At first the music moguls were afraid of MP3. Protecting copyrights was hard enough without easily accessible Web files enabling any old joes to access-and copy-their favorite music. But when the Recording Industry Association of America (RIAA) started filing lawsuits against the Web sites and technology companies responsible for providing that capability, it was clear the industry had started to take MP3 seriously. Music on the Web was going to be big.

Today on the Internet, only the word sex generates more searches than the term MP3 does. Musically inclined Web surfers can purchase their favorite CDs and listen to the radio on-line, download their favorite songs, and even custom design CDs. And wouldn't you know it, start ups have begun springing up in a variety of niches to capitalize on the digital-music revolution.

DURING THAT RARE BLOCK OF COMMERcial- and chat free music on your favori

So far, 35 radio stations throughout the country have gone live with the service. Some 2,200 stations are on GetMedia's waiting list, but Goldman doesn't have the resources to set them up as fast as he'd like. Last September, GetMedia got some help to the tune of $10 million in venture capital from IDG Ven tures, Menlo Ventures, and the Rosewood Stone Group. Goldman plans to use that cash to beef up his 60person staff and outfit those stations awaiting the service.

The concept has been a hit with the investment community. Last November, Reciprocal completed a $35-million round of mezzanine financing that included technology- and music-industry heavyweights like Hewlett-Packard, Xerox, and TVT Records. Microsoft had even made its own investment of $15 million in March 1999.

But not everyone on-line is on the RIAA's bad side. A handful of savvy startups have joined the antipiracy brigade by offering secure on-line distribution and easy-to-use licensing as a legal alternative to the MP3 free-for-all.

Reciprocal Inc., headquartered in Buf falo, N.Y, operates on a simple principle: all music, whether it's on CD, the Internet, or the Paleolithic eight track tape, comes with an implicit license agreement. "You can't legally make 1,000 CD copies and sell them on the street," says Reciprocal senior vice-president Howard Singer. But on-line, it's a different story. Music is far too easy to copy and distribute illegally, and sometimes consumers are entirely unaware of their own illegal activity. "You can buy a song from Emusic.com, put it on your computer, post it on a Web page, and send it to your friends," says Singer. "There's no technology in place to put any speed bumps in the way of doing that. And the major record labels don't find that satisfactory."

Reciprocal started out as part of Soft bank Corp., a Japanese holding company with interest in more than 120 Internet companies. It spun out in 1997 and has diversified its offerings to include services for the text- and software-publishing communities. But with the prolif eration of digital music distribution, the market for such a service in music alone is huge.

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