Public Enemy record plays on Zip disk

Iomega says it's a more secure alternative than MP3.

NEW YORK -- Online record company Atomic Pop will release the latest album from the rap group Public Enemy on Iomega Corp.'s Zip disks, marking another departure for the recording industry from traditional ways of offering music.

The album, "There's a Poison Goin On," will be available in the Zip-disk format from the record company's Web site, and Atomic Pop anticipates retail outlets Circuit City Stores Inc. and J & R Music will offer it on Zip disk as well. Atomic Pop, of Santa Monica, Calif., is holding discussions with other retailers and expects the disks to hit stores by the end of June. The album is currently available for download from Atomic Pop and will be released on CD and cassette -- but not until mid-July.

Atomic Pop founder and CEO Al Teller, a former top executive with MCA Music Entertainment Group and CBS Records, says that with so many new techniques being explored in the music world, the recording industry will have to join the fray.

"The Internet and the corresponding technologies will cause a reinvention of the entire music business," he said, adding that "the mechanisms by which music will be brought to fans will become more and more diverse in the next five years."

A customer who buys the Public Enemy album on Zip disk will be able to play it using a Zip drive, which is standard on many new personal computers, and customized streaming-media software from Liquid Audio, which is included on the disk.

Have it your way
Atomic Pop said consumers can order a Zip disk containing the album, or they can download the music from the company's site. Downloading the album is slow, however, and demands that the audio files be compressed, which leads to a loss of sound quality. Consumers would also need to download and configure their own Liquid Audio player.

While a standard floppy disk can hold just 1.44MB of data, a typical Zip disk can hold 100MB, or just over an hour of music. Zip disks are now also available in a 250MB format, which makes the disks more useable for consumers who want to store and carry video, as well as those who can't leave home without their entire hard drive.

By using the Zip format, Atomic Pop hopes to avoid the battles over piracy that have engulfed the music-compression format known as MP3. MP3 files are enormously popular on the Internet, but a lot of online traffic in them involves recordings "ripped" off compact disks and encoded as MP3s by special software. As a result, most record companies are extremely wary of the format, and the industry has eagerly sought an alternative format that would address its worries.

The Zip disks containing the new Public Enemy album are encoded with serial numbers and encrypted. When the disk is loaded into a PC, the serial number is detected and used to create an encryption "key." The key prevents the data from being saved to a PC's hard drive, which makes copying it nearly impossible. The process is complex, but the idea is to put safeguards in place that will allow the data to be converted to music and played, but not reproduced.

Piracy on the mind
Although Jim Taylor, Iomega's (NYSE:IOM) chief marketing officer, warns that "there's no security system that can't be broken," Iomega, of Roy, Utah, had piracy concerns in mind when developing the Zip disks. "We wanted to work out a solution that would allow copyrighted material to be distributed but would dramatically reduce copyright theft," Taylor says, adding that he hopes the Zip technology is a step in the right direction.

Michael Nathanson, a music-industry analyst with Sanford C. Bernstein & Co., says that new distribution tactics and music formats will continue to spring up as Net entrepreneurs keep searching for a money-making strategy. In the meantime, he says, it remains to be seen exactly when, and how, the Net will pay off for musicians.

"Right now," he says, "for artists, the Internet is all about 'show us the money,' "