Bill Gates Goes Head to Head with MP3


April 14, 1999 12:00 AM ET

It was bound to happen. Just when you thought MP3 had become the audio format for downloading music off the Net, here comes a slew of contenders battling for Internet ears -- and a piece of the $40 billion music biz.| Leading the pack is Microsoft, which yesterday introduced its own MP3-killer, officially known as Windows Media Technologies 4.0 (code-named MS Audio 4.0), at the Los Angeles House of Blues.

The announcement comes just days after Real Networks bought Xing (long affiliated with MP3 technology) and partnered with IBM (who's already working with the five major labels on a secure standard for selling music online). Meanwhile, Apple just announced that its QuickTime 4.0 would play MP3 songs on Windows and Mac systems, too. What does this mean for music consumers? Looks like there won't be one uber-player for online music any time soon.

Microsoft's solution, a descendent of its Netshow technology, claims to offer smaller file sizes and superior sound quality over MP3 and Real Networks files -- and it allows record labels to implement whatever controls they want to curtail the piracy that woke them up in the first place. "What we're delivering is a technology that not only beats Real Networks handily in the streaming space, but delivers quality equivalent to MP3 with files that download in half the time and take up half the storage," says Gary Schare, lead product manager at Microsoft for Windows Media Technologies.

Designed for both Windows and Mac users, the technology will be included in future versions of Windows 98, and it's free; just download the beta software (final release due this summer) from Microsoft's site (www.microsoft.com). Schare says the player supports several audio and video formats, including MP3 and older Real Network files.

Whether or not it's truly better than MP3, it's got a few strikes against it already. First, consumers currently love MP3 and its freedoms -- including the ability to infinitely reproduce and send copies of songs. Second, there are already thousands of MP3 songs available at the click of a mouse, most for free. Third, and most important, the music biz has not exactly embraced Microsoft's system. In fact, none of the big five record companies has signed on to distribute music online using MS Audio 4.0. That's because all five are working with the Recording Industry Association of America (RIAA) to produce a standard (known as SDMI), and they're experimenting with IBM's EMMS system. Got it?

That said, as of today, MS Audio 4.0 has partnered with some major sites and companies. A partial list includes Amplified.com, Audible.com, Beatflow Records, DreamWorks Records, CDuctive.com, Del-Fi Records, Fuel 2000 Records, Launch.com, musicmaker.com, Platinum Entertainment, POINT Group Ltd., Raveworld.net, Restless Records, Rykodisc, Sightsound.com, Tunes.com and TVT Records.

Visit Launch.com and you can sample previously unreleased material by XTC and a new single, "Clocks In Sync With Mine," from former Arrested Development rapper Speech, who is releasing his sophomore solo effort, Hoopla this summer on TVT. The song is free, but expires after eight weeks -- a familiar way to limit use of software applications. Users can re-register thereafter.

During the House of Blues event, Microsoft also announced that Casio would soon introduce a $499 portable player/mini-PC that not only plays Windows Media Technologies 4.0 audio and video, but offers mini-PC-like functions. Expect this gadget to hit stores in May. Schare indicated that other players, like Diamond's Rio and Creative Technologies' Nomad, may support the Microsoft format as well.

Will Microsoft succeed in bumping off MP3, the record companies and other technology companies? Probably not. But remember: When Microsoft enters the fray, it plays to win. And this game has just begun. Expect more mergers, acquisitions, downloads ... and litigation.

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