Shutdown of Napster Term Paper

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NAPSTER INC. SHUTDOWN

For few years, Napster.com was every music lover's favorite site. This was where they could do download their favorite music and share MP3 files with other online users. Napster Inc. was the brainchild of a college dropout Shawn Fanning. Being highly ingenious, he utilized his computer skills to develop a file sharing software and named it Napster. This software enabled users to share music files with each other and thus for sometime they were glad to have found an economical way of listening to their favorite songs. Little did they know that this file sharing would lead to a major lawsuit against Napster, which would result in the closure of the company. Napster was nothing but great software, which made use of compression technique known as MP3, facilitating economical transfer of music files from one computer to another.

The problem arose when groups like Metallica, Dr. Dre and RIAA decided to sue Napster Inc. For illegal use of copyrighted material. Metallica even gathered a list of 300,000 who they thought were illegally using the Napster software to download and share music files over the Internet. RIAA then officially filed a case against Napster Inc. claiming that 38 million users had been violating copyright law through Napster software. Napster defended its activities under the 'fair use' clause of AHRA law which states, "No action may be brought under this title alleging infringement of copyright based on the manufacturer importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital music recordings or analog musical recordings." But RIAA refused to accept this declaring that Internet was listed in ARHA's list of "digital audio recording devices."

While Napster Inc. may have been distributing copyrighted music through its file-sharing software; we must not forget that it was not doing this to intentionally violate the law. KARL MAMER (2000) defends Napster saying, "Napster has long argued that it provides nothing more than a simple technology known as peer-to-peer software. When users are swapping MP3 files, whether they're legal or illegal, it's a transaction between two computers." The company's upper level management genuinely believed that there was nothing wrong with private non-commercial copying of music. It must also be kept in mind that closure of Napster doesn't automatically bring piracy to an end. In fact there are still many online companies engaged in similar activities as Napster.

Another reason why I am firmly against the closure of Napster Inc. is because it is clear from available facts and figures that no music group was losing money since the emergence of Napster software. In fact sales of compact discs increased 6% in the first quarter of 2000, when Napster was alive and operating successfully. Amidst claims of decreasing sales and shrinking profit margins, we failed to consider these simple figures, which make it, clear that while 58% of college students were using Napster to download music, 79% was purchasing music on CDs too. It was not like Napster completely replaced CDs. Most students surveyed said they would download music from Napster only to preview it before they actually purchased the CD. (Figures taken from Case Study: MP3 Downloading and Napster: Reference 4)

It is true that piracy is a crime but some limit must be placed on the extent to which anti-piracy laws can control our freedom and our activities. There was once a time when copying a song from one audiocassette to another was common and no one had the right to encroach upon another's right to engage in harmless non-commercial activities. With the influx of anti-piracy laws however, a certain section of society inducing digital music companies and young music lovers who cannot afford expensive CDs are likely to encounter serious problems. Closure of Napster is unfair because as long as there is Internet, free music will continue to proliferate, often illegally. In fact several small and large companies in the field have already developed new innovative techniques to make free music available on the Internet. This includes "online radio stations like those at Live365.com, or small independent MP3 download sites like Epitonic, or groovy technologies and add-on applications like Kick.com." (Janelle Brown, 1999)

Another valuable site, which sprung up in 1999, was GNUTELLA, and it grew up really rapidly with 4% growth in the one particular week. The site has take over the sites like Napster.

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com because of the availability of large number of songs which are no longer displayed at Napster's music site. Every song, which has gone out of stock on the Internet, is available at GNUTELLA and due to this the traffic increased 400% in the first year.

Janelle Brown in her article "The music revolution will not be digitized" (1999) had this to say bout the companies engaged in distribution of digital music, "The digital music start-ups were hardly saints or true freedom fighters by any measure -- many were plagued by greed and blithe disregard for the rights of artists. But they were all focused almost entirely on customer-friendly innovation -- personalization, portability, interactivity, access to hard-to-find tracks, exposure to new music. Wooing customers was a requirement for the start-ups."

Experts are of the view that free music would not disappear while its misuse may decrease with the introduction of computer codes. But several others disagree with this analysis; they feel that as long as the Internet is around, no one can stop the use free distribution of digital music. That is because Internet is all about making things easier, and while some online music companies like Napster may vanish, some other would spring up to fight on consumer's behalf. Ira Rothken, an attorney who is representing several online digital music companies says, "There will always be technologies that make the transfer of information more efficient. That is here to stay," (Brown, 1999)

Whatever comes free is more than welcome and popularity of a technology lies in it being inexpensive. The reason digital technology is popular and is adopted rapid by consumers around the globe is that it makes music cheaper and people no longer have to spend a fortune on collecting the music of their choice. Therefore digital music companies will not vanish all of a sudden, and there is a chance that new methods would be developed to make music more accessible and cheaper.

There are several reasons why Napster became extreme popular among music fans and why it is unfair to restrict the use of this wonderful software. The first is of course the cost saving factor. We must understand that MP3s are free of cost not only because they are available on the Internet but also because there are no "intermediation" costs involved. In other words, when we buy a CD, the cost of it is distributed between many people such as "the manufacturer of the disc itself, the distributor of the disc, the retail store where he purchased it, or the record company that produced the recording." Not only that, almost 16% of the purchase price goes to the composer and the recoding artist. Therefore when the CD finally reaches the consumer, all these costs are added up in the final cost thereby increasing the price of a CD significantly. But if the same music were released on the Internet, there would be so such costs involved, the musician himself would earn all the money coming from the sales. The consumer therefore ends up paying less while the musicians get to earn more.

Secondly users could easily download and exchange files of the music that they really liked listening to. Access to instant music through Napster removed the additional annoyance of buying a CD that contains many songs one would not want to hear. Sometimes a consumer likes only one song in a new album but with the CD one is forced to pay for the songs one simply does not want.

Though piracy may be a problem for some, still it is not as big an issue as it was made out to be. The president of BMG Entertainment, Strauss Zelnick, agrees and he is of the view that it would be best to make use of the opportunities that are available and which have been brought into the music industry by digital technology rather than cursing the problem of piracy. "Even piracy, that's hands-down a copyright infringement, can in certain instances speed up the process of legitimate market development, we're moving quickly, we need to move even more quickly." (Costello, 2000)

And when you hear that coming from the CEO of a $4.6 billion giant music company, you better pay attention. BMG Entertainment has promoted stars like Whitney Houston and Britney Spears and Zelnick's views on the subject of digital technology simply cannot be ignored. He feels that the business of digitized music is just going to.....

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