Phase 2-encoded.

Lotus-style copy protection failed in the United States because it relied on software-only methods. By contrast, SDMI relies on the cooperation of hardware.

Each SDMI-compliant player must contain read-only code that respects "rules" embedded within digital audio. For example, a specific song can permit unlimited copies, no copies (such as DVD-Audio), or anything in between.

The SDMI guidebook says this can lead to new business models for musicians: "try-before-you-buy, listening rights for a certain period of time, subscriptions, rent-to-own, etc." This sounds a lot like business models that many PC software publishers and shareware authors have tried or wanted for years.

I recommend that you read the details on SDMI for yourself. To do this, go to Click "Public Information," then click "Specifications and related documents." For a five-page outline of the spec, download the "Guide to SDMI." For complete details, download the 35-page "SDMI Portable Device Specification." These files require Adobe's Acrobat PDF Reader. If you don't have it, go to

Then let me know your thoughts. Use "SDMI" as the subject line of your e-mail. Comments received by August 9 will be considered for publication in a future column.


Software Development

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