Low Tech History
Once upon a time, there were some giant companies that, with the failure of the 4-channel battle fresh in mind, formed an expert group with the mission to invent tomorrow's technology in sound compression. Fortunately, they did. The format, named MPEG Layer 3 or for short MP3, took advantage of the fact that our ears are not nearly as good as we generally believe them to be, and thus omitting frequencies that we wouldn't hear anyway. They also made the format suitable for streaming by letting the sound be represented in small, individually compressed blocks of audio data. Each block had a header containing some information relevant to the decoding process. As they ended up with a few bits to much, they used them for some additional information such as a 'copyright' bit and a 'private' bit.
Since the format had such an outstanding compression and still very good sound quality, it was soon adapted as the de facto standard for digital music. The lack of possibilities to include textual information in the files was however disturbingly present. Suddenly, someone (Eric Kemp alias NamkraD, I've been told) had a vision of a fix-sized 128-byte tag that would reside at the end of the audio file. It would include title, artist, album, year, genre and a comment field. Someone, possibly the very same someone, implemented this and everyone was happy. Soon afterwards, Michael Mutschler, the author of MP3ext, extended this tag, called ID3, to also include which track on the CD the music originated from. He used the last two bytes of the comment field for this and named his variant ID3 v1.1. (more information about ID3 and ID3v1.1 can be found here).
The ID3 v1.1 tag still had some obvious limitations and drawbacks, though. It supported only a few fields of information, and those were limited to 30 characters, making it impossible to correctly describe "The Hitchhiker's Guide to the Galaxy from BBC Radio" as well as "P.I. Tchaikovsky's Nutcracker Suite Op. 71 a, Ouverture miniature danses caractéristiques by The New Philharmonic Orchestra, London, conducted by Laurence Siegel". Since the position of the ID3 v1.1 tag is at the end of the audio file it will also be the last thing to arrive when the file is being streamed. The fix size of 128 bytes also makes it impossible to extend further. That's why I (Martin Nilsson) and several along with me thought that a new ID3 tag would be appropriate.
The new ID3 tag is named ID3v2 and is currently in a state of 'informal standard'. That is, we decided, since there were less and less improvements and additions made, to proclaim the draft as a standard (an informal one since no standardization body has approved this decision). You can find the informal standard in the Developer Information section. ID3v2 is often followed by its revision number, i.e. the current informal standard is ID3v2.4.0.