There is no question that the two most pivotal developments in the recent history of the music industry’s marketplace are Napster and iTunes. Both have transformed the industry, and have shaped its landscape to what it is today. But before we take a closer look at these two in their historical context, let’s consider the technological developments in the music industry that led to the tectonic shifts that Napster and iTunes brought about. Magnetic recording technology, led not only to the revolutionary changes in the music production methodology, that we spoke about in the previous module, but also to the development of the digital data storage media, which accelerated the progress of the digital technology itself. It led to the development of the early, reel-based tape drives, memory discs, and hard drives, which were all pivotal components of the computer systems. As the digital technology and computers became faster, smaller, and cheaper, the possibility of the consumer-level digital audio became more and more realistic. Now, since 1974, a Dutch electronics company Philips, was working on the idea of a digital audio disc, to rival LPs and cassettes, which ruled the music market at the time. In 1977, they set up a lab dedicated solely to the development of such audio format, which they called a “compact disc”. Simultaneously, and independently, Sony was working on a similar idea in Japan, and the two eventually joined forces in 1979. The disc’s specifications were decided on jointly, and the new format was set as: 12 centimeters in diameter, used a 16-bit, 44.1 KHZ digital audio conversion rate, and was capable of up to 74 minutes of music. And though 74 minutes sounds like such a random number, there was a method behind the seeming madness. Still madness, to some, admittedly, but with a method, nevertheless. You see, the president of Sony, Norio Ohga, was an opera singer and a classical music lover. 60 minutes capacity, which was the CD team’s original proposal and intention, just wouldn’t cut it for Ohga. Why? Because Beethoven’s Ninth Symphony couldn’t fit on it. And since the longest recording of Beethoven’s Ninth Symphony is the 1951 performance by the German Bayreuth Festival Orchestra, conducted by the legendary Wilhelm Furtwangler, which lasted 74 minutes, that was the timing limit chosen for the Compact Disc format. And now you know. Don’t you feel special? In 1982, the first CD players were introduced in the market, with the price tag of 750 dollars, or about 1800 dollars in today’s value. That was a very steep price for a consumer-type audio device, but the technology in it was so new and so revolutionary, and so expensive to develop and manufacture at the time, that it simply couldn’t cost any less and still be financially viable. That price tag was also one of the reasons why most of the first batch of the CD recordings released, was from the classical music genre. Philips and Sony figured that rock and pop fans were not only still in love with their records and cassettes, but most couldn’t or didn’t want to afford a CD player. Classical music fans, on the other hand, could and would. Plus with all the importance that classical music fans put on the quality of sound, the new CD format was right up their alley. But slowly, things started to pick up for the Compact Disc across the market and across the genres. In 1985, Dire Straits’ album “Brothers in Arms”, which was recorded, mixed and mastered digitally, and released as a CD, sells over a million copies. It was the first CD release to reach a million units in sales. Other artists and labels took notice, and the game was on. The number of CD releases grew, and the CD sales grew with it, until CD finally took over the market as the dominant audio format, and all but killed both LPs and cassettes. The CD sales peaked in the year 2000, with about 2.5 billion units sold, and unknown billions of units pirated and copied. The format is still with us today, and it still represents a significant portion of the music market, but its sales are steadily declining for over a decade now, and other music formats are slowly taking its place. It is the CD’s digital nature, the fact that it was a format which converted sound to ones and zeros, at the consumer level, and stored it as pure data, and not as an analog signal, that stimulated and enabled those other audio formats to eventually develop and grow. It’s new approach to audio inspired another audio revolution in its wake, which yet again reshaped the industry and the market. MP3 was developed in the late 1980s as a natural and necessary solution to the problem of transferring digital audio over computer networks. As an analog version of a song is converted to binary information via analog to digital converters, all the resulting ones and zeros constitute a sizable file; not today, of course, but a sizable file for the time, and we are talking about mid to late 80s here. The CD audio standard of converting audio, created by Philips and Sony, using 16 bit long data samples 44,100 times per second (or a 16 bit / 44.1 KHz standard, right?) comes to about 1.5 megabits per second of data. The size of such digital audio file made it prohibitive for computer networks transfer over the telephone lines, which was the standard at the time. The file had to be much smaller to be practical for such a transfer. But how do you make a digital audio file smaller? How do you get rid of some of those ones and zeros without changing the audio itself, as it gets converted back to the analog world and played back? Karlheinz Brandenburg, at the University of Earlangen in Germany, was assigned that problem by his professor Deiter Seitzer, who himself worked on a similar problem as related to the digital transmission of speech, in the telephone systems using traditional and ISDN lines (Integrated Services Digital Network lines). Brandenburg took that as a challenge, and as his PhD thesis. By 1988, he and his team have developed the solution in the form of a particular type of data compression method, utilizing psychoacoustic principles as their guide for removing non-critical bits. Essentially, removing the part of the audio information our brain doesn’t process, or which is secondary to our experience of pitch and dynamics of the sound. That same year, the team met with the International Standards Organization, the ISO, in order to standardize this new method of encoding audio. The ISO’s group called Moving Picture Experts Group, or MPEG, had a subgroup responsible for creating standards for audio applications. It is this group, together with Brandenburg and his team, who after considering the effects of different layers of proposed compression on various digital media files, decided that, what was then layer 3, is the type of compression that gives the best results for audio at low bitrates. The name of the new audio compression type: ISO-MPEG-1 Audio Layer 3. Catchy, right? Easy to remember, ready for marketing. In an alternate Layer 3 universe, of course. Over the next few years, the format was polished and perfected, and in 1992 the ISO includes ISO-MPEG-1 Audio Layer 3 as one of the standard methods for encoding audio, with a particular advantage over the other methods, in as much as it brings the size of the digital audio file down to as little as 10% of its original size. So, a 50 megabyte song, could be possibly brought down to about 5 megabyte size, which was definitely conducive to computer networks transfer. Which was the original problem and challenge, and the whole reason why this new format was developed. OK. Problem solved. What now? Anybody want it? Not so much, it seemed. A company called Telos Systems in Cleveland, Ohio, used the ISO-MPEG-1 Audio Layer 3 compression method in the early 90s to transfer some audio files from a recording site to a studio, over the ISDN phone lines. So that was innovative and prophetic, as we do that nowadays all the time. But it wasn’t being adopted as any kind of standard new way of doing audio. It just sat there. And then, in 1994, the Brandenburg’s team hit on the idea that would change everything. The Internet was taking off, and it didn’t have an audio standard. Why don’t we make our encoding the Internet audio standard? A year later, in 1995, they chose the extension for their new file type - dot mp3 - and the MP3 as we know it today was born with its new stage name. Oooh, and we were just getting to like its real name: ISO-MPEG-1 Audio Layer 3. It just like rolls off your tongue, doesn’t it? Well, good luck to you, little fellow. Good luck MP3. But it didn’t go exactly as the team envisioned. The plan was this: the MP3 encoding software, the software that would compress the audio files and bring them down in size, would be marketed and sold to companies at a professional, commercial price (read, expensive). The MP3 decoding software, the software needed so you could listen to the compressed files, would be made affordable for the consumers. Fair and equitable. Oh, such dreamers, those Germans… It kind of started that way, but then, of course a student in Australia buys that professional-grade MP3 encoding software, from a small company in Germany, with a stolen credit card from Taiwan, hacks it, breaks it down, reassembles it as an archive file, wires some copies to Sweden, and puts one on a U.S. FTP site, as a freeware. And there goes that fair and equitable business plan, never to return again. You think the Brandenburg’s team was little miffed with the Australian delinquent? Just a little maybe? They looked for a kid, they told everyone that the file is not freeware but a stolen software, they tried everything to stop the carnage, but it was too late. The cat was out of the bag, running free in the wild, and duplicating as it went along. Like a virus. Brandenburg and his team lost control of their creation, and became mere spectators to the show that was just starting. Little by little, more and more people got hold of it, and started converting their CDs to MP3s, and exchanging and sharing songs from their ever-growing collections. And it was just a matter of time when someone would do something about bringing them all together in one place on the Internet, so they can browse each other’s hard drives for songs they wanted, and download MP3s from each other’s collections to their heart’s desire, no matter where in the world the were. That someone, was a 19-year old Shawn Fanning, and the place was Napster.
