10 Computer Published by the IEEE Computer Society INDUSTRY TRENDS D igital online music has become a big industry. US revenue from content sales will grow from $338 mil- lion last year to $1.6 billion in 2009, according to Mike McGuire, research director for Gart- ner Inc., a market research firm. Worldwide, digital music sales soared from $380 million in 2004 to $1.1 billion last year, according to the International Federation of the Phonographic Industry. The portable digital-music-player market is also booming. Jon Erensen, a Gartner senior research analyst, predicts player sales will rise from 133.3 million in 2005 to 297.8 million in 2009, as Figure 1 shows. While these figures portend a bright future, the digital-music industry faces a major potential problem: content purchased in one format will not necessarily run on players based on a different format. This is particularly the case for the two major vendors of digital-music players: • Apple Computer, whose iPod is the most popular player and whose iTunes distributes the most music, all of which ap- pears in the advanced audio coding (AAC, also sometimes called MPEG-4 AAC) format; and • Microsoft, which encodes music in the company’s Windows Media Audio (WMA) format. However, incompatibility also af- fects music based on both Real- Networks’ RealAudio and the MP3 (MPEG-1 Audio Layer-3) formats. None of these codecs works with data encoded by the other formats. In addition, AAC, WMA, and RealAudio use intellectual-property (IP) protection schemes—designed to keep users from playing, copying, or transmitting content in ways the provider doesn’t authorize—that won’t interoperate with one another. For several years, MP3 didn’t in- clude IP protection. When propo- nents finally released a scheme for MP3, it was too late for widespread industry adoption. In essence, consumers often find they cannot play music they have purchased when and on whatever player they want, unless they have the time and money and are techni- cally savvy enough to implement a workaround, if one exists for the format they’re using. These incompatibility problems confuse customers, which could cause many potential purchasers to avoid legitimate online music sup- pliers and either buy from other sup- pliers or continue using CDs, according to McGuire. This, in turn, would limit the digital music indus- try’s growth, said William Pence, chief technology officer for music vendor Napster. The music industry, including the major record labels, would thus like to see the problem go away through interoperability and, for some propo- nents, open digital-music standards. However, said Annette Hurst, IP attorney for Heller Ehrman LLP, “Neither Apple nor Microsoft ap- pears to see any benefit in a new open standard, each apparently hop- ing its format will become the de facto proprietary standard with all the attendant financial benefits.” TO EACH ITS OWN Apple sells music only on its own market-leading iTunes site. The music plays on the iPod; the iTunes Digital Jukebox, which runs on PCs and Macintosh computers; and a couple of types of cellular phones. Apple thus largely controls the sale of both its music and the players on which it runs. WMA-formatted music is sup- ported by Windows Media Player software on PCs as well as about 110 devices—including music players, mobile phones, DVD and CD play- ers, and PDAs—made by companies such as Creative Technology, iRiver, RCA, SanDisk, and Samsung. “There are also a growing number of networked and rack-mountable home-theatre devices that support WMA,” said Marcus Matthias, a product manager for Microsoft’s Windows Digital Media division. According to Matthias, 66 music providers—including MSN Music, MusicMatch, Napster, Rhapsody, Yahoo, and Dell’s and WalMart’s online stores—sell WMA music. RealAudio music plays on Real- Player for desktop computers as well Digital Music Faces Incompatible Formats David Geer