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salon.com > Technology Feb. 3, 2000
URL: http://www.salon.com/tech/feature/2000/02/03/napster

MP3 free-for-all

The tiny Napster is shaking the music industry to its foundation.

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By Janelle Brown

Shawn Fanning looks like your typical 19-year-old kid -- in a
long-sleeved T-shirt and a University of Michigan baseball hat, he's
unassuming and soft-spoken and a bit reluctant to make eye contact
with the journalist grilling him across the table. Just last summer he
was a college freshman at Northeastern University majoring in computer
science, and hanging out on IRC in his free time. Napster was the very
first Windows program he ever wrote: He had to buy a book to figure
out how to code it.

Today, Fanning is surrounded by the chaos and bustle of his new
start-up, also called Napster; he's dropped out of school to work full
time on it and he's been suddenly enveloped by a seasoned CEO and
layers of vice presidents and managers who are scurrying about trying
to invent business models and marketing strategies and revenue streams
for his barely-in-beta product. Napster the software program -- a
downloadable application that lets users temporarily turn their
computers into servers for the purpose of swapping MP3 files -- is
growing faster than anyone could have imagined. To add to the
excitement, Napster the company is now embroiled in a lawsuit with the
notorious Recording Industry Association of America.

Being the founder of the controversial music start-up of the year has
to beat freshman English.

Despite its rather humble beginnings as a college freshman's software
project, Napster represents a new paradigm in online music
distribution -- much like its predecessor MP3.com, which is also
embroiled in a lawsuit with the RIAA. Barely six months since
conception, the quirky Napster, built by two music-loving teenagers
and their energetic CEO, is already causing a ruckus in the online
music space. If the company manages to survive both its growing pains
and its lawsuit, Napster could well turn the entire music industry on
its head.

"Everyone looks at Napster and goes, 'Holy shit!'" enthuses CEO Eileen
Richardson, a vivacious former club diva with burgundy-tinted curls.
"The implications of it are tremendous and far-reaching. The recording
industry has been a highly controlling industry -- it controls
distribution, and it even used to control production. They now see a
loss of control, they don't understand the Net or technology, and so
when someone is fearful or scared the thing to do is say, 'We are
going to sue you.'"

The Napster world headquarters is scattered about the top two floors
of a concrete box of a building in sleepy San Mateo, Calif., 20
minutes south of San Francisco. "Headquarters" is a rather grand term
for what is really a handful of tiny offices squeezed between the Palo
Alto Coffee Company and a financial advisory firm with a pretentious
name and leather decor. Napster, which has grown from two people to
nearly 30 in the last few months, is taking over offices as they
become open in the building.

The decor is pure start-up chic: Blank whitewall adorned by a few
Christmas cards, hand-scrawled notes and a desiccated floral bouquet.
There are maps on the wall with little flags pinned to cities across
the United States. "What do the flags represent?" I ask Brandon
Barber, a senior product manager at Napster. He gazes at the map
blankly -- it's probably the first time he's seen it -- and laughs.
"They are still here from the last tenants." The conference room also
houses the office microwave; while I'm chatting with Barber, the vice
president of finance wanders in and starts eating her Lean Cuisine TV
dinner.

Napster has been in these offices for just a few months. Fanning and
co-founder Sean Parker, another college student whom he met on IRC,
developed the concept of Napster last summer. Then, at the
encouragement of Fanning's uncle John, the two began coaxing money out
of their friends and family. They eventually met Richardson, a Boston
venture capitalist with 10 years of experience in the tech industry,
who, seeing the growth potential of the project, came on as CEO and
immediately moved the two students out to San Mateo -- on the edge of
Silicon Valley, where the big money is. The teenage founders are now
buried in mid-level engineering and biz dev positions, while the
"adults" Richardson has since hired officially run the show.

The fact that Napster is still in beta hasn't prevented the product
from spreading quickly. "Our real significant metrics aren't public
yet, but I can say that our user base is approaching being the fastest
growing community in the history of the Net, including Hotmail," says
Barber. Guesstimates of Napster's user base range from the thousands
to the hundreds of thousands and on up into the millions; a more
accurate gauge of the site's buzz is probably the sheer number of
people who are talking about it, and the fact that everyone who uses
the program seems to love it.

"I like Napster because I can listen to cool music and get music I
couldn't get through other channels and share it with other people.
It's a fun thing to do," says Stanford senior David Weekly, a Napster
fan who was recently drawn into a mini-controversy when he puzzled out
the protocols that make Napster work and published the results online,
to the dismay of Napster executives. He uses the service up to 10
hours a week to swap electronica and Mahler songs and staunchly
defends the practice: "Sharing music is pretty core to what makes
people people -- it's not an evil reflex to want to share music you
love."

As a Napster user, you designate a folder on your hard drive, where
you will store the MP3s you're willing to share with the world. Then,
every time you turn on Napster, your computer temporarily becomes a
server, allowing other Napster users to download the MP3 files in that
folder. The minute you log on, Napster will send a list of the songs
in your directory to its central servers; users can then search the
master Napster list for individuals who have the song that they want
to download. Napster doesn't store the music on its own servers, but
simply matches up the IP addresses of the downloader and downloadee.
There are no broken links, server glitches or unrelated results; the
database of available songs is astoundingly deep.

"Napster was built on a frustration with unreliable, Web-based search
engines like Scour.net and mp3.lycos.com and just the desire to share
music," explains Fanning. "There was no good way to share musical
content with people."

Napster, in contrast, works so well that it's already clogging the
bandwidth of universities, where those first-adopter college kids
live. Earlier this month Hofstra University in Hempstead, N.Y., asked
its Internet service provider, Applied Theory, to try to limit the
amount of Napster traffic going through its pipes. Apparently students
were leaving Napster on all night long, downloading hundreds of songs
and hogging all the bandwidth. Bob Riley, director of network services
at Applied Theory, explains, "Napster isn't doing anything illegal, or
anything that the Net wasn't designed to do. The problem is that it's
one of those killer apps that people talk about, an invention that
consumes resources and is too popular."

Fanning says that IRC, his old stomping grounds, was the program's
biggest influence (though Napster also bears a striking resemblance to
underground shareware programs like Hotline). Staying true to the old
IRC adage of share-and-share-alike (as in don't download something
unless you are going to upload something else), Napster's open
structure means that there are no "lurkers." Finding one Napster user
with similar tastes often leads to a treasure trove of new and
interesting music you'll like; everyone who uses Napster, it is
predetermined, is willing to share.

Despite the rapidly growing company built around it, Napster still
feels much like an underground MP3 community. "Napster feels a little
like the first days of MP3, when no one was trying to hide anything
but was just saying this is really cool," explains Weekly. "It's sort
of like those glory days -- here's all the music, we're not ashamed to
share everything."

Of course, Napster is also rife with piracy. Napster staffers insist
that the program was intended to be used by artists and fans. Fanning,
a novice musician himself, says he envisioned indie bands making their
MP3s available for download without having to go through
intermediaries like MP3.com or Emusic. But the reality is that most
people are using Napster to swap illegal MP3 files -- ripped (copied
from CDs into MP3 format) copies of 'N Sync tracks, the latest Alanis
Morissette tune, the new album from Korn. This does not make the RIAA
happy, and as a result, the industry trade group is taking Napster,
Fanning and his entourage to court.

Napster, of course, downplays the fact that most people use its
service to swap illegal MP3s. Richardson focuses on the community and
marketing potential for the product. "One opportunity for us is
community, adding ICQ [instant messaging] features so that while you
are downloading a song you can say to the guy, 'Gosh, I can't believe
you have this!' People are so passionate about music, and it's
inherently viral, it's a natural fit for this community stuff," she
explains. "But also, since we know you as a user and can see what you
are downloading, we can feed up to you, through collaborative
filtering, a band you've never heard of that you have a 99 percent
chance of loving." Record companies could use this to promote new
bands, she says.

The recording industry isn't buying this. In December, not long after
the beta release of the product, the RIAA filed suit alleging that
Napster is operating as a haven for music piracy on the Internet. The
RIAA was unwilling to comment for this story, but infuriated press
releases and statements from the group's officers claim that Napster
is promoting copyright infringement: "Napster is similar to a giant
online pirate bazaar: Users log onto Napster servers and make their
previously personal MP3 collections available for download by other
Napster users who are logged on at the same time. Napster provides its
users with all the facilities and means to engage in massive copyright
infringement."

Napster's response is that the onus for honesty is on the users, not
the network. According to Richardson, Napster is like an ISP,
protected under the Digital Millennium Copyright Act: It isn't the
company's fault that people use its service to exchange illegal files,
just as it wouldn't be AOL's legal responsibility if terrorists used
one of its private chat rooms to plan a bombing. And it's true that if
Napster's users were innocently exchanging MP3 recordings of their own
invention, the RIAA would probably pay no mind to Napster whatsoever.
However, those college students would rather swap chart-toppers -- and
it's easier for the RIAA to go after the network than tracking down
the hundreds of thousands of individuals who are exchanging a pirated
song here and there. Although they're doing that too.

According to Robin Gross, a staff attorney for the Electronic Frontier
Foundation, Napster may find a precedent in the Betamax decision -- a
1984 case in which the motion picture industry attempted to sue Sony,
the makers of the first VCR, for enabling copyright infringement. The
Supreme Court decided that technology can't be outlawed merely because
some of its uses are for unlawful purposes. Adds Gross, "There are
substantial non-infringing uses for this [Napster] technology -- this
is a technology that allows people to share public domain works with
each other, or there might be copyright holders who don't mind sharing
their works."

Being in the RIAA's bad graces puts Napster in good company: An RIAA
lawsuit has become almost a coming-of-age ritual for online music
companies attempting some new form of digital music distribution. The
RIAA has in the past sued up-and-coming companies like Diamond
Multimedia, which built the first commercial portable MP3 player; it
also sent threatening letters to MP3 search engines like
Mp3.lycos.com. In all cases, the RIAA has had to settle.

In late January the RIAA filed a fresh lawsuit, against MP3.com for
its new My.MP3.com service.

My.Mp3.com launched in a beta version just a few weeks ago, as an
extension to MP3.com's digital music download service. Featuring a
nifty little software application called Beam-It, My.MP3.com lets you
access CDs you already own as digital files online. (You put your CD
in your computer's CD-ROM drive and the Beam-It software recognizes
that you own the CD and transfers its own corresponding MP3 files into
your online account for your use. Your actual CD acts sort of like a
license.) The idea is that My.MP3.com will become your music locker --
a central location to keep all those memory-hogging MP3s, so that you
can access them from any computer in the world.

The RIAA's lawsuit here hinges around the invisible machinations
behind Beam-It: Whenever you "beam" a CD into your account, someone at
MP3.com is actually running out and buying that CD and ripping it for
you. MP3.com has amassed and ripped a collection of 45,000 CDs to have
at the ready.

The problem, says the RIAA, is that MP3.com has no license to that
music, and no right to build that database. As RIAA president Hillary
Rosen put it in an open letter to Robertson, "It is not legal to
compile a vast database of our member's sound recordings with no
permission and no license. And whatever the individual's right to use
their own music, you cannot exploit that for your company's commercial
gain."

Michael Robertson, in response, says that the new music distribution
system is perfectly legal: No one is getting access to those digital
music files unless they have already paid for the CD. He has also, as
is typical with Robertson, twisted the lawsuit into a grass-roots
fight -- it's not one company vs. the RIAA, it's you and your right to
listen to your music wherever you want to vs. the Big Bad Record
Industry.

"We think it's a clear issue of consumers' rights here," Robertson
explains excitedly. "You don't have to pay more royalties to listen to
a CD in your living room; why should you pay more royalties to listen
to your CD in your living room on your computer?"

And, to an extent, he is right. If I own a CD that I already shelled
out $16 for at my local Virgin Megastore, why shouldn't I be able to
instantly store that CD online? MP3.com is merely turning that process
-- of ripping a CD into individual MP3 files and then uploading those
files into an online account -- from an hour-long process into a
two-minute process. The end result is the same.

The RIAA, again, is not buying this argument -- or, perhaps it's
looking for a way to wrest control away from these upstart companies
that threaten to change the way music is exchanged. "This is a new
architecture that the record industry doesn't control; and any
business model or delivery model that they don't control is a threat
to their business," explains Gross of the EFF. "If you can use
copyright law as a reason to squash your competition, then why not?"

Although the Napster and MP3.com cases are built around different
legal questions, the lawsuits are rooted in the same record industry
insecurities. Both lawsuits, when it comes down to it, are arguments
about distribution -- My.Mp3.com and Napster both enable unique new
ways to exchange and build libraries of digital files; they are means
of distribution that didn't originate in the record industry. Both
companies are rooted in grass-roots ideologies that want to give
control to consumers, not the record companies.

"It's about power," Robertson says, drawing parallels between his
company, valued at well over $1 billion, and little Napster, which is
looking to follow in MP3.com's footsteps. "It's about who's going to
have control. Distribution is one part of it, but there's a macro
issue -- who's going to interface with the consumers and deliver the
goods to them?"

"People are naturally passionate about music, naturally want to share
it; artists naturally want to create and share their music and find
their fans: That's what music is all about," enthuses Napster's CEO,
Richardson. "Now we have the Internet -- why can't we do some of that
there? But everyone in the music industry is coming in and saying,
'No, these are the rules, and I own the music.' They're just
pretending to be about copyright," she says.

Richardson is confident that Napster will win its lawsuit; the case
will probably be drawn out for much of this year. But even if Napster
does win, the company will have to adapt and change. Unless Napster
wants to remain a recording industry pariah, it will have to find a
way to ease the record labels' fear that kids will stop buying CDs
because they can get the same music free as MP3s on Napster.

Richardson is fully aware of this. "Our vision is that we are a
marketing mechanism, a way for people to learn about music that they
otherwise wouldn't be able to," says Richardson. "We have a long way
to go until we figure out the answer to that question [of security]:
Whether it's watermarking music, or just being able to hear part of a
song, or whether the labels will finally say, 'OK, this is just
marketing,' and understand that their market is going to grow $40
billion to $100 billion. We don't have the answers; we're just trying
to stay in business."

There is a chance the RIAA will win its suit, of course. But even if
Napster is shut down by the RIAA before it even has a proper launch,
the concept isn't going to disappear. Kids like Fanning, who are more
concerned about building cool music communities than corporate
battles, aren't going to let this idea die. As Robertson puts it,
"This is all inevitable -- it's universal around Net people that this
technology is unstoppable. Even if you were to win against Napster or
Mp3.com, the future is still coming and changing."

The real question is whether the record industry will itself try to
adapt -- and, instead of trying to derail the train, will jump on and
take a ride.
salon.com | Feb. 3, 2000

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About the writer
Janelle Brown is a senior writer for Salon Technology.