NEW YORK -- Incompatible media players are becoming a drag on adoption rates and growth curves, the chief strategy officer of RealNetworks warned the music and technology industry Tuesday.

Speaking at the Jupiter Plug.IN Conference & Expo here, Richard Wolpert said the music industry still has to focus on making sharing music among a variety of devices as easy on the consumer as possible.

No more "if you buy this, you can only play it with this device -- that's confusing for people and a concern of music labels," said Wolpert. "Current device/store incompatibility will slow adoption."

Wolpert cited DVDs as an example for the music industry to study and copy in order to fix its own incompatibility problems. For example, if you bought a DVD at Tower Records, would you accept it if that DVD would only work on a player made by Philips?

"I don't think this would have allowed for proliferation of DVDs. But in the music space, that's what we have," he said. "We do not think that's something that's been good for consumers or for the industry."

It's a way to solve this problem for consumers, all while protecting the content with DRM, he said. Whatever platform you're using to acquire your music on a PC or computing device, that media can move to any device you select for transfer with the "Harmony for portable devices" feature. "You can buy a song [online] and move it to two different devices," he continued. "It lets you choose."

Indeed, JupiterResearch's latest study on the industry said digital music would hit $270 million in 2004, more than double last year. Sales are forecast to hit $1.7 billion by 2009, which would total about 12 percent of the industry, the study said.

Strauss Zelnick, the CEO of media company ZelnickMedia, said the four main trends that are driving true media convergence have begun to accelerate along with the economic recovery: digitization of media, globalization of that media, consolidation of media ownership, and conversely, fragmentation of audiences with the proliferation of new media channels.

With digitization, he continued, "you're getting more content in a smaller pipe, and the pipes go in different directions. This continues to influence every media business, as traditional analog media turns digital," said the former head of BMG Music.

But fragmentation is the most important of these trends to watch, Zelnick added.

"The nature of the media business is that it used to rely on audience aggregation" to sell advertising and make money. No more.

"Fragmentation is growing faster and faster as these channels proliferate." As the number of voices and audience grows, the aggregated audience is declining, said Zelnick.

This will mean advertisers will have to be more targeted than ever before, and why media ad dollars continue to shift into direct marketing -- especially interactive media.

Zelnick said three massive industries are now colliding and targeting consumers: software, consumer electronics devices, and the communications and entertainment industry.

"They will link billions of people, not just with words, but with music, video and other media. This will usher in possibly the most creative and disruptive time in the last 50 years of the media business."


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