In this week's "Cybershake," we examine how the record industry is trying to spin a new way to distribute the latest musical hits to radio stations. Plus, we note that several online companies are trying to follow the path of Netflix. But this time, the focus is on video games, not movies.
The music industry has certainly changed its tune about the Internet. It was only a few years ago that record companies pursued and shut down music file-sharing site Napster. Now, music companies and artists are embracing online music stores such as iTunes as means of reaching high-tech, digital consumers.
And what's good for consumers is slowly making its way to the other half of the music chain: broadcasters.
Record labels are still distributing the latest tunes to the tens of thousands of radio stations in the United States the old-fashioned way.
"They're sending them right now through traditional ways of a hard disk and U.S. mail," said Jim Robinson, founder and president of Promo Only.
But his Orlando, Fla.-based company has developed technology that will help record companies do away with shipping labels and possibly even the records themselves.
Promo Only's MPE, or Music Protected by Encryption, allows record companies to send new tunes over the Internet to broadcasters. Just like consumer-oriented online music sites, record labels can e-mail radio stations when new songs from their artists are available for airplay. Radio stations with access to MPE can preview the music and then download a version that can be played over the air.
"It's our own audio format that we developed ourselves that met the requirements of broadcast and as well met the requirements of the record labels," said Robinson.
However, MPE is different from say, iTunes, in that only industry professionals equipped with the proper software can access the service. And as the name implies, each digital music track is protected by encryption which can be unlocked only by authorized MPE users. Each file also contains a unique number ID, preventing radio stations from making and distributing unauthorized copies.
Promo Only officials say the system has been used by Universal Music Group, the record label that represents such recording artists as Gwen Stefani, U2, Eminem and Jay-Z. But the company is optimistic that MPE offers many advantages that attract more labels to sign up.
"Now with the push of a button, in literally seconds, they can have a track available to 10,000 stations if they want," said Dean Ernst, director for Promo Only.
Others companies, such as Sony Music, are also working on digital delivery systems. But Promo Only is the only system that is concentrating solely on the U.S. market. It has even signed on Clear Channel Communications, the largest radio conglomerate in the United States with more than 1,200 stations nationwide.
Whether MPE or some other digital distribution system becomes king of the hill remains to be seen. But proponents say the new systems will mean big improvements for the music recording industry.
"They can get the new Britney [Spears single] that she just recorded in the studio yesterday to the radio stations the next day and for sale the very same day," said Ernst. "You can see actually a CD-less record label coming down the road."
-- Larry Jacobs, ABC News