Glaser takes swipe at MS Audio

"Our view is that the way to participate in this market is squarely and directly, to work within the system," Glaser said. "Don't introduce another format and tell everybody the compression is better. Just as HTML grew and got better, that's how this market is going to go forward."

Currently the CD-quality MP3 format has become a popular way for broadband users, such as college students, to exchange songs -- often illicitly.

Many legitimate MP3 sites have sprung up, and Creative Labs and Diamond Multimedia both offer Walkman-type players for the format.

RealNetworks (Nasdaq:RNWK) has bought into MP3 as an important tool for developing the market for digital media distribution.

But Microsoft (Nasdaq:MSFT) on Tuesday introduced the Microsoft Audio 4.0 format, which it says offers superior quality to MP3 with files half the size.

Coming soon: Broadband
Glaser criticized media companies for resisting digital distribution formats, comparing their fears to the worries that VCR movies would cannibalize theatrical revenues.

"In the long term, the right way for people to build their media-based businesses is to make their content as widely available as possible," he insisted.

Glaser also predicted that the market for media over high-speed Internet connections will reach critical mass sooner than many businesses expect.

When you count college students and office workers on T1 lines, as well as home users with DSL or cable-modems, half of the audience for streaming media will have broadband access by 2002, Glaser said.

"It won't be everywhere, it won't be in 50 percent of homes, or in cars, but in terms of the growth of the market we see that cut point as a very important one," Glaser said. "Now is the time to market to this space, to build businesses and to build infrastructure."

RealNetworks, which was introduced at Spring Internet World in 1995, is now a $5 billion business and the leader in the market for streaming media, the instant-playing format for the Internet.

Getting personal
Besides broadband access and a secure, high-quality format for music delivery, Glaser suggested that personalization will greatly alter the way most people use online media.

The next stage for portal sites, for example, will be to add direct links to video and audio content. Personalized pages such as My Yahoo! or My Excite will offer customized news and information clips, just as they offer customized text stories today.

Users will even be able to search the content of a video clip by keyword. Portal site Lycos Inc. (Nasdaq:LYCO) says it is developing such a system in anticipation of widespread broadband use, and CNN is currently making its entire video library available online.