The Digital Media Losers of 2004

By Richard Menta 1/08/05

2005 will be the key year for digital media. The reason is because the Supreme Court has announced it will take up the Grokster case on appeal from the record and movie industries. The decision from that case will define the parameters of copyright, fair use and the culpability of technology for many years to come.

2004 seemed to be a perfect lead up as more people than ever both trade online for free and purchase digital music files from the likes of iTunes and Napster. More digital music portables were sold last year too, culminating in a 4 million unit Christmas for the iPod.

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Key legal issues were decided here and in Canada, both supporting the P2P services. Apple continues to lead digital music and portable sales stimulating competition in many forms. This year will be a big one.

The 2004 Losers list is as follows:

1. iPod Killers

There were none. A few competing players like the Rio Carbon are excellent, but none have even put a dent on the iPod's dominance. A marketing phrase, nothing more.

2. Sony

Back in 2000 Sony failed in it's first attempts at selling a digital media player. That's because these players did not play MP3 files, only Sony's proprietary ATRAC 3 format. Then the inventor of portable audio watched as a computer manufacturer took over the digital market. Sony finally relented and released its first MP3 player the Sony Network Walkman NW-HD1. Unfortunately, the NW-HD1 was uninspiring.

3. WMA

What puts the WMA format on the losers list is the fact that Overpeer was able to corrupt the Windows Media DRM and load adware onto music files. This means far more malicious software can be added too. WMA files are now an information security risk and if debilitating trojans appear, consumers will learn to avoid the format altogether. This will lead services like Napster and others selling WMA tunes to offer a second file format to hedge their bets to avoid losing sales. Could this become the opportunity for Ogg Vorbis and FLAC to gain mainstream acceptance?

Security issues haunt Microsoft again.

4. Winamp

The player lives, but its soul - the original team that nurtured it including Justin Frankel - has walked away.

5. Closed Torrent Sites

Bittorrent is on the winners list, but several key torrent sites that were raided are on the losers list as they have been permanently closed. The maddening thing is that torrent sites don't trade music files, just torrents (little road signs to files) so there is no legal precedent in ANY country that makes them illegal. The problem is, these sites don't have the money to mount a case. The concept of guilty until proven innocent gets a boost here.

6. California File Traders

California State Bill 1506 is a new state law that makes it a crime for that state's file traders to use a service like KaZaa or eDonkey without first supplying their emails to the state. File traders can go to jail just for not complying. Millions probably break this law every day. Time will tell if the state will start using it soon.

8. Induce Act

It stalled in Congress, but it could see life again this year.

9. Dell's iPod buyback

It didn't work.

10. RIAA "Sue 'em all" Campaign

Thousands of file traders have been sued by the music industry so far and the RIAA claims that these suits have succeeded in reducing file trading. That statement is false.

Just look at the average number of simultaneous users trading files as measured by Big Champagne and it is obvious that file trading increased dramatically in 2004 as the record industry filed suit after suit.

Global monthly average simultaneous users 2004:

January, 6,046,998; February, 6,831,366; March, 7,370,644; April, 7,639,479; May, 7,286,377; June, 7,401,431; July, 7,115,975; August, 6,822,312; September, 6,784,574; October, 6,255,986; and, November, 7,452,184.

US monthly average simultaneous users 2004:

January, 3,528,419; February, 4,039,989; March, 4,603,571; April, 4,688,988; May, 4,589,255; June, 4,583,920; July, 4,584,111; August, 4,549,801; September, 4,687,536; October, 4,435,395; and, November, 5,445,2

The fact that the Motion Picture Association of America (MPAA) has joined the lawsuit merry-go-round despite the numbers (numbers that Big Champagne openly shares with them) is probably more an effort by new Chairman Dan Glickman to make himself appear as a no tolerance leader than as a real anti-piracy strategy. Hey, Jack Valenti is a tough act to follow!


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Other MP3 stories:

The Digital Media Winners of 2004

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