The Myths of Napster
Let's stop repeating the same misinformation.

[I recently got a lengthy and interesting email from someone who read my original post. This updated version includes their comments and my rejoinders (if any). New material is in italics at the end of each Myth/Reality couplet. Updated 4/4/01.]

I just finished reading my thousandth article on the lessons of Napster. It doesn't matter who published it. Each new telling has become boringly the same. And wrong.

Myth: Copyright is for the benefit of the artist/creator.
Reality: Two problems here: (1) the intended purpose in creating Copyright laws was to protect the public's interest, not the author's. The reason Copyrights expire is to make sure that information can't be hoarded, and is eventually made available to all; (2) most artists assign their Copyright to corporations. A few do what I do, which is to put "revert rights" into their contracts, but most don't. Big acts become corporations in their own right, which is why Metallica really sued Napster. This wasn't "original artist" suing "rip-off artist"; instead, we have corporation suing corporation.
Update: The Copyright Act of 1978 stripped out most "expiration" clauses, so large media companies can now hoard information indefinitely. The suggestion has been made to Congress to again amend the act, this time with a clause that says something like "if you don't publish a work for 'x' years, you would lose your copyright protection." I wholeheartedly concur with this idea, and suggest you write to your congressional representatives in support of it.

Myth: Even if Napster disappears, the genie is out of the bottle and can't be put back in.
Reality: Really? The nature of the Internet is such that it's just as easy to build policing tools as it was to build sharing tools. If I know the digital bits on my CD tracks, I can build mechanisms to locate info streams that contain it. Of course, the next thing that happens is that the sharers use encryption to hide the bits. Fine, I can still think of three ways to guess that a stream has music bits in it, and I also have a slight advantage in that I know what the original bits were before encryption. Curiously, the toughest thing to find is when someone makes an analog copy of my music and then re-digitizes it, which leads us to the next myth...
Reader Comment: The Digital Media Copyright Act makes it illegal for anyone to snoop inside an encryption stream. The only reason Napster is a target is because they've got a central server that can be attacked (through the courts). Platforms that have no central server would be difficult to monitor and shut down.
Update: I guess my use of the word "encryption" may have caused some confusion. With files that are encoded into another format, such as CDs being made into MP3s, I don't believe the encryption clauses of the DMCA apply (I could be wrong). If a user then puts a file into encrypted form (i.e., uses a secure schema to protect the data from being read by anyone other than intended recipients), then the DCMA clearly applies, and it would be difficult, if not impossible, to get clearance to decrypt the stream. This has been a bone of contention for some time in privacy battles, with the privacy advocates arguing for unbreakable encryption and no right to decode, and the government arguing for key held in escrow and the court-ordered right to obtain "taps." Whatever the current state of law, I was arguing more on a "what's possible?" side, not on "what's doable?" level. It's clear that if Napster used encryption to protect files being transferred, that the case against it couldn't easily be made, at least not without the accuser themselves violating a law. As a copyright holder, I have mixed emotions about this issue.

Myth: It's the fact that you can make an exact copy of digital products that really worries Hollywood, et.al..
Reality: Nope. They were worried when audio tape appeared, they were worried about videotape (witness the Betamax case), heck, BMI and ASCAP are worried about bands in hotel bars that play songs written by one of their artists, which could hardly be construed as a high quality copy. Consumers have long been satisfied with less-than-perfect copies. Heck, in China, they watch videotapes of movies taken with handheld 8mm cameras in theaters. The only thing that digital adds is that pirates can create perfect duplicates that are indistinguishable from the original. Hollywood was worried about the ease by which copyrighted information can be duplicated and shared. To share music before, Johnny had to spend at least 1/2 the running time of a record to create a hissy, but decent copy of it on cassette, which he then needed to physically deliver to his friend, Jane. Now, it takes less than 1/10th the running time to rip a CD, and Napster makes it possible to physically share that with millions of Janes (and there's no media cost!). If Hollywood objected to cassette tape duplicates (which they did), they would of course object to Napster, as it lowers the barriers of sharing.
Reader Comment: I recall $1.49 being the cost to produce a CD. That might be high now. Most artists get at most $2 from the sale of the CD. That leaves $11+ to the distributors and marketeers. Record labels aren't in financial trouble (yet), but they are scared. Of course they're scared, they don't make money off of music, they make it off of distribution. Until now, they've had a lock on distribution, but the Internet, and digital file formats, changes that.
Update: Good point (that record labels make their money off distribution). Back in the 70's film companies thought that video rental deprived them of their share of the film distribution pie, since all a company had to do was buy a videotape once and rent it multiple times--the film company didn't get a piece of the rental income (and the renter got to see the movie in its original, distributed form, so we're again talking about exact copies). Eventually, Hollywood figured out ways to get back into the driver's seat, but you're correct, it was the lock on distribution that was broken and worried the studios. As for the costs involved, I consider the numbers irrelevant to the discussion. The actual cost to a record company (including artist royalties and promotion, which are costs beyond the physical duplication costs) is not totally out of line with the distribution markups. You pay more of a markup on jeans.

Myth: The recording companies are dinosaurs that are already in financial trouble, and Napster potentially hastened their demise.
Reality: Well, if you mean they're large like dinosaurs, I suppose I can allow that. But the notion that the business model of selling physical copies of music is doomed and unprofitable is shortsighted and not borne out by any evidence I can find. Radio was supposed to wipe out the record business, too, but it didn't. True, digital is a little different. Once I rip my favorite CDs--I don't have the time to rip a 1000 CDs, which is why I would pay for a service like MP3 originally proposed, but that's another myth, see below-- I have them with me in my car, in my MP3 player when I jog, and all my computers. But I still like having a physical copy around, and I think the majority of people do, too. After all, how many times have you lost the data on your computer or heard of someone who has? And let's say that physical copies do go away, who's going to sell me the virtual copy? The artist? Not likely. I'm not going to want to deal with wading through thousands of artist Web sites to find what I'm looking for. And most artists haven't the slightest notion of how to market and sell product. I can't imagine them all heading back to college for an MBA. I can't even imagine some of them hiring a business-savvy person and trusting them to do what it takes. Every bit of time spent being a business person takes away time from creating new work. The economics just don't work without distribution intermediaries. Yes, some of today's music distributors won't make the transition (just as some didn't manage the transition from record to CD very well), but the good ones will.
Update: When the final decree was set by the court and it appeared that Napster's free-for-all days were numbered, I had an interesting conversation with a friend. She told me that she had spent all weekend at the office (which had a fast T1 line) in a downloading frenzy before "Napster goes bye-bye" and cut off her supply of music. Say what? This friend makes well into the six figures a year and could easily afford to have me drive to Tower Records and fill the back of my SUV with compact disks on her behalf without denting her pocketbook. This got me to thinking again (not a pretty sight, by the way, as the steam vents out my nostrils and curls my beard). But in the end, I keep coming to the same conclusion: Napster is sort of like radio. For "convenience listening" and sampling, the ease at which you can find most artists and songs is Napster's compelling aspect. But the quality of an MP3 is compromised compared to a CD, doesn't transfer well to the home or car stereo (yet), and more easily misplaced (read: accidentally erased). Perhaps we'll see some music distributors die because they don't adapt, and some new ones emerge because they "get" the new paradigms, but they'll still music distributors in the future..

Myth: People won't pay for a Napster or MP3 service.
Reality: Sure they will. I kind of liked what MP3.com was trying to do. I own over a 1000 CDs. All I'd have to do is enter each one into my CD-ROM drive once and I'd have access to it from any of my computers from anywhere I could reach the Internet (which eventually will include my car, I'm sure). Better still, I'd get all the artist and track information in a database, making it easier to find what I want, no matter what mood I'm in. MP3.com was dead on with their idea, though the implementation had a few speed bumps and was presented to the record companies as a fait accompli.. Napster hasn't fully defined their service, so it's hard to guess whether it will serve my needs, though it certainly seems to serve others. But the point is that I do have needs (and desires) that intersect with what can be done. If dotcoms make it easy, solve my access and other problems, plus price it reasonably, sure, I'll buy into their service. And so would a lot of other folk. Is that a business worth billions? I doubt it. But it should be a profitable and sustainable business, if done correctly.