Groovin' to that Internet beat

If you like to groove at the cutting edge of today's music scene, boogie on over to cyberspace.

There you'll find Internet radio stations that play to international audiences, sites that offer downloadable music (often for free), and artists who are bypassing the established studios in the hope they can make it big on the World Wide Web.

The Internet shake-up is only beginning. In five years, many industry officials predict, you will be able to:

*Carry your entire music collection with you in a device that fits in your shirt pocket.

*Quickly find a broad range of music that will dwarf the selections available in today's record stores.

*Access those tunes anytime, anywhere in a way that will make today's radio look like tin cans and string.

It may turn out that consumers of the future won't own any music at all and subscribe instead to music services that let them access virtually anything for a monthly fee.

"We're on the threshold of some major changes in the way people get information and entertainment," says Geoffrey Sands, partner in Booz Allen's media and entertainment practice based in New York.

Already, some hardy pioneers are turning off their radios in favor of their computers. "I spend a lot of time on the computer," says Miles Matulionis, president of his own oil-consulting firm in Calgary, Alberta. "When I'm working in my home office, I'll have [Internet music] on in the background all the time."

Dee Considine, receptionist at a New York City finance company, tunes in to a Dublin, Ireland, radio station from work. "I keep it on for everyday things that are happening at home," says the Irish native.

Half of the revolution is Internet broadcasting - or webcasting - which is growing at phenomenal rates. Last July, only 6 percent of Americans (12 and older) had ever heard a webcast, according to Arbitron NewMedia (a division of the radio-ratings company). By February of this year, the number had jumped to 13 percent - equivalent to the combined populations of New York, Los Angeles, and Chicago.

"I think it's really developing into a new medium," says Greg Zerdino, vice president and general manager of Internet information services for Arbitron NewMedia. "What is a traditional radio station offline is going to look a lot like television online."

Already, stations are experimenting by adding photos and text to their audio webcasts, adds Ed Huguez, chief operating officer of INTERVU Inc., a "streaming" services company in San Diego that makes audio and video work on the Internet.

Of course, radio stations will have plenty of competition. Internet search companies Yahoo! and Lycos earlier this year inaugurated their own online music services. And new players are popping up all the time.

"We're looking to provide a complete new musical experience because this medium allows us to integrate music, video, and text," says Michael Lubin, cofounder and chief executive of Global Music Network.

The other half of the music revolution is Internet retailing. An increasing number of music vendors, such as Amazon.com and CDNow, are selling CDs online. But some consumers have already moved beyond that.

They're skipping CDs entirely and downloading music directly to their computers. Sometimes they're storing clips of songs that bands give away to promote themselves. Sometimes they're taking bootlegged versions of albums that have been digitally recorded.

That spells trouble for record stores. "I would be very concerned if I owned a record-store chain," says Kevin Sheehan, founder of SoundStone.com Inc., which runs two online music retail sites in Somerville, Mass. But it holds tremendous potential for record companies.

Suddenly, they'll be able to stock all their old, slow-selling titles without going to the expense of stamping out CDs in advance. Early this month, for example, Sony Music Entertainment announced it would store more than 4,000 albums from its catalogs on computers and make them available to stores on demand. So a customer can select an album, pay for it, and have it downloaded to a recordable CD within 15 minutes.

Once the recording industry comes up with a standard that prevents such piracy, record companies will move more quickly to let consumers download albums directly. Some companies are already using their own copy protection to attract customers. Every night, Jo Saber in Chicago plugs a hand-held digital player called the Rio into its cradle. Her company, Tunes.com, downloads 10 new songs based on her musical tastes.

"It's a jukebox that knows what I like," says Ms. Saber, vice president of marketing for Tunes.com. If she likes a particular number, she can download it for keeps.

Perhaps they'll skip purchases altogether and log into a service that would allow them access to music for a monthly fee. "The Web is going to be a powerful experience for consumers," she says.

MCY Music World, a New York-based digital-download company, is working on the NETrax portable player that would retrieve music from a flash memory card the size of a credit card. Currently, such cards can hold some 30 songs. By the end of 2000, they'll be able to store 300, predicts MCY vice president Rich Stumpf.

Internet music faces challenges, however. Record companies are not keen to sell the music of their top artists online until they can protect themselves from illegal copying. The Internet itself is too slow and too small to carry the audio and video that music executives envision.

For example: When the Backstreet Boys released their new album "Millennium" in May, mass merchandisers sold more than 500,000 copies on the first day. Online, that would represent 2.5 trillion bytes of data, says Larry Kenswil, president of electronic commerce and advanced technology at Universal Music Group in Los Angeles.

"If we tried to throw 2.5 terabytes of data at the Internet, you wouldn't be getting e-mail for awhile."

It will take several years for Internet companies to create a bigger Internet that mainstream consumers will be able to access at blazing speeds. And it will be costly.

Thus, record companies such as Universal Music Group may not be able to lower prices for music of their top artists. But, Mr. Kenswil says, "there will be a lot more music available to people than there has been in the past.... And [consumers] will like that."