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Buzz: Shutdown
Is the Napster free-for-all finally over?
By ERIC ELLIS
July
27, 2000
Web posted at 3:30 p.m. Hong Kong time, 3:30 a.m. EDT
Quick! Boot up Napster and download as many songs as you can. You've got until midnight Friday to do it -- while it's still legal. Yep, the Napster MP3 free-for-all is over. For the time being at least. Despite the best efforts of the same legal team that had Bill Gates for breakfast in the recent Browser War case, the start-up was today handed an injunction by the U.S. District Court to stop enabling computer users to duplicate copyrighted music over the Internet.
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It's a big win for the recording industry establishment, which brought
the case. The injunction takes effect Friday, and you can rest assured
as news spreads around the world, that Napster will be the most-visited
site on the Internet for the next 48 hours.
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The injunction covers all copyrighted recordings of a dozen major record labels, which means about 90% of the music market. The case is not yet won, though. This is simply an injunction, but it's not a good ruling for Napster, which has already announced an appeal.
Napster's pragmatic CEO Hank Barry is suddenly talking of sharing royalties with artists like Dr Dre and Metallica, who have led the campaign against Napster. But with the legal momentum behind the establishment, it looks like curtains for Napster. Or is it? Napster may eventually go out of business -- the industry is after damages for the millions of free tracks already downloaded -- but its arrival has fundamentally changed the music landscape.
Legally, the U.S. ruling pertains only to the U.S., so there is little to stop Napster setting up shop in Canada, which has a spiky history of thumbing its nose next door. O.K., recording companies have big operations there too, and the media industry last year successfully put another cheeky start-up from Toronto out of business that was streaming network TV shows online without getting permission. So Napster can set up shop somewhere else, where American
law is considered an ass. Like Iran. But it's unlikely Shawn Fanning, the nerdy 19-year-old who devised the Napster platform, is about to suddenly become a friend of Tehran's mullahs.
The world wide nature of the Web, however, makes this sort of thing very difficult to police. And teens and 20-somethings are proving extremely inventive these days. For every Napster, there are a dozen start-ups out there like it, some like Freenet of the U.K., which come with a philosophy that all information should be free.
Media companies hate that kind of talk. But the music industry is forever changed, which it seems to recognize. Said Cary Sherman, general counsel for the Recording Industry Association of America: "Frankly, now that the court has spoken and the rules have been made clear, it paves the way for negotiations to see if there's a business model that suits everybody."
The Napster ruling follows the settlement reached with MP3.com, an agreement that was driven by the recording industry. The two rulings will be closely watched by other forms of media -- like in Hollywood -- which is becoming increasingly worried about web-delivered digital DVDs.
While what happened in the San Francisco District Court today is bad for Napster, it's also a wake-up call for the media establishment to adapt their distribution systems for the Internet Age, or spend most of it in the courtroom.
Eric Ellis is the Southeast Asia and Technology Editor of the
regional finance portal AsiaWise.com
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