MP3's challenge
The owner of most of the intellectual property inside the MP3 format is Germany's Fraunhofer Institute, a massive research organization with interests far beyond audio technology. It's licensed its rights to Thomson Multimedia, which collects the growing patent royalties.That company already charges MP3 download companies about 1 percent of royalties, while hardware companies must pay 50 cents per unit shipped. MP3 encoder companies, such as Musicmatch, pay Thomson about $5 per unit, contributing to the relative scarcity of free MP3 "rippers."
Thomson hasn't yet decided what to charge Webcasters using the MP3 format. Vice president of new business Henri Linde says that fee will likely be 1 percent of annual revenue, or an annual fee of $1,000 for small companies.
Despite those payments, the MP3 format is still soaring in the marketplace. Thomson's figures show that 10 million hardware devices supporting the format have been manufactured, and roughly 150 million software units have been downloaded or otherwise distributed.
That gives Thomson and Fraunhofer a huge head start in the market even as other music formats such as Windows Media are gaining ground. It also gives them a huge stake in protecting that lead against any sign of encroachment by Vorbis.The Ogg developers staunchly defend the notion that they have created everything from scratch, or at least have built their system without using any of the Fraunhofer-owned technology. But their rivals say they aren't so sure.
"We doubt very much that they are not using Fraunhofer and Thomson intellectual property," Linde said. "We think it is likely they are infringing."Whether this is true, analysts say Thomson and the German company are likely to file patent lawsuits the moment Vorbis appears to be a viable market candidate. By creating a perception of uncertainty around Vorbis' future, MP3's parents could prevent conservative digital music companies from adopting it."If you're going to go into a marketplace where people play hardball, that's what hardball looks like," Scheirer warned.
Diamond said he would never have done a print version of the magazine if he were starting it today, partly because of the hefty resources involved in distribution, printing costs and nagging deadlines surrounding a print publication. He's more attracted by the Web's ability to offer interactivity with editorial content."Now we can be free of that completely and be as creative as we want on our own time schedule and really have things be as visually, verbally and musically diverse and off-the-wall as we want to be on our own terms," Diamond said.
The GrandRoyal.com team hopes that its new site will capitalize on the band's cultural influence. The site will feature editorial revolving around the band's tastes in the underappreciated, the quirky and the campy. For example, the Oxford English Dictionary attributed Grand Royal Magazine for the first use of the term "mullet" to describe a hair style--long in back, short on top
--sported by hockey players and '80s-era heavy metal bands, according to Rogers.Historically, Grand Royal has helped many lesser-known artists step into the spotlight. In 1995 the magazine published a feature on legendary reggae producer Lee "Scratch" Perry that eventually led to a CD compilation of his works. The magazine also sparked interest in now popular rock/hip-hop artist Kid Rock after it included a feature about him in 1997, Rogers said.