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Will Napster Be Music's Downfall Or Its Salvation?

By Erica C. Barnett

MAY 8, 2000:  The year was 1984, and a case involving a popular but controversial new technology was just heating up before the Supreme Court. On one side, the Old Order -- Walt Disney and Universal Studios, two companies which held the copyrights and purse strings on thousands of scripts and feature films -- was making its case. Though innovative, they said, the technology violated their intellectual property rights, allowing consumers to illegally obtain copyright-protected materials for free. It would have to be controlled.

The defendant in the case was Sony Corp., a Japanese company that had broken into the American market by offering cutting-edge home electronics. The technology being vilified was Betamax, a home recording system which, for the first time ever, allowed consumers to make high-quality copies of movies and TV shows in the privacy of their homes.

The studios poured massive resources into their case, but after a protracted battle, Sony won. And, in time, the proliferation of VCRs resulted in huge profits for the movie industry. Today, the stiff-shouldered resistance of the movie industry to "high technology," as The New York Times called Betamax after the ruling, seems almost quaint.

But is it? If a similar case now winding its way through the federal court system in California is any indication, the entertainment industry's antipathy to new technology is as real -- and relevant -- as it has ever been. This time, the innovation is Napster, a file-sharing software program that allows users to swap MP3 (digitally compressed) music files from computer to computer. And once again, copyright experts and artists themselves are deeply divided on the legality -- and the long-term implications -- of the software and its progeny.


Who Benefits?

Look up "Ginger Mackenzie" on Napster, and chances are you won't find much by the Austin artist, whose latest CD, Kismet, has sold more than 20,000 copies. That's because Napster's range doesn't extend far beyond what you'd find in the top 40 bin at your local Tower Records, making music by local and independent artists a rare and coveted find. But if you look at the right times (Napster's library is always changing, as users log on and off the system), you might find copies of Mackenzie's most popular single, "The Garden of You and I," as well as some live tracks recorded the old-fashioned way -- by a bootlegging fan with a handheld tape recorder -- and transferred onto the Napster network for widespread distribution.

That's okay with Mackenzie, who says she isn't worried that free MP3s will cut into her sales. "If people really love the music, they're going to buy the records," says Mackenzie, who was one of the first Austin artists to take her act online. Her Web site, http://www.gingermackenzie.com, features every track from Kismet in RealAudio (listen-only) format, and a link to her song list at MP3.com, which sells CDs in traditional and MP3 formats. Mackenzie recently became the No. 1 pop artist on the site, after a year of promoting her music with e-mails, fliers, and free tracks from the album.

But Mackenzie can see the pitfalls of programs like Napster, which often make entire albums by established artists available for the taking. "If I were a really successful artist and people were getting my stuff on Napster for free, I'd be freaking out," she says. "The intent is to steal music and not pay for it ... I can't imagine any artist actually wanting to be on Napster."

That's not what Napster's founders say they had in mind when they created the file-sharing software, which has been downloaded by some nine million users since the site (http://www.napster.com; Mac version at http://www.macster.com) was launched in October 1999. (Napster CEO Eileen Richardson calls the company "the fastest-growing Internet company of all time," with a user base that grows between 5% and 25% every day.)

According to Shawn Fanning, the 19-year-old college dropout who programmed Napster, the software was designed to be a tool that would allow independent bands to put their music up online without the help of intermediaries like conventional music sites and record labels, which typically take a cut from sales of between 50% and 85%. But (as Betamax's opponents knew) even benign technologies can have nefarious uses: Since Napster's launch, the program's acolytes have turned it into a tool for widespread distribution of copyrighted material -- demonstrating, Napster's founders say, that every promising innovation can have unintended consequences.


Three Easy Steps

For all the uproar over Napster in recent months, few people outside the high-tech universe (aside from college students, who fueled the explosion in the program's popularity) know how the software works, much less why it's considered so insidious. To use Napster, you have to download the software onto your hard drive, designating a folder of files as "shared." Then, using the software and your Internet connection, you search for an artist, album title, or song; in a matter of seconds (more or fewer depending on the speed of your Internet connection), Napster returns a list of Napster users who have what you want on their PCs, along with the speed of their connections.

Select a song and in a matter of minutes -- anywhere from five to around 20, depending on the length of the song and the speed of both connections -- the song is yours; no purchase necessary.

The genius of Napster is its simplicity: It works by routing requests through a central server, where a massive list of music currently available on all Napster users' hard drives is stored. The server doesn't actually contain any music itself; instead, Napster turns its users' computers into mini-servers, connecting users directly to users in a kind of massive swap meet on (theoretically, at least) a global scale.

Though it's just showing up on the national media's radar, in Internet time, Napster is already last week's news. Already, half-a-dozen new programs with more features and fewer sticky legal issues have gained currency among free-music geeks. Most of them improve on Napster's concept by enabling users to trade multimedia files like photographs and videos; they include Imesh (http://www.imesh.com), Scour Exchange, a project of popular MP3 search site Scour (http://www.scour.com/Software/Scour_Exchange), and Wrapster (http://www.wrapster.com), which disguises other types of files as MP3s and allows users to trade them on the Napster network.

But by far the most intriguing of the new programs is Gnutella, a multimedia file-sharing program that works by spreading a network of file requests among users who have downloaded the software. Unlike other file-sharing software, Gnutella doesn't route requests through a central server. Instead, when a user performs a search (a site devoted to Gnutella uses "strawberry-rhubarb pie" as a search example, but porn and MP3s are probably far more common, if typical Internet use is any indication), the program searches for other Gnutella users over the first user's Internet connection. Once it finds one user's computer, it contacts all the Gnutella users that computer has ever contacted, and so on, in a complex web of virtually untraceable connections.

"Computers don't know how to talk to one another, but you add Gnutella and suddenly they're able to talk," says Gnutella developer Gene Kan, a Silicon Valley software engineer. "Client-server" programs like Napster, Kan says, are "like piling a bunch of people onto a bus; there's only room for so many people." Gnutella, on the other hand, is "more like a bunch of people on motorcycles on a freeway -- you can go anywhere you want and there's no need to slow down because there's no limit to how many motorcycles the freeway can hold."


Napping Through Class

The crowding problem prompted college administrators to ban Napster en masse earlier this year, after students using the enormously popular software crowded others off university systems by leaving Napster on for hours at a time. By the time the campus purge peaked in March, more than 200 universities -- including Oregon State, Indiana University, Harvard, Northwestern, and the University of Texas -- had blocked or restricted on-campus access to the site.

At UT, where dorm denizens are forbidden to turn their computers into servers of any kind (Quake servers were once the more common permutation), Napster was blocked on Jan. 25. Bill Bard, UT's deputy director of telecommunications services, compares the blocking software to a circuit breaker: "You leave it on until the load becomes too heavy, then you have to cut it off."

Resourceful students had no trouble getting around the blocks. Proxy, or off-site, servers, were one option; free Internet services, linked up to a dorm phone line, were another. "Getting around the block isn't that hard if you're determined," says Spencer Chow, a sophomore computer science major at UT. Chow, who generally supports UT's decision to block the site, lives on-campus in Jester dorm; before the program was banned, he used Napster daily, often for two to three hours at a time.

Many universities found that technology, which causes the bandwidth problem in the first place, was also the solution. Largely in response to a petition circulated by 19-year-old Indiana University student Chad Paulson, who founded a group called Students Against University Censorship to fight the school's Napster ban (the petition garnered some 23,000 signatures), IU unblocked access to Napster's site; the solution they used -- a routing method that reduces Internet congestion by sending requests through the university system first, then out onto the World Wide Web -- is available at bestpath.iu.edu/internetdraft.txt. Other solutions have gradually emerged, and universities have started unblocking Napster one by one. Problem solved.


"Fair" Enough?

Other problems, however, haven't found such easy solutions. Chief among these are questions of copyright: the very questions over which the Recording Industry Association of America -- which represents America's major record labels -- and 18 record companies sued Napster last December. They claim Napster was contributing to its users' copyright violation by helping them exchange illegal files; in the lawsuit, which went to trial March 27, the group is seeking $100,000 per copyrighted song exchanged using Napster.

Legal experts are divided on the implications of the lawsuit, which (much like the Betamax case) raises questions about whether a manufacturer can be held liable for the way its products are used. Napster CEO Richardson says her company isn't responsible for what people do with Napster; they just make the product, they don't monitor how people use it. (Critics counter that that's like selling drug paraphernalia and saying it's only meant for legal use). According to Tony Reese, a copyright expert and associate professor at the UT School of Law, copyright law dictates that "you have to be materially contributing to or inducing someone else's copyright infringement and you have to know about it, or it has to be a situation where you should have known," to be held liable for contributory copyright infringement.

In addition, companies can't be held responsible for copyright infringement as long as their product has a significant number of "non-infringing" or "fair" uses that don't violate copyright -- for example, in the case of the VCR, taping a show to watch it later, or "time-shifting."

"With the VCR, there are some TV show owners who don't object to having their shows taped. Mr. Rogers testified that he didn't mind parents taping his show to watch with their children later," Reese says. "The question is whether or not there are any uses [of Napster] that aren't infringing. Has any of this music been put up by bands ... to be freely traded because they want people to hear it? [And] is there enough of that sort of use of that product so that it would be a substantial non-infringing use?"

Record companies say there isn't. They believe Napster is used almost exclusively for piracy, and they're willing to throw all the resources at their disposal into the fight against the company. And some musicians agree -- most notably Metallica, which filed suit on April 12 against Napster and three universities (including Indiana and Yale, which were later dropped from the suit in exchange for blocking access to Napster). Other musicians who have spoken out against Napster include Dr. Dre -- who also sued Napster -- the Black Crowes, Aimee Mann, Sean "Puffy" Combs, and Creed.

So is it piracy? An RIAA spokesman points out that musicians traditionally (at least since the advent of the phonograph in the late 19th century) have received compensation for recordings of their work; if you perform the music, the logic goes, you should get paid. In a statement distributed by the RIAA, Lars Ulrich of Metallica said he found it "sickening to know that our art is being traded, sometimes with an audio quality that has been severely compromised, like a commodity rather than the art that it is."

Napster supporters counter that the software -- much like recordable cassette tapes before it, which the recording industry also opposed -- helps spread the word about new music, especially music by small labels and unknown bands who can't afford to play the record-label lottery. UT student Chow says he was never really interested in music until he discovered Napster. "I, for one, have bought more CDs than I [ever] have before, and I still know people buying CDs even though they have Napster," Chow says. "I've discovered many artists as a result of Napster." And many artists, including Public Enemy's Chuck D, the Offspring, and alt-radio staple Limp Bizkit, are behind Napster 100%. (Limp Bizkit is reportedly negotiating a $2 million tour sponsorship with the company.) And, according to the recording industry's own statistics, CD sales were up in 1999, from $847 million in 1998 to $938.9 million, a dollar-value increase of 12.3%.

"We are and always have been about letting our fanatical online music community discover musical artists in an interactive manner," says Napster CEO Richardson. "MTV is passive; radio is passive; but the Internet is interactive ... Hopefully we can augment [the recording industry's] business and add another way of marketing their music for them."

No thanks, say many artists and their representatives. Not only does Napster facilitate piracy, they say, it discourages music fans from going to the store and buying music. "Musicians are dependent on sales of their products for their livelihood. Why would they bother getting publishing rights if they're just going to give their music away?" says Ginger Shults, vice president of the Austin chapter of the American Federation of Musicians, the largest musicians' union in North America.

Trish Murphy, an Austin musician whose latest album, Rubies on the Lawn, was one of the runaway hits of 1999 thanks in part to promotions on her Web site (http://www.trishmurphy.com), says she worries that free trading of copyrighted material could threaten musicians' sales. "MP3s are a tool for exposure; they are not a tool to pirate music," Murphy says. "Sites that give away MP3s for free are not giving away something that belongs to them; they're taking music away from someone that does not belong to them and pretending it does not belong to anyone."

Others have argued that it's the users, not the company, who are really at fault. "Something needs to be done about Napster, and they need to do something about piracy," says Paulson, the Indiana University student who organized the petition on Napster's behalf. "But I don't think they should go after Napster. If anything, prosecute the users, don't prosecute the company, because you're going to have a never-ending problem if you prosecute all these companies for what their users are doing." (Interestingly, Paulson later turned against Napster, publishing an open letter on his Web site, http://www.savenapster.com, that called on the company to take a clear stand against the "rampant illegal use that has flooded this convenient service.")

Whoever -- if anyone -- is ultimately found at fault for copyright violations in the Napster case, it will be difficult, if not impossible, to hold back the offending technology. Although the RIAA has attempted to reach an agreement with artists on "watermarking" technology -- a kind of digital security system that would lock users out of music files unless they had purchased a special device to play the music -- most musicians and programmers seem skeptical that the initiative, called the Secure Digital Music Initiative, will ever get off the ground. (Preliminary proposals for the software are expected June 25.)

"There's so many brilliant people out there that there'll be someone that can hack it and they'll set up their own site -- 'We'll unencrypt your CDs for you!'" Mackenzie says. And ultimately, even if Napster is shut down, its supporters predict that someone will come up with a more foolproof version -- one that will stand up to legal, as well as technological, challenges.


A 100,000-Headed Hydra

Many believe they've already found their product in the free, open-source Gnutella, which spawns new offshoots (Gnotella, Gnubile, Gnut, etc.) almost daily. Since there's no company behind Gnutella -- the original Gnutella site, designed by two employees of AOL-owned Nullsoft, was shut down within 24 hours -- legal experts say it's far less vulnerable to lawsuits. And because Gnutella users' requests aren't routed through a central location, there's no server to shut down, either. The only "offenders," in terms of copyright violation, are individual users, of which developer Kan estimates there may be as many as 100,000. Those users make up the backbone of Gnutella; a few users more or less make very little difference to the program, which is, a Gnutella Web site (http://www.gnutella.wego.com) claims, "designed to survive nuclear war."

"If Yahoo goes down," explains developer Kan, "you basically stop working. Gnutella is like a million Yahoos; if one person goes down, it doesn't matter. Every person on Gnutella is equal to every other person on that network. There's no central point of failure." And ultimately, Kan says, Gnutella isn't a tool for piracy, "it's a search technology" -- albeit one whose most popular use is transmitting copyrighted material.

When you put information up on the "GnutellaNet," it becomes instantly available via Gnutella's search function -- unlike traditional search engines, which typically take weeks or months to index the information they receive. "Gnutella allows you to act as information provider and provide a search engine for that information ... I hope that it spells doom for search engines," Kan says. "It's not lost on anyone that the Internet does not work on time measured in months -- it works on time measured in seconds. ... Web search engines right now are indexing yesterday's Web."


The End of the Web as We Know It?

Whatever programs like Napster and Gnutella mean for the future of search technology, they are almost certain to radically alter the landscape of the music industry, perhaps forever. And they'll do it in a matter of years, not decades. Ultimately, the entities that stand to lose the most from file-sharing technology are the ones that hold the copyrights -- the major record and publishing companies, movie studios, and television networks.

Some, including John Avignone, president and CEO of the Austin-based music Web site Audiopia (http://www.audiopia.com), predict that people will continue buying music in the traditional CD format, at least until MP3s become less tedious to download and easier to purchase. "The reality is that right now, nobody's selling MP3s," says Avignone.

Jim Werking, president and CEO of Austin-centric music site AustinMP3.com, says cumbersome payment technology makes MP3 sites like Emusic.com unappealing and a pain to navigate. "Right now if you go to any site on the Net you have to enter your credit card number and it's replicated all over the place," Werking says. "To me, that's kind of a turnoff." Apparently, he's not alone; according to online music news service Webnoize (http://www.webnoize.com), the most popular MP3 site, MP3.com, sold just 15,600 CDs last August on behalf of 26,700 artists -- an average of half a CD, or about $3 in profits, per artist.

But someday -- perhaps someday soon -- MP3s will be as widely available online as porn, and just as easily accessible. So what happens then? Some predict that music will cease to exist as a physical object, and will come to be thought of as discrete packets of information, which users can combine and customize in new, interactive ways. "My position is that the consumers have spoken, and they like having an interactive way to discover new music," says Napster CEO Richardson. "The fact is that people will pay for something of value, and I think they will continue to pay for music."

Will record companies get on board? Online music devotees say it would be in their best interest to do so, rather than spending thousands of dollars on lengthy, and ultimately futile, court battles. "The recording industry could embrace [Napster] and use it as a tool instead of negating it," says Paulson. "I think they'd be a lot better off, and I think they'll have to do it eventually."

In the long term, many in the music business believe record companies will have to cut their prices to win online pirates back into the paying-customer fold. "For a long time, since CDs became the primary medium for recording music, prices have skyrocketed. What college student in his right mind is not going to take advantage of [Napster]?" says Murphy. On the other hand, "Why would people want to pirate a CD if they could buy it for $5?"

No one knows what the music business will look like in a year, much less a decade, but few believe it can stick to the same old business model and survive. Some, like AustinMP3.com president Werking, predict that music will be free; the most successful artists will be those with the widest distribution channels and the most devoted fans, in the manner of bands such as Phish or the Grateful Dead.

Others, including Mackenzie, predict that even if it's one day possible to burn CDs and print high-quality jacket artwork from a home PC (as Murphy predicts will happen), people will always want to go somewhere to buy their music. Eventually, "every record store in the country will have every record on a big computer and you'll go in and listen to it on your headphones and go up to the counter and they'll burn a copy of it for you right there," Mackenzie says. "The big warehouses of CDs that you have today -- we won't have that any more."

And some, like Audiopia president Avignone, predict that record labels will continue to hold musicians' reins; sites like Napster will be shut down by Internet service providers, Avignone predicts, and consumers will download music directly from the major labels in the comfort of their homes.

But for now, with so much still unknown about the future of music distribution, how can artists use MP3 technology and Internet exposure to their advantage? Many in the music industry say success is still about self-promotion: getting your name (and music) on the tips of people's tongues. AFM VP Shults says she advises artists to put up only a portion of their songs; if people like what they hear, she says, they'll be willing to buy the rest.

"We do not advocate any musician giving away their services," Shults says. "If the artist receives compensation, that's fine, but to give it away for free is like giving away CDs. There's no incentive for anyone to buy your music." Werking, who was a musician himself for 20 years, says he advises artists to put up one or two songs everywhere they can, along with a link to a central site where people can buy the rest of the CD.

But the best exposure may still be plain, old-fashioned word of mouth. Just ask Mackenzie, who handed out thousands of fliers at last summer's Lilith Fair and spent more than a year building her e-mail list before making it to No. 1 on the pop/rock chart at MP3.com. "A lot of it was ... e-mailing the link to my song on MP3.com to my e-mail list and telling them they could download one of my songs for free. And they would tell other people, and it would just spread," Mackenzie says. "The Internet and all these tools are not a magic pill -- they're still just tools. You have to work hard just like you always have. And we worked really, really hard."


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