The creator of the MP3 audio-compression format says attempts to shut down the illegal-music trade are doomed to fail unless the recording industry gives people a reason to start obeying the law. Karlheinz Brandenburg said the Secure Digital Music Initiative (SDMI) had been unable to slow the flood of people using services such as Napster or Gnutella to exchange music without paying for it. 'Every month we see more and more people downloading music files that are unprotected,' he said. 'Consumers still see MP3s out there on the Internet where they can take everything for free. Stopping it is not as simple as saying 'this is the law, you have to follow it'.' SDMI, a partnership between the big international recording-industry associations, is trying to encourage people to use only authorised MP3s. Researchers are working on audio watermarks for music files or scrambling with encryption. Mr Brandenburg said past efforts to stem MP3 distribution had backfired. Efforts in 1997 by the Recording Industry Association of America to shut down three Web sites distributing MP3 and a legal challenge to block the sale of the Rio portable MP3 player a year later were public-relations blunders. 'It was the best free advertising the people distributing MP3 files could get,' he said. 'The popularity of the format took off after both incidents.' Mr Brandenburg said luring people away from pirated MP3s would require offering them something they could not get from free sites, such as better quality or a wider selection of music. He also suggested using a moderate level of security, making it necessary to try to circumvent the protection to copy files instead of doing it with a click of a mouse. Recording-industry officials claim 60 million CDs were copied illegally last year, and 10 million copies were sold without permission. The result was the loss of US$120 in revenue. The MP3 format has played a key role by allowing music to be digitally encoded, compressed and transmitted electronically into portable devices or over the Internet. Mr Brandenburg first hit upon the idea when he wrote his doctorate thesis 10 years ago. He recently received the German Future Award for 2000 for his initiative. He was honoured with Bernhard Grill and Harald Popp. All three work at the Fraunhofer Institute in Germany. Mr Brandenburg was in Hong Kong to make a presentation at the International Symposium on Consumer Electronics 2000. In his speech, he said he understood the pain musicians and recording companies felt when their work was pilfered. Ironically, MP3s first became popular after one of the first encoders that Mr Brandenburg developed was stolen by an Australian youth, who posted it to a file-transfer site and thousands of people downloaded it free. It was a double-edged sword. Mr Brandenburg's work was gone, but suddenly everyone was using it. 'We were angry at first, but today I don't think we could have done anything better to get word out about our product,' he said. Meanwhile, Mr Brandenburg has plans for an MP7 format and an advanced audio-coding system. The format will offer improved sound quality with smaller files and increased security.