As it turns out, the free-music revolution may be ending before it really began.
The movement that sought to transform the record industry by distributing released recordings for free–along with an easily accessible selection of unreleased rarities and “bootlegged” recordings–appears to be in its death throes.
Free-music standard-bearer Napster, enmeshed in lawsuits by record companies, last week sought to save itself by agreeing to become a for-pay, subscription-based service by joining with one of its adversaries, German media company Bertelsmann AG. Bertelsmann owns the major record label BMG and a vast catalog of music ranging from Duke Ellington and Elvis Presley to the Dave Matthews Band and Christina Aguilera.
Like supply-side economics and the democracy movement in China, Napster and its free-music brethren have confronted forces too powerful to overcome–copyright laws, fierce challenges from outraged artists like Metallica and the financial muscle of the recording industry.
As dramatic as the turnaround for Napster is, however, the reaction from many users and industry observers seems to be one of resignation rather than outrage.
“It’s clear that this is the end of Napster,” said Michael Robertson, founder of MP3.com, which has also endured copyright suits from the major record labels. “If you want to start charging people to go to a baseball game and you start putting up ticket booths and turnstiles, you’ve got to close that big gate next door that allows people to come in for free. And that means shutting down Napster and creating something new. And what is that something new? A centralized subscription music system.”
A primary free-music alternative to Napster called Scour, also facing lawsuits from media companies, followed Napster’s Tuesday announcement a day later by agreeing to sell its assets to a for-pay online company with financial backing from the recording industry.
What’s most surprising about these events, industry observers say, is that many Napster and Scour users say they believed all along that the free-music gravy train had to end.
“Five years from now, it’ll be a footnote,” said Brian Drake, 27, an information systems consultant in Shawnee, Kan., who has downloaded hundreds of songs from the Napster site. “People will remember it as, `Wow, I can’t believe they got away with it for as long as they did.'”
Moreover, say some users, they’re glad Napster hopes to survive by becoming a for-pay service.
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“I would pay,” said Shelby Melban of Phoenix, who developed a Web site aimed at helping those banned from Napster regain access. “I’ve tried using other programs, and none of them compare. Napster allows easy access to a vast amount of music.”
While industry experts predict that free-music services will survive in some form, paid services are poised to become the accepted medium for online music delivery–provided that subscription prices stay as low as predicted. A Bertelsmann-run Napster may charge as little as $5 a month for access to its catalog of songs.
Moreover, Napster–like Coca-Cola or Nike–has become a brand that could draw those seeking quality and easy access.
“Napster is a valuable brand name,” said Anthony Berman, a San Francisco-based entertainment attorney specializing in Internet issues. “There are other services that are doing similar things. But the Napster brand name has a lot of credibility with the young demographic.”
Still, it remains to be seen how much backlash Napster will experience among its estimated 38 million users. To many, Napster symbolized an anti-establishment presence on the Internet–a cyber-age version of home tape trading where users could exchange songs with one another. Now, it appears headed for a radical makeover, as it partners with an industry under fire for everything from gouging consumers on CD prices to stifling artistic creativity.
What’s more, the Bertelsmann-Napster alliance does not guarantee Napster’s survival. It still faces a copyright infringement suit from the Recording Industry Association of America, a trade group representing the major labels. Bertelsmann remains a plaintiff in the case, and Napster is awaiting a federal appeals court ruling–expected any day now–on whether it can continue operating as it awaits trial.
“The legal precedent is important to set regardless of whether Napster has a deal,” said RIAA President Hillary Rosen. “Bertelsmann wants the precedent too; they’re not going to pull out of the lawsuit until the system is licensed.”
Other groups, such as the London-based International Federation of the Phonographic Industry, insist that the suit against Napster must go forward. Jay Berman, the group’s chairman, said Napster’s activity must be ruled illegal “in order to create an appropriate climate” for other for-pay arrangements between record companies and Web sites.
Meanwhile, in a plot twist worthy of a rock opera, some of the other companies suing Napster are already alarmed that the plan to transform the renegade company would give Bertelsmann a competitive edge.
“The buzzword is stunned,” said Kal Rudman, publisher of the radio industry trade magazine Friday Morning Quarterback. “Obviously, the other labels have their connections–Warner Brothers and AOL, et cetera–but everyone’s still waiting for the court decision. So the timing of this thing stinks. Bertelsmann wants to be first and therefore the standard bearer to work out a royalty deal.”
Rudman predicts that Napster’s fall could mean the rise of other free-music programs such as Freenet and Gnutella, which allow users to share song files without a central index–and are thus less vulnerable to copyright suits.
“As hard as any of the major labels fight to contain online [free] music programs, the genie is out of the bottle,” he said. “They’ll never reverse this. The fans demand it. It’s like cocaine.”
Yet other industry insiders see Napster’s transition as a sign that the heady days of uninhibited song-swapping are all but finished.
“We considered the ultimate conclusion to be inevitable,” said Howard King, attorney for the hard-rock band Metallica. “There’s been a recognition by Napster, off the record, that they were infringing copyrights–and that if they didn’t do something about it, they were going to go out of business.”
Still, some of the most prolific consumers of Napster’s free recordings say they are willing to subscribe.
Rick Reese, 24, found Napster so user-friendly that he figured out how to get himself readmitted after he was banned from the site and forced to try others.
The customer service representative from Des Moines, who has garnered more than 2,200 songs for his Napster library over the past few months, said he’d be willing to pay $20 to $50 a month for the privilege.
At the same time, any agreement to turn Napster into a for-pay service is likely to have casualties. Those who download music not available in stores–such as live music or songs not on a commercial album–feel certain that they won’t be able to get the material on a pay version of Napster. The reason? Many of these songs are unauthorized “bootlegs” that Bertelsmann would not distribute.
“Not everybody’s doing it just to get free music,” said Stephen Durgan, 29, of Lindale, Texas. “It has a lot to do with appreciation of the music and getting material you can’t get in the store. I like the spontaneity of live music. A lot of times they won’t play a song the same way twice.”
Judson Powers, a sophomore at Clemson University, also wonders about the fate of independent music under the agreement.
“Napster was originally developed to support independent artists. If all the record labels support it,” he predicted, “they’ll divide the money by tracking which artist’s songs are downloaded. That doesn’t leave a place for independent artists.”
There is, of course, still grumbling among Napster users about the recording industry’s heavy hand. Though many users appear willing to pull out their wallets to the Napster service, they’re not especially happy about it.
“I don’t mind paying a fee; however, I hate the idea that even that money won’t be going to the artists, it will be going to the record labels,” said Angee Wagner, 23, a social worker in Oklahoma City. “To me it is not about getting the free music. I think instead it was more of a revolt against the record companies and the prices of CDs.”
At a minimum, some observers praise the deal as a sign that the often-hostile tug of war between major record labels and Internet innovators may be headed for a truce.
“It’s certainly nice to see a major label not saying, `Let’s sue everyone into the ground,'” said Stanton McCandlish, advocacy director for the Electronic Frontier Foundation, an Internet-oriented civil liberties group in San Francisco. “They do want to play ball, even if they want to change the rules of the game.”
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