Photo: Joran Hollender

Of the countless human pursuits touched by technology, music has been among the most profoundly transformed. Beginning more than a century ago, when Thomas Edison's phonograph gave rise to the recorded music industry, technology has brought music to the masses with steadily increasing efficiency, fidelity, and convenience. Today, the Internet, digital recording, and new storage technologies are coming together to prompt another momentous shift. It is liberating music from the last link to Edison's era: the dependence on physical, recorded media that has long confined it.

Of all the technologies fomenting this revolution, one of the most pivotal, and interesting, is the compression algorithm. The most common example is the ubiquitous MP3, which was a key enabler of Napster's rise in its copyright-flouting initial incarnation. MP3 is just one of an expanding array of such algorithms—more than 100 at last count—that also includes such contenders as WAV, WMA, Ogg, AAC, and AC-2. All of them use a variety of clever tricks to compress music files 90 percent or more, so that the data can be more economically transmitted over a network, such as the Internet, and stored on a computer or music player. They're all vying for a central role in the global recorded music industry, which now generates US $32 billion a year in revenues.

Powerful alliances are being formed. And unlike many previous technology-related business battles, technology may actually be a significant factor in this one. Consider Sony Corp.'s slick new music player, the NW-HD1. Praised for its compact size, long battery life, and clever touch-sensitive controller, the device nevertheless has been widely and bitterly criticized for its choice of compression algorithm: ATRAC3, a proprietary system used by Sony alone.

Not since the days of the PC operating system wars in the 1980s, arguably, has a software issue held so much sway over an emerging category of consumer electronics. And this time, at least, technology will weigh fairly heavily as the marketplace sorts out winners and losers.

For the algorithms, the basic tradeoff is between sound quality and how much they can compress the music files. But there are other important considerations, including the extent to which the full-fidelity, uncompressed files can be re-created from the compressed files, how copy protection is implemented, and how secure the downloaded files are from unauthorized distribution.

The contest is far from over. But already, glimpses of a seriously streamlined future for the sale and distribution of recorded music are apparent—ones that are showing the way for digital movies, too. The first part of the transition is well under way: Apple's iTunes alone is selling about $500 000 worth of music a week; additional online music services from RealAudio, Wal-Mart, Napster, and others are also doing brisk business. The advantages over the old industry model are overwhelming: record companies don't have to ship plastic discs all over the world, and music fans need no longer clutter their homes with racks of CDs or tapes. Instead, somewhere near their favorite audio listening spots are a hard drive (or two or three) and a computer displaying a list of thousands and thousands of songs, arranged by album, by artist, or simply by mood. No more shuffling through stacks of discs; a click of a mouse changes the tune.

This revolution is not happening just in the home. It is truly everywhere. Once compressed, music files can be quickly and easily loaded into a compact, shirt-pocket-size player, where they are stored on a miniature hard-disk drive or in flash memory. The hard-disk-based systems, such as Apple's ubiquitous iPods, can store thousands of songs—your entire music library, probably.

This is just a hint of what's to come. Today, early adopters are using wireless networks to move music from their computers to audio gear all over their homes. When wireless personal area networks based on the IEEE 802.15.3 standard become commercially available, people will be storing movies this way as well. Eventually, CDs and DVDs will join the vinyl albums gathering dust in the backs of closets, and yet music and movies will be everywhere—in file servers, magnetic and semiconductor memories, communications lines, and in the air itself.