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Tracey S. Roth

Dot Com Commerce

Managing Editor, [email protected] CENTER CRM Solutions

[March 22, 2000]

The Flap Over MP3

Can you hear the latest sounds coming out of the music industry? Is it a new country girl pop band? The latest team of teenage boys harmonizing to fluffy love songs? A new alternative band with torn jeans and pierced body parts? Noit's the sound of lawyers across the industry putting their gloves on. A fight of epic proportions is brewing over a seemingly harmless bit of technology -- the MP3 file. To be honest, the fight isn't really over the technology of MP3 itself: the music industry claims it is perfectly happy having artists distribute their own MP3 versions of their songs, as long as they are able to keep hold of the copyright and the earnings. The true flap is over sites which allow users to download and share MP3 files -- most notably MP3.com and Napster.com.

Enter the Recording Industry Association of America (RIAA). The Association filed a lawsuit against Napster on December 7, 1999, and quickly followed that suit with one filed against MP3.com on January 21st of this year. Just to make things more interesting, in early February MP3.com filed a lawsuit against the RIAA charging the organization with unfair business practices. There is no doubt this is the beginning of a wide-ranging saga that will have important and long-term implications for the delivery of entertainment over the Internet.

The controversial Napster.com is a site on which music lovers can share music in MP3 format, or compressed sound files that can be downloaded and stored. MP3 files can be created using a program called a ripper, which converts tracks from a standard compact disc into a .wav file, which can then be converted into an MP3 file using an encoder. The songs are available through Napster.com, but the actual MP3 files are stored on users' hard drives -- not on the actual site, which simply acts as a directory of which users have which files. This is an important legal distinction, because lawsuits against Napster cannot charge the company directly with copyright "piracy"; they can only allege that Napster is encouraging and facilitating piracy.

So who is contributing to the staggering amount of material available on Napster, be it legal or illegal? Just about everyone, it seems. The site is enormous and popular. So popular, in fact, that a number of colleges and universities have had to block access to it on their university intranets, saying the enormous bandwidth requirements for transferring MP3 files were chewing up the universities' intranets.

The entertainment industry is understandably panicked. With a moderate amount of software and hardware, you and I might never need to enter a CD store again. Once I've got the MP3 files I want, what's to stop me from burning my own CD? The answer is absolutely nothing. For a few extra cents, I can buy an empty jewel case and CD labels for my printer, so I can even package it to look professional. What would stop someone from making multitudes of these CDs and selling them on a street corner? Again absolutely nothing.

The interesting angle on this particular tangle of litigation is that no one is keeping very quiet about their beefs with one another. All three sites -- MP3.com, Napster.com and RIAA.com -- are publicly airing the details of the lawsuits. MP3.com has posted on its site both text of the RIAA's lawsuit and a copy of a letter from Hilary Rosen, president and CEO of the RIAA, to Michael Robertson, CEO of MP3.com, informing him that the suit had been filed. The RIAA has posted press releases on the suits and an FAQ-style page on its site outlining why it feels the need to take legal action.

The RIAA is irked with MP3.com because it operates for-profit, making money off sound recordings it does not own and has not licensed. The suit against Napster alleges that the site "enables" piracy. The RIAA goes to great length to not appear biased against MP3 technology as a whole, just misuse of it. It fails miserably, in the way a police officer will tell you he has no problem with the fact that you have a radar detector, just that you use it. Yeah, whatever.

So what's the solution? Let the entertainment industry have its way and strangle MP3 technology the way it deep-sixed commercial use of digital audio tape (DAT) back in the 80s? That doesn't seem likely. The U.S. entertainment industry may be huge and powerful, but even it has little hope of stifling Internet users. So far, record companies have sought to get the public's support by offering comments from various artists on the evils of MP3 piracy. The lead singer of Creed, an extremely popular alternative rock band, was quoted as saying Napster is "robbing him blind." A representative for the band Hootie and the Blowfish has told the public that this type of Web site "makes us sick." (I could offer a personal and relevant comment about Hootie and the Blowfish's music at this point, but I'll keep it to myself in the interest of not alienating any readers.)

It's a little hard to feel sorry for multimillionaires complaining about losing money. However, we can hardly expect the entertainment industry to throw up its hands and say "Whatever. What's a few hundred million dollars?" The film industry must be getting nervous as well: A few years down the road, with improved compression techniques and ultra fast bandwidth technologies, what's to say I won't be able to download films?

We can roll out all the legislation we want designed to protect the entertainment industry, but the Internet has no national borders. The only thing legislation might do is make MP3 users in other countries happier and more willing to share their files.

Speaking of legislation, all the current legal posturing has been taking place around a centerpiece: a U.S. Congressional document entitled "The Digital Millennium Copyright Act." The act was ostensibly created to protect copyright laws for intellectual and artistic property, but much to sites like Napster.com's benefit, it includes a statute that "limits Internet service providers from copyright infringement liability for simply transmitting information over the Internet." In other words, this document won't be of much help to the RIAA.

Some members of the entertainment industry are attempting to take a realistic approach to the issue. Young people under the age of 25 are huge consumers for online music, but they are also huge consumers for purchasing CDs and are responsible for most of the sales of certain types of music -- rap and alternative, for example. Alienating one's consumers is never a good way to do business (surprise!) and as a result, many players in the music industry are showing signs of willingness to discuss compromises and alternatives.

In any case, the next year should be a good show for anyone interested in following this dispute. To pass the time while waiting, why not go find some of your favorite music online?

Hootie and the Blowfish fans can direct their protests to troth@tmcnet.com.

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