Microsoft has announced a new audio format aimed at challenging MP3's domination of distributing music over the Internet.

The launch of its Windows Media Technologies 4.0 beta came a day after IBM and RealNetworks said they would co-operate on a format to combat online piracy.

Microsoft said its technology would produce "high-quality download-and-play music with files half the size of equivalent-quality MP3 files."

Copyright protection built in

Using a beta version of its Media Player, FM-stereo-quality streaming audio was also possible for all modem users, it said

A rights-management system is incorporated to reduce piracy and boost the growth of digital distribution and online sales of music.

Microsoft had lined up a roster of music sites, independent labels, bands and developers to announce their support for the new format.

Casio said the software would be incorporated in its new hand-held PCs, running Windows CE and that it saw "high-quality music playback as a key selling point."

Software suits record industry

Hilary Rosen, president of the Recording Industry Association of America (RIAA), which took Diamond Multimedia to court over its Rio hand-held MP3 player, welcomed the software.

She said she looked forward to reviewing its features in the course of the SDMI process.

The Secure Digital Music Initiative is a forum organised by the recording industry to come up with standards this year for delivering copyright-protected music over the Internet.

IBM's solution, the Electronic Music Management System (EMMS), will be tested by consumers in San Diego shortly. Its deal with RealNetworks will mean some of the Seattle company's encoding technology will be included in the software.

In other developments:

• RealNetworks has acquired Xing Technology for $75m. Xing claims most consumer MP3 files have been created with its encoding software.
• AT&T has released an updated version of its a2b music player, saying it will make downloads faster and provide crisper sound than MP3.
• Apple is rumoured to be planning an announcement on its next-generation Quicktime player next Monday.

'Outrageous' MP3 search

Meanwhile, the International Federation of the Phonographic Industry (IFPI) is pressing ahead with legal action against a Norwegian MP3 search engine.

FAST Search & Transfer ASA licensed its database and MP3 search software to the Lycos directory. While the IFPI says most MP3 files infringe copyright, FAST says that its technology just points to what is available on the Net, and it is not responsible for something generated by a random query.

Paul Jessop, the IFPI Technology director, told a recent London seminar on protecting intellectual property that it had provided information to FAST and Lycos about artists who had never authorised their work to be made available in the MP3 format.

It was clear that they were infringing copyright, he told the seminar organised by the Institution of Electrical Engineers' Multimedia Communications Group.

"They are giving people excessively easy access to illegal files, this is a fairly outrageous way of finding illegal files on the Internet," he said.

MP3 a de facto standard?

Philippe Person of Swiss-based Audiosoft, specialising in secure online music delivery, addressed the question of whether MP3 was a de facto standard for music on the Net.

A standard needed the technical specifications, industry and consumer acceptance, legitimate players and a structured market to succeed. he said.

He said the technical specs in their raw form did not satisfy the music business and while electronics manufacturers were embracing MP3, the record industry was not.