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More than two years have passed; more deadlines have been missed than can easily be remembered. Public tests have been announced, then concluded with only quiet comments. Dissension, if not a feeling of outright irrelevance, is growing among members, and recently the executive director, the man who guided the group since its founding, resigned. This is the condensed history of the Secure Digital Music Initiative (SDMI).

Despite the years of work, and bulging membership rolls bearing such formidable names as Microsoft, IBM, the Recording Industry Association of America, Intel, and Sony, SDMI is "not much closer to its goal than they were some time ago," says Ric Dube, an analyst with Webnoize, a digital entertainment research firm.

SDMI was formed in late 1998 by a group of computer, consumer electronics, and entertainment companies that planned to produce a standard for secure, copyright-friendly digital music. The effort has been dogged by problems, however, including concerns about whether the standard would impinge on traditional consumer rights. Those questions have since been addressed, but in doing so, the initiative has lost time and seen MP3 and Napster explode into dominant digital media forces.

To make matters worse, on January 24, Leonardo Chiariglione, SDMI's executive director, resigned, announcing that he had been appointed the head of a new research group at his employer, Telecom Italia, and would need to devote his energies to that project.

Chiariglione's departure is seen by many observers as the result of his frustration with the organization's progress and as a further indication of the consortium's troubles. He played "a fairly essential role" in SDMI, Webnoize's Dube says, and his departure "could be troublesome."

Chiariglione, on the other hand, would not say that he was frustrated by the organization's internal politics, but rather likened his departure to a race, saying that it was now time to hand the baton to someone else.

The Inside Story

One employee of an SDMI-member company, who spoke on the condition of anonymity, offers a different account.

Chiariglione resigned "to save face," the source says. "No real consensus could be had. Each of the three constituents (computer makers, consumer electronics firms, and music companies) had enough to deadlock the others and Leonardo finally realized it."

Despite denying reports of frustration, Chiariglione did say that the final SDMI specification, which he told the IDG News Service in November was "very, very near" to market, has missed its deadlines because the organization "has so far been unwilling to work on the basis of project and timeline."

The source close to SDMI points to another issue, however: a structure, dominated by the larger members, which makes it harder for small companies to succeed. "The bad boys get money (MP3.com, Napster) and the big boys get deals (IBM, Microsoft, Real Networks), so companies realize this is simply a forum which does not correspond with business opportunities."

Infighting and Backbiting

Beyond that, some companies have been put off by the internal dynamics of the consortium. "We are surprised by the extreme politics given the fair and reasonable conduct ... exhibited," the source says.

Webnoize's Dube sees some of the same problems. The goals SDMI set were "probably too ambitious," he says, but internal dissension has also played a role. Because of the diverse constituencies SDMI brings together and the diverse interests each group has, dissension has sometimes even arisen within the same company, he says, citing Sony, which has a music company, a consumer electronics group, and a computer group, as a company that might have conflicting goals.

Chiariglione now says that SDMI has a clear timeline and will be completed by June. Even if SDMI is completed by then and is incorporated into consumer electronics, compact discs, and computers by the third or fourth quarter of this year, Dube is not convinced that it will matter.

Though SDMI's "goal is admirable," the rise of Napster and MP3 has shown consumers, as well as some companies, that "a lot of good things are going on ... without a standards body," he says.

If Dube is right and SDMI will be irrelevant, then why do any companies stick with it?

The Why of SDMI

There are at least two answers. There is the SDMI answer, provided by Chiariglione, which says that the standard will be adopted because it is in the interest of the member companies to do so. However, there is also a more pragmatic answer, albeit a less polite one, offered by the source near SDMI: "The name of the game is to prevent being f---ed." Such a fate, in this case, would result from not having kept close enough tabs on competitors and thereby allowing them to gain an advantage in the market.

But even given the desire to keep enemies closer than friends, when asked about SDMI's future, the source says, "It's past."

Dube does not share such a negative view, but he is skeptical.

"Nobody ever made more money from a product that did less," he says, noting that CDs are more functional now than they would be with SDMI.

The success or failure of SDMI, he says, rests with whether consumers will want products containing the standard. If they don't, vendors might not be likely to adopt it.

The SDMI source has another, dimmer view of the situation, saying the body "clearly has no clue as to ... the fact that SDMI will be a non-specification (with) little if any functionality, but it appears that they are trying to salvage a 'win' at any cost."

The prospects of such a win for SDMI, however, are looking less and less likely.

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• SDMI,
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• Recording Industry Association of America,
• Napster,
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