15 October, 2000
No killing the Napster hydra
The internet company may lose to the record industry in court, but others will spring up to take its place, write Nick Paton Walsh and Jamie Doward
David Boies was not having the best of days. It was an August afternoon, and he was in the lounge of a Los Angeles airport, waiting for American Airlines to sort out a flight that had been oversold.
Recognised by his peers as one of the biggest-hitting lawyers in the US, Boies is used to dealing with the foibles of big business. When the US government wanted to take on the corporate behemoth of Microsoft in the anti-trust trial, it hired Boies. And after a few lengthy stints before the judge, he caused the biggest company in the world to consider breaking up.
But he could have been forgiven for thinking this airport delay was just another sign that his luck was turning. His current client, Napster, the internet company that invented a piece of software so powerful it threatened to swamp the world with pirated music, was being sued by the Record Industry Association of America (RIAA).
The case was not going well. Boies had lost the first court battle, and, with this huge challenge in the balance, he was stuck in a departure lounge. The flight was blighted by one mechanical problem after another, and they were paying people not to board.
Once finally on the plane, Boies became aware of a man repeatedly turning to look at him. Eventually, the stranger asked: 'Hey, aren't you the Napster lawyer?' Boies assented, and then his inquisitor stood up and announced: 'Napster's lawyer is on the plane.' A cheer rose among the tired crowd of passengers. For the first time that day, perhaps, Boies knew that, even if not in the legal sense, he was backing the winning side.
The court battle between the reactionary RIAA and the copyright-insolent Napster is set to reach its climax within the next couple of weeks. Whichever way the judgment goes, though, Boies's airborne experience is as clear a sign as any that the war is already lost for the RIAA.
Three things are clear about Napster. The first is that it lets anyone copy and share MP3 files - files that use special compression techniques to digitise music so that it can be downloaded over the internet - with alarming ease and at virtually no cost. The second is that many of these duplications or 'exchanges' break time-honoured copyright rules, the laws that ensured the artists got their royalties when the record company sold their music. The third is that people love it. More than 35 million people are now fully fledged converts to the church of Napster. And, after years of paying through the nose for CDs, they don't mind breaking the law to visit it.
It has divided some of the biggest names in the music world. Anti-Napster band Metallica have criticised their fans for enjoying the service too much. The Corrs are also in the anti-Napster camp. Radiohead, however, were far more sanguine when their latest album, Kid A , popped up on Napster prior to its massively hyped launch. Perhaps Radiohead's stoicism is the best way to deal with Napster.
The court case may eventually force Napster to shut down, but it has spawned a host of imitators who are not going to disappear. In fact, the International Federation of Phonographic Industries estimates that there are currently at least 25 million illegal music files on the internet, producing up to 5 million downloads every year.
Take Gnutella, for example. Gnutella is basically the internet's answer to Frankenstein's monster. It was developed as an unofficial project by a team of programmers at America Online who released it onto their website in March, only to realise the consequences of what they were doing and shut it down 24 hours later.
Too late: the Gnutella code was out in the wild wild web and significantly it was a serious improvement on Napster. Unlike its predecessor, Gnutella doesn't have a central data base. This is crucial. Napster's central catalogue of music directs users to various sites where they can download records of their choice. Gnutella, however, constructs a labyrinth of virtual private networks which means there is no one point of reference - making it almost impossible for the music industry to kill it via legal action.
'There's no one body hosting the index, so there's nobody the industry can sue. It's extremely difficult to prevent Gnutella from existing,' said Jay Marathe, head of consulting with technology investment firm Durlacher.
Significantly, Napster, too, is using the index argument as a defence. The company no longer pools music on a centralised database, only directions as to where to find different artists located on various servers in cyberspace. Napster's critics, however, argue that this index is clearly designed to enable people to pirate music.
The music industry is not the only business sector that is watching the Napster case with great interest. Scour.net and DIVX, two daring deviants to Napster which allow users to download film and video clips, are currently attracting an enormous following.
The music industry now tacitly accepts that, if Boies has to retire a beaten man, another Napster variant is likely to spring up and take over the mantle. In a sign of weary recognition, Paul Russell, head of Sony Music Europe, conceded that it would be possible to accept the likes of Napster - if it used its online advertising revenues to pay and promote artists.
'If they came along and said, "We are smarter than you. We are going to sign up artists and we are going to invest in their careers and we are going to put their music up and invest in their careers" I could live with that,' Russell said earlier this year.
But the real challenge for the record labels is to create a viable online alternative to the likes of Napster which, while never being able to kill online piracy, will prevent it from dominating the industry.
The future is not totally gloomy. After all, the record able audio cassette didn't kill the LP or the CD. For similar reasons the online pirates might not end up ruining the music industry.
'At present it's very difficult to find the tracks that you want using Napster. It's often very slow, the names of the artists are sometimes wrong, it sends you to hard drives that are not that reliable. If I wanted to create my own compilation of tracks it's a long, hard slog. If the music industry could offer these sort of improved services, I believe that people would be willing to pay for the service,' Marathe said.
But so far the music industry has been slow to react, choosing simply to swat the pirates with legal action. This is not a viable strategy for the future. The major record labels know that, whatever the Napster court case ruling, the judgment will ultimately change nothing. Other sites will always spring up to take its place.
It may well be that Napster is heading for an early demise. So what? Long live Napster.
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