Programmers prepare new, free MP3 format

Concerned over the steadily rising royalty fees for online MP3 music companies, a group of open-source (software that is developed, tested or improved through public collaboration) developers have created a new music format that will be free and will equal or better MP3's quality. The project titled "Vorbis," is led by programmers at CMGI's iCast, and is scheduled to be unveiled in beta form at next week's MP3.com summit in San Diego.

Vorbis is different from MP3, the most popular downloadable music format on the Web. No royalty payments were collected, and German research institute that created the format is now collecting its dues by charging companies that create MP3 software and hardware or sell MP3 downloads.

Vorbis will hit a market where earlier music formats have established themselves. It’s perceived as difficult for a free version to now gain popularity. MP3 is the dominant format. Even Microsoft's Windows Media format is gaining acceptance by record companies and others seeking a more secure format. So far, Liquid Audio has been used for secure music downloads. Real Networks' technology is also used for much of the streaming audio on the Web.

Jack Moffitt, iCast Vice President who is overseeing Vorbis, is also the creator of the open-source Icecast, a streaming MP3 technology similar to Nullsoft's Shoutcast, now owned by America Online. He came to iCast last year when the company acquired Net radio firm Green Witch. ICast and other Webcasting companies are facing potentially steep hikes in their operating costs next year, a looming fact that has helped drive the Vorbis effort.

The Fraunhofer institute in Germany, a sprawling research organisation that has licensed its rights to Thomson Multimedia, now in charge of collecting royalties, itself patents much of the technology underlying the MP3 music format. MP3 download companies pay 1 percent of the price charged to the listener per song, with a $15,000 minimum. MP3 hardware companies must pay 50 cents per unit shipped, also with a $15,000 annual minimum. In such a case the royalties can be added.

The strongest impact has been on software companies trying to make free MP3 encoders--a difficult task given that the company must pay Thomson $5 per unit. This implies companies such as MusicMatch that distribute free MP3-based CD "rippers," that allow people to convert CDs and translate them into digital file formats, are actually suffering considerable financial drain with every download.

Some free rippers have developed in the open-source community, such as the LAME (which originally stood for Lame Ain't An MP3 Encoder) program. This is distributed as code that must be "compiled" into a working software program, allowing it to exist in a legal grey area.

Thomson's MP3 licensing Web site indicates the model likely to be similar to those for the other businesses. The company doesn’t plan to charge royalties for MP3 streaming or MP3 broadcasting until the end of 2000. Beyond this date they anticipate a small annual minimum with a percentage of revenue.

Vorbis needs to win support both of online music companies and consumers if it has to make its presence felt. The programmers are ready to make the project successful. Plug-ins have been written for many of the most popular MP3 players, like Winamp, Freeamp and Sonique. Positive feedback has begun to arrive. iCast will be among the first to adopt the technology

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