Free How Music Got Free by Stephen Witt Page B

fit for polite company. He was dark, bearded, and unusually handsome. He wore glasses, dressed sharply, and spoke with a deep and sonorous voice. But he was still an engineer, and not naturally predisposed to the art of the deal. What Fraunhofer really needed was a closer—and then, almost on cue, one arrived.
    His name was Henri Linde, and he worked as a licensing manager for the French conglomerateThomson SA, where he had spent his career negotiating. Along with AT&T, Thomson had acted as the corporate sponsors of the mp3, and by late 1995 the company had sunk more than a million dollars into the project. In fact, researchers at Thomson had independently secured basic patents on the technology, and they had an outsized stake in its future revenues. But no one at Thomson’s headquarters in Paris had the faintest concept of what they’d actually invested in. Linde was dispatched to Erlangen to author a situation report.
    He approached the mp3, in his own words, “unburdened by knowledge.” He had no engineering background. He did not understandthe math. He did not build his own loudspeakers. His sole qualification for the job was that he spoke German. When the Fraunhofer team tried to explain how the technology worked, with talk of reference frames and bit reservoirs and polyphase quadrature filter banks, it was his turn to nod and smile politely. Yet, unlike the BMG executives, he could see at once that the engineers had achieved something remarkable: they’d obsolesced the compact disc.
    Perhaps the only thing more remarkable than Fraunhofer’s accomplishment was their total failure to capitalize on it. Although he liked the Fraunhofer group personally, to Linde it seemed they weren’t really businessmen. They were scientists. They didn’t understand the marketplace, they didn’t understand sales, and they definitely didn’t understand how to profit from intellectual property. Looking over the paperwork, Linde realized that even the few licensing agreements the team had so far signed would have to be renegotiated.
    Linde reported back to Thomson headquarters with the startling news: on an overlooked line item in the corporate R&D budget, six German nerds were sitting on a gold mine. The response from corporate was skeptical. If the mp3 was so great, how come no one was using it? Perhaps Linde should try selling laser discs as well. But Linde kept pushing, and finally his corporate overseers conceded that, in the unlikely event that he ever found a customer for the mp3, he was authorized to license the tech. They also made clear that this was a side project, and that the work was not to interfere with his day job.
    Linde, a born competitor, didn’t believe in MPEG’s profits-by-committee approach, and pushed the Fraunhofer team to innovate. And so they did. Late in 1994, Harald Popp had commissioned a manufacturing run of dedicated mp3-decoding chips. Now, combining one of the chips with a power source, a soldered-on headphone jack, a primitive flash memory card, and a circuit board, he commissionedan engineer to jerry-rig a prototype of the world’s first handheld mp3 player.
    The device was about the size of a brick and could store oneminute of music. Which minute? The Scorpions were the obvious choice—or perhaps Suzanne Vega—but the team worried that encoding “Wind of Change” or “Tom’s Diner” to mp3 format might infringe on the artists’ copyrights. Fearing pushback from an industry that already disliked them, Fraunhofer eventually settled on an original composition, from team member Jürgen Herre: “funky.mp3.”
    Another long discussion grew out of a second question: did Popp’s mp3 player constitute a distinct invention of its own, or was it merely an implementation of an already patented technology? Linde pushed the team to apply for a patent on the device, but ultimately the Fraunhofer group decided that an mp3 player was nothing more than a storage device.
    A visitor to the Fraunhofer