Media Wonk

The end of MP3? - February 28, 2007

All of a sudden it’s open season on the MP3 format.

Last week, a federal jury ordered Microsoft to pay $1.5 billion to Alcatel-Lucent after finding that Microsoft had infringed two Alcatel-Lucent patents underlying the music-compression format.

Now comes word that an outfit calling itself Texas MP3 Technologies has filed patent infringement complaints against Apple Inc., Samsung Electronics and SanDisk, claiming the three leading makers of portable music players violated two patents it was recently granted on MP3 playback devices.

Although all of the cases have a long way to go yet, they’ve already sent shockwaves through the industry.

If the Microsoft verdict stands—a big if according to many patent experts—it could force anyone who uses the MP3 format, either to encode music or for playback, could end up having to pay twice for the same technology.

The Texas case seems to be a classic example of patent trolls at work (the address listed for Texas MP3 Technologies is a post office box in Marshall, Tex., and there is no listed phone number) but that doesn’t mean their claims won’t hold up.

leading some to speculate that MP3 may simply get too hot for big companies to handle.

In an article for Wired, for instance, Eliot Van Buskirk argues that the ultimate winner from all the recent litigation could turn out be open-source compression formats, where there are no patents or licensing fees to worry about.

Or at least something based on a published standard, like AAC, where the licensing would be cleaner.

Apple uses AAC for iTunes but it doesn’t own the format (it owns the Fairplay DRM in which iTunes tracks come wrapped). It’s part of the industry standard MPEG-4 technology can be licensed by anyone.

Which raises an interesting question for the record labels: Would a meltdown of MP3 create an opportunity for the industry to adopt a new format for digital delivery of music? And if so, is that something the industry should encourage?

I guess that’s two questions.

MP3 has always been something of a rogue format as far as the labels are concerned. It’s sound quality is inferior to the CD Red Book standard, and its prominence is based largely on its widespread use in unauthorized file trading.

Only lately have the labels begun, reluctantly, to embrace it as a format for the commercial release of music.

But what if the industry came up with a new, high-fidelity digital audio format--one partially owned by the labels?

Consumers would benefit from better quality, musicians would prefer it. And if it became the industry standard, the licensing system could give the labels a new tool to try to bring some order to the digital marketplace.

Imagine if a peer-to-peer network could be induced to license the compression format it used from the labels.

Or if Apple needed to license something other than AAC for iTunes. How might that shift the balance of power in negotiations over download pricing?

Lot’s of obstacles would have to be overcome before such reveries could come true, of course, like anti-trust laws.

But if I were running a record label, I might quietly be rooting for Texas MP3 Technologies—whoever they are.

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