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Is it possible that, in their efforts to suppress free music trading on the Internet, the music companies and individuals who are suing Napster may win the legal battles but lose the war? From a legal standpoint, the situation has never looked good for Napster — most trial-court judges who have heard copyright infringement cases against Napster or other MP3-distributing companies have come down on the side of the music industry plaintiffs. Unlike my colleague Roger Parloff, I’ve never thought the legal arguments raised by Napster’s opponents added up to a slam dunk. But let’s suppose, for the duration of this column at least, that they do. What then? The music industry, with a fistful of winning verdicts in its pocket, will still have a handful of problems on the Net. The first is that there’s a sizable, established market for downloadable music, thanks to Napster. It’s unclear whether much of that market will abide by the record labels’ ludicrous pricing policies for online sales. Sony, for example, is charging $2.50 to download a single track. (Entire albums aren’t available for download on Sony’s site.) At that rate, the Dixie Chicks’ 13-song album Fly would cost more than $32. I can buy the CD itself from Amazon.com for less than half of that (shipping included). It’s hard to see how Sony’s pricing strategy makes sense even in the traditional music market, much less in the new market for Internet-based music distribution. When you are so far out of step, you’ve created a perverse incentive for users to go elsewhere — or, just as likely, to snag music for free from Napster’s probable successors, Gnutella and Freenet. Both of these tools allow distributed file-sharing much the same as Napster, but without relying on centralized directory servers like Napster’s. They create a special problem for would-be music-industry plaintiffs: It’s not clear whom to sue, and even less clear what can be gained in court even if you find a likely defendant. (We may take it as a given that the archetypal slacker MP3 trader is judgment-proof.) Both Gnutella and Freenet are freely distributed on the Internet. All they require is a raft of techno-friendly volunteers with extra hard-disk space to become a fully operational alternative to Napster. Parloff argues in his recent column that neither of these decentralized file-sharing systems is likely to reach Napster’s popularity, but some of his arguments sound to me like whistling in the dark. I’ve experimented myself with Gnutella and Freenet, and find myself easily imagining tools like these taking the place of Napster, especially if there’s a widespread perception among Internet users — including that army of techno-friendly volunteers — that Napster was unfairly crushed by the music industry. What’s more, I see the potential for third-generation file-sharing tools that combine Napster’s efficiencies with, say, the built-in anonymity features of Freenet. When it comes to ways of improving these distributed file-sharing systems, the only limit is the inventiveness of programmers. I wouldn’t bet against them. In short, I think it’s likely that even if the music companies win in the courts, they stand a pretty good risk of losing where it counts, both in their pocketbooks and in the hearts and minds of music buyers. But perhaps we should look beyond the question of picking the winning side in the ongoing struggle between the content industries and the Internet’s cheerful file sharers. Instead, shouldn’t we try to find common ground between music makers and music lovers? Let’s start by looking at a parable about how music lovers really think (I call it a ‘parable’ although it actually happened). A couple of months ago I asked folks in an advertising forum on the WELL, a conferencing system based in the San Francisco Bay Area, if any of them knew the source of the haunting music in the background of the television ad for the ‘vapor edition’ of the Volkswagen Beetle. Someone helpfully pointed out that the song appears on the album Blue Wonder Power Milk by the band Hooverphonic, but couldn’t remember its name. That was enough of a clue. I went to Napster, downloaded a bunch of songs from that album, and recognized “A Renaissance Affair.” I liked that single a lot, but not the rest of the album. (Unsurprisingly, Volkswagen used the best song for its ad.) Now, it’s already hard to characterize this example as a lost sale. I wouldn’t have bought the album on the basis of one song. (I no longer buy records on teenage impulse.) But get this: I told a friend about the song and the album, and she went out and bought it via Amazon. Her purchase would not have occurred but for my visit to Napster. So, Napster was what made that particular sale possible. Now, I’m not saying that all instances of copying via Napster put money in the pockets of artists. But some of them do. In the absence of sound independent statistical research, anyone who claims that Napster creates net lost sales for artists is just voicing a religious conviction about music copying. More importantly, the implication of this parable is that a basic assumption of record labels — that we won’t buy the cow if we can get the milk for free — may simply be wrong. My friend the record buyer could have asked me for my copies of “A Renaissance Affair” and the other songs on the album. She could have gone to Napster and found them herself. What she did instead was spend money for music — contradicting the paradigm of music consumers that the record companies seem to have embraced, and affirming instead the notion that, for some of us at least, good music is worth paying for, even when we can get it for free. I think my friend is typical. Music lovers don’t begrudge seeing that music makers get paid — they embrace it. It’s these consumers who ought to be informing the public-policy debate about sharing music on the Internet. Some music-company leaders have stuck their necks out over the possibility for a rapprochement between Napster-like companies and the music industry. “I think we can all work in harmony,” says Val Azzoli, cochairman and co-CEO of the Atlantic Group. “I would even pay Napster to be a distributor. But my beef is not getting paid.” Azzoli is onto something — the best outcome of all the current strife would be for the record labels to find a way to work with the technologists. But not everyone is as flexible or as farsighted as Azzoli. The consensus in the music industry is that the best and only strategy is to sue choice targets and scare everyone else into compliance with the music industry’s particular and restrictive view of copyright. Entertainment lawyer Helene Freeman, of counsel in the New York office of Minneapolis’s Dorsey & Whitney, has classified this attitude as “an intractable problem.” Says Freeman: “I believe the record industry is ideologically committed to litigation.” What they ought to be committed to instead is collective problem solving. It’s time that the music companies, consumers, and technologists sit down and hammer these issues out — to talk to each other outside of a courtroom. And the time for such a forum is now — before the music companies discover that winning every legal battle has only hastened both the loss of control of their music and the loss of the hearts and minds of music lovers. Mike Godwin ([email protected]) is chief correspondent for Intellectual Property Worldwide and author of Cyber Rights: Defending Free Speech in the Digital Age (Times Books, 1998).

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