How MP3 Was Born

Karlheinz Brandenburg often is cited as the inventor of the music format. But he credits many for a discovery that has upended the music business

by Jack Ewing

Karlheinz Brandenburg doesn't like being labeled the "inventor" of MP3. He points out that the most popular format for digital music on the Internet is the work of at least a half-dozen core developers and many others who made important contributions. Even folk-rock singer Suzanne Vega inadvertently played a walk-on role in the creation of MP3. "I know on whose shoulders I stand and who else contributed a lot," says Brandenburg, now director of the Fraunhofer Institute for Digital Media Technology in Ilmenau, Germany.

Still, there's no doubt Brandenburg was one of the crucial contributors to the technology that upended the music business and paved the way for Apple's (AAPL) immensely popular iPod media players and iTunes download service (see BusinessWeek.com, 2/26/07, "Apple's International iTunes Controversy"). In a recent interview, Brandenburg, 52, recalled how MP3 came into being. The story offers a lesson in the innovation process and a warning about how tricky it can be to sort out the intellectual property rights behind inventions that involve numerous organizations and people.

In February, a jury at the U.S. District Court in San Diego awarded Alcatel-Lucent (ALU) $1.5 billion in damages from Microsoft (MSFT) for use of some MP3 patents. Those patents stem from work done at Bell Labs, which belonged to a corporate forebear of the French-American telco-equipment maker.

"Terrible Distortion"

Brandenburg's involvement in digital music compression began in the early 1980s when he was a doctoral student at Germany's University of Erlangen-Nuremberg. A professor urged Brandenburg to work on the problem of how to transmit music over a digital ISDN phone line. It wasn't just a computer coding problem. Brandenburg had to immerse himself in the science behind how people perceive music.

That was where Suzanne Vega came in. Her song Tom's Diner, though seemingly a simple ditty, proved devilishly difficult to reproduce without annoying background noise. "Suzanne Vega was a catastrophe. Terrible distortion," Brandenburg recalls. "The a cappella version of Tom's Diner was more difficult to compress without compromising on audio quality than anything else."

When MP3 developers refined the technology to the point where Tom's Diner sounded true to the original, they had made a major breakthrough. "I've listened to this 20 seconds [of Tom's Diner] a thousand times. I still like the music," says Brandenburg, who met Vega years later when both attended an event in Cannes to mark the creation of MP3.

Fierce Competition

Brandenburg continued working on MP3—which wasn't known by that name until later—after finishing his doctoral work in 1989 and becoming an assistant professor at Erlangen-Nuremberg. He worked closely with scientists at the Fraunhofer Society, one of Germany's premiere research institutions, and joined the staff of the Fraunhofer Institute for Integrated Circuits in Erlangen in 1993 (see BusinessWeek.com, 3/12/07, "An Idea Incubator Tries to Grow Cash").

The Fraunhofer team was by no means the only group trying to solve the problem of transmitting music over the Internet. Groups at several other German universities as well as in other countries were racing to develop a standard. Researchers knew that figuring out a way to send high-fidelity sound over telecommunications lines could be important, though few suspected how immense the impact would be. "It became much bigger than we thought at the time," Brandenburg says.

Competition was fierce, and it was sometimes political as well as technical.