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Content Choices for the Consumer - The Future of Music Servers (1/12/2006)

By Matthew Simmons, Digital Fidelity

In this article, I will be looking at the future direction of content in the home, and the products that are best placed to maximise the customer's enjoyment. But I want to make a brief observation about the recent CEDIA show. One of the most striking things about the Denver show was the complete lack of iPod-hysteria; quite a contrast to last year's show where at times iPod integration seemed to be the most crucial issue facing the install industry. This year, we were back to the core of the install market, focussed on better ways of control and automation. There are some really nice iPod solutions out there now, but the reality is that if we are to exploit this new opportunity, the real focus should start further back in the food chain.

For our industry, I am inclined to think that the iPod is actually a red herring. As Woodward and Bernstein were advised in 'All the Presidents Men' to 'follow the money', I will steal the idea with modification: we need to 'follow the content'. We need to know what content the consumer is buying and using now, and what his/her options will be over the next five years, not forgetting, very importantly, how we deal with legacy media. iPod is an important piece in the jigsaw right now, but it's not the only part, and by the very nature of market forces, it will become less important over time.

The Apple iPod family

Nevertheless, I am starting out with the premise that people love the idea that they can have all their content accessible from one device - after all, this is the key driver in the phenomenal success of iPod, and 70 million (and rising) people can't be wrong. We have to figure out the best way of replicating this functionality at home - manifested as viable products, and I am going to look at the options that do this the best now and in the future. I will touch on the key market drivers, the road blocks and the new opportunities.

Following the content

Everyone who owns an MP3 player must also own a computer to get music onto it, and market research tells us that these computers are, in the majority, hooked up to the Internet via broadband and sit on a home network. This is why I said that physical iPod solutions are a red-herring. That content is already stored digitally on a device or devices on the network and is available. What's needed are solutions to find, catalogue, manage and play it.

Let's also just divert here and look at what this content is likely to be for our customers - right now it's predominantly CD-based. Despite the hype about downloaded music, legal or illegal, the predominant source medium for the CEDIA sector will be CD for the mid term. This is because the 'album' is actually the most financially viable format for a record company - no content owner likes selling content 'a la carte' - it only works for example in TV for movies and some sporting events where the events are of genuine premium value to create profit in their own right. Content owners are able to deliver much wider choice through bundling content as albums in music or channels in the TV world, to the consumer, and, despite the hype around iTunes, the pure a la carte model will not deliver profit to content owners unless the unit price is very high, nor deliver value or true long-term choice to the consumer.

That is not to say that electronic copies of music as downloads is not commercially viable and we can expect more pressure from the record companies to move away from physical content delivery to the consumer to direct delivery online. We can still expect an inexorable move to a complementary download model; the content owners remove a huge chunk of cost that goes to the retailer and also the costs of mastering to CD - but it won't only be the a la carte iTunes model.

The other crucial upside is that by moving away from the physical medium, the content owner is no longer constrained by the industry-standard parameters for the medium - bits and sampling rates can be adjusted to meet the consumer's needs and budget much more easily and, while high definition is a challenge with current bandwidth restrictions, we have moved so far in the last five years into the broadband era, that this will only improve at an accelerated rate. To deliver tracks to the consumer at the bandwidth heard by the engineer in the control room of the studio at a premium price, with no pressing or distribution costs other than a bit of server space, is of instant appeal to the record industry and consumer alike.

And lastly, each purchase can have attributed to it its own license - the dreaded DRM (Digital Rights Management). We already know that this is a massive issue to the record companies who are losing millions of dollars of revenue through pirated CDs and file sharing. Outside of Apple, whose highly-restrictive Fairplay is precisely the opposite of its name, there seems to be genuine desire to get this right for the wider consumer electronics market for the future, which means enabling legitimate multiple use of downloaded material. As an aside, it will be fascinating to see what happens over the next 12 months in the EU with France ruling against Fairplay as anti-competitive!

Digital Rights Management

It's worth digressing a little here to discuss the issue of DRM-controlled content, and particularly the Fairplay system from Apple. Without going into serious detail on the whys and wherefores of DRM and the legitimacy of ripped content, because there is enough there for another whole article, it is a still a very key issue for our sector.

While Microsoft envisages a level playing field and realises that consumers would prefer to have purchased (and therefore DRM'ed) content available across a range of devices from different a manufacturers, this is not the case with Apple who is fundamentally a hardware manufacturer. Fairplay, the Apple DRM system, was conceived as a closed system and only works with Apple devices and software; it is never licensed or made available for integration by other vendors. As such, content purchased from iTunes can only be played out directly off iTunes from the PC or Mac, or from the registered iPod via the Apple serial interface (as opposed to USB).

The net result therefore for everyone, is that content purchased from iTunes, resident on iPods, must be played through the line/headphone output (and serial interface for control) of the connected iPod with the inherent quality limitations, and the track data must effectively conform to the limited Apple interface - which again is quite limiting for our sector. The only major company to have engineered a software solution to get around this was Real Networks who were taken to court by Apple and no longer offer the solution - others who claim full iPod integration, including Apple DRM, can only do this through the serial interface on the iPod.

So, medium term, we can expect continued retailing of CDs, but with increased emphasis on developing parallel distribution of music online that is bundled as well as a la carte, in the form of services such as Napster and Rhapsody, and we can expect to see DRM allowing restricted re-usage of purchased downloads by the consumer. What this means for all of us in the CEDIA market, is that content will be located around the home in increasingly various formats and types of device; and the consumer will want single-point access and control of it all.

Let's now look at the product options available to exploit this opportunity and their pros and cons.

The traditional music server

We are all familiar with traditional music servers by companies such as Imerge and Request that offer huge storage of ripped music from personal CD collections. Interestingly, there are significant new brands entering the market this year. The Vibe from Colorado vNet was one, but there were two brands at CEDIA that really caught the eye. One was from Harman, a CE giant with pre-existing mass-market distribution. The other was a range of four servers from NAIM, launched earlier in the summer. NAIM is a genuine audiophile speciality brand from the UK, and lays to rest the widely-held belief that any product based on PC technology is incapable of producing good audio.

The NAIM NS03 combines traditional server functionality with network scanning and iPod docking, with a nice display on the front

The digital music server is ideally placed to be the main archive for a CD collection, and is capable of producing good audio. Most servers are designed to be installed into a home control system by companies such as AMX, Crestron and NetStreams. Older formats such as vinyl can be manually added by recording-in, but have serious cataloguing issues to manage. Control of the music library is expected to be via a wall panel, since the typical small text-based front-panel display is not the best interface for managing a large music collection on drives of upwards of 80GB and as much as 1500GB. However, as the market moves out of the specialist sector and into the non-CEDIA market, which is why the Harman and NAIM offerings are interesting, control interfaces on the server itself will be crucial to success as many units will be deployed alongside the Hi-Fi system rather than being integrated into multiroom systems.

iPod is recognised by server manufacturers, and its integration is touted as a feature, but there are inherent difficulties with the physical elements. If the server is in a rack in the basement, the iPod is unlikely to be docked too often!

The server is great for distribution around the home using analogue signal paths through a matrix or as audio-over-IP, and it is possible to add new sources to the platform such as Internet radio. So the traditional server copes well with our legacy formats, has potentially the best sound quality, and offers superb control and distribution when integrated, but it assumes that it is the main central depository for content and, iPod integration aside, does not really legislate for the growing amount of content stored on PCs around the home - although the NAIM range is the exception to this with its intelligent scanning feature.

iPod docking systems

Most iPod docking systems are adequate for standalone use in a small room, but unless integrated into a control system to enable the user to get at the content remotely, such as the Crestron CEN-IDOC and Russound iBridge Dock offerings, information displayed on the interface is too small for convenient use. The iPod interface was always developed for using the product in hand-held context, and at this it excels, but at three meters it leaves a lot to be desired.

Sound quality is generally poor with these options mainly because of Apple's restrictions to those licensing the serial port dock from them; effectively the listener is using the headphone jack to output audio into whatever playback system is chosen. If the USB connection could be used, the Apple DAC is bypassed and digital audio is available. This facility is available on some music severs such as the iMerge range, but only by connecting the device to a networked PC that the server can 'see'. However some, such as NAIM's new servers, can accept USB connection direct to the server which makes integration much more seamless; the iPod content that is not DRM controlled, is gathered into one integrated music library for control around the various wall panels.

Media extenders

These devices, as exemplified by the ROKU Soundbridge, typically seek out content on networked PCs that have been identified to the extender device by the loading of a small application that resides on the source PC. Content is then played out wherever the media extender is, into some form of home system. While this type of product is of interest in the context of a wider system, it is not easy to install for the average user and it needs software loaded onto the data source device, which research indicates is an issue for some people worried about spyware and such like. Furthermore, these devices typically have very small single-line interfaces, which very much limit their use to pre-existing playlists, and they are open to the vagaries of current home networking technology.

The best in this category is undoubtedly the Sonus system which stands head and shoulders apart. It does still need a piece of software on the content source, but has solved most of the other problems. Sonus effectively reinvented wireless networking to create its own highly-robust and predictable home network and the controller still draws admiration wherever it is displayed. Its only downside is the fact that it is a complete system in its own right, making integration more of a challenge.

Next-generation solutions

All of these solutions are very good at exploiting the niche to which they are directed, but in the brave new world of digital media being distributed to the home in an increasing variety of ways, none really offers the complete solution. If the typical home has a pile of legacy content in the form of CDs and ripped music on any number of PCs, then we are not yet doing a great job of recognising this and creating appealing solutions. Products available now are dictating how the consumer must organise their life around the content. In the case of the traditional server, customers must pretty much centre their activity around the music server as the key source. In the case of the media extender, the consumer has more flexibility, yet control (with the exception of Sonus) is very limited. It seems strange that the most flexible of current technical solutions, that could potentially solve this problem, is also the worst at control and difficult to install. Perhaps it is because manufacturers in this space have not come from home or consumer electronics, but from the IT sector.

Virtual servers

Among the products that have an eye on the greater choice and diversity the future has to offer, is the NetStreams SMM100 virtual server. The concept behind this product is that the virtual server never actually stores any content - ever. The content always stays on the source device and is simply played out via the virtual server.

The NetStreams SMM10 virtual server stores no music but finds it on the local network and presents it as one music library

The virtual server aggregates information about the content stored on devices resident on the home network and serves up a single music library onto the control surface of the consumer's choice with all the expected attributes such as cover art, genre etc. Thereon in, the consumer need have no interest in where the music resides in the home; they can simply control the music through their chosen interface and enjoy the experience. NAIM has added this functionality to its whole server range, effectively making its products hybrids - traditional music servers but with the ability to seek out additional music on the network.

The most interesting upside of this technology is that it does not need iPod integration (except for guests' iPods - which it deals with seamlessly), as it can get at all the music already ripped on the PC, including MP3s in iTunes that are not content-protected by Apple's Fairplay, and presents a massive opportunity for the media industry. With open access to the DRM protocols, such devices would be able to aggregate a music library from all the devices on the home network where music is stored, including guests' wireless devices or physically-docked MP3 players, leave the music on the device on which it was licensed, and still be able to control it and play it around the home with maximum flexibility and enjoyment.

From the manufacturer's point of view, the virtual server can be created to address any target market in mind from audiophiles, because these devices will be able to cope with genuine DRM-protected hi-def audio - not just standard 16-bit 44.1kHz audio - down to the MP3 collector who simply needs great control of a massive library.

Conclusion

From the perspective of the CEDIA market, this is all good news. With the forecast increase in choice offered to the consumer, both in terms of format and delivery, this plays very much to our industry strengths of control and simplification of complexity. Without this control, the consumer will not be able to fully exploit what will be offered to them. The trend is starting now - traditional audio is very flat as a market, with the only growth coming through the integrated home. Watch this space.

Matthew Simmons is Commercial Director of Digital Fidelity, a manufacturing and software consultancy that supplies flexible, content server platform solutions to audio-visual manufacturers.

www.digitalfidelity.com