The Recording Industry Association of America (RIAA) is suing Diamond Multimedia in the US in a case that highlights the need to adopt new business models to survive in the Web environment.
In a classic example of how Web technology can overtake an industry, the music business has been trying to constrain digital music file distribution until it can change its business model to take advantage of this new format.
Meanwhile, it has been outmanoeuvred by Net music pirates.
In an attempt to control the illegal, free distribution of music the RIAA is seeking to establish that Diamond's tiny Rio PMP300 MP3 (MPEG Layer 3) music file player is a piracy tool.
The Rio plugs into a PC, from which it retrieves music files encoded in MP3 format - a compression format that reduces the size of music files by up to 12 times. A typical five-minute pop song can be reduced to a 35Mb file that a user can download over a modem in a few minutes.
A spokesman for Diamond Europe explained that the company is merely distributing a playback device that resulted from the need to diversify from its roots as a graphics card vendor. Rio was developed from the MP-man, acquired through the purchase of Taiwanese vendor Saehan Information Systems. "We saw it as an open standard and a good product," the spokesman said. "We don't view this as different from other technologies such as CD writers, apart from the fact that the Rio doesn't record. We like to think of ourselves as pioneers, not renegades," he added.
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