Best Of '99: Digital Nation: What A Difference A Year Makes

In 12 months, music industry has moved from fighting digital distribution to touting downloads by Kid Rock, Sarah McLachlan, others.

[Editor's note: Over the holiday season, SonicNet is looking back at 1999's top stories, chosen by our editors and writers. This story originally ran on Wednesday, Sept. 15.]

Staff Writer Chris Nelson writes:

Time flies on the Internet.

Less than a year ago, the Recording Industry Association of America sued

to keep the Rio portable MP3 digital-music player off store shelves. The

action was the strongest salvo yet in a war to keep unauthorized copies

of music off the Net.

Fast forward to this summer: Major artists from Kid Rock, David Bowie,

Limp Bizkit, Mariah Carey, Marcy Playground and Tori Amos to Sarah

McLachlan, Alanis Morissette, Pavement, Public Enemy, Sugar Ray, Bush,

Jewel, Creed and Santana have released or are planning to release music

online in a variety of formats.

Puff Daddy issued several versions of his single "P.E. 2000" (

HREF="http://media.addict.com/music/Puff_Daddy/PE_2000.ram">RealAudio

excerpt) in Liquid Audio format, while the Beastie Boys put out

three remixes in Microsoft's Windows Media format. Former Soundgarden

singer Chris Cornell released a cut in the once-taboo MP3 form.

From lawsuits to legal downloads: how did we get here?

Although we've got a long way to go until downloading or streaming music

is as common as buying CDs, many in the online industry say we're barreling

toward that goal faster than most people expected.

And many say the suit filed against Rio-maker Diamond Multimedia by the

RIAA set the gears a-turning.

"The Rio [suit] kicked everybody into motion," said Andrea Cook Fleming,

Liquid Audio's vice president for corporate marketing.

Lucas Graves, who analyzes the online and entertainment arenas for Jupiter

Communications, agreed. He said the lawsuit transformed the grassroots

hobby of MP3 downloading into front-page business news.

"Here was a phenomenon that was buried in the darker recesses of the

Internet, with, let's face it, not many people participating," he said.

"But the industry saw the potential to have its lunch eaten."

Diamond won the suit earlier this summer, and later both parties dismissed

their outstanding claims. By that point, the collaboration between music

and tech companies known as the Secure Digital Music Initiative had

completed a copy-protection standard for portable players like the Rio.

As co-participants of SDMI, Diamond and the RIAA were working side-by-side.

"The market was ahead of the music industry," David Watkins, president

of Diamond's RioPort spin-off company, said. "The lawsuit catalyzed the

record industry to push forward." (SonicNet's parent company, MTV

Networks Online, owns a portion of RioPort.)

While some tech companies such as RioPort say a music-industry change of

heart hastened the availability of music online, the RIAA says the

technology companies shifted their stance that downloadable music had to

come free of charge.

"In the past, tech companies said technology does what it does, get used

to it, find new ways to make money [using free downloadable music]," said

Cary Sherman, the RIAA's senior executive vice president and general

counsel.

Partnerships with companies such as Microsoft and Liquid Audio now offer

artists and labels the choice to make downloads free or for purchase,

he said.

Nearly everyone agrees that the online music world is pushing forward

with a full head of steam, but it's barely begun to exploit widespread

digital distribution. Graves pointed out that downloadable songs constitute

just a fraction of the music distributed to consumers each year —

and paid-for downloads, in turn, account for just a fraction of that

amount.

Even as the press and music industry focus on downloadable music, some

contend that streaming content — which can be listened to, but not

saved — will usurp downloading as the next important entertainment

revolution.

Jim Griffin, chief executive officer of OneHouse, an online entertainment

consulting company, said the most important development of the past year

has been the adoption of the Wireless Application Protocol. WAP is a set

of standards to help devices such as cell phones be used for Internet

access. While some people envision houses with broadband Net connections,

Griffin is anticipating the same thing for wireless phones and Palm Pilots.

"There is no way that digital music can be seen without wireless," he

said.

If the online music world continues to develop so quickly, we may get

that wireless access a lot sooner than we ever dreamed.

* * *

Marcy Playground singer John Wozniak said he's been using

the Internet since before some of his fans were born. "I was 8 years old.

My elementary school (Marcy Open School) had a terminal where I could

dial up a mainframe at the University of Minnesota and play weird text-based

games with my friends," he said in a statement announcing his band's

upcoming download promotion. Fans who preorder Marcy Playground's second

album, Shapeshifter, online will receive free temporary downloads

of all the cuts in the weeks leading up to the LP's November release.

"The computer — which was basically just a really big typewriter

— would start churning out text almost as fast as I could read it,"

Wozniak said. "It wasn't fast by today's standards, but it was incredibly

high tech for the day." ...

Indie rockers the Spells — the duo of Sleater-Kinney's

Carrie Brownstein and Helium's Mary Timony

are offering a free MP3 this week of their cover of the Who's "I

Can't Explain" through online retailer Insound.com. ...

Punk label Kill Rock Stars has one free MP3 from nearly every artist who

has recorded an album for the label at killrockstars.com. The roster

includes Bikini Kill, Elliott Smith, Mary Lou Lord,

Unwound, Sleater-Kinney, Tight Bros From Way Back When

and more than three dozen others. ...

Former Talking Heads and Modern Lovers guitarist Jerry

Harrison has started an online music company. Garageband.com invites

musicians to post downloadable music to its site and plans to reward the

most popular bands with recording contracts. ...

Musicmaker.com, a custom-CD and download company that has rights to music

from Beastie Boys label home EMI, Backstreet Boys company

Zomba and Nine Inch Nails label TVT, said Tuesday that it would

begin selling its CDs and downloads through retailer Musicland this week.

More than 200,000 tracks will be available for custom discs through

Musicland's SamGoody.com, Suncoast.com and other sites. About half that

number of tracks will soon be available for purchase by download in Liquid

Audio, Windows Media and secure MP3 formats. ...

Tommy Olsen, a 17-year-old Swede who was sued for music piracy, is expected

to receive a decision in his case Wednesday (Sept. 15), a spokesperson

for the International Federation of the Phonographic Industry said. The

IFPI's Swedish arm sued Olsen for posting links on his website to

downloadable music across the Net.