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Diamond strikes music and content deals

The popular but controversial MP3 format moves closer to legitimacy as the company that makes the Rio MP3 player partners with Liquid Audio and Audible.

LAS VEGAS--The popular but controversial MP3 format put another notch on its legitimacy belt today.

Diamond Multimedia Systems, which makes the Rio portable MP3 player that earned it a lawsuit from the music industry trade group the Recording Industry Association of America last fall, today said it has struck deals with music delivery firm Liquid Audio and spoken audio Net content site Audible.

The deals mark another important step for the MP3 (MPEG 1, Audio Layer 3) format, which compresses high-quality sound files so they can be downloaded quickly onto a PC hard drive. The format enjoys tremendous popularity among music fans online, but remains scorned by many in the music industry because it is the favored format among online music pirates.

The Liquid Audio and Audible deals are significant because they show an ever-increasing maturity for MP3, which is being embraced by an increasing number of electronics manufacturers and content providers.

For its part, Liquid Audio, a developer of secure online music delivery systems, said it plans to incorporate the Diamond Media Device Manager into its Liquid Music Player during the first half of 1999. With the technology marriage, Rio users will be able to download and play Liquid's more than 100,000 tracks from major artists after purchasing them.

"Diamond has already had proven success with Rio among consumers and has generated astounding interest in the digital music market," Gerry Kearby, cofounder and chief executive of Liquid Audio, said in a statement. "Our cooperative efforts will result in the delivery of hot titles to consumers while providing the copyright protection being demanded by content holders."

Liquid Audio is facing ever-increasing competition from the likes of AT&T's a2b Music, among others. a2b also offers secure music download technologies, and has the telco's deep pockets, influence, and marketing muscle behind it. Getting in with a device that is growing in popularity and getting media attention, like the Rio, could bring the firm some important exposure.

Under the terms of the agreement, Audible will make part of its library available in the MP3 format, and will work with Diamond to ensure that its content can be downloaded to the Rio, the firms said. The alliance will create an offering similar to books-on-tape products; users will be able to download spoken audio such as speeches, articles, and books to listen to on the go.

Audible also is offering an MP3 showcase on its site. Rio customers can download an audio portion of Stephen King's book Bag of Bones, read by the author, among other promotional items.

"Our relationship with Audible represents an important step in offering a new and previously unavailable genre of audio content to Rio customers," Ken Comstock, general manager of the audio business unit at Diamond Multimedia, said in a statement. "Audiobooks, time-shifted radio programs, leading business information, and educational material reach a large, viable market segment, and consumers will look to the Rio to experience the plethora of nonmusic content on the Internet."

The Rio PMP300 is a portable digital music player that stores up to an hour of digital-quality music or up to eight hours of voice-based audio from the Internet or CDs through a PC.