MP3's challenge
The owner of most of the intellectual property inside the MP3 format
is Germany's Fraunhofer Institute, a massive research organization
with interests far beyond audio technology. It's licensed its rights
to Thomson Multimedia, which collects the growing patent
royalties.That company already charges MP3 download companies about 1
percent of royalties, while hardware companies must pay 50 cents per
unit shipped. MP3 encoder companies, such as Musicmatch, pay Thomson
about $5 per unit, contributing to the relative scarcity of free MP3
"rippers."
Thomson hasn't yet decided what to charge Webcasters using the MP3
format. Vice president of new business Henri Linde says that fee will
likely be 1 percent of annual revenue, or an annual fee of $1,000 for
small companies. Despite those payments, the MP3 format is still
soaring in the marketplace. Thomson's figures show that 10 million
hardware devices supporting the format have been manufactured, and
roughly 150 million software units have been downloaded or otherwise
distributed.
That gives Thomson and Fraunhofer a huge head start in the market even
as other music formats such as Windows Media are gaining ground. It
also gives them a huge stake in protecting that lead against any sign
of encroachment by Vorbis.The Ogg developers staunchly defend the
notion that they have created everything from scratch, or at least
have built their system without using any of the Fraunhofer-owned
technology. But their rivals say they aren't so sure.
"We doubt very much that they are not using Fraunhofer and Thomson
intellectual property," Linde said. "We think it is likely they are
infringing."Whether this is true, analysts say Thomson and the German
company are likely to file patent lawsuits the moment Vorbis appears
to be a viable market candidate. By creating a perception of
uncertainty around Vorbis' future, MP3's parents could prevent
conservative digital music companies from adopting it."If you're going
to go into a marketplace where people play hardball, that's what
hardball looks like," Scheirer warned.
Diamond said he would never have done a print version of the magazine
if he were starting it today, partly because of the hefty resources
involved in distribution, printing costs and nagging deadlines
surrounding a print publication. He's more attracted by the Web's
ability to offer interactivity with editorial content."Now we can be
free of that completely and be as creative as we want on our own time
schedule and really have things be as visually, verbally and musically
diverse and off-the-wall as we want to be on our own terms," Diamond
said.
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The GrandRoyal.com team hopes that its new site will capitalize on the
band's cultural influence. The site will feature editorial revolving
around the band's tastes in the underappreciated, the quirky and the
campy. For example, the Oxford English Dictionary attributed Grand
Royal Magazine for the first use of the term "mullet" to describe a
hair style--long in back, short on top --sported by hockey players and
'80s-era heavy metal bands, according to Rogers.Historically, Grand
Royal has helped many lesser-known artists step into the spotlight. In
1995 the magazine published a feature on legendary reggae producer Lee
"Scratch" Perry that eventually led to a CD compilation of his works.
The magazine also sparked interest in now popular rock/hip-hop artist
Kid Rock after it included a feature about him in 1997, Rogers said.
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MP3's challenge 
Linear Mode
