DIAMOND'S RIO: THE LITTLE MUSIC PLAYER THAT COULD

Ever since I bought my first audio compact disk (Def Leppard' s Hysteria) back in 1987, I've been hooked on CDs. So hooked, in fact, that I now have more than 150 of them. My problem now is figuring out how to listen to them on the go. In the old days of analog recordings I stuffed one or two audio cassettes and a portable tape player in my jacket and was set for three hours of "traveling music." Now, I carry "wallets" of CDs and try to squeeze my portable (but bulky) CD player into a bag that's already overcrowded with my notebook computer, newspaper, CD-ROMs, paperwork, batteries, cell phone, and other tools of my trade. Often it's easier to remain tuneless than to rifle through this baggage on an overcrowded New York City subway car.

Help may have just arrived, however, in the form of Diamond Multimedia Inc.'s new Rio PMP300, a device smaller than a standard audio tape cassette that has no moving parts and that can deliver up to an hour of CD-quality music and run for up to 12 hours on a common AA battery. The Rio just began shipping to national retailers such as Circuit City and Electronics Boutique, and is expected to sell for about $200.

At the heart of Rio's remarkable capabilities is a computer software format technically called MPEG 1 level 3, or more commonly referred to as simply MP3. The MPEG 1 software standard, which allows video to be digitally compressed and stored on a computer hard drive, has since been replaced with the MPEG 2 standard for purposes of displaying video. However, MPEG 1 can reproduce audio that rivals the quality found in CDs -- and from a file that takes up much less space: A normal uncompressed CD audio track might take up tens of megabytes on a hard drive. An MP3 audio file, by contrast, takes up only a few megabytes of space to deliver the same audio quality. And since MP3 music is encoded in the same 1s and 0s of other computer files, MP3 files can be stored on a hard drive or in solid-state "flash" memory chips -- such as the 32-megabytes of memory built into in Diamond's Rio.

Of course, to get MP3 computer files into a Rio PMP300 requires a PC with at least an Intel 90-Mhz Pentium (or similar) processor and Microsoft's Windows 95 or Windows 98 operating system. (Diamond is currently considering producing a Rio for the Apple Macintosh, but hasn't made a firm decision yet.) The good news is that getting the Rio to work with a PC isn't hard, since it connects using an included printer port adapter. (The adapter also has a so-called pass-through port, so both a printer and the Rio can be simultaneously connected.) In fact, during the 15 minutes or so it took me to install both the device and required software I never had to open the 24-page instruction manual.

Once the Rio is installed, all that's required to enjoy it is to get some MP3 tracks into the device -- and the included software does a lot to make that easy. Not only does the installation CD-ROM contain several test MP3 files, Diamond also included a separate CD stuffed with about 100 MP3 files of music from various "independently-labeled" artists. You won't find Madonna or Frank Sinatra. But there is a good mix of tunes that cover the gamut from rock to jazz to rhythm & blues to country. And if nothing on the sampler disk suits your fancy, there are several Web sites, such as www.mp3.com and www.goodnoise.com, that carry the latest tunes from hundreds of "garage bands."

What's more, several well-known artists, such as rap groups Public Enemy and The Beastie Boys, have thrown their support behind the MP3 format and released a few songs on the Web using the technology. And on Dec. 3, Web site mp3.com announced that it will soon have MP3-based music tracks from top-tier artists such as Peter Cetera, The Blues Brothers, Willie Nelson, Dionne Warwick, and Vicki Winans -- released with the various artists' blessings. Once you've found an MP3 file you want to download to the Rio, all you have to do is "drag and drop" the appropriate file using the included Rio Manager software.

If you are into a broader selection of mainstream music and artists, the Rio comes with software called MusicMatch Jukebox that can encode, or "rip," tracks off any audio CD placed in a PC's CD-ROM drive. And there's where controversy over the Rio has developed.

Last month, the Recording Industry Association of America (RIAA) went to court to stop Diamond from selling the Rio on the grounds that it violates the 1992 Audio Home Recording Act (AHRA). The act imposes technology restrictions on certain types of audio recording devices -- namely schemes that make it easy to illegally pirate copyrighted music. However, the U.S. Central District Court of California denied the industry's motion, finding that since the Rio cannot create the MP3 files, or create "serial copies" between Rios, it's exempt from the AHRA. (The RIAA is appealing that decision.) On Dec. 2, Diamond filed legal motions contesting the RIAA's claims and asserting that the association's attempts to squelch the Rio smack of antitrust behavior.

Even as the legal battles continue, the Rio is going on sale and giving customers an earful. In testing the unit, I found that the Rio truly seemed to combine CD-quality sound with the convenience of a tape cassette. MP3 files that encoded music at 128-kilobits per second (kbps) -- the highest-quality setting -- produced sounds that rivaled tracks on my ordinary audio CDs. A built-in "equalizer" lets you tailor the sound of the music to one of four settings. The "Rock" equalizer setting emphasizes the bass frequency, for instance, while "Jazz" boosts both the high and low tones of music.

Being able to "rip" any of my audio CDs into MP3 files, store them on my PC, and load only the ones I want to hear on my Rio is an awesome feeling. I can skip the tracks I dislike, or mix artists and tunes from different CDs. And since the Rio is a chip-based device, the music starts in less than a second once you hit the "play" button. Jumping between tracks on the Rio -- from first to fourth, or even repeating a particular portion of a track -- happens nearly as fast. The Rio also avoids the "skips" that result from harsh handling of a CD player. And at 2.4 ounces, the Rio may be the perfect workout partner for exercise fanatics.

For all the wonders of the Rio, it does have a number of faults. For instance, the tiny LCD display that shows the track number, volume level, and other info doesn't have a light, making the Rio hard to use at night. The included headphones, in my opinion are uncomfortable and sound tinny. I ditched them for a more conventional pair of headphones that cover the ear completely. The battery cover is poorly designed and opens too easily. While the Rio's memory isn't affected by sudden loss of power, it is annoying to have the music stop playing because your battery just fell onto the floor of a subway car.

The most disappointing drawback of the Rio is its limited built-in memory. With high-quality MP3 files requiring about four to five megabytes of space, you'll find that the Rio can hold only five or six CD-quality tracks. That's 30 minutes or less of music. The Rio has a slot that will accept forthcoming memory cards that are about the size of a matchbook cover and that should help extend the play time. However, Diamond won't have such cards available until February -- at a price of about $50 per 16 megabytes. In the meantime, the only way to get more music is to lower the MP3 encoding quality from 128-kbps to 64-kbps. While that nearly doubles the Rio's capacity, I found that the quality of sounds from such "near CD-quality" files can vary greatly. At times, tracks that contain a wide range of notes can warble horribly, making the music sound as if it's being played from a badly mangled audio cassette tape.

Loading MP3 files from a PC to the Rio can also be a hassle if your computer is long in the tooth. While Diamond claims that the software will work with a 90-Mhz Pentium PC, I wouldn't recommend it. That's because the slower your PC, the longer it takes to rip a track off an audio CD. On my test PC, which has 32-megabytes of memory and an 266-Mhz AMD K6 processor, it took nearly eight minutes to rip a 5-minute song from one CD. On a 300-Mhz Pentium II laptop with 128-megabytes of memory, however, it took just under six minutes. According to Diamond officials, to rip an entire CD can take anywhere from 15% to 25% longer than the CD's run time, depending on your PC's configuration.

What's more, Diamond's technical support staff concedes that the software may not work with some CD-ROM drives. (A list of those it won't work with is available from Diamond's technical support site.) And if you plan on downloading MP3 files from Web sites, you had better have a cable-TV modem or other high-speed Net connection. It took more than 30 minutes to download one CD-quality MP3 file over my 28.8-kbps modem.

Despite such faults, though, the Rio may be the start of a digital revolution. For example, a German company called Pontis GmbH (www.mplayer3.com) will soon release its own portable MP3 player that will come with two slots that can accept up to 64-megabyte cards. (Company officials were unable to send a unit for review because of memory card production problems, which may also delay the release of the unit.) And according to industry reports, sometime next year Korean consumer giant Samsung plans to release an MP3 player called Yepp that will include a built-in microphone to do "live" MP3 recordings. (www.samsungelectronics.com/news/cgi-bin/secnews.cgi?app=print&key=221&) That could lead to further legal battles with the RIAA, which represents music publishers and record companies. But then, what's a revolution without a few shots being fired?

By Paul M. Eng, Senior Correspondent, Business Week Online