A few months ago while I was in San Francisco I turned on the morning news and heard about a rally that was going to be taking place that day at the headquarters of the creators of Napster.  One of the leaders of the rally against the online sharing software was none other than Lars Ulrich, the drummer for the popular heavy metal band Metallica. The story contained quotes from Ulrich complaining that Napster was allowing people to steal from Metallica and thus take away their hard earned money.  I was in the area that day so I went ahead and watched some of the rally out of more than a passing interest as I thought that here marked another one of those pivotal moments when something was about to change in a significant manner.

For those of you living in a cave for the last few months, Napster (http://www.napster.com) is a freely available software product that is tied to an also free online service that allows users on the Internet to easily share music with each other.  Nothing in the software itself expressly promotes the copyright infringing activity of sharing music to which you don’t own the rights, that is to say that Metallica CD you just picked up at your music store.  The software and the service are agnostic to the activities of the users, allowing users to commit crimes to their hearts’ content, but also enabling users to share music that an artist or individual does have the right to distribute.  So why is there all this uproar against Napster in particular?  I believe the answer lies in the fact that Napster has been successful and that the industry attacking them is just upset that they didn’t get control of the process and the business first.

I recall not too many years ago when the compact disc was just starting to be introduced to the general public.  Record companies were up in arms then about the fact that since the quality of the audio on a CD was so high that is would better facilitate bootleg recordings.  Envisioning a legion of fans making cassette copies for fun and profit the industry cried, “something must be done, we cannot allow our profits to be affected”.  Not much attention was given to the rhetoric and as many expected people indeed did make and share copies of their favorite artists as has been done for years and in spite of this the recording industry still made billions.

I think we all can agree that the recording industry has always been a greedy machine.  Not that that’s necessarily a bad thing.  Heck, we live in a capitalist society and the best way to increase your capital is to keep some slacker from giving away your goods and services for free.  But has that greed gone too far and blinded the industry to the possibilities behind new technology because they want to maintain control over the status quo?  I think that the current lawsuit being brought against five of the biggest recording companies by twenty-eight states alleging that the industry is involved in price fixing shows clearly that they aren’t always thinking things through for the benefit of consumers.  In this specific instance, the industry was going to limit marketing dollars to retailers that attempted to lower the prices of CD’s below a certain limit. By discussing this as a consortium and ‘agreeing’ to the price instead of just acting individually in competitive manner the recording industry was in effect causing consumers to pay more for music.  This is exactly the type of monopolistic attitude that forces many to have little sympathy for the recording industry when they cry ‘lost revenue’ because of something like Napster.

So, I think we can all agree that the lawyers representing the recording industry probably don’t have the consumers best interests at heart when they attack a system like Napster, an attack that is ironic when you consider that Napster isn’t the one breaking the copyright law but rather the users are.  (A point one of my lawyer friends thinks I should bring up at this juncture is that a Federal District Court found that Napster did violate copyright law by operating the service and creating a marketplace where users could ‘share’ music.  Fortunately for Napster the 9^th Circuit agreed with me, or more importantly disagreed with the District Court and suspended their injunction pending an appeal) So why not go after the users? Ah, but you can’t go after a million users.  It costs too much to bring them to court one at a time and since they aren’t a corporation with deep pockets that can be sued for punitive damages, it isn’t all that appealing for the lawyers.  Thus Napster becomes a poster child for what happens when a little guy incurs the wrath a group of big corporations by having an original idea and implementing it without their blessing.  It should be noted that even if Napster is somehow stopped from conducting its business, the point is still moot because some other technology will come along to allow the individuals to continue copying music as they have done for decades.

But what exactly is the answer?

Clearly, I think the recording industry and the artists need to embrace the technology.  One industry that I think is an interesting example of how this could be done is the Adult Content sites that are on the Internet.  Now I am not trying to condone or promote this type of material here so don’t start firing up that letter to the editor just yet.  What I want to do is take a step back from what the adult industry is promoting and instead investigate how they are doing it.  One of the things that has been amazing me for years is that people will actually pay for adult material on the Internet from one site when that same or similar material is available free from another site.  This would be like two burger joints next door to each other, one selling burgers and the other giving them away and the line to the burger joint taking money for their product is all the way around the block when the place giving the burgers away has hardly any customers at all.  I believe the secret to this success that the commercial sites are enjoying is that they offer more than just the content that you could get for free somewhere else. Added value is what I see as the secret to making money distributing music on the Internet.

If the record companies or the distributors would offer value for me to surf by their sites and buy my music on the Internet over and above what I could otherwise get by simply downloading the music somewhere else I would be the first in line with my credit card.

Though we still have a long way to go, some successful examples of this concept are already beginning to pop up. Amazon.com (http://www.amazon.com) a company of which I have been a customer for a few years is continually adding services that I use nearly everyday.  Their search feature allows me to find books and music easily and when I find what I am looking for they even recommend similar artists and authors so I get the chance to experience something new. Another example of a value add I think will begin to become more mainstream is the concept behind companies like EZCD (http://www.ezcd.com) that allow you select music from various artists from which they will produce a custom compilation on CD and ship it to you.  Once companies like this make it easier to use the CD burners that are in almost everyone’s computer these days they will have a product that will sell like hotcakes.

What the recording industry and its artists need to realize is that people will always ‘share’ music.  They need to quit complaining about new technology and find a way to provide us with products and services we will line up for.

One interesting footnote to this story is Lars Ulrich the previously mentioned drummer for Metallica and his public rants about how he is being ripped off by consumers sharing copies of his music.  In the liner notes for the Metallica’s CD “Garage Incorporated” James Hetfield, the bands singer recalls how Lars used to come over to his house, hang out and make copies of records.  Hmmm…could this be the pot calling the kettle black?