August 3 - 10, 2000
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Pandora's box
Even if the courts shut down Napster for good, the music industry has been irrevocably changed by digital downloads.
by Laura A. Siegel
At three o'clock last Saturday morning, the music-swapping service Napster was essentially supposed to shut down under orders from a US District judge. The company won an 11th-hour appeal, but its future still looks bleak. The Recording Industry Association of America (RIAA), which brought the suit against Napster, has declared victory over those who would share music for free. But actually, the decision hardly matters.
If Napster falls, there are dozens of other file-sharing programs ready to take its place -- programs like Gnutella (which has no central server and no controlling business that can be sued), Scour Exchange, Napigator, iMesh, and Freenet, which gives users complete anonymity. More than a million people flocked to one Gnutella portal for the first time in just a few days following the Napster injunction last Wednesday. And more programs are sure to follow. "It's sort of like parents when they find out kids are having sex," says Michael Bracy of the Coalition for the Future of Music, which advocates for independent musicians. "They say no, don't do this. But it's too late for abstinence."
Music is going online, and the established music industry is losing control of it. In their panic, the major labels are suing left and right. The much-publicized lawsuits, against not only Napster but also MP3.com and, now, Scour Exchange, just show how frantic the labels are. "This notion of focusing on [Napster] is a sign of the recording industry's complete and utter desperation," says Dave Marsh, a music critic and the editor of the monthly music and politics newsletter Rock & Rap Confidential. "What the record companies are asking for is prohibition until they can control the technology."
The termination of Napster -- if that's what's decreed at the next hearing, in September -- is only a short-term solution at best. The record industry can't stem the tide of free-music services -- especially those run not-for-profit by networks of individuals -- any more than the film industry was able to stop videotaping. Meanwhile, the business is flailing to catch up with the technology and co-opt it -- but so far, with little success.
Also, Matt Ashare examines the real problem with MP3s,
Douglas Wolk proclaims that digital-file trading is here to stay,
and Carly Carioli watches another community spring up on the Net
The industry has good reason to be scared. In one year, Napster has made it easy for anyone with an Internet connection to steal music on an unprecedented scale by finding songs stored as MP3s -- compressed digital audio files -- on other users' computers and transferring them to their own. More than 20 million people now use Napster, according to the company -- double the number at the end of April.
Piracy has been around as long as recorded music, but never have the technologies been so high in quality, so easy to use, and so far-reaching. People who would never steal a CD from a store happily download the same album. It doesn't feel like stealing, there's no obvious victim, and people don't seem to fear getting caught. If Napster use were to continue apace, music analyst Michael Nathanson of Sanford C. Bernstein & Co. told Billboard, by 2002 it could cost the music industry 16 percent of US music sales -- that's $985 million. As many as a billion MP3s are available through Napster alone, according to the Pew Internet and American Life Project.
And the technology is getting better still. Right now, most listeners play MP3s on their computers. But the market is growing for CD writers, or burners, which let users put MP3s on CDs. Portable MP3 players are also available, and as they become more widely used, they'll probably make digital music files even more popular. The music industry knows this: when the first player came out in early 1999, the RIAA sued the manufacturer -- and lost.
Napster claims free downloading hasn't hurt CD sales, and some musicians and merchants agree. "The more people are downloading an artist freely on the Web, the more likely we are to see a lot of sales on that artist," says Derek Sivers of CD Baby, a site that sells independent-label CDs. "People come in to buy CDs of artists they hadn't heard of till they discovered them on MP3.com or Napster." But if MP3s are sparking CD sales right now, it's because CDs are still easier to use and more portable. As technology improves, that's likely to change.
