Microsoft changes its tune on MP3 ripping

The Redmond, Wash.-based company on Monday will announce two add-in packs for Windows XP, one providing full MP3 support and the other DVD playback. CyberLink, InterVideo and Ravisent working with Microsoft will offer the programs--the MP3 Creation Pack and DVD Decoder Pack--for download when Windows XP launches in October. The companies will charge for the software, but pricing has not been determined.

The change could help squelch criticism that Microsoft favored Windows Media Audio (WMA) format over MP3, which testing versions of Windows XP ripped at a low quality.

Microsoft could also push back against pundits who argue that the company more fully integrated Windows Media Player into XP for the purpose of crushing competitors. The three companies enabling Windows XP's MP3 and DVD capabilities all make software that competes with Windows Media Player. Each company will offer its own version of the two add-on packs.

For months, Microsoft has been sharply criticized for Windows XP's handling of MP3 files. Early testing versions of Windows Media Player for Windows XP ripped MP3s at about half the more typical minimum quality delivered by competing products, such as RealNetworks' RealPlayer Plus.

"That's not much better than listening to a tinny AM radio," Gartner analyst Michael Silver said of the MP3s ripped by testing versions of Windows XP's media player.

Critics had argued that Microsoft planned to push Windows Media Audio over MP3 by leveraging XP's integrated media player.

Mark Rush, a technical support technician from Raymore, Mo., described Microsoft's approach as a "blatantly transparent attempt to steer the market in a direction wholly favorable to Microsoft. Rather than let the merits of the Windows Media format speak for itself and win over converts by its superior quality...they chose the rather underhanded approach of limiting the quality and performance of a competing file format."

In fact, the heated debate over digital music formats and media players contributed to the collapse of talks between AOL Time Warner and Microsoft that could have put the America Online service on the Windows XP CD.

MP3 threat weakens
Microsoft may have had good reason for not readily embracing MP3. The software maker has built digital rights management features into Windows XP that the company hoped would woo music publishers battered by illegal MP3s distributed by Napster and similar music file-swapping services. MP3's popularity for illegally copied songs threatened Microsoft's digital rights strategy and "any potential relationship with music publishers," said Guernsey Research analyst Chris LeTocq.

"Maybe Microsoft thinks that Napster is now dead and gone and MP3 is much less likely to infuriate the content providers," LeTocq added. "They may also see with the Pressplay deal there is enough going on for MP3 to wither on its own vines."

On Thursday, Microsoft cut a deal with online music service Pressplay, which agreed to offer WMA-formatted songs to MSN Music customers.

No matter what Microsoft's reasons for solidifying MP3 support in Windows XP, the add-on packs give "users the full flexibility of choice for creating their music collections, whether it is using WMA to get CD-quality sound in half the file size of MP3 files, or using MP3 technology itself," said Jonathan Usher, Microsoft's group manager for the Windows Digital Media Division.

CyberLink and Ravisent could not be reached about the announcement, and InterVideo would not comment ahead of any alleged announcement.

Still, Windows XP users will have to pay extra for ripping MP3s using Windows Media Player, a move that could empower competitors but also make it easier for average users to go with WMA.

"Microsoft doesn't want to alienate or encourage people to go way from Windows Media Player because of the gigabits of Napster MP3s they have stashed away," LeTocq said. On the other hand, "you've got to wonder what this will cost people."

For Leon Russell, a Windows user from Lake Charles, La., Microsoft's offering full MP3 is a crucial selling point for Windows XP.

"I'm not upgrading to a media player that's going to see my MP3s...(but) won't play them and only play Microsoft files," he said.

Show me the money
In the end, Microsoft's distaste for MP3 ripping may have much less to do with any grandiose plans to replace the popular digital music format with WMA and more to do with money: The company didn't want to pay licensing fees for MP3 encoding or DVD playback. In fact, testing versions of Windows XP could rip MP3s or playback DVDs as long as a third-party encoder or decoder was present.

Shawn Sanford, Microsoft's group product manager for Windows, last month acknowledged the company didn't want to tack the MP3 encoding and DVD decoding license fees onto the cost of Windows. That, he said, is why in test versions of Windows XP Microsoft opted for a budget-version encoder that ripped MP3s at low quality.

"We simply wanted to make sure the technology worked," he said. "When you look at a DVD decoder, for example, you're talking about rights to playback. There's a licensing fee involved there."

So CyberLink, InterVideo and Ravisent, which already pay for the rights to use either MP3 encoders or DVD decoders, will bear the burden rather than Microsoft. Those rights aren't cheap. Thomson Multimedia, which licenses the rights to MP3, charges technology third-party encoding developers $2.50 per unit, according to the company's Web site.

No matter which company delivers the full MP3 support, Microsoft has packed into Windows XP some exciting enhancements for music aficionados, testers say.

Microsoft has revamped how the Windows file system handles music files. A folder containing MP3s, for example, offers column views with lots of information about the songs, such as the title, artist, year and genre. From a left-sided pane it is possible to play the song, burn it to a CD-recordable disc or buy the CD online.

"It's pretty cool the way XP senses the presence of MP3 or other audio files and then automatically places extra options on the sidebar," Rush said. This is "very handy and convenient and just one more example of how XP has been written to do automatically and transparently some of the things that, in previous versions of Windows, had to be done manually by the user."