And Justice For All: The Napster Chronicles - Company Business and Marketing

Emedia Professional, July, 2000 by Michelle Manafy

Since digital music hit the Web, it has spawned Pandora's boxes like Russian nesting dolls. Every time one box is opened, some controversial issue is unleashed and, the instant it seems controlled, another appears more tenacious than the last. Napster, digital music's latest scapegoat, has been barraged with lawsuits accusing the company of everything from copyright infringement to racketeering.

Napster, a nifty piece of software that turns a user's home computer into a server and enables just about anyone with a modern to launch files into a searchable database, makes obtaining free music online--copyrighted commercial releases included--easier than it's ever been. Last December, the Recording Industry Association of America (RIAA), representing the major music companies, struck back when it sued Napster for copyright violations. The RIAA also accused Napster of the unlawful use of digital audio interface device and of violating the Racketeering Influenced and Corrupt Organizations Act (RICO).

However, the litigation really heated up when metal icons Metallica took control of the bandwagon. Metallica filed suit with the U.S. District Court in California, alleging that Napster "encourages piracy by enabling and allowing users to trade copyrighted songs through its servers." Soon after, rapper Dr. Dre filed a $10 million dollar suit in federal court in Los Angeles, claiming that "Napster has built a business based on large-scale piracy."

At the time, Dr. Dre gave the company an ultimatum to remove all of his music from its directories or risk a suit, but Napster refused, stating that it bears no responsibility for any acts of piracy its users commit. Metallica gave Napster a similar directive, to which the company responded that it could not remove illegal copies of the band's music or restrict users unless Metallica could provide proof of specific violations.

At issue is whether a software maker is liable for the ways in which its products are used. The Napster case will depend heavily on how the courts interpret the Digital Millennium Copyright Act (DMCA) of 1998 and the Audio Home Recording Act (AHRA) of 1992. Most of the digital music-related computer software and hardware has not been accountabled under the AHRA because it is not used exclusively for copying music. Like MP3, CD-R, VCR, and other technologies used in copyright-infringing activities, Napster meets the AHRA's requirement of having "substantial non-infringing uses," in that at its core Napster is simply a way of sharing files. But the DMCA casts the issue differently, and the recent prevailing wind in the courts has tended toward a less lenient interpretation.

On the other side of the issue, and following a great tradition of authority-bucking, bands like the Offspring and Limp Bizkit openly support Napster and the MP3 model of music proliferation. Limp Bizkit has not only voiced support for Napster, but the band, along with opening act Cypress Hill, will also begin a free Napster-sponsored tour this July. Singer Fred Durst said, "We believe that the Internet and Napster should not be ignored by the music industry as tools to promote awareness of bands and to market music."

It does seem likely that the digital music boom will push the music industry toward a new business model in which bands and labels earn some sort of electronic royalties; threats like Napster, My.MP3, and Gnutella will simply hasten the process. But Limp Bizkit and other Napster supporters, however forward-looking in their attitudes, come off as somewhat naive as well. In the absence of such a royalty structure or track-by, rack sales model, it's hard to imagine where they expect their income to come from after the likes of Napster make much, if not all, of their music available online. For the vast majority of bands, touring is only profitable in that it stimulates album sales, and merchandise tie-ins, while lucrative, probably can't support the industry at the level that record sales traditionally have. On the other hand, a new Web-based sales model could do away with the music "industry" as we know it, and mean more direct income for artists themselves. For better or worse, dial-up speeds and hard drive capacities are not up to the promise of an Internet music revolution quite yet.

Trading MP3 files eats up bandwidth and requires a fair amount of free time, which is why the keenest interest in Napster seems to come from college students with access to university networks with their mammoth servers and fast Internet connections. Chiming in with perhaps the only unequivocally valid complaint in the MP3-muddied Web waters, many universities are restricting the use of Napster. Citing both legal ambiguity and the incredible bandwidth drain campus Napster use has become--imagine some significant portion of a school's population keeping multiple multimegabyte uploads and downloads on the university server, and frequently sending the behemoth files in one direction or the other--more than 70 universities have banned the software, and others have limited its use to weekends and issued warnings about possible legal issues. Indiana University, originally named in Metellica's suit, went so far as to join Metallica as a plaintiff. The University expressed concern that its "faculty, staff, and students could incur legal exposure if they use the technology."