For the music biz attendees at last month's annual South by Southwest music conference in Austin, Texas, the lingo was markedly different from that of

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The future's flea market

Welcome to South by Southwest, where music biz hucksters are hawkin'—and flockin' to—the digital revolution.

For the music biz attendees at last month's annual South by Southwest music conference in Austin, Texas, the lingo was markedly different from that of recent years. Bandwidth replaced buzz band; MP3 reigned while MTV waned; Web radio nudged aside traditional radio; and the ancient "record contract" gave way to "exclusive Internet representation deal."

Reflecting the music industry's tidal wave of interest, paranoia, and red-hot speculation about the Internet's impending effect on record labels, distribution, retail, and all things relative, the Austin Convention Center became a futuristic flea market filled with 21st-century hucksters talkin' 'bout a revolution.

But what a muddled revolution it is. On one side of the carpeted, fluorescent-lit ballroom, curious attendees crowded around a booth for Atomic Pop, a self-described "music-driven lifestyle Web platform" that includes among its functions the role of record label. The Santa Monicabased company is headed by former major-label president Al Teller, and has already signed the well-known hard-rock act L7. But while Atomic Pop digitally distributes its music through MP3, other company representatives in the same room barked out predictions that their products would soon make the MP3 today's equivalent to the sorry-ass eight-track tape.

On the other side, at the a2b music booth, a marketing exec sang the praises of MPEG-AAC compression, which she dutifully reported is 25 percent faster to download—about 10 minutes per three-minute song on a 28.8 modem—and oh so clearer than the hyped MP3. Using AT&T Labs' technology, a2b music has positioned itself as a record-industry-friendly, secure alternative to the easily bootlegged MP3. (Atomic Pop's response was to hand out T-shirts emblazoned with the slogan "MP3's not evil, people are.") Another play-by-the-rules option touted at the convention was from Liquid Audio, which also promises MPEG-AAC's quick download times and anti-piracy features in the form of digital watermarking.

Convoluting the whole downloadable music debate, other start-ups chimed in from the sidelines with tangential distractions. Total Music Network, an online site developed by the massive New Yorkbased Cablevision, broadcasts concerts and video clips with the superior quality of broadband. Indieaudio.com, webradio.com, and Green Witch Internet Radio offer variations on Internet music broadcasting. The CD-ROM magazine Launch used SXSW to introduce new features like its Web site (www.launch.com). NewTech Music hawked itself as "the true digital music label," though it couldn't boast the big names associated with Atomic Pop.

Despite the confusion, on the eve of this digital music revolution, these Internet companies all have at least two things in common.

First, none of them are entirely sure what they're doing. Liquid Audio and a2b music can flaunt the inferiority of MP3, but the kids in cyberland—and many artists and record companies—have made the downloadable file's non-trademarked calling card an instantly recognizable brand name. The two MP3 rivals also must continue to cool their heels until portable devices like the Rio, which currently only plays MP3, come on the market with the capability to play their formats. Other curve balls include: the Secure Digital Music Initiative, a compendium of record companies and high-tech companies currently debating a possible standard in music distribution; and Microsoft, which will reportedly debut its high-speed MS Audio 4.0 later this month with the possible intention of crushing MP3 and all other downloadable comers.

Second, they want a piece of the $13.7 billion recording industry pie. Of course, they'll have to align themselves or compete with monolithic retail chains like Trans World or Tower, and with already existing online stores like Amazon.com and CD Now. But it's clear that the commotion isn't some overblown hoopla. The Recording Industry Association announced last week that the once-key 15- to 24-year-old demographic is buying less and less recorded music. The implication is jarringly clear: High school and college students, many with access to high-tech institutional computer systems, are taking advantage of the MP3 free-for-all or are paying for individual tracks online.

While many commentators and retailers have responded to such news by sounding alarms about the imminent death of record stores and labels, the ahead-of-the-curve bunch is scrambling to explore the new options. Many keep reminding themselves about the doom that turned to boom in the music industry when the new CD format revived a stagnant market in the '80s. A possibly more direct correlation is when the film industry decried the advent of VCRs as a cinema killer, only to watch home video and multiplex theaters thrive together.

The Internet and downloadable music, in other words, could make the record business even more profitable for even more people. Or, it could be the next century's equivalent to a gold rush, with many start-ups fighting to stake a claim as the Next Big Thing.

 
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