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In this story: Who rules Net music? Enter the Memory Stick Coming within a year Plenty of competition RELATED STORIES, SITES

April 8, 1999
Web posted at: 1:03 p.m. EDT (1703 GMT)

by Rob Guth

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TOKYO (IDG) -- In the basement of the Blue Note jazz club on Monday, Sony President Nobuyuki Idei gave an small hint of how his company will tackle an ongoing war over Internet music.

Following a half hour of live music with Tito Puente and his Latin Jazz All-Stars, Sony's Idei kicked off an announcement of the company's Super Audio CD with a few words on the evolution of the compact disc. As he closed his remarks, Idei pulled from his suit pocket what looked like a stick of purple chewing gum.

"For the network era of compressed and downloaded audio, we have another media -- it's called the Memory Stick," he said holding the stick up to the light. "With this, we want to introduce a kind of Walkman, or what you might call a Netman," he said.

The Memory Stick is already sold in Japan mainly as a storage device for digital camera images. In the works, said Idei, is what Sony engineers call the Memory Stick Walkman, a tiny handheld device for storing and playing back music. The Memory Stick Walkman would be a next generation of Sony's popular Walkman portable music devices that could store and replay music downloaded from the Internet. Sony has not announced plans for the device nor shown it publicly.

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Who rules Net music?

Idei's comments come amidst a growing battle over how music on the Internet will be sent, received, and played back. The fight came to life last year with the proliferation of MP3 (Motion Picture Experts Group, Audio Layer 3), a compression technology that makes it easy to download music. Though Web sites that use MP3 have helped unknown musicians gain a following online, the technology has also been used to spread pirated music, rankling record companies that hold music rights.

Sony's U.S.-based record company, Sony Music Entertainment, last year joined the Recording Industry Association of America (RIAA) in a group that is fighting MP3 and working on a format for selling copyright-protected music over the Internet. The group, called the Secure Digital Music Initiative, formed soon after the RIAA failed to gain a court injunction to keep an MP3 portable player from being sold.

Sony officials say they will not sell MP3-based products and strongly emphasize the need for a secure system that protects copyrighted material from piracy.

"We want to make rules because MP3 is already making a market," said Fujio Noguchi, producer at Sony's Creative Project Office in Tokyo.

Enter the Memory Stick

The stick, a miniature flash memory card like those used in digital still cameras, is designed to fit into devices that are about the same length as an AA-sized (1.5 volt) battery.

Consumers will be able to build a library of music files on their PCs and transfer copyright-protected music onto a Memory Stick, people familiar with the development said. The stick, like cassette tapes today, could then be used in any compatible device such as a Walkmanlike portable player or a car audio system.

The Memory Stick is currently available in 4MB, 8MB, and 16MB versions, and will soon have 32MB capacities. By the end of this year, Sony officials expect to ship a 64MB version that could hold about two hours of stereo music in "long play" mode, they said.

Coming within a year

Sony will launch a Memory Stick Walkman within the year, Idei confirmed in response to IDG News Service questioning. He said Sony hasn't decided a name for it.

Idei said he expects the Walkman will be used later this year in an online music trial led by IBM in San Diego. "We are going to make an announcement shortly... the product itself is ready," he said. He added, however, that Sony needs to complete a copy protection system before the device is launched.

In February, Sony announced a family of security technologies that officials say can encrypt music so it can be transmitted over networks and between devices without being illegally copied. Those technologies, called MagicGate, will be integrated into the Memory Stick, according to officials.

One of the strengths of the stick is that it houses standard flash memory, allowing hardware makers to incorporate a range of compression or security technologies into Memory Stick-related products, according to David Kellar, vice president of Access Media International, a Tokyo-based consultancy. In particular, Kellar pointed to an MP3-like audio compression technology expected next week from Microsoft as a potential candidate for the Memory Stick.

Plenty of competition

To be sure, a tough fight could be waiting for Sony. The grass roots spread of MP3 continues in force. Forrester Research estimates that the installed base of MP3 players surpasses 10 million units, including hardware and software versions.

The Memory Stick is also entering a field flush with miniature flash memory cards. Sony claims that its design -- it uses a 10-pin connector versus 14 pins on some other products -- enables hardware makers to build low-cost devices. Still, the big challenge may be the price of the Memory Stick itself.

Flash memory is used in small capacities in products like cell phones but is still relatively expensive. The 16MB Memory Stick, for instance, runs about $66.

"From a price standpoint... it's going to be hard for Sony to gain an advantage," Kellar said. He adds however, that, "it is Sony -- the Walkman company -- and that will be a big advantage."