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published
8 May 2000
Sue your
customers
by Dylan Tweney
Here's a business model for the 21st century: Develop
a product. Promote the heck out of it with a generous marketing
budget, and wait for it to catch on (it will be easier if you're
selling something really cool to begin with).
Then, when your customers get truly excited about the product --
they're starting fan clubs, telling other people about your product,
evangelizing in the streets, sharing information and collectibles
related to your product -- then, and only then, make your final
move: Sue their pants off.
It sounds ridiculous, but it has come to this. Last week, lawyers
for the metal band Metallica in effect served notice to more than
335,000 of the band's fans. The lawyers came to the San Mateo offices
of Napster, which makes software for sharing MP3 music files over
the Internet, to throw down the gauntlet [1,2].
According to Metallica, hundreds of thousands of people have been
using the Napster software to download free copies of copyrighted
Metallica songs, thus depriving the band of the income from CD sales
and royalties.
Now, unlike MP3.com, the Napster folks are clever. They know all
about copyright laws, and they have built their software in such
a way that Napster Inc. never actually touches any MP3 files, copyrighted
or otherwise. The Napster software only facilitates the exchange
of music files among individuals; it's essentially a glorified chat
tool that's been souped up with the addition of a file transfer
utility and a server-based search engine. If you're looking for
recordings by Metallica, or Pearl Jam, or even Flatt & Scruggs,
the software lets you know what other Napster users have those files
available. When you want to download something, you connect directly
to another user's computer, where the file resides, and the song
is transferred from their desktop to yours.
Napster is free, it's music-centric, and it's subversive; these
three things especially recommend it to the college audience. As
a result, it's become extremely popular since the Fall semester
started last year. The Napster system now comprises over a terabyte
of music files, any of which are theoretically available to
you at the click of a button.
I say theoretically, because for all its conceptual brilliance,
Napster is plagued by a number of serious flaws. The application
itself is quirky and buggy. Using Napster puts a heavy strain on
Internet bandwidth -- so much so that some universities have banned
it, because it was bringing their networks down. And it's completely
reliant on end-users' connections to the Net, which means that it
can often be very difficult to successfully download a file you
want.
But that hasn't stopped hundreds of thousands of music fans from
using Napster to trade their favorite songs with one another. This
irritates the music industry, which feels -- justifiably -- that
its intellectual property is being devalued.
Metallica complained to Napster last month, but Napster quickly
evaded responsibility by pointing to their software license agreement,
which explicitly reminds users that if they download copyrighted
material, it's on their own heads. Tell us who's violating your
copyrights, and we'll shut them down, Napster said. So the Metallica
lawyers gave Napster a list -- 13 boxes full of paper printouts
listing the usernames of people whose computers are making Metallica
songs available to the world.
Now, there is no question that Metallica is shooting itself
in the foot by going after its best customers, provoking many
of them to destroy their Metallica CDs and inciting others to download
as many bootleg Metallica MP3s as possible. Yes, there is a lot
to mock about the idiocy of the band and its lawyers [3].
On the other hand, it's easy to be glib about the situation --
to tell the recording industry to "face the new reality"
and accept the inevitability of Napster and tools like it, as columnist
Dan Gillmor did this weekend [4].
You'll notice that most proponents of the "information wants
to be free" camp are applying this principle to other people's
information. You don't see Gillmor giving away his column for
free, after all; I'm sure the Mercury News pays him well in exchange
for that continuing stream of intellectual property. If I started
publishing copies of Gillmor's columns on my own Web site, I'm certain
that Knight-Ridder, which owns the copyright, would have its lawyers
on my doorstep in double time.
The fact is, intellectual property is both the cornerstone
of the new economy and its most vulnerable asset. Demanding
that the owners of valuable intellectual property give up the goods
would be like asking Andrew Carnegie for free steel, or demanding
that Akamai host your high-bandwidth multimedia site gratis. The
music industry will no more willingly give away the copyrights to
its songs than Apple or Microsoft are going to give away the source
code to their operating systems (token gestures towards "open
source" notwithstanding). It took a lot of money to develop
those products, and the companies are going to protect their investments
-- and make a profit -- any way they can.
What that means in the near term is that lawyers will be throwing
wrenches into community-driven intellectual property exchanges like
Napster wherever they appear, unless those exchanges can do one
of two things: Absolutely, incontrovertibly demonstrate that they
are not facilitating the violation of copyright; or figure out how
to compensate copyright holders when their intellectual property
is traded.
In the middle term, this monkeywrenching will extend beyond lawyers
defending copyrights, and will include moralistic do-gooders, political
activists, and nuts and weirdos of all description. It's the nature
of a public exchange that it is, well, public. Don't like people
ripping off your songs? Do a search for the culprits on Napster
and bring the search results to San Mateo. Got a notion to embarrass
people who download porn from a public exchange like Gnutella? Publish
a list of them on your Web page [5]. Want to fight the worldwide
trade in ivory? Do a search on eBay.
But in the long term, what will happen to intellectual property
on the Net is anybody's guess. The Net has enabled the biggest explosion
of intellectual-property-driven wealth in history. But it also makes
it easier than ever before to rip off that very property -- and
is changing notions about the legitimacy of "owning" information
at all.
How long can an economy last that is built on such a self-destructive
foundation?
---
[1] Metallica
drummer: Stop ripping us off!
[2] Metallica
names Napster users in MP3 music fight
[3] An
open letter from Metallica
[4] Media
industry's business model must evolve or die
[5] Gnutella
porn surfers exposed
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UPDATES & FEEDBACK
In an "information
economy," information is currency. You can choose to have an information
capitalism model (what we have now), or you can choose to have an
information communism (what a lot of folks are saying the net gives
us). ... Mickey Mouse, Microsoft, and Metallica all have IP rights
under the current system, and things are pretty much going to stay
that way for a long time to come. (Eric Hall, 5/8)
Make donations
to Lars Ulrich, Metallica's drummer, to make up for all the band's
lost revenue:
http://www.paylars.com (5/8)
Excellent backgrounder
on the Metallica suit:
Metallica sues Napster, universities, citing copyright infringements
and RICO violations (5/8)
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