Napster: End of the Record Biz?

[Guest]

Originally posted by stevepow:

Wow, Lee for a software developer, it is difficult to understand your view. If lots of people swapped the program "files" you develop around, pretty soon you wouldn't be making much money.

 

Not true, because the software I develop is not static. Most of the code I write for one company would be useless for another, otherwise they would just go buy (or steal) a pre-existing, off the shelf program.

 

The programming I do is "work for hire" for someone else.

 

Maybe you have something cool figured out that actually lets the Artist decide what is shared and what it paid for and I look forward to your posting or WEB site that can start a resolution to this.

 

Yes, the web site will contain some blueprints for a new economy in the music biz and the opportunity (through discussion forums, polls, and a few other methods) for others to contribute to the ideas and work toward carrying them out.

 

So, I could go into a lot of detail about why I think Napster et al are a help rather than a ripoff for artists, and how they could be even more so... but I think the web site will do a better job, so I'll just shut up about it for now and let you know when the site is active... meanwhile I'm headed out to the see the Who in concert, for which I have paid and am quite sure they are getting paid http://www.musicplayer.com/ubb/smile.gif.

 

--Lee

[Guest]

Lee,

 

I expectantly await what your website has to say regarding this issue. My main disagreement with your rationale isn't the question of if Napster et al helps or hurts artists/songwriters. There are other forms of "free" music that customers get all the time (Radio, being one of the most popular ones). My point is that Napster allows transfer of intellectual property without getting the PERMISSION of the artists and or songwriters/publishers. Permission or not, radio still pays a performance royalties through their license with the FCC. Napster pays.....??? Nothing.

 

Sure, you or any "unknown" or independent artist can happily put your music out on Napster. You may get lucky and get some attention... Heck, you may even sell a few CDs. But YOU put your music out their. YOU gave Napster permission to "share" your music. That's an entirely different thing than a well-known band (Metallica) having their music (The Mission Impossible 2 song) being available for the world to "share" before they're even finished with it! Is this the kind of permission-less, unscrupulous "sharing" that you're referring to? How can that behavior be justified?

 

I'm not trying to point you out or anything, because I do believe that Napster, in it's place and with the right "controls", royalties or licenses, is a great promotional medium that could do more helping to the music industry than hurting. But, the way that they do business now is totally counter-productive to an author/songwriter/artist/record label's right to ownership and control. And then to turn around and send out cease and desist orders to their supporters who are following their lead in permission-less reproduction of intellectual property is just a slap in the face to any thinking person.

 

Ex

 

 

 

 

 

[This message has been edited by exmun@yahoo.com (edited 09-29-2000).]

[Guest]

Originally posted by exmun@yahoo.com:

Lee,

 

I expectantly await what your website has to say regarding this issue. My main disagreement with your rationale isn't the question of if Napster et al helps or hurts artists/songwriters. There are other forms of "free" music that customers get all the time (Radio, being one of the most popular ones). My point is that Napster allows transfer of intellectual property without getting the PERMISSION of the artists and or songwriters/publishers. Permission or not, radio still pays a performance royalties through their license with the FCC. Napster pays.....??? Nothing.

 

Ex,

 

I am in favor of Napster working out licensing agreements with performing rights societies so that, if Napster is making money, the artists make money.

 

However, right now we are in a "pioneer" state in terms of this new economy. Several problems exist that need to be worked out:

 

1) Napster is not profitable yet so far as I know, and it remains unclear when and how they can ever be profitable. So, although I condemn their action against the guy with the T-shirts, I'm not sure they're in any position to ante up to the artists just yet. I think the creator of Napster's intention was to just get the infrastructure out there and demonstrate the tremendous potential of the technology as a promotional tool for artists and fans. Now we are left to deal with the legalities and the economics of the whole thing.

 

2) To that end, we don't yet HAVE the legal or economic framework to deal with this. Copyright laws need to be maintained but they do need to be changed. And the existing performing rights societies can't deal with the issue as is. In other words if somebody like Napster wanted to work out a deal where the artists can get paid, they wouldn't know who to pay, and being responsible for the payments on their own would soon bankrupt them. We (artists) need a new society like ASCAP or BMI, but tailored toward both artists and composers so they can get paid modest royalties per download in the same way that (only) composers get paid for radio airplay today.

 

But, right now, it just ain't there. That is part of the purpose of my web site, to get everybody working together on this. But as long as the copyright laws and the economic bodies don't exist yet, there is no sense bitching at Napster or anybody else. Lawmakers are who we need to bitch at, and we need to make sure we are telling them the right things as opposed to just having a knee-jerk "I'm getting ripped off" reaction.

 

Sure, you or any "unknown" or independent artist can happily put your music out on Napster. You may get lucky and get some attention... Heck, you may even sell a few CDs. But YOU put your music out their. YOU gave Napster permission to "share" your music. That's an entirely different thing than a well-known band (Metallica) having their music (The Mission Impossible 2 song) being available for the world to "share" before they're even finished with it! Is this the kind of permission-less, unscrupulous "sharing" that you're referring to? How can that behavior be justified?

 

I don't know that it can be "justified" legally, but:

 

1) It has always existed, it was just never as fast or easy as it is today. Most of us who've ever been a rabid fan of one band or another have made it our business to seek out advance releases, bootlegs, and other stuff we're not strictly "supposed" to have. And in a way it made us closer to the bands to feel like we followed the process of their recording. And it's not as if we then didn't go buy the CD when it came out. Now, there are just more of these things and we can get them faster.

 

Sorry, I just cannot sympathize with Metallica. I don't think they're losing an iota in CD sales because of Napster. And if they're miffed about fans getting bootlegs before they were "supposed" to, well waaahhh. When you choose public life, there is a price for that and part of the price is that it's hard to keep anything in your life private. Get over it. Lots of other known bands are really happy that fans already know the songs well by the time the album comes out and they perform promotional concerts and such. I recently read where the Wallflowers were cracking jokes onstage about the audience singing along with songs that weren't out yet: "You've been downloading all our new stuff from Napster, haven't you?"

 

2) There is really no way to enforce this kind of thing and it is counterproductive to waste energy trying. Napster et al would soon be out of business if they had to make it their business to enforce copyright laws on every individual who swapped files there -and the whole point of Napster is individuals swapping files.

 

Like every technology before it (cassettes, DAT's, CDR's etc.), there are people who are going to abuse file swapping. Now they just get to abuse it more and faster, but the concept is the same. Let's not spoil an extremely powerful tool for getting our music heard, by focusing on the bad apples. That would be playing right into the hands of the current music industry - whom I think most of us can agree ARE the common enemy. http://www.musicplayer.com/ubb/smile.gif

 

There now, I said I was gonna shut up and I didn't. http://www.musicplayer.com/ubb/smile.gif Oh well, this discussion is good grist for the mill, as it were.

 

--Lee

[polczspop.belmont.edu]

From my Music Business class notes (that's my major):

 

Record companies will eventually adopt the technology of Napster and its contemporaries. This will cut out the distributor and middleman retail ventures, increasing profits bigtime for the record companies.

 

The govt. has deemed internet downloads/transmissions to be public performances, so mechanical fees are due just like music played on the radio. Sites will buy mechanical liscenses to be able to legally "broadcast" music downloads. While they could have sponsors and do it for free, there is a buck that could be made, so, inevitably, a buck will be made. Most sites will probably charge a fee to download music, either a system of points per download or a monthly fee, kinda like cable.

 

This is a very interesting time, new rules and structures are forming with the changes in technology. It will definitely get interesting! http://www.musicplayer.com/ubb/biggrin.gif

 

-Steve

[Guest]

Here is a recent article regarding Napster:

 

 

ð NAPSTER, CD SALES, BLAH, BLAH, BLAH...

 

A group of Internet software and hardware firms will release a study that contradicts record industry claims.

 

The broadest survey yet on the burgeoning Web music industry found that people who sample music on the Internet via digital

downloading and other new services are likely to follow up by purchasing compact disks in stores and online. The new poll

released by the Digital Media Association, adds to a growing pool of conflicting data about what effect Internet music services are having on the recording industry. Previous surveys found use of the controversial Napster music-sharing program could hurt sales of traditional music recordings.

 

The new data are under a particular spotlight because of an escalating fight in the courts and Washington over the future of digital entertainment. The major recording companies want strong protections against piracy, and they have attacked services such as Napster, which allows users to download songs they haven't paid for. In fact, the poll is being unveiled by the digital trade association just as a House subcommittee takes up the issue of copyrights on the Internet, a key policy battleground. The Digital Media Association is a trade group that represents firms offering audio and video services on the Internet.

 

The new survey, by market research firm Yankelovich Partners, says 66 percent of all consumers said that listening to a song

online has at least once prompted them to later buy a CD or cassette featuring the song. The survey included 16,903 people

age 13 through 39 who buy and listen to some music. Music on the Web is growing rapidly, in the form of services that allow

consumers to download songs to their own computers, as well as streaming, which offers radio-style music programming via the

Internet. According to Media Metrix, the number of visitors to the top 30 Internet music sites grew 19 percent just between

November 1999 and April 2000, to 22.8 million in April, the most recent number available. Paid digital music downloading is

expected to hit $1.1 billion in sales by 2003, according to a projection by Forrester Research.

 

The survey, done during March, was sponsored by a group of Internet, software and hardware firms, as well as one unidentified recording company, Yankelovich said. The survey paints a portrait of how consumers are using the Internet music services. Two-thirds of the people polled said they had downloaded music from an online source. Three-quarters said that in the future, people will get most of their music online. Of those who were downloading or streaming music, 92 percent listen to it on their desktop computers, while just 10 percent used a portable device and 14 percent used their home stereo. More than 60 percent of them used the Internet to get to music they can't find on radio.

 

More Likely to Buy CDs

 

But perhaps the most striking statistics dealt with the effect the Internet music could have on purchases of traditional, physical forms of music. A third of people who stream music said it made them more likely to purchase CDs in stores, while 61 percent said it didn't affect their buying habits. Only 6 percent said that listening to streamed music made them less likely to buy CDs.

 

Meanwhile, almost a third of those who have downloaded music said it made them more likely to buy, while 57 percent said their buying patterns weren't affected.

 

"Internet music is creating new markets," said Jonathan Potter, executive director of the Digital Media Association. The findings appear to contrast with data released this week by the recording industry as part of its lawsuit against Napster Inc. Those two surveys targeted college-age consumers. One survey by SoundScan, a company that tracks retail record stores, found that music sales at stores near college campuses that had recently banned Napster were down from the first quarter of 1999 through the first quarter in 2000, while overall national sales grew by 6%.

 

The other, from Field Research Corp., found that 41 percent of Napster users said or implied that the service had replaced

some of their CD purchases. "There's a huge difference between promotional uses authorized by copyright holders and

wholesale piracy, which our studies show significantly hurt CD sales," said a spokeswoman for the Recording Industry

Association of America.

[Anderton]

I'm here at the Music Interactive Xpo in LA (which is why I haven't been able to post too much lately), and you might like to know that Napster is on EVERYONE'S tongue. If you walk into any of the workshops, eventually the talk gets around to Napster. They are getting so much free publicity from all this...if nothing else, they have name recognition.

 

The big problem is that Napster DOES sell CDs and it DOES reduce CD sales. It depends upon the person who does the downloading whether they leave it as a file on their hard drive, or go out and buy the CD. But I think the real issue is the cheapening of intellectual property.

 

Ironically, it was the record companies themselves who opened this Pandora's box. When the digital home taping act (or whatever it was called) passed, it traded off a tax on blank digital media (DAT and "audio" blank CDs) in return for legitimizing copying of analog cassettes. Did you know that you can make as many copies of music you want on cassette and pass them around to your friends, and this is perfectly legal? Granted, cassettes don't sound that great and aren't "clones" of material, but the point was made: if a record company thought it could make more money by following Plan B, it will be more than glad to jettison Plan A.

 

Another issue is that record companies killed off the single because CDs were doing so well, and make so much money. But kids, and people in general, WANT singles. The internet is filling that vacuum.

 

I don't have a lot of sympathy for the record companies, but I have a lot of sympathy for the artists. Having been screwed by record companies for so long, I guess it's at least refreshing for them to be screwed by consumers instead . Ultimately, I think that the Brave New Digital World will in fact allow more musicians to make at least a decent living. But it's a long road to get there.

[polczspop.belmont.edu]

Anderton,

 

From what I've learned, there is a portion of the cost of buying blank cds and such that goes to a company that divides all the money up among record labels to give to the publishers, based on studies showing how much different music is copied. The same goes for blank audio and videocassettes.

 

Under the current laws, internet transmission has been deemed a form of public performance (like radio or playing music in a large club), which means mechanical fees are due. The complication is who pays them and how to enforce it, which is currently being worked on. Formats of greater sound quality and of greater security are being/have been developed.

 

I'm *SURE* Napster is a big buzz right now everywhere! It is here in Nashville, too! At various functions in the business that some of my friends have attended, publishers and songwriters (among others!) DETEST Napster and can't wait for something to happen that will guarantee them their due royalties!

 

In all likelihood, nobody from Napster will actually go to jail, the record companies will probably let them off in exchange for contact information for Napster uses and the file sharing technology which is inevitably going to be a big part of music distribution in the near future.

 

-Steve

[Guest]

Originally posted by polczs@pop.belmont.edu:

Under the current laws, internet transmission has been deemed a form of public performance (like radio or playing music in a large club), which means mechanical fees are due. -Steve

 

Steve,

 

Just a minor correction. It is Performance Royalties that are due when music is "publicly performed" and not Mechanicals. Mechanicals are for physical product (CD's, cassettes, etc...)

 

Ex.

[polczspop.belmont.edu]

Originally posted by exmun@yahoo.com:

Steve,

 

Just a minor correction. It is Performance Royalties that are due when music is "publicly performed" and not Mechanicals. Mechanicals are for physical product (CD's, cassettes, etc...)

 

Ex.

 

 

You are completely right, I'm sorry... all this studying and late nights and ramen noodles.... hehehe... i must be losing my mind! http://www.musicplayer.com/ubb/biggrin.gif

 

Thanks!

 

-Steve

[alphajerk]

this thread is WAY TOO LONG for me to bother with after this post [my 28.8 connection sucks].

 

so i thought i would share some facts.

 

the day napster went down, gnutella went from 30k hits a day to 1.3 MILLION hits. the record companies if they try to fight this are going to lose. PERIOD.

 

as people have posted, since napster debuted, cd sales have risen quite substantially. [i dont have figures, but search a little and you will find them]

 

eminem [our favorite artist] sold 1.76 million CD's the first week even though napster had all the tracks before the album was even released. maybe he would have sold 3 million wiht out napster, maybe he would have only sold 300k.

 

lastly, a good article came out in Grok [the Industry Standard offspring]. the article is called 'learning to love napster' aptly named.

 

check it out: http://www.thestandard.com/article/display/0,1151,17465,00.html

[lwilliam]

This week's Billboard mag stated that the RIAA had reported CD sales in the U.S. were up 6% this year. I know I've bought more CDs this year than last year - but Napster didn't have anything to do with it.

 

 

------------------

Larry W.

[chrismilnehotmail.com]

I don't use napster very much, but how is this any different than someone turning on their radio and hitting record. Then taking those songs and putting them on a custom CD to listen to in there car? Anyone remember doing that with cassettes when you were young?

 

It's not like this stuff is CD Quality! I find mp3's nearly revolting to listen to, but if i want to hear a song to get a better idea if i would buy the CD then I might use it.

 

Oh, and what happened with all of the lawsuits agains the RIAA about holding CD prices high even though they swore to lower them when costs to produce cd's lowered?

[Chip McDonald]

Originally posted by Anderton:

Yes, it seems the company that's devoted to "sharing" feels that way only when dealing with other people's work. As far as I'm

they may have had...they're just another bunch of parasites, making bucks off of

 

They're a Big Corporation, and likewise are behaving as such.

 

1,000 years from now, if "humans" still exist, they'll refer to this period as the time when massive organizational constructs behaved pseudo-sentiently. Napster, even if it had a modicum of grass-roots philosophy to itself originally, has succumbed to the inevitable. Big corporations are "aimed" by their organizational structure, pushed by the lawyers and CEO's general id - not a specific idea. Because a corporation is formed to make money in a capitalistic society, the ultimate outcome of this arrangement is cut-throat behavior.

 

Napster is just behaving like any other organization that reaches a certain critical threshold in organizational complexity. It's a distillation of their legal department's base objective - to maximize profit, even though it doesn't make sense philosophically.

I would think AI researchers could learn something from watching corporations evolve.

 

Or maybe not - could be I've got some bad mango chicken here....

[Anderton]

Here's an interesting Napster update I pulled from the web...

 

By Dick Kelsey, Newsbytes

NEW YORK, NEW YORK, U.S.A.,

10 Oct 2000, 5:12 PM CST

Music file-swapper Napster would have a good chance before a jury hearing the lawsuit brought by the recording industry, according to a survey of the potential jury pool released today.

 

A surprisingly high 41.5 percent of 1,000 men and women over 18 years of age believe that taking copyrighted music off the Internet should be free if it's for personal use, according to a National Law Journal survey of the done by DecisionQuest. It's not a majority, the journal and pollsters said, but it's a big enough chunk of the potential juror population to make civil suit litigators, record company CEOs and recording artists nervous.

 

"These data should be music to Napster's ears," said DecisionQuest vice president David Davis in a statement. "It is very difficult to win a case by attempting to change jurors' preexisting attitudes. Add to this that judge's instructions are often ignored, and we have a scenario where the barrier to persuading a unanimous jury to find against an alleged Internet 'pirate' may be a note that is too high to reach."

 

Napster was sued by a number of record companies and music publishers represented by the Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA). The groups allege that Napster is contributing to copyright infringement and should be shut down. A federal judge's decision to close Napster while the case progresses is now being heard by the Ninth US Circuit Court of Appeals.

 

The study found that while nearly 42 percent of those asked think taking copyrighted music off the Internet should be free if it's for personal use, just 19 percent believe it should be free for commercial use as well.

 

"Pirates" received a much more favorable rating than hackers, the study found, with 77 percent saying that hackers who access other people's networks or computers should be prosecuted as criminals.

 

Nearly half said they would be willing to ignore a judge's instruction on the law in order to "do the right thing" in a case, the study found, which means jurors could show leniency toward copyright violators no matter what a judge says.

 

"If I were a lawyer representing a company whose copyright had been infringed, I'd be very worried after reading these results," said Patrick Oster, editor-in-chief of The National Law Journal. "I would have to rethink my chances of getting sizable damages, and seriously consider settlement."

 

Of the sample, 54 percent have been called for jury duty. Of those, 39 percent have served on a jury.

 

Reported by Newsbytes.com, http://www.newsbytes.com

[Anderton]

Another Napster update...the candidates speak!!

------------------------------------------

Candidates Comment On Napster In Internet Debate

 

By David McGuire, Newsbytes

WASHINGTON, D.C., U.S.A.,

17 Oct 2000, 1:18 PM CST

 

Responding to a question about Napster submitted as part of an ongoing Internet debate, Vice President Al Gore and Texas Gov. George W. Bush today both stressed the need to protect artists' intellectual property rights in the emerging e-commerce arena.

 

"I think Napster is a terrific innovation, but I think we've got to find a way to reconcile this technology with artists' rights. If an artist writes and sings a song, and someone else benefits from it without compensating the artist, the artist is hurt," Gore said in a posting on the Web White & Blue 2000 "Rolling Cyber Debate."

 

While refusing to comment on the pending Napster case, Bush sounded a similar note, saying "I do believe we must find a way to apply our copyright laws to ensure that artists, writers, and creators can earn a profit from their creations, while at the same time, adapting to and utilizing new technologies to deliver media to consumers in an Information Age."

 

The candidate's Napster postings came in response to today's Web White & Blue "Question of the Day," and show how the Rolling Cyber Debate is bringing out issues that have not been receiving attention in the televised debates, Web White & Blue organizer Jonah Seiger told Newsbytes today.

 

The major candidates have responded to nearly every question posted by Web White & Blue and in so doing have expounded on their views of everything from cloning, to domestic violence to Internet and copyright, Seiger said.

 

The parties participation in the cyber-debate is probably due in no small part to the huge exposure Web White & Blue is getting courtesy of its Web site partners - 17 of the world's most widely viewed information sites, including CNN.com, Yahoo and ABCnews.com among others.

 

"If you are an Internet user interested in the political season you will find Web White & Blue," Seiger said.

 

And after tonight's televised debate, Web White & Blue will be the only game in town for the candidates to attack the views of their opponents and clarify their own stances on the host of issues that the cyber-debate addresses, Seiger said..

 

Responses to the "Question of the Day" can be viewed at http://www.webwhiteblue.org . The site also contains an archive of past responses.

 

Reported by Newsbytes.com, http://www.newsbytes.com

[alphajerk]

i really have never seen a political race like this one. one of the biggest dumbasses running against a ideological amoeba.

 

and this has NEVER been about the artists. this is about the pockets of the lawyers. leading the industry into a battle they CANT win funding these lawyers into early retirement.

 

if i were on the jury i would certainly vote in favor of napster. the industry has got to learn they just cant bully everybody around. they overcharged consumers for years, now its payback time.

 

and ironically there was a 6% growth of sales despite all this piracy. if i am going to pay for music, i want a well thought out product in my hand. not something that sits on my hard drive waiting to crash [and i would have to buy the storage for the music, i dont think so, thats their job].

[Guest]

Most folks using Napster are listening back on their PC speakers right? That's not much of a sound experience. I think most of them are not burning CD's. As someone said earlier, this does fill a void for singles. People have been burned too may times buying a CD with 1 hit and lots of filler.

 

In my experience people will buy CD's based on what they hear from downloads.

 

Should music be shared without the Artist permission? On the surface we may think No! But the music buyer believes that he has bought the recording, and therefore can share it as he pleases. The buyer doesn't think of mechanical licenses or performing rights societies. The CD is simply an object that they feel they can share.

 

So is the music buyer only granted a license, as a software buyer would be? Or is the music buyer simply purchasing a license to listen to the contents of the CD? If so, maybe they should be rented at Blockbuster like videos or DVDs.

 

How different is Napster from the public library, where I can take out CD's, listen to them or copy them as I please, and return them to the library, all at no cost to me?

 

The Napster user will probably not see much difference between Napster and a lending library. Or it seems like borrowing a CD from a friend down the street.

 

Maybe the fundamental question is who has control of that sound recording after it is purchased; the buyer or the producer (meaning artists/record companies etc.)? Or, as consumers, do we need to change the way we think about 'buying' music?

[joegaganhotmail.com]

Hey, this is my first post here!

I don't think anyone could ever prove whether or not Napster had anything to do with the rise in music sales. Kind of like using a kite in the sky to see how deep the ocean is...

I am afraid that the lawyers are the ones really making the $$ on this right now. I know the record industry is scared.

I don't agree that they deserve to be 'punished' however. They were just doing what companies do, making money. Of course some artists have been taken advantage of, but at least there is a structure by which the artist gets paid for sales of the product.

Regardless of how it goes, the wake up bell has been sounded for artists to become smarter and more creative in cultivating a fan base that truly supports what we do. I am not interested in having a 'fan' who doesn't believe in my right to be paid for what I have worked hard to produce.

We are currently studying what this means. Our experiments include: Releasing 'limited edition' CDs with handpainted cover art[can't get THAT through your modem].We have sold over 40 of these in 3 months at $30 each.

Involving our fans in a personal way that creates a 'family' experience of belonging to something creative and great. We have the word 'brothers' in our band name, we invite peole to join our family when signing up for our mailing list, run a public, all topics forum at our website, etc.

Involving our fans who are financially able in investing in our band's recording projects.

A lot of working capital has been raised this way. Each one of these investor/fans has a huge connection to the band and real interest in seeing us succeed.

Touring and playing live as much as possible, working hard to make each show an experience that the audience member will remember and cherish.

All of these opportunities are aimed at exploring how to create a fan base that truly supports us. I think bands/artists should be extending the envelope, rather than whining about 'getting screwed'

We are creating our success one block at a time.

 

 

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