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On-line plunder rocks music world Add to ...

The man who shall be known as Dr. Download still remembers the day in 1965 when his descent into addiction began. He met the dealer and forked over the money for his first fix: The Byrds' Mr. Tambourine Man.

Now he's 46, a university professor and a father. Yet the addiction continues. In the 35 years that followed the purchase of Mr. Tambourine Man, Dr. Download has probably spent enough on LPs, tapes and CDs to pay for a decent house.

But something has changed. Upstairs, in the small office where he marks term papers and keeps his lists of music, are the tools of his new pursuit: downloading free music from the internet.

There is a Pentium II computer, a cable modem and a Hewlett-Packard CD-burner. Together, they have allowed him to download thousands of music files and create his own CDs, breaking the music dealer's hold over him at last.

"When you think about it, it's almost unbelievable," Dr. Download says. "Everything is out there. And it's free."

The problem is that while it's free to Dr. Download and the countless others who download music, it cuts into royalties earned by musicians and record companies. That's why the companies are growing increasingly agitated about the rise of a phenomenon that has the potential to make them extinct -- the downloadable digital music file.

This is straight lost income to the music companies. That's all there is to it. It's stealing. SOCAN lawyer Mark Walker

Driven in part by developments on the Internet, the music business is already undergoing wrenching change. The merger of Time Warner Inc. and EMI Group PLC this week is merely the latest in a long series of consolidations that have left the bulk of the industry in the hands of four giant players.

The on-line phenomenon presents an unprecedented threat to the traditional business model. Mark Walker, a lawyer with the Society of Composers, Authors and Music Publishers of Canada (SOCAN) believes free downloads could spell the end of the music industry as we know it.

"This is straight lost income to the music companies. That's all there is to it. It's stealing."

The most popular format for downloading music is known as MP3 -- a term that has become the most searched-for word on the worldwide web, surpassing "sex," the previous record-holder. It has been estimated that in 1999, more than six billion MP3 files were downloaded worldwide.

If there is such a thing as a typical on-line music file collector, it could be Jean François Drolet, a 26-year-old Torontonian who works in the high-tech industry and spends his spare time collecting MP3s. Until he began using the Internet, Mr. Drolet spent about $50 a month buying CDs. Now it's $50 a year.

Since 1997, Mr. Drolet estimates, he has downloaded more than 3,000 MP3 files. "It's amazing," he said. "I've never come up with a song that I couldn't find on the Internet." He is untroubled that he has received all this music free.

The availability of digital files such as MP3 has been paralleled by the rise of cheap and usable technologies for storing and playing them. Recordable CD players, -- "burners" -- are now available for as little as $300. Gary Patterson, chief financial officer for the Future Shop electronics chain, says there has been a sharp rise in sales of the units. Some computer makers now include CD burners as standard equipment.

Also available are inexpensive portable MP3 players such as the Rio, by Diamond Multimedia Systems -- a machine that sparked a failed lawsuit from the major record labels, which claimed it would encourage musical piracy.

Then there are free software players like Winamp, which allow any computer to play digital files. It has been estimated that more than four million copies of Winamp and similar programs were downloaded in North America alone last year.

The obvious question is: what happens to the record companies when Mr. Drolet and Dr. Download can get their fix free?

"A lot of things are going to change, and no one knows exactly how," said Will Straw, director of McGill University's graduate communications program. "Stores could disappear. Record companies could disappear. Nobody knows where it's all going to go."

Mr. Straw sees the Internet as an unprecedented agent of change, upsetting the long-standing hierarchy of the music industry and creating new relationships between the makers and consumers of music.

New software developments are already accelerating the pace of change. One of the most interesting is a program known as Napster. Invented by a teenaged boy who wanted to share guitar files on the Internet, Napster has expanded beyond its originator's wildest dreams. It connects untold numbers of MP3 file collectors around the world, allowing them to browse each others' hard drives and share files. It's all free.

At the Napster site ( http://www.napster.com) you can download the Napster software at no charge, then use it to hunt the web for MP3 files. Type in a song title and Napster will list all Napster members who have it, along with their computer-user name, the size of the file and the speed of their Internet connection.

At the bottom of the Napster screen is a count of the songs available -- "277,437 songs available in 2,155 libraries," it announced recently. Minutes later, the number of songs had risen several thousand, rolling ever-upward.

The music industry sees Napster as nothing less than a power tool for thieves. In December, the powerful Recording Industry Association of America filed a lawsuit against the fledgling company, charging that it was aiding and abetting the theft of intellectual property.

"We love the idea of using technology to build artist communities, but that's not what Napster is all about," said RIAA representative Cary Sherman. "Napster is about facilitating piracy and trying to build a business on the backs of artists and copyright owners."

Earlier this week, the RIAA also launched a suit against MP3.com, a service that provides digital copies of their CDs.

The outcome of these and many other similar suits will eventually determine the legal foundation for the on-line music industry. Mr. Walker of SOCAN thinks trading of MP3s is illegal and Napster, MP3.com and others threaten the music industry's foundation.

"The music business is about creating product, then generating demand for that product. If people can get it for free, there's not much possibility of return."

Napster and MP3.com may be just the tip of the iceberg. The next wave in Internet music delivery is "push" technology, which automatically directs music files to Internet users based on their tastes. One company involved in this area is Backweb Technology, a California firm that signed an agreement with RealNetworks, a major Internet media player.

Backweb's technology, known as Quicksilver, changes the acquisition of music files from a search mission to a simple matter of reception.

"With push technology, you don't have to go looking," said Bill Heye, vice-president of product strategy at Backweb's Toronto office. "It comes to you."

Mr. Heye says Quicksilver is intended to be used with a payment-based model, where users would be charged for the music they decide to download -- but he acknowledges that no one has figured out how the payment system would work.

"There are still many things to work out," he said. "But I think that people will be willing to pay. Over time, I think you are going to see the emergence of a pay model."

Mr. Heye says music firms are experimenting with various forms of copy protection that could make it difficult to copy music files. One system, known as "watermarking," limits the number of times a file can be copied.

Another limitation on illegal copying is posed by the average Internet user's lack of technical knowledge -- for many people, the act of downloading a file poses a challenge they do not care to master.

Oliver Trudeau, president of a Montreal-based Internet music service called eworldmusic.com, says the technical hurdle is one reason people are willing to pay for music, on-line or not. At eworldmusic.com, customers pay $1.50 to download an MP3.

"Right now, what's important to think about is time," Mr. Trudeau said. "If it takes people half-an-hour to find a music file on the web, they'd be better off paying for the music instead."

Mr. Trudeau thinks the current lawsuits about legality of such sites as MP3.com and Napster will determine the future of the music industry.

"If big players like MP3.com are allowed to break the law, it's going to be a huge threat to the music industry. We believe that someone has to pay. If no one pays for the music, there will be no more creation, and we'll have to listen to the Beatles until we die."

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