Objective and Background of SDMI

The Secure Digital Music Initiative (SDMI) is a forum that brings together more than 180 companies and organizations representing information technology, consumer electronics, security technology, the worldwide recording industry, and Internet service providers. SDMI's charter is to develop open technology specifications that protect the playing, storing, and distributing of digital music such that a new market for digital music may emerge. (www.sdmi.org)

The SDMI group was officially assembled on December 15th, 1998. The RIAA (Recording Industry Association of America) and other sister companies such as the IFPI and RIAJ were the primary forces behind the creation of this group, consisting of a wide range of companies (more than 160) who plan to create a new standard in digital music transfer - one that they hope will supplant the extremely popular MP3 format. The difference between the SDMI framework and the MP3 format is that the distribution and replication of SDMI files is regulated, eliminating the issue of unauthorized distribution that has been associated with MP3 since its inception. Since the SDMI format would include a technological measure to prevent unauthorized reproduction, replicating SDMI files would be in violation of the DMCA. Unlike many attacks against the MP3 format, SDMI consists of a far broader membership than simply recording companies: Adaptec, Aiwa, America Online, AT&T, Microsoft, Mitsubishi, and Sun Microsystems are all participants.

The belief of the SDMI group is that there must be a way of distributing music over the internet while protecting the rights of the artist. Currently, many copyrighted MP3s are available for free download from many web sites and internet communities such as Napster. Under the SDMI format (which may consist of multiple formats) the music could be downloaded and replicated at a price, providing the original artist with the licensing fees that MP3s steal from them. They believe that by providing a framework that allows for safe, economic, and encrypted transfers they are simultaneously satisfying consumers' desires for cheap, readily available music, and the artists' need for royalties. Additionally, by encrypting file transfers and watermarking SDMI files, the consumer will be protected from downloading unwanted content such as virii.

The Secure Digital Music Initiative

There are two phases in the SDMI group's plan to eliminate MP3: the first phase is to produce a specification for portable devices that will play SDMI supported files. The second phase is developing an architecture for delivery of digital music in all forms. SDMI will also allow the "ripping" of compact discs that have the SDMI watermark. This will ensure that all SDMI files were copied from legitimate sources.

The specifications for the portable device were finalized and published on July 13th, 1999. Some of the companies who plan to release SDMI-compliant portable devices are Diamond, Creative, Matsushita, Panasonic, Toshiba, Mitsubishi, Lucent, Sanyo, Philips, Sony, Thomson/RCA, Audiovox, Pioneer, Sharp, Hewlett-Packard, Zenith/LG Electronics, Texas Instruments, Iomega, QDesign, SanDisk, Microsoft, Intertrust, Reciprocal, WAVE, MusicMarc, Liquid Audio, Fraunhofer, NatWest, BMG, EMI, Sony, Warner, Universal, and Rock.com. These companies will be using a variety of transfer technologies, since no download standard has been agreed upon yet.

An interesting ironic note is that all planned SDMI-compliant devices will support the MP3 format. Although this is probably necessary due to the popularity and ubiquity of the MP3 format, whether users will purchase SDMI players as SDMI players, rather than MP3 players, has yet to be decided. Allowing the playability of the MP3 format will greatly expand the potential user base of SDMI, but may hinder early acceptance, as many users will discover that SDMI is essentially a limited version of MP3. This is a testament to how pervasive the MP3 format has become.

Phase two will involve creating the technology that will filter pirated music and allow the easy downloads of files with the SDMI watermark. This technology will not be ready for at least another year. Since SDMI is creating a framework and not a format, interoperability between music, software, and devices will be determined on a company by company basis. Right now, Microsoft and InterTrust are two primary developers of this secure file transfer technology. The success of the SDMI initiative is largely in their hands at this point.

Problems with SDMI

Since there are so many companies involved with SDMI, coming to decisions about specifications and standards can be very difficult. There are many very powerful companies in the SDMI group who each maintain their own beliefs as to which formats should be adopted by the SDMI initiative, so interoperability can become an issue. Since the SDMI group has decided to let the market place decide what the format standards will be, it might take a very long time before any SDMI-compliant audio player will play any SDMI-compliant file.

There is also the danger that the market may split into too many different directions, causing users to return to the familiar MP3 format. SDMI must make sure that they are a strong, unified entity, rather than a disjoint montage of warring factions. This is difficult since many of the companies involved are direct competitors (e.g., Microsoft and Sun). Another problem is that even if companies such as Microsoft and InterTrust develop good technologies for file distribution, there will always be people who will try to hack the system. Since no software-based encryption technology (such as file-transfer systems) is truly secure, given enough time and a strong enough desire, whichever transfer protocol is chosen will be hacked. Thus, at this point, it does not seem that the SDMI technologies will become a dominant force in the market - the MP3 format has become very popular and the SDMI initiative may be too little too late. It will take a lot of organization and compromise in order for the SDMI to make a difference.

What this means to the Consumer

At the very least, the SDMI format gives the consumer another option. Since SDMI portable devices allow playback of MP3 files, as long as these devices are sold at a comparable price, consumers may choose to buy these new devices to keep these options open. The consumer will be allowed to access music that is only available through the SDMI framework, which could help SDMI gain a much-needed user base. However, this framework restricts the consumer's access to music, by placing limitations on the number of copies that can be made and charging for every song downloaded. This stands in direct contrast with the spirit of MP3 trading (maximum consumer freedom), and will probably slow, if not stop, widespread acceptance of the format.