MMW-05 -- Beatnik Moves Into Wireless Market

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J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on the week's music technology news
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Issue No. 5
Wednesday, February 13, 2002
Tokyo

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CONTENTS

++ Feature: Beatnik Moves Into Wireless Market

++ Noteworthy News
- Report: Music Industry Failing to Stop MP3 File Swapping
- Security Hole Reported in Morpheus

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++ FEATURE: Beatnik Moves Into Wireless Market

Last week, I had the opportunity to speak with a representative from
Beatnik, the California-based company which created the Beatnik
Audio Engine and the RMF (Rich Music Format) music format. Like many
companies in the music media industry, Beatnik has been shifting its
focus recently to the wireless sector, and I was curious to find out
more about the company's plans for this market.

The Beatnik Audio Engine has been around for several years now, but
was primarily geared toward the delivery of musical content via the
web. In recent months, Beatnik has begun licensing smaller versions
of the engine that can be integrated into mobile devices. It is
unique in that it can play back and mix files in the MP3, WAV, AIFF,
RMF, and MIDI formats. Current licensees of BAE include Sun
Microsystems, Intel and WebTV Networks.

Similarly, Beatnik's new XMF (eXtensible Music Format) is a
derivative of the RMF format that is specifically for use on
wireless devices. The company has been working with the MIDI
Manufacturer's Association (MMA) and 3GPP to standardize XMF as an
open format for mobile audio applications.

At present, it seems Beatnik is actively searching for partners in
the mobile phone manufacturing sector who are willing to licence the
audio engine for use on their phones. Although the engine is not
included on any currently available phone, the company is optimistic
about its potential for integration into phones, especially in
Europe.

At the same time, of course, Beatnik would love to see ringtones
created in RMF or XMF, and is also marketing an editing tool and
seeking content creation partners for this purpose. However, there
is a classic case of the "chicken and egg" problem to overcome here:
it's hard to find ringtone creators to make files that aren't
supported on the phones, and it's hard to find phone manufacturers
who will include XMF support when there aren't currently any
ringtones in the XMF format.

Nevertheless, Beatnik appears confident that it can overcome these
obstacles, and has wisely chosen to make Europe the center of its
efforts. Unlike Japan, where the majority of mobile phone
manufacturers have opted for a hardware solution to audio (i.e.,
embedding sound generation chips made by Yamaha or Rohm), it seems
that many of the European phone manufacturers are more open to the
idea of using a software engine. Furthermore, whereas the Japanese
market for ringtone sound formats is currently split between Faith
and Yamaha, the European market is presently up for grabs, with the
Japanese formats in competition with a variety of proprietary
formats owned by the manufacturers.

So, along with the upcoming i-Mode rollout in March, we have another
reason to keep an eye on Europe this year -- for this is where
Beatnik will most likely unveil its first serious ringtone
offerings.

++ NOTEWORTHY NEWS: Report: Music Industry Failing to Stop MP3 File
Swapping

A recent report issued by OC&C Strategy Consultants has concluded
that the record industry's efforts to curb the popularity of free
music download services have largely failed. The report, which was
based on interviews with record company executives, online
retailers, and digital service providers, found that legitimate,
paid-for download services made only $1 million last year, while
more than eight billion tracks were downloaded from free sites in
the same period. The OC&C report goes on to conclude: "Labels will
have to accept lower priced and lower margin models for digital
sales in order to compete effectively with pirate services."

http://news.bbc.co.uk/hi/english/entertainment/new_media/newsid_1809
000/1809391.stm

++ NOTEWORTHY NEWS: Security Hole Reported in Morpheus

A group of "anonymous security experts" has reported a security flaw
in the popular file-sharing program Morpheus that allows a random
list to be generated of people using the service. It is then
possible to gain access to the computers of these users and copy
files from anywhere on their hard disks. The Morpheus peer-to-peer
application, which boasts more than nine million client downloads,
allows users to search for digital media, such as music and videos,
on the MusicCity network. Morpheus now claims to have plugged the
hole.

http://dailynews.yahoo.com/h/zd/20020204/tc/_dangerous_hole_discover
ed_in_morpheus_1.html

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SUBSCRIBERS: 194 as of February 13, 2002

STAFF
Written by Steve Myers (steve.myers@l8tech.com)
Edited by J@pan Inc editorial team (editors@japaninc.com)

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