Before the new millennium, the world of online file-sharing was somewhat of a wasteland. A new technology, ‘MPEG 1 level3 Codec(MP3 for short)’ was developed by software engineers to enable a sound file to be compressed to a 12th of its original size by removing the sounds that were inaudible for the human ear. This is the new format that the music industry had been eagerly awaiting since after the shift from LPs and cassettes to CDs(and the re-circulation of back-catalogs in the new format) sales had been stagnating. A new ‘boost’ provided by a format shift would surely be welcomed, and could MP3 be it?
Well, no, actually. This was regarded as too much of a volatile format since it was not implemented in the conventional structures for pricing, marketing, and distribution and seemed to be too elusive for control.
“Let’s ignore it and hope it will go away,” might have been an attitude that some planners and strategists in major record companies subscribed to.(“It takes an enormous amount of effort to determine how to offer music to consumers online in a way that meets their needs and grows the business.”-the Recording Industry Association of America/RIAA,21/08-001)
It took the efforts of «one kid» to radically change the situation by ‘planting a new weed, ‘Napster.’ At the Northeastern University(1998) in Boston 19 year old Shawn Fanning was working on a code that would land him a few lawsuits, the cover of Times Magazine, numerous awards, and ultimately a software company that changed the music industry.
According to legend he was working around the clock, basically learning Windows programming in addition to Unix server code that he already mastered as he went along, always with his laptop wherever he went. The inspiration for this fervor evidently came from friends complaining about the unreliability of file sharing, and he says (to Ansir comm.Inc.) “I had this idea that there was a lot of material out there sitting on people’s hard drives, I just had to figure out a way to go and get it.
An interesting view on why an how it was just Fanning that managed to piece together this solution was given by Ali Aydar, friend and co-worker at Napster( to Ansir Comm.), he insists that a team couldn’t have written Napster, nor by anyone 21 or older!”
Shawn could focus on problem solving-and there was no one to tell him he couldn’t do theses things. There was no one who ever really understood what he was doing. He didn’t even understand the legal issues involved. It was such a cool idea that he never once stopped, never really came up for air.”(my italics)
Napster took advantage of P2P2 technology and functioned as a directory of MP3s while connecting via its central server music fans with files to share on their hard drives. You just searched an artist’s name or a song title, and a maximum of 100 ‘hits’ would turn up, then double-click ‘download’, and you’d have a new, instant, addition to your music collection!
Napster made access to(working) files a lot easier, and by creating an application that worked Fanning attracted the attention of the Evidently Napster became the fastest growing site in history, hitting the 25 mill. mark within a year .
The Legal Battles
As users flocked to the site like seagulls to a ship loaded with fresh catch, the RIAA- Recording Industry Association of America took(in Nov. 1999) action, of the legal kind. RIAA filed a ‘ contributory infringement of copyright’ suite, each individual ‘infringement’ with a $ 100.000 price tag.
It is important to note that, at this point, there were no indications whatsoever that Napster was ‘harming’ record sales, thus indicating that the case was about more than profits, whether principles, legitimacy or control or all of the above. ( “In view of the healthy state of the US economy, it would be surprising if record sales did not increase. Common sense suggests that sales would have increased even more without Napster.”-RIAA.Figures from IFPI-the organization representing the global recording industry) show(2000) that CD sales grew globally by 2.5% with a particularly strong increase in Europe( 5.1%).)
As spring was turning into summer in May 2000 a black van drove up to Napster Inc.s HQ in San Mateo, California. It could, perhaps be called a ‘commando raid’ of sorts, the van was delivering 13 boxes containing the names of 300 000 Napster users who had been downloaded the music of the American rock band Metallica during one weekend.
Metallica had requested that Napster removed their songs from their directory since this was a violation of copyright, and Napster agreed to remove people from the list who were trading if they were individually named, and that’s what Metallica did, as well as suing the company and Yale, Indiana, and the University of Southern California for violating ‘the Racketeering Influenced and Corrupt Organizations Act.’
They clearly wanted Napster to stop “looting our art” as Metallica’s drummer Lars Ulrich put it(and in the process alienating scores of fans that their success was dependent upon, and spawned dozens of “I hate Metallica” campaigns on the net.). Napster’s weakness (as an independent, renegade operator) was becoming apparent, the system that made it so easy to use also made it very easy to monitor(having a central server that organized the search).
The short term consequences, however, of the lawsuits were to create an even bigger ‘buzz’ around the site, and user numbers mushroomed. By now, even though no profit was being made, investors in the San Francisco Bay area had realized Napster’s business potential and invested enough money to a.o. enable the company to hire ‘big-shot lawyer’ David Boies (counting among past clients Al Gore and Microsoft) to argue their case for the courts. Despite having the financial clout to fight a hard legal battle the ruling of Judge Marilyn Patel(inJuly-00) was not very uplifting for the company(see; appendix 1).
She found that there were no proofs of any significant ‘non-infringement’ activity through Napster, and that although there was no evidence of any widespread sales of copied material, the users were still benefiting financially by getting for free what they otherwise would have bought. She ruled that Napster had to stop free access to copyrighted material within a couple of days.
The company appealed. By now Fanning also had to release the reins of the company which was molded into a standard business model headed, eventually, by CEO Hank Barry( a copyright specialist) And, thus the image of the ‘independent renegade’ vs. ‘the Giant Corporate machine’ started cracking up, and was shattered completely, in the eyes of some, when the German entertainment giant Bertelsmann Music Group (BMG), in October 2000, bought into Napster by issuing a massive loan (reportedly $50 mill.) for the company to develop a paid subscription service. This was a move that, moreover, discouraged impending lawsuits from other (independent) record companies.
The ‘Softwar’
The ruling in the ‘RIAA vs. Napster case’ did not do anything to discourage the amount of actants involved within this network, in fact it generated a virtual ‘software war.’ The situation was, Napster had to cut access to copyrighted material. Fine, how?
‘Monitoring’ is one thing, ‘control’ could be quite another.
The second Napster verdict would further bring the ‘control issue’ to the centre of the proceedings, and, the importance of ‘Digital Rights Management software'(DRM) surfaced as a key factor after the second Napster verdict.
“While they would never admit it, Napster is doing the record industry a huge favor. Napster is demonstrating that the only way to control copyright violations is to protect their content before they release it to the public.
The technology to do so, called Digital Rights Management, was new but rapidly maturing. The recording industry, however, has failed to adopt it, largely due to political in-fighting and poor communication.
Perhaps Napster will force the music industry to be more proactive with technology.” (‘Suing is better than doing,’ By Bill Burnham, ZDNN May 9, 2000). -the12th of February; California’s Ninth Circuit of appeals ruled that Napster was guilty of “vicarious copyright infringement,” ,however, it said it is the responsibility of the record labels and music-publishing companies now suing Napster to show which tunes should not be freely traded.
That means an earlier stay of the injunction issued by the Appeals Court July 28 will remain in effect until the injunction is amended by Patel.
-Feb.27/02/01- BMG was reported to be testing a Napster ‘clone,’ ‘Snoopstar’, unawares to Berry and the ‘Napsters.’ A backup was obviously prepared for the possible shutdown of Napster. (12/03 CNN.com)
PulseNewMedia,a Canadian software firm releases a software that alters the names of MP3 files (‘Metallica’ becomes ‘Etallicam’) and thus enables downloading from Napster.
-“We are trying to allow users to download files they are entitled to”(CEO of PNM, James Chillcott).(my italics) the main reason for releasing the software is to “create a better recording industry in general.”
(20/04/01)- CNET News.com reported that Napster licensed technology from ‘Relatable’ that identifies wavelength patterns produced by their sounds. The technology, called TR<M, identifies each song by comparing acoustic patterns (the song’s ‘fingerprint’) instead of the inadequate, text-based system.
This was, naturally, not a ‘foolproof’ system, the compromising actor could feed nonsense codes and numbers while the software searches for song identities. The software mirrored a program released March 4 by U.S. company Aimster
that lets users trade files by piggybacking on instant message networks.
Aimster Chief Executive Officer Johnny Deep stated that changing file
names with encryption makes it illegal to systematically remove the altered files. Deep said Napster might be able to remove encrypted file names one by one, but it couldn’t “reverse engineer” the NapCameBack Encoder to remove all songs that had been encrypted — even though the encryption is so simple that anyone can deduce the real title of an encrypted file name.
The Digital Millennium Copyright Act outlaws the reverse engineering of encryption schemes, Deep said. Encryption is defined as “the scrambling and descrambling of information using mathematical formulas or algorithms.”
(Aimster did later agree to withdraw the software from their site.)
The plot certainly thickened as other actors took advantage of the fact that new technologies are challenging laws and statutes that have not been upgraded sufficiently to ‘keep up.’
By now it was rather obvious that the ‘control technologies’ had to be honed
to keep the ‘renegade technologies’ at bay outside the gates.
In the UK the International Federation of the Phonographic Industry(IFPI) has commissioned a development of software to track internet file swapping(Q, May-01).
And, in Nashville a company called ‘Copyright.net’ invented a software ‘robot’ which sought out and reported illegal downloads. The copyright holder can then demand that your Internet Service Provider(ISP) terminate your connection (Q,May- 01).
A problem with sharing files is that you then, basically, invite anyone into your hard-disk, and the prospect of using this for control purposes opens up a whole new ‘can of worms’ of ethical and legal questions, and this type of technology will create a network that is both rigid and volatile.
The complex system of publishing and mechanic royalties that exists in the ‘real world ‘music business model has yet to be developed for the internet, though ‘the Guardian'(12/04/01/) reports that a company called RioPort claimed to have developed a software to keep track of the parties that need to be compensated when a song is sold. This never became a standard, and right management and tracking is still a hot issue 20+ years later.
Further complicating the matter( of legal issues ,and organizing technology accordingly)is the fact that no central database and file protocol for songs have been established, to successfully implement the new ‘control technologies.’ When the problem of ‘piracy’ surfaced the majors realized that this was an area, a territory, that had to be conquered and controlled.
Intel, IBM, Matushita Electric and Toshiba created ‘Content Protection for Recordable media'(CPRM) that implied that CDs or flashcards should include a CPRM code to make it impossible to record copyright-protected files onto them at all, or even have it implemented on users hard disks (Q Magazine, May-01) with the questionable consequence that it would give technology companies ‘quasi-legal’ rights to determine what is copyrighted or not.
The Music Industry Reluctantly Pivot
User activity kept plummeting, but Napster’s restructuring to comply with the ruling
kept the service from being shut down.
By now it was obvious that the technology involved with downloading was going to be an integral part in presentation and distribution of artists, and Napster already had a working system, and since the company had to enforce copyright it made sense for record companies to ‘sign up.’
In June. 2001, Napster inked a deal with MusicNet, a company created by media software developer and BMG plus AOL Time Warner’s Music Group and EMI Recorded Music, thus allowing Napster to sell songs offered by MusicNet, though spokespersons for Warner and EMI are eager to stress that the company will have to prove that it is successfully blocking the downloading of copyrighted material. Curiously enough, according to SoundScan, a company that tracks record sales, the industry’s gross sales dropped 5.4 percent in the first half of 2001.
This drop coinciding with Napster’s problems led to speculations that the company was in fact ‘boosting’ CD-sales. (Joel Selvin Sunday, August 5, 2001 San Francisco Chronicle.). Others, on the other hand, would argue that the ‘Napster effect’ was finally taking hold, “Global record sales drop for the first time as US consumers succumb to Napster effect.” ( “Music Pirates sink industry”(David Teather, media business editor. The Guardian, 20/04/01). An argument is that the biggest decline was in the US-“the most internet-literate nation.” Especially the sales of singles were plummeting (down 39% in the US, down globally, 14%).
I think it imperative to stress that the ‘Napster-effect’ is very hard to measure
and that other factors like the fact that the exposure to the singles from albums has become so ubiquitous(radio, MTV videos, internet etc.) have contributed to such a decline for quite some time. A paradox, not addressed in the same ‘Guardian’ article is that Recorded music in Europe grew (1.4% in value), with Britain and Scandinavia being “the most buoyant markets.” These being highly computer-literate markets as well one might wonder how to explain “the Napster-effect” given this fact.
June 27th: Britain’s Association of Independent Music(AIM) and the Independent Music Companies Association(IMPALA) signed a worldwide licensing agreement with Napster this week. This authorizes Napster to use thousands of tracks belonging to hundreds of independent labels across Europe.
In a printed statement, Shawn Fanning said, “Independent artists and labels have always been the trendsetters in music and the music business. I’m grateful that they are now showing that leadership when it comes to using technology to make music more accessible.»
Hank Barry added, “Later this summer, the new Napster will launch to the benefit of artists, labels, and consumers alike. Independent artists who record for the labels represented by AIM and IMPALA will be the first to benefit, thanks to the forward-looking leadership shown today.” (27/06-01. Doug Wyllie, Gavin.com)
-Friday 13th of July:Napster settles out-of-court with Metallica and rap star Dr.Dre Chief executive Hank Barry described Metallica’s lawsuit as “a courageous…and principled approach to the protection of its intellectual property. They brought to our attention essential artist’s rights issues which we’ve addressed in our new technology,” Mr Barry said.(www.ananova.com)
At this time Napster remained out of service to comply with the latest ruling that it needs to show that it can prevent all users( 100%) from downloading copyright material. And, the company failed to ever become a legitimate music service and changed hands through a couple of acquisitions. In 2022, the Napster streaming service was acquired by two Web3 companies, Hivemind and Algorand.
Clearly this territory is no longer a ‘wasteland,’ but rather more like a jungle with branches that intertwine and merge, but the willingness to harvest and cultivate the «land» with new technology led to streaming companies like Spotify, Tidal, Deezer etc. Napster paved the way for a sea change in music distribution. A change that washed away the music label’s control over format and distribution. For better and worse.
