“A pitched battle for control of the music-downloading business is raging among Apple, Microsoft, RealNetworks, and Sony. Their weapons: software used to buy and listen to music downloads on computers and portable devices. Their goal: to become the industry standard for how music and movie downloads are delivered. The winner will command a lion’s share of the thriving market for digital content and devices. Here’s an explainer on digital media formats,” Heather Green writes for BusinessWeek.
Is there a difference between the music sold at different music sites?
No, the music is the same. But each song you buy off the Net comes wrapped in two important pieces of software: copy-protection software to prevent piracy and compression technology so it can be downloaded quickly. This combination is called a format. Apple has a format that combines its FairPlay copy-protection software with compression technology called AAC. To play downloaded songs that are encoded in a format, a computer or portable device must have specially designed audio-player software. This is where it gets tricky. Four companies are backing competing formats. Besides Apple’s, there’s Microsoft’s WMA, which is being used by Wal-Mart Stores, Napster, and Musicmatch. Sony and RealNetworks each have their own formats.
Is Microsoft going to win, like always?
Not necessarily. Microsoft scares executives, even powerful record bigwigs. They’re wary of being beholden to the software giant, so they’re working with many different tech companies. RealNetworks is the weakest player in the bunch, and Sony is a wild card because it’s late in selling downloads. Most experts think the battle will play out between Microsoft and Apple. Apple has the early advantage, with 70% of the music-download market and 25% of the music-player market. Still, Microsoft’s WMA works with 60 different music devices and a handful of download services. So Apple will have to be innovative if it doesn’t want to be marginalized once again.
Full article here.