Nipping at Napster

The site that put the year's best album on your hard drive is getting boarded by the real pirates: major labels.

IN A YEAR CHOCK FULL OF newsworthy music-related stories, there was none with greater impact on the music industry--and the music consumer--in 2000 than Napster. Virtually everyone who pays attention to such matters is at least familiar with the program, but for those who aren't, here's a quick rundown. Napster allows computer users to log onto its site, download MP3 music files from the hard drives of other people who are logged in at any given moment, and do so completely free of charge.

The result is that Napster users become virtual customers at the world's greatest-stocked record store, a record store with an ever-shifting inventory ranging from live and unreleased rarities to the latest Britney Spears hit, depending on who is sharing files at the time. And did I mention that--for the time being, anyway--it's all free?

It is this last point that has record companies and certain artists so rankled about the program, and to a certain extent, justifiably so. A song, after all, is a copyrighted article, one that generates revenue for both the label and the artist. Napster allows its users to "share" songs with other users, completely bypassing the traditional forms of music distribution, and therefore bypassing the income-generating processes that have been put in place to collect the cash.

Music-sharing programs have reduced music to its purest form, one that separates the actual music from the packaging. In other words, the difference between buying a CD in a record store and downloading the music from that CD from Napster onto your hard drive is this: liner notes and the photos that accompany them (plus a slight increase in quality). CD burners, which allow people to record music downloaded from their hard drive onto their own CDs, have become increasingly affordable to the extent that one will pay itself off in a short time if its owner is a regular music consumer.

Twenty or so years ago, when cassette decks became de rigeur for the audio enthusiast, record companies led us to believe their backs were against the wall. What was to stop someone from borrowing their friends' records and taping them for their own use, again bypassing the revenue-generating machine the record companies had painstakingly put into place? They reacted by instituting an advertising campaign whose slogan was "Home Taping Is Killing Music." But as we all know, 20 years later music, and the industry that produces and markets it, is far from dead.

In the 1980s, when record companies introduced the compact disc format, the discs sold for around $15, nearly double the price of LPs at the time. But the inflated price tag came with a promise from the labels: As more CD pressing plants were built, the price would ultimately drop to compete with LP prices.

But, of course, they didn't.

Instead, as consumers scrambled to replace their old records with (supposedly) better sounding and more convenient CDs, the number of manufacturing plants increased, and the cost of production decreased for the labels, which took the extra money and channeled it into artist promotion and pay raises for their employees. And little by little, the cost of CDs actually increased substantially, to the extent that the current list price for CDs by the highest-profile artists just reached the ungodly price tag of $18.98.

Let the backlash begin.

That would be sites like Napster, which promotes an unspoken renegade mentality: If the labels are gonna screw us, what's to stop us from screwing them back? The answer is, of course, nothing.

So if millions of people are now getting their music for free, you'd think the labels would take proactive measures to combat file trading. Instead of acknowledging the fact that programs like Napster are here to stay (several others have sprung up since Napster's advent), and that they are nearly impossible to regulate, the labels have continued to gouge their customers and fight their battles in court. Of course, they won, and will continue to win; but the question remains, do the file-trading renegades give a damn about a court ruling if they can continue to get their music for free?

The immediate result has been for some of the labels--those under the umbrella company Bertelsmann Music Group, one of the three largest groups of labels in the world, and one that had sued Napster previously--to strike a deal with Napster. Under the agreement, Napster will begin to charge a monthly fee for use of its service--$4.95 seems to be the number being tossed around--though how the money is ultimately divvied up will surely be a source of further contention. Still, it seems to be the wisest move the labels can make at this point, since it at least acknowledges that the current technology will likely only be improved in the future.

And even with all of the ubiquitous file trading going on (Spin magazine went so far as to name the Best Album of 2000 as "Your Hard Drive"), at the halfway point of 2000, industry execs begrudgingly admitted that sales were up 8 percent over the previous year. Maybe those liner notes count for something after all.

The lesson here is that the labels are adaptable; they always have been. So while it might take a bit of rethinking and restructuring on the part of the labels, the music industry is hardly a sinking ship.

Those who stand to really lose out are the artists themselves, who sign less-than-ideal contracts with the major labels and pray for a hit to boost sales into the black. The artists are the ones who are losing out on their publishing royalties, which generally amount to a substantial portion of their income.

As quoted in an article from the Boston Phoenix, Courtney Love (of all people) stated the issue pretty succinctly early last year at the Digital Hollywood Conference: "Digital distribution gives everyone worldwide instant access to music. ... So that there's no confusion, I want to clarify that stealing an artist's music without paying for it is piracy. And I'm talking about major-label contracts, not Napster."

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