This popular but contentious standard — which has drawn fire from the Recording Industry Association of America (RIAA) and groups in Europe over issues of copyright protection and intellectual property — is spawning a grass-roots crop of Internet audio players that some say heralds a revolution in the technology for popular music players.

In large part, the gear is coming not from big corporations but from engineers like Hugo Fiennes, a 27-year-old Englishman who has turned his Internet savvy and enthusiasm for listening to music in his Mazda MX5 sports car into a startup company that has customers queued up for products that have not rolled off the assembly line yet. (MP3 defines digital compression and decompression for downloading, storing and playing CD-quality audio files off the Internet.)

Hugo Fiennes' 'empeg-car' is one of many
MP3 players designed around the world.

Fiennes' "empeg-car" is just one of a clutch of portable, in-home and in-car MP3 players being worked on around the world. The hardware guide at the MP3 portal site lists 25 standalone MP3 portable players, 10 car players and 23 computer-tethered players with model names like MPMan, yepp and MPStation. Some are individual hobbyist projects, others are players slated for volume production by consumer-electronics companies like Samsung Electronics.

Their emergence is sending shivers down the recording industry's spine. The RIAA locked horns with Diamond Multimedia Systems Inc. when the San Jose, Calif., company began shipping its Rio PMP300 portable MP3 player last year. The Rio has since become a hot seller. Separately, concerns over MP3's lack of security features prompted the RIAA to promulgate its own standard for secure Internet music.

Fiennes has become technical director of Empeg Ltd., formed here last year as a result of underground Internet enthusiasm for his in-car Linux computer running an MP3 digital-audio decoder in software, which Fiennes built as a personal project. The player, now reworked from its hobby origins and commercially branded empeg-car, uses one or two 2.5-inch disk drives to store up to 500 hours of CD-quality audio — 7,000 singles or more than 500 albums — in the auto dashboard. The unit, which replaces the standard car radio-cassette player, can be taken out and linked to a PC to be loaded with audio files. Indeed, Fiennes has modified the design so that the empeg-car can also be played through a domestic stereo system.

Empeg-car digital audio MP3 player embodies what
some call a revolution in popular-music technology

Songs can be categorized with supplied PC-link software, to provide selection options triggered by an infrared remote control. A 128 x 32-pixel vacuum fluorescent display indicates which song is playing and helps with navigation through what is, in effect, a database.

The initial production run of a few hundred units has just begun at contract manufacturer Hansatech Ltd. (Kings Lynn, England), and models are due to go on sale over the Internet in mid-March. But anybody getting in touch with Empeg Ltd. now to buy one will have to wait.

Fiennes said several thousand people from around the world have registered their interest in empeg-car over the Internet, effectively forming a first-come first-served line. Fiennes said the Empeg player would list for just under $1,000.

Empeg is also discussing selling or licensing the empeg-car design to established manufacturers. "It's a great calling card. With something out there it shows we know what we're doing," Fiennes said. "We have already spoken to several major electronics companies from Japan and the United States."

All this is a far cry from how the player began. "When it started it wasn't a commercial thing at all," Fiennes said. "I was looking at CD autochangers for my car and I thought that at the price I might as well have an MP3 player."

Fiennes said he could see the advantage of not having to shuttle CDs between house and car and saw that MP3 could put an entire music collection on a disk drive. Fiennes, an experienced software and hardware developer who has worked under contract to Psion and is still under contract to Symbian, documented his project on a Web site.

"Basically I was just putting up plans and progress reports telling people what I'd done in case they wanted to have a go," he said. "Quite a few people did want to have a go, but lots more started sending in orders or asking when they could buy one. Everyone who saw the unit instantly wanted one."

Back in March 1998 Fiennes chose an off-the-shelf industrial embedded-PC board from Advantech Co. Ltd. (Taipei, Taiwan) and set out to build what he then called his "mp3mobile." The board was rugged and contained all that was needed, including flash memory and audio D/A converter outputs, he said. It originally held a 150-MHz Cyrix processor, now upgraded to a 166-MHz Pentium.

Using a standard microprocessor to run the Linux operating system and a software decoder is not the most power-efficient solution. But it was quick to develop, and changes can be made easily.

That's important in a fast-moving sector like Internet audio. Indeed, Fiennes recognizes that technical, commercial or legal developments could quickly make MP3 obsolete. In that case a Linux dashboard-mounted computer would be just as able to run MPEG-2 Advanced Audio Coding (AAC) or almost any other emerging standard, he said.

"The main advantages of MP3 are that it's good enough in terms of music quality, it's out there and it's popular," said Fiennes. But he also said MP3's image "is clouded by the fact that pirates use it."

In fact, Fiennes is acutely aware that MP3 is a political hot potato. First off is the potential problem of customers encoding their compact-disk collections into MP3 format. Fiennes argues that people already copy CDs onto analog audio cassettes to play in their automobiles, and that is usually regarded by the music industry as a legitimate personal use rather than lost sales. In any case the empeg-car could be used entirely for legitimately recorded MP3 files. But that touches on the second problem: uncertainty about the MP3 legal situation.

Because MP3 does not protect against copying, the RIAA and five major record companies late last year launched the Secure Digital Music Initiative to create an umbrella standard for securely sending digital music over the Internet.

The move is an attempt to beat back MP3's tidal wave of support. The recording industry wants to protect artists' work from Internet piracy, which occurs when MP3 files are downloaded for free and copied onto users' computers.

The dispute over MP3 erupted into a legal battle between RIAA and Diamond Multimedia when that company released its Rio player last October. The RIAA sought a preliminary injunction to prevent shipment of the player, which it claimed violated the 1992 Audio Home Recording Act by encouraging piracy of recorded music.

Diamond prevailed, and began shipping the playback-only device in November. But now hackers have posted software on the Internet that allows the Rio to record digital music files and transfer them to other devices.

Turmoil over intellectual property even roils the MP3 community itself. In Europe, the Fraunhofer Institut Integrierte Schaltungen (Erlangen, Germany) and Thomson Multimedia SA (Paris) claim to have patents on technologies fundamental to MP3. (Fraunhofer's royalty position is outlined online.

The two companies have decided to pool their patents and claim royalties for any commercial decoders, all encoders (whether sold or given away) and also files in MP3 format. The good news for Empeg Ltd. is that for commercial MP3 players, the two companies are typically asking only $1 per copy. Fraunhofer admits on its Web site that it has not asserted its claimed patent rights at numbers below about 10,000 units.

Royalty scheme
For MP3-format files, Fraunhofer suggests a royalty scheme of a penny a song or 1 percent of the value. But whether this would apply to private encoding remains unclear, as does the practicality of Fraunhofer and Thomson collecting such royalties.

For Fiennes and Empeg, MP3 isn't the whole story. "We can carry almost any decoder," he said. "We may well expand empeg-car to support multiple formats. We've been talking to Liquid Audio and Lucent Technologies." The Perpetual Audio Coding scheme developed at Lucent's Bell Labs is being proposed as a U.S. digital radio standard; Liquid Audio (Redwood City, Calif.) touts an Internet audio compression and encryption algorithm of the same name.

In addition, Fiennes said, "We're also following progress in the [RIAA's] Secure Digital Music Initiative."

At least initially, Empeg will avoid Fraunhofer's more stringent position on encoder software where the suggested royalty is $25 a copy. "We won't supply encoder software, because most of our early customers will already have encoders," Fiennes said.