The New Digital Jukes: Not Your Daddy’s Wurlitzer
Streaming Magazine June 2000

John Silliman Dodge

We're smack in the middle of a music revolution. A mere three years after Rob Glaser of RealNetworks lit the fuse on the streaming media business, the record, radio, retail, technology and venture capital industries are all hyperstimulated over Web-based music. There isn't a major online retailer that doesn't use sound samples to sell CD', not a record label without a music download strategy, not a radio network without big streaming initiatives, and not a major technology player who doesn't acknowledge that digital media is the biggest thing to hit the computer industry since Al Gore created the Internet. And at the center of this maelstrom is a piece of software, a next generation media player called a jukebox.

You may not use your computer to locate, download, manage and playback your music, but the 20-somethings who work with you do. And for good reason. The arguments for turning your PC into a stereo system are compelling. Install jukebox software on your computer and you can search, find, download, manage, arrange, manipulate, duplicate, playback and personalize stereo music in multiple digital formats. You can limit this to music that you transfer from your existing music collection onto your hard drive. Or the Web can be your oyster with millions of songs available for audition and download. You can load your entire CD collection into your laptop and play your music at home, at work, on the road, at a friend's house. All your music is with you all the time. Through wireless applications like Sonicbox and others, you can link your computer to the big stereo at the other end of the house and blast away to your heart' content. With free Web-based storage offers such as myplay and X-drive, you can upload music to your own digital locker and access it anywhere there's a net connection. You can listen to Web radio from LA to Timbuktu. And a new generation of portable and handheld devices conveniently fills the gap for mobile listening, so if you were about to argue "not everyone has a laptop," just stop right now.

There are dozens of music players and jukeboxes available. Visit CDDB.com for a comprehensive list. The names most likely to succeed come from the technology brands you know: RealNetworks, Microsoft, AOL and MusicMatch. In some cases this is because their technology is better than their competitors; often it's because their marketing and distribution systems are superior. But the current products offered by the majors are all good and in the spirit of the Web, they';re free.

Let's take a look at some common functions. With jukebox software you can:

Digitize your CD collection- if you're like me you have a few thousand CD's taking up valuable real estate. Hundreds of these you actually listen to. Dozens of those contain great songs from start to finish. So take a weekend, brew some extra zippy Italian roast and play stash or trash with your record collection. Digitize the songs you love, file the rest away in boxes and take the leftovers to the used CD store or to Goodwill. Why would you want to do this?

Manage and manipulate music- We've all made special mix tapes for ourselves and friends. Using a jukebox is the new and vastly improved way. You can create custom playlists in minutes and save them with titles like Rowdy Mix, Dinner Mix, Barry White Seduction Mix, etc. Since the songs are now computer files, you can drag and drop them into position with ease. Hit play and enjoy. But wait, there's more.

Search and find music- Converting your CD collection to digital form is one thing. You can also use a jukebox to find new music on the Web. Portal sites such as MP3.com, eMusic, Riffage, Launch, Musicmaker, Amplified, Listen, Wall of Sound, ArtistDirect, UBL and many others offer a huge variety of music from independent and unsigned artists as well as select tracks from known artists. The record labels are in the game as well, ala Universal Music's Farmclub. Amazon has a music download section. And increasingly the jukebox makers themselves are becoming mini music portals-aggregating content, providing search capability and acting as directories, radio guides and referral agents. Ironically, the fact that music is everywhere presents a problem.

The challenge in the million song universe is finding music that you actually want. The more music that's out there, the more overwhelmed by choices the consumer becomes. The music industry adds at least 500 new CD's each week to the existing millions of songs in the commercial catalog. This is more content than the primary promotional pipes-radio and MTV-can possibly hold. Finding Britney Spears is one thing. But the "search-by-entering-text-in-a-box&" If you're a genre fan you can search for rock or jazz but the sheer number of returns is unmanageable. Recognizing this as an opportunity, jukeboxes are entering the music recommendation business in a big way. Their suggestions can be based on the opinions of a staff of music editors, on collaborative filtering (people who like this also like that), using sophisticated data and taste mapping technologies like MusicMatch's, and the new frontier of DSP-based music recognition and classification systems, or "electric ear" software pioneered by companies like Gigabeat, Mongo, and the company I work with in Seattle, CantaMetrix. The goal of all this activity is personalization, providing you with a steady flow of new music mapped to your highly individual tastes.

Download or transcode music- once you locate music on the Web, downloading or transferring a copy to your hard drive is fairly straightforward. You can listen while you download, work with multiple file formats and even transcode or convert a group of songs from one quality data rate or format type to another. All the software makers acknowledge that the manipulation process is still too tricky and technical and they all state a similar goal to simplify the user experience. For example, the terms "record"; and "copy" are different in the analog world but identical in juke parlance.

Beyond the vertigo that normally accompanies paradigm shifts, the record labels' biggest concern has been protection against digital shoplifting. Understanding that an intellectual property market can't flourish without such protection, the technology and record industries have prioritized the development of digital rights management, or DRM solutions for the secure distribution of copy-protected digital media. Using encryption, providers and distributors can thwart piracy by unlocking playback only by the individual who purchases the content. This is subject to a whole array of permissions, credentials, terms and conditions designed to make the transaction both secure and as flexible as possible. The point of the Secure Digital Music Initiative, or SDMI is to stimulate commerce while protecting the rights of copyright owners. Music itself may not remain the property of its creators, but the profits from music certainly should. And until the record industry's legitimate security concerns are taken care of, the legal tunes won't flow.

Copy and playback music- The latest jukes support most of the major portable devices. Once your Workout Mix is worked out, you can download it into your Rio, Nomad, Lyra, Sony Music Stick, etc. and off to the gym you go. By the way, you may wonder what kind of music experience you can have with tiny, tinny speakers like the ones on my Gateway laptop here. Thanks mostly to the video gaming industry, a half-dozen companies make great sounding and good value speakers specifically for desktop computer users. See Cambridge Soundworks, among others. And even inexpensive headphones make the portables sound great.

That's the feature overview. I've chosen four big jukebox names, Microsoft, RealNetworks, MusicMatch and Winamp. Time for a product face off.

Microsoft Windows Media Player 7

In March, Microsoft released the beta version of Windows Media Player 7, an integrated audio/video media player, radio and jukebox. This all-in-one approach enables users to find, download, manage, arrange, manipulate, play and integrate music with portable devices. The product is a huge strategic play in Microsoft's ongoing battle against cross-town rivals, RealNetworks.

In response, Real unleashed a salvo of press and Media Metrix measurements that underscored their dominance in the space. And in a classic piece of nose-tweaking, check this headline in Real's communication dated 15-March-2000: "Industry-leading RealJukebox adds Windows Media Audio to Long List of Playback Formats, Extending Reach to Incremental 2% of Media Content."Meeow.

WMP7 has a stunning new look and feel. It's straightforward and simple to operate, the result of much user testing. If offers one-click access to all common activities. It's easy to personalize with a variety of different faceplates known as skins. New audio and video codecs make this their best performing product to date. The beta version supports portable devices including the RCA Lyra, Palm-Size PCs and Pocket PCs as well as removable storage such as CompactFlash, SmartMedia, Iomega Jaz and Zip drives. Support for the Diamond Rio 600, Creative Nomad II, and others is reported to be available shortly. Together with their newly revamped music, video and radio directory at WindowsMedia.com, WMP7 is fully integrated with AMG, Alliance Entertainment's All Music Guide for access to pictures, cover art, information on about 400,000 albums, artist biographies, discographies, reviews, and buying opportunities. It's a very rich combination of features, functions and access to media and data.

Size matters, and WAV files are chunky. But MP3 compression helps trim these big boys to roughly 10% of their original size without significant loss of quality. (Audiophiles argue this last point. I counter that quality is rarely the primary issue.) Windows Media now touts CD-quality sound at half the file size of MP3, effectively doubling the amount of music storage space on your drive. Accordingly, file transfer time is halved as well. With plummeting hard drive prices this isn't a big deal. But with the new generation of portables, often half the cost of the device is in the memory. Smaller file size means more music goes on the road with you. This is a good thing.

I drove over to Redmond for the WMP7 unveiling. Product Manager, Sean Alexander says, "Today';s devices are targeted toward the technical crowd. What we're trying to do is take digital media mainstream. We went with four design themes for WMP7: ease of use, all-in-one functionality, the best audio/video experience-not just quality sight and sound but equalization and enhancements. And more personality, with skins, animations and fun."

Sean added, "Radio is the killer app right now in streaming media. Everybody is able to get it, everybody feels real comfortable with it. So we wanted to make it drop-dead simple to use. The radio bar was an amazingly popular feature with Win98. The new player has a separate radio tuner, a whole new search engine with over 1900 stations that are broadcasting in Windows Media. Users can search by call letters, frequency, or even a particular personality, whether it's pure Web radio or broadcast radio."

The beta version of WMP7 is currently available for download with the final version scheduled for release this summer via download and bundled with the next iteration of the Windows operating system for consumers called Windows ME (Millennium Edition). It's hard to find fault with the new combination player/juke. Compared to Microsoft's earlier efforts, WMP7 looks like a home run. The only downside is that (per usual) everything revolves around Windows. The software encodes only in Windows Media format. Their position, backed by user testing, is that WMA is sounds superior compared to MP3. MP3 is an aging technology, after all, and WMA would like to be the successor to the throne. It's secure, which pleases rights holders like EMI who will offer over 100 albums exclusively in WMA. But it's also a proprietary, closed-system approach in an increasingly open and interoperable world. Windows Media may get their wish and become the industry standard in the end. But if that happens let's hope that it' because the market decides that Microsoft has the right combination of engineering, security, quality and universality.

RealNetworks' RealJukebox-

Days before this article was due, RealNetworks invited me to headquarters. After I signed a strict non-disclosure agreement, a group of product managers displayed their latest efforts. Their stated objective was/is to create a jukebox "asier to use than Microsoft and with more features than MusicMatch." Interesting to note that the Real team views MusicMatch, not MS as the product to beat. The result is the Real Entertainment Center, a suite of products and services that include RealPlayer 8, RealJukebox 2 and RealDownload, manager software that enables you to schedule, pause, resume and reconnect to audio/video downloads all on an accelerated basis. You can download these three components individually or collectively.

The pre-release product I saw was temperamental but good enough to show. And a good show it was. Like the new WMP7, the RealJuke2 sports a variety of cool graphic accompaniments called visualizations. A productivity sink at work perhaps, but tons of fun offline. Fun was one of Real's design themes for the new products. Others centered on combining ease of use and power, support for all popular formats, music discovery, and evolution to changing technology.

The new juke has a new look and feel, simpler and more stylish. Navigation has been revamped; they';ve gone to a Web page metaphor complete with the all-important back button. Under the hood, the encoder is speedy. The claim is three times the speed of WMP7. (With everyone's specs I learned that you must read the fine print to get all the details.) Put in a CD and six minutes later it's transferred.

Like their competitors, Real's design goal is to hide the complexity of the digital music process from the user. Unlike MS, Real aims to be format-agnostic. Product Manager Rob Grady didn't mince words. "We have the only universal jukebox out there. Consumers want to be able to go to whatever Web site they want without having to hassle with different formats. And we're the only jukebox that enables them to do that." RealJuke2 encodes in Real, Windows, MP3 and WAV formats. They playback or decode in nine different file formats and DRMs ("every format and rights management format that matters") including MP3, a2b, LiquidAudio, Mjuice and Windows Media Audio among others.

Finding tunes is a cinch. The Download Music Guide, Artist Guide (from AMG) and Radio Tuner features make certain you are never at a loss for music and information.

Adapting to change is what the auto-update feature is about. This keeps users current with the latest product revisions. For example, as support is added for a new file format your desktop is notified that an update is available. One click, the plugin downloads and you're good to go. It's a flexible approach, one that clearly demonstrates the benefits of a software over a hardware solution.

The upgrade Plus product costs $29.99 and contains "enthusiast features" such as faster encoding, transcoding to convert different bit rates and formats, a crossfade capability (as a former DJ/producer I really like this feature), variable bit rate encoding, an equalizer, the ability to record at a CD-quality data rate, CD jewel case insert printing, exclusive skins and visualizations, and phone support, a useful feature as the product grows more complex. And complex it';s getting. We joked about a "RealJukebox For Dummies" series. Don't be surprised if you see it happen.

You can't argue with the math. RealNetworks has an installed base north of 115M RealPlayers and 32M RealJukebox basic players. People download 100K free jukes every day, either bundled with the player or separately. And each of those pieces of software is also a communication link back to the Mothership. When a new Real product comes out...blink-blink-blink...you know about it.

Finally, Real is actively testing a new service code-named Quicksilver which is expected to ship before the end of the second quarter. Consumers can sign up for music delivery overnight like the morning paper. Tell them your favorite artists and they notify you when there's product. Also, the Real.com Messaging Service pushes breaking news, featured music of the week, new releases, download of the day, video links and more to your mailbox. Personalization is gaining ground. For a new take on giving people more of what they want, read on.

MusicMatch-

Headquartered in a mission-style office complex north of sunny San Diego where they recently (and willingly) relocated from Washington State, MusicMatch makes the jukebox that the other companies envy. They lack the numbers of the majors but consistently win the attention of editors at publications such as ZDNet, PC Magazine, CNET and the demanding Walt Mossberg, technology columnist for the Wall Street Journal. The current installed base is greater than 5M users and daily downloads from their site and partner sites range between 25 and 30K. During new product launches, that number shoots as high as 60K.

MusicMatch offers the highest-quality recording capability of any of the free jukes. "Our customers rank recording quality one of the most important features they look for when choosing personal jukebox software," said Dennis Mudd, co-founder and CEO. Version 5.0 uses the famous Fraunhofer codec to achieve what many feel is a better-quality recording. It also encodes music at up to 320 kbps. Since 128 kbps is indistinguishable from CD-quality sound, 320kbps is gilding the lily, but you can do it. You can burn playlists directly to CD's, link to a list of online radio stations via the Net Radio feature and for info-junkies, the Net Music Guide is a custom-tailored version of the popular Muze music data service. The Plus model ($29.95) allows printing of custom CD jewel cases, two clicks to burn audio CD's or MP3 CD's and faster ripping and burning.

Quality and cool features aside, the single most intriguing aspect of MusicMatch is its approach to personalization. I called Bob Ohlweiler, the VP of Marketing for MusicMatch and asked him to describe the MusicMatch Guide. "Our company is focusing on the environment of the future. The pace of people's lives is quickening, the amount of time they have to spend on leisure is shrinking. As a result they listen to the same music they listened to when they were in college. MusicMatch is trying to solve this with a very unique approach. On an opt-in only basis, while our customers are listening to their jukes, they upload their listening logs to us and in turn we provide them with personalized music recommendations. We've hired the right people to develop and model personalization science that is focused on music. Our expert, Dr. Ted Dunning has tremendous experience in this area and with his direction we've built a complex math model based on musical relationships that's independent of genre. Now we can connect people with music that is outside of the usual and customary boxes and is based on the tastes of hundreds of thousands of other people. It's a big, highly accurate neural net with over one million users and cataloging over 250M play events."

"Traditional, generic personalization engines typically rely on simple correlation and tend to provide recommendations that lack variety," adds Bill Caid, VP of Internet Services for MusicMatch. "MusicMatch's service determines the more subtle and complex relationships that attract the same listeners to very different types of music, not just the music that is the most popular, and we believe that MusicMatch's recommendations are more eclectic, comprehensive and interesting than those provided by any other source."

Acknowledging that the competition has formidable marketing muscle, Ohlweiler went on to say, "Distribution is important, but usage is more important. We want the high value customers, Real can have all the low end they want. Now Microsoft in the short term is taking a very interesting tact by not having MP3 encoding in their product. They're going to be bringing a lot of new people into the space. Our view is that more people will become aware of jukebox software and that sets them up to be MusicMatch customers when they start to look for a superior product."

According to the new Director of Corporate Communications, Gary Brotman, the company's growth target is "to double the number of users by the end of this year." And with a product this good, their only challenge will be getting the word out.

Winamp-

Technically a music player and not a jukebox (no encoding capability), Winamp is part of the expanding AOL empire. They're included here because any brand this well-capitalized is likely to have plans behind plans. The software was invented by wunderkind programmer, Justin Frankel whose company, Nullsoft was purchased by AOL together with Spinner in 1999. Today they're headquartered together in the Potrero Hill district of San Francisco known as Audio Alley.

Long the favorite of techies and early adopters, Winamp is a playback-only decoding device, the first such widely-available software designed for playing MP3's. Other Winamp firsts include being the first player with a graphical user interface, the first with EQ, with playlist management, with a mini-browser, multiple skins, plugins, and with streaming MP3. Their installed base exceeds 25M users, 12M of whom are active, defined as using the player at least once a month. They're growing at a clip, adding 150-200K new uploads every day. The product is free and there is no upgrade offer.

As a music player, Winamp has three or four things going for it. There's a cool spectrum analyzer and oscilloscope plus a ten-band graphic EQ. With over 7000 available skins you could sport a new look every day for twenty years. There are over 350 visualization and audio effects plugins including surround sound, 3-D and compression/limiting. They have multiple content relationships so access to music is plentiful and varied. But the most interesting component is Winamp Radio. The feature formerly known as Shoutcast is the first ever distributed MP3 streaming solution. Anyone can create a streaming radio channel from their desktop. An individual DJ's channel appears in the Winamp radio directory. So far there are 12M participants, a vivid example of the communities of interest Winamp Product Manager, Rob Lord refers to later.

How do they determine what users want? "We get lots of user feedback. Lead programmer, Justin Frankel is a great listener. Via IRQ channels and email, he rolls positive feedback into development and pushes out a new product on a monthly cycle. Technically this isn't open source but it's very open to extensions and plugins. Winamp is almost like the Linux of MP3 players."

I asked Rob about business models. "AOL is a media company. The player is monetized at Winamp.com with both advertising and commerce. AOL is very interested in developing focused communities of interest and monetizing that through technologies. Going forward, there's an active developer community around the player. We'll connect users and developers and grow the whole cycle. The goal is to get big." Given the company's parents, we can expect bigness to happen soon.

Regardless of whose brand name is on the software, the role that the jukebox will play in the digital music revolution has implications for everyone up and down the value chain. Some predictions for the players:

Radio-could be bad, could be good. Depends on how quickly radio is able to recognize that their fortune lies in their customer relationships and not in how many cool new tunes were released last week. It's this brand-extension thinking that propels Nike into apparel, watches, and now personal electronics. Nike could have shrugged and said, "Hey, we're just a sneaker company." True, the markets need to settle such issues as format compatibility, security and interactivity. Once that's out of the way the new jukes are in a position to threaten terrestrial broadcasting. The counter arguments about Web radio lacking local content, personality and portability could disappear like so much smoke. Speedy ubiquity via broadband and wireless could put the final nail in the coffin. Or the broadcasting industry could take the Viagra and do some embracing and extending of its own. They have the relationships, after all.

Records-uh oh. Now the labels have to find out who the people are who buy their products. For years they've left consumer marketing largely up to radio and retail. Cozying up to consumers now will be a challenge. Generally viewed as foot-dragging and predatory, the labels and their trade org, the RIAA could use an image makeover. FTC charges of CD price coercion don't help. A touch of paranoia is understandable in the light of Napster/Gnutella, but the labels need to get comfortable with and creative about change. Old business models are morphing at warp speed. Microsoft's president, Steve Ballmer sees the end of the shrink-wrapped world and the beginning of the ASP or application service provider model. You won't buy a product, you'll lease a service. Big Music has taken this cue and in one of the first such music subscription moves, Universal and Sony Music plan to license music and video content to a new joint venture that will offer streaming and downloading features to Web users via PC's, wireless devices and set-top boxes. The MSP or Music Services Provider model won't replace physical CD sales anytime soon but it will co-exist alongside CD sales and grow the pie incrementally. And Big Music is hungry for a bigger pie after years of single digit growth.

Retail-uh oh, take two. I'd fear for my long term health if I were a record store chain. The labels are in a position to use jukes to "disintermediate" or cut out the middlemen. Via the technology providers they could deliver music directly to consumers and gather their feedback digitally. With margins to the bone already, retail will have to find new ways to add value to the shopping experience and still make a profit. To their credit, they've been the primary customer interface all these years. They know how to move product. The brightest among them will adapt, improve, survive and thrive.

Technology-the clear winners no matter what happens. As the Web becomes the default system of distribution, the enablers will rake in the dough regardless of whose content goes down whose pipes. They are the new gatekeepers. In the digital gold rush, the guys who sell supplies are the ones who truly get rich.

It's way too soon to predict winners in the jukebox revolution. I have a favorite but I encourage you to get in the game-pick a product, explore and play with it, have fun. The new jukes are all quite deep and sophisticated but still relatively simple to use. Microsoft's latest entry and their intention to make the WMP part of the operating system proves how seriously they take "music space." The lightning response from RealNetworks proves just how unwilling they are to roll over. AOL's larger plans are shrouded in secrecy but likely will compliment their "AOL Everywhere" strategy. And everyone views MusicMatch as the standard bearer of excellence.

One thing is certain going forward: the quality of personalization science will be what separates the goods from the greats. It's quite apparent that these combination jukebox/media players are poised to become the desktop music portals and marketing channels of the future. And the better they get to know you and cater to your personal taste, the better consumer you'll become. Beyond the desktop, the handhelds, portables, phones and other gadgetry will proliferate this technology to the point not too far off where any music system that isn't Web-enabled will seem like an anachronism.

Ah pilgrims, it's a great time to be alive in the music biz. See you on the Web, JD.