August 2000      An Opinion Piece By Charles Anthony The battle between the record industry, represented by lawyers for the Recording Industry Association of America (RIAA) and Napster, the file transfer software providing website that is the plaintiff in the RIAA's lawsuit, brings to a sharp focus, the dramatic paradigm shift the Internet demands of those who wish to thrive in the digital marketplace. The recording industry won't face up to the fact that the sort of file sharing system, the model that Napster is using, is just second nature to the distributed system that is the Internet. Failing to perceive the benefit, the industry has gone and shot themselves in the foot, litigating against a company that is developing the model for business they will need themselves in order to realize the potential of the Network; they should see a potential partner or an innovative rival instead of the demon that they make the file sharing sites out to be. The recording industry won't face up to the fact that the sort of file sharing system, the model that Napster is using, is just second nature to the distributed system that is the Internet. Peer to peer file sharing is what the Internet was about from AARPA days. Way before even a World Wide Web or web browsers, file transfer via ftp, and the University of Minnesotas own gopher program, allowed academics to share files across the distributed system that linked the Universities and other research centers around the globe. The advent of a graphical mark up language, the creation of the Web Page, Mark Andreeson's Mosaic cum Netscape Browser and the decision to open the network to all comers, opened the door for the eventual commercialization of cyberspace, and in just over 5 or 6 years great advances have been made with; the integration of digital audio and video; in providing higher bandwidth to more and more businesses and individuals; increasingly sophisticated peer to peer instant messaging and file transfer programs that are revolutionizing how we communicate, share pictures of the kids with grandma or of the vacation with friends. Industry has to realize that to utilize this, to capitalize on this you can't turn the system around, break it or bottleneck it, centrally control or censor it; file sharing, even piracy are a fact of life in the digital age. You have to come up with a method that utilizes the Net as it is, as it works in practice not theory, as the people who use it and make it will it to be. The defense for Napster argues, I think convincingly, that the issue had already been settled when the same claims of harm against the industry were heard with the advent of VHS and beta video tapes and by extension, audio cassettes. Back then the industry fought and lost a battle over the right for you or I to tape a copyrighted television program , movie, or music program we enjoyed and then share it with a family member or friend. The courts ruled, rightly so , that since no money changed hands, the taping of these intellectual properties, for non-commercial purposes was not a violation of copyright laws. Napsters lawyers argue that that is exactly what Napster users are doing only difference being that they do it online. They are taping and sharing as any hobbyists or enthusiasts of anything else may be prone to do, only for them they have the luxury of digitizing and then sending their favorite audio or video to a likeminded individual over the network. Since no money has changed hands how can the industry claim a loss? No loss no violation. In addition the industry ignores the research that indicates that contrary to their fears, Napster represents a boon to the industry. In essence the RIAA is attacking the best thing to happen to music promotion since FM. A study by Jupiter Communications indicated that Napster users buy more music CDs on average. The Jupiter analysis went on to say that users of any online music file sharing system, like Napster or Gnutella, are 45% more likely to increase their overall music purchasing than non-users. The overall conclusion of the study, in Jupiter's analysis, was that the recording industry should move from a position of litigation to one of adoption and incorporate network music sharing in their distribution channels. According to a Newsbytes report on the Jupiter research, if the music industry were to let players like Napster stand, it would drive incremental sales. But, if the industry partnered with networked music-sharing technology companies, the benefit would be exponentially greater. In other words, 'get with the program, this is how things work on a distributed network. Don't fear what you don't understand and can't control.' The situation demands a new way of looking at promotion and distribution, but it isn't hopeless. Contrary to some current arguments this isn't the end of record companies; at least not all of them. Those that learn to use the new technology and understand the appeal that leads an individual to peer to peer systems, will be the ones to survive and have a place in the electronic distribution of music. Stars aren't made by just putting an MP3 file online somewhere anymore than a successful business gets started just hanging a pretty sign above the door. The record companies will always have a role turning the wheels of the starmaker machinery as anyone serious about commercial success knows. But to continue , they have to embrace the technology,develop their own partnered channels; understand the meaning of 'value added services' on the web and provide those services if they are going to merge into the traffic flow and do commerce on the Network. Again from the Jupiter study, according to Newsbytes, "the trump cards for consumers' adoption must address two features: guaranteed file quality and virus protection. ……In its research, Jupiter said that consumers identified these two features as most important in their decision to pay for a music subscription service above other features such as discounts, newsletters and deep artist information. The record companies have the money, the creative talent and the technical resources to create partnered mega sites, that would provide speedy, high quality, digital downloads of popular artists with an adjacent online boutique containing a myriad of merchandised products featuring band logos, photos and artwork. They should be thanking Napster and their investors for paying to pave the way for them. Take a look at Napster, see what it is and isn't and you should know what you need to do as a company, as an industry to go one better and survive. That's progress, that's capitalism so let the RIAA stop whining and litigating about it and join the revolution. Charles Anthony is the former production manager of Computer Buyer's Resource, the founding Editor and Publisher of the first free regional Internet print magazine InfoNation and the current Editor of iBiz. He can be reached at edit@ibiz.net iBiz iBiz Table of Contents