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Technology & science

Wednesday, May 29, 2002

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MP3, Internet audio well beyond 'fad' stage

By Lois M. Collins
Deseret News staff writer

      Nathan M. Schulhof believed early that high-speed data transmission would change the world. But he had trouble getting others to share his vision. He took an idea he had for music compression to the biggest cable companies, but he couldn't get them interested. He talked to Panasonic, Sony, "everyone."
Nathan Schulhof holds a Listen Up Player, which he invented. He lays claim to the title "father of the MP3 player" industry.
      He spoke at technology shows and development conferences, touting the coming wonders of high-speed.
      "People would say it's a fad, it's going to go away. I couldn't get them to see this vision," he said.
      He was "forced to build the hardware" with his company,, which thrived for eight years before Internet stocks crashed. His hardware was the forerunner to today's MP3 technology.
      At one point, in the not-too-distant past, was the leading Internet radio site in the world, according to David Politis, a longtime friend of Schulhof's and Utah tech watcher and commentator.
      The experience is why Schulhof, who has built a number of companies and dabbled in a variety of technology endeavors, lays claims to the title "father of the MP3." His Listen Up Player, the first device of its kind, won an Innovation Award from the Consumer Electronics Show in 1997, followed by an Internet Showcase Award in 1998. Eventually it was featured in more than 100 magazines. Within a couple of years, other companies began producing their own versions, and in 1999 the MP3 market hit $100 million in sales.
      He had envisioned a device that would select, capture, store and play back audio content from the Internet or other broadband sources. The device, for which Schulhof and Audiohighway were awarded three different intellectual property patents, now has a life of its own, with many manufacturers using various compression techniques to capture music. Teenagers and adults everywhere use the devices to store and play their own choice of tunes.
      Legal decisions that threw up barriers to song swapping, concern over copyright protection of compact discs and the near-death-blow dealt to the papa of music swapping, Napster, haven't slowed things down. A few fee-based online music subscriptions have sprung up. And more than 50 million Americans say they download digital music, while a similar number (the groups overlap) listen to Internet radio and streamed audio, according to Ipsos-Reid, a polling and consulting group that published its look at online music habits in "Tempo: Keeping Pace with Online Music Distribution" in January.
      It found that most people who have downloaded a music file go back again and again. The biggest single age population includes people 12-24. Older groups are getting hooked, too, and 25 percent of those 25-34 download their own music. The PC is becoming a "jukebox," according to "Tempo." And it's not slowing down.
      If you'd guess that Schulhof's experience with music compression would lead him to view the music industry as a big bad wolf that wants to stifle innovation, you'd be wrong. He got to know a lot of the industry people and "grew to like them. I don't think they're bad people, and I don't think they're trying to stunt growth. People who simply copy music are stealing, and that's how these companies make their living. But I don't think the issue of protection is their biggest issue any more."
      MP3 players and similar technologies are selling well, he said, mostly to hobbyists. "I don't think true velocity has hit yet. It hasn't reached critical mass where the consumer says, 'I will accept this and put up my money and pay for it,' though you can get people to take something for free.
      "I think the future will drive this. It's always software that drives hardware. I think the first crossover will be where the hardware will drive software, and people will be willing to buy it that way. Then it will flip."
      When high-speed bandwidth is everywhere and there are several ways to use the technologies, it won't be commercial or "techie" any more, he said.
      "It's still techie." Someday, though, the hardware will drive the market. "It gets closer with ease of use. We are a digital world, and with MP3 players, the numbers have grown spectacularly. A lot of people have them. Just look around on the subways in Chicago or New York. It's going to grow up."
      Today, Schulhof heads Nathan Schulhof, a Southern California-based consulting and investment firm that targets technology and biotechnology. He's busy looking for the "next big trend" in a number of areas. He has no plans to develop that trend himself, he said.
      Then again, "I've learned to never say never."


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