Broadcast.com's Mark Cuban says there's little economic incentive to keep the format alive.
Just as MP3 was getting off the ground, the Internet music format is dead, or nearly so.
That, at least, was the pronouncement of Mark Cuban, president of online multimedia aggregation site Broadcast.com at the opening of the South by Southwest Interactive Festival here Sunday.
"MP3 will die. I'm sure of that," Cuban said. "It will be absorbed by RealNetworks or Microsoft, and it'll become just a notation... No one has the economic incentive to keep it alive." Responding to the challenge that MP3 already has a strong culture around it, Cuban quipped, "Disco also used to have a strong culture."
MP3 has become a phenomenon in the online world, after being adopted as the format of choice for college students exchanging near-CD-quality music on the Net. Several companies have come out with hardware to make MP3 portable, and the music industry is even looking into supporting the format. But Cuban argued that all that momentum could disappear if compelling content became available on some other format: "The Internet market is very fluid."
Cuban's company is widely seen as a pioneer in distributing multimedia over the Internet, from hundreds of radio stations, television stations, audio books and business events. Wall Street has also been kind to Broadcast.com, with Internet stock fever more than doubling the company's shares since the beginning of the year. But Cuban is the first to admit that no one has yet figured out the business of distributing audiovisual media over the Net. The only thing to be sure of, he said, is that things will look very different in two or four years. He warned that the biggest players on the field today might not even exist in two years' time. RealNetworks Inc., for example, which makes the industry-leading RealMedia streaming media platform, could be bought by a larger company. Streaming media will just be too important for Real to remain independent, Cuban insisted.
Unsurprisingly, coming from a content-aggregation company, Cuban believes the only thing that won't change is that "aggregation is king. Distribution is everything. If I put Seinfeld on a cable-access channel, it's nothing," Cuban said.
Among his picks for successful emerging distribution methods are wireless Net access and online pay-per-view services. Network television stations as we know them will disappear, but local TV stations will thrive by reselling the downstream bandwidth available on the HDTV spectrum. "Within four years, backbone bandwidth will be free for downstream," Cuban said, saying it could be bundled with such hardware as routers. Upstream bandwidth, however -- sending information to the Net, as opposed to receiving it -- will be "pay as you go," meaning that Web content providers will still have to find ways to make a buck.
Broadcast.com has grown enough in the last year to purchase companies such as Net Roadshow and Simple Net, but it also faces growing competition. CMGI, the venture firm behind Lycos Inc., recently said it would put its financial muscle behind a Broadcast.com-like startup, and Microsoft appears to be getting into the content-aggregation business with the new version of its Internet Explorer browser.
But Cuban said he's unworried by the competition. "We think we have a three-and-a-half or four year advantage over everybody else, so bring them on," he said.
Take me to the MP3 Special.