Since the creation and dissemination of MP3, and other formats of compressed audio, in the 1990s, a fierce debate has ensued - between the major record labels (BMG, EMI, Time Warner, Sony, and Universal) and the multitude of other companies who aim to deliver music over the Internet. High profile legal battles, such as those between the RIAA (Recording Industry Association of America) and the now-bankrupt Napster, have created well-defined and opposing camps. On the one side are the Majors, who view MP3s as a potential threat to their legitimate sales revenue - through file-sharing, home-pirated CD-Rs, etc.; on the other side is nearly every other Internet-related music enterprise (file-sharing services, on-line record companies and distributors, music retailers, etc.) who view MP3s - as well as the other popular compressed formats, such as Windows Media, Real, Quicktime, etc. - as a quick, easy, and convenient way for consumers to gain access to huge amounts of music.

Such is the anxiety of the Majors, they have done everything in their power to make MP3s, et al - of their proprietary music - difficult, inconvenient, and sometimes impossible to transfer over the Internet - unless they themselves can profit. This is the rationale behind two now-faltering services, MusicNet (BMG, EMI, and Warner) and PressPlay (Sony and Universal), which allow subscribers to stream and download some of their respective catalogues; by all accounts, subscribers have been frustrated by limited catalogue access and high subscription fees.

But some recent development suggests a burgeoning new role for compressed audio, and a possible change in the mindset of the Majors: the creation of signature "media players" for individual CDs, and their promotional distribution over the Internet. A striking example is the "Josh Groban Player" and its placement on targeted websites, such as the Classical Music Archives (www.classicalarchives.com), the top classical music site on the web. Before elaborating, however, it is important to clarify a few things about MP3 and other compressed audio files.

To begin, audio files are delivered to consumers over the Internet in two ways: 1) by "streaming" (Windows Media, Real, Quicktime) where the file travels from a music vendor's central audio streaming server to the user's computer, and which cannot be saved to a hard disk - unless you're a digital-audio techie; and 2) by "downloading" (MP3) where the file is sent out from a central audio server and then easily saved -- onto the user's hard drive.

There is also a distinction between the two types of delivery in terms of the quality of the audio file: "streamed" files are generally "encoded" at a low-bit rate (16-20 kps), in order to allow for a fast transfer, even over a modem line; "downloaded" files, by contrast, are generally encoded at a higher bit rates (64-128 kps). The quality rule is simple: the higher the encoding rate, the better the actual sound of the music.

As mentioned, MP3s, Windows Media Audio, Real Audio, and Quicktime Audio are all formats of compressed audio; basically, an MP3 file omits portions of the outer frequencies - the bass and treble part of the music - of an un-compressed Audio file (e.g. from a CD, DAT, etc.), and thereby eliminates a good portion of the file size required to pass it quickly along the Internet. MP3s can be stored in great numbers on a computer's hard drive, or a portable MP3 device (like the I-Pod), because they require much less hard disk space to hold than the original uncompressed (.WAV) audio files. But while that is good for quantity, it is not always great for quality. Simply put, the fidelity of the compressed format is inferior to an uncompressed Audio format. How inferior depends not only on your own point of view, but also on the encoding rate (ranging from 16 to 128 kps, or higher). Admittedly, an MP3 file encoded at 128 kps sounds very nice, and played over good speakers would fool many a listener - though not likely a true audiophile.

An audio file encoded at 16 kps, on the other hand, makes the music sound scratchy, distorted, and generally unpleasant; try streaming any song clip at the Barnes and Noble or CD Now web sites, and suffer through the grating sound of 16 kps compressed audio. Other Internet music sites, such as TowerRecords.com offer streamed clips at 20 kps, a notable improvement in audio quality. Even better, but not always available uninterrupted to modem users, are the song clips streamed by Amazon.com, which are encoded at 32 kps, yielding relatively good audio quality. A relatively new service offered by the All Media Guide (AMG), called SonicGuide, provides song clips in either Real and Windows Media audio encoded at both 20 and 64 kps, the latter providing near excellent audio quality; however, only a few small sites (e.g. PopShop.com) have signed on with the service - which at present offers only a very limited number of song clips. Many Internet radio services (Spinner, Radio Yahoo, etc.), incidentally, stream music encoded at the relatively low-quality 20 kps, while a few others (Live365, etc.) stream at bit rates encoded up to 56 kps, and higher.

Next to the quality of the audio, another major issue surrounding compressed audio files is the time amount of the song deemed "allowable" for transfer over the Internet. Logically, if one actually purchases a song file - either through a subscription service or on a "per song" basis, even the Majors allow the entire song to be downloaded; however, MusicNet, PressPlay, and other subscription services have put restrictions on which devices and for how long the song may be played - another complaint of users.

With streamed clips, on the other hand, the limitations are considerably more severe and wide-spread: for reasons not easily understood, the Majors collectively enforced a standard time limitation of 30 seconds for all Pop music genres (Pop, Rock, Rap, R&B, Country, Folk, World, etc.), expanded to 1 minute for Jazz and Classical clips. Anyone who has streamed a song on the Internet has undoubtedly been frustrated by the inadequacy of a 30 second clip, which generally provides a poor sense of what the song is really about. Some services, such as AMG's SonicGuide, are attempting to make the best of this bad situation by hand-selecting the "most representative" 30-second segment of the music - which helps accounts for their small selection of clips. Finally, the Majors have generally placed limits on the number of songs per CD that can be streamed by an on-line retailer - generally limited to five, and often to the first five songs. In this regard there is not as much consensus among the labels, and the major clip-streaming services (Loudeye and Muze) have exacted different arrangements from the individual labels.

All of this begs the question of what the Majors are trying to accomplish with their restrictions. Obviously they are trying to sell CDs, but they are likewise unwilling to reveal too much of their products for free. Why? Tacit in their attitude is the fear that if someone can stream an entire CD, they would have no need to buy it. But is this so? Several factors would seem to negate it. The success of music listening stations in retailers such as Tower Records, Barnes and Noble, and Hear Music have shown that people like to be able to preview music before making a purchase. To a large extent, this it what radio does as well - providing listeners a sample hearing of the music, as a preview to purchase.

More directly related is the evidence stemming from two recent media reports, which suggest that people who frequently download MP3s are in fact more likely to buy CDs than those who don't. Jupiter Media Matrix and Ipsos-Reid both issued findings that refuted long-standing claims of the RIAA and other industry groups that peer-to-peer file-sharing and free downloads were the driving forces behind declining music sales. According to the Ipsos-Reid report, for example, "81% of downloaders report their CD purchases have stayed the same or even increased since they initially began downloading music from the Internet…. And nearly half (47%) of these individuals indicate that they have subsequently purchased a particular CD from a band or artist solely because of something they first read or listened to on the Internet… This suggests that current music downloaders can be influenced by their online music activities, and may subsequently adjust offline listening and purchase behaviors as a result."

Despite these new findings, the lawsuits continue, such as between the RIAA and Kazaa, the villain du jour file-sharing service which has assumed a leading position following Napster's - and more recently Audiogalaxy's - demise. At the same time, Kazaa, through its partners AltNet and Brilliant Digital, has secured a deal with EMI to place encrypted music files at the top of its search engine, thereby providing some assurance of copyright protection. Such deals between peer-to-peer distributors and the Majors have been attempted in the past, and generally failed. One example is Aimster, a file-sharing service that likewise struck a deal EMI, whereby thousands of users were able to download clips from Radiohead's Kid A CD - which later rose to Number 1 on the Billboard Top 200 Album chart. Following a series of legal battles with the music industry, however, Aimster's founder Johnny Deep declared bankruptcy. Whether Kazaa will be more successful remains to be seen, but history is not on its side.

And while much still appears bleak and embroiled in argument, there is new hope for compressed audio format, and especially through the development noted above - the creation of signature playlists or "media players" for specific CDs, and their promotional distribution on targeted sites on the Internet. The landmark case involves Josh Groban, the "Classical Crossover" singer whose self-titled debut CD rose to the Number 8 in the Billboard Top 200 Album chart. In March, 2002, Warner Brothers, Groban's label, approached the marketing/technology firm Buzztone and asked them to create a self-contained player for the CD. The player, or "buzzalong" created by Buzztone streams each song on the CD - in its entirety - in relatively good audio quality (encoded at 32 kps), and allows users not only to start and stop the music, but also to email the player to a friend, purchase the CD, join the Josh Groban fan club, etc - in essence to create a viral promotions campaign spread from user to user. As part of its marketing campaign, Buzztone made arrangements to set up banner links to the Player on various targeted websites, including Classical Music Archives. In addition to the link, placed on its home page, Classical Archives also created a separate Josh Groban page - including a photo, biography, CD contents, etc - whereby Groban joins hundreds of the Classical Archives' other Featured Artists on the site. The response of the Groban Player on the Classical Archives website and elsewhere was outstanding, and was without doubt part of the buzz that helped catapult the CD to such sales success. Indeed, an estimated 5% of all sales of the Groban CD were generated directly from Player - a figure that should have record executives everywhere scurrying to create signature players for their own artists.

The lesson here is clear: by allowing music fans easy, unlimited access to streaming (but not downloading) the Josh Groban CD, sales were strengthened, not weakened. In the wake of the Groban player's success, Warner Brothers and Buzztone have created similar players for Neil Young's Are You Passionate?, the Queen of the Damned soundtrack, Brandy's Full Moon, and Kid Rock's Cocky - though the latter two allow only 1 single each to be streamed. Other, labels, such as the Indie, Vagrant Records, has partnered with Buzztone to create a single-player for Dashboard Confessional's Places You Have Come To Fear The Most. The data on these Players confirms that streaming complete songs in good audio quality helps, not hurts, CD sales.

The Majors have a legitimate right to be wary of the free and unsupervised exchange of MP3 files across the Internet, but their concerns about copyright protection should not blind them to the tremendous value of streamed and downloaded music as a promotional tool and goodwill gesture, one that by all accounts can increase sales and build customer loyalty. Whether they go on to embrace the compressed audio format, or continue to fight it, however, is another question.