Flurry of downloads as end nears for Napster

The Associated Press
Friday March 02, 2001

SAN FRANCISCO — Napster users enthusiastically downloaded free songs Thursday on the eve of a court hearing that could finally end its great music giveaway – and present record labels with a new set of problems. 

Napster Inc. tried to buy time with a series of legal appeals ahead of the hearing by U.S. District Judge Marilyn Hall Patel. 

But it was unclear whether that would delay Patel from quickly issuing a reworked order that would effectively shut down the free service. 

The 9th U.S. Circuit Court of Appeals in San Francisco last month largely affirmed Patel’s July decision ordering the company to stop allowing music the swapping of copyrighted music. 

The judges asked Patel to rewrite the order in a way that allows Napster to survive if it can do what even its lawyers say is impossible – keep pirates off its network. 

Soon afterward, Napster offered $1 billion – in exchange for a 40 percent cut of online music sales – to the recording industry to settle the copyright infringement suit. 

The Recording Industry Association of America has soundly rejected Napster’s offer, anticipating victory in the landmark case. 

Still, breaking the habits of more than 50 million Napster users accustomed to free online content will be anything but simple. 

The RIAA sent out 85 letters on Feb. 19, asking Internet service providers to take down OpenNap servers – homegrown personal computers set up to facilitate Napster-like activity. But OpenNap is just one of any number of networks where people can trade music without paying for it, and going after actual users could prompt a buyer backlash. 

“They’ll have no choice but to sue their customers and they just can’t do that,” said Phil Leigh, an analyst with Raymond James & Associates. “It would be anarchy.” 

Already, Congress is being called upon to tweak federal law in response to the latest copyright and technology issues. Lawmakers interested in preserving online music sharing include GOP Sen. Orrin Hatch, himself a musician and Napster user. In response, the RIAA has hired former Montana Gov. Marc Racicot, a Republican who is close to President Bush, as a lobbyist. Racicot’s position: despite the popularity of file-sharing technology, lawmakers shouldn’t rush to weaken copyright law. 

“We are confronted with some circumstances presently that make it very complex because of the explosion of technology available to us,” Racicot said this week. “Frankly, in my judgment, you cannot mutate the property rights of others or diminish them in any way or diminish the law to conform to technology and to private demand.” 

Music fans downloaded 2.7 billion files in January using Napster, more than double September’s activity, and more than 96 million songs were traded on Feb. 12, the day an appellate court said Napster would likely lose its case at trial, according to Webnoize. Another research firm, Accenture, predicts that by 2005, the digital music market will grow to $3.2 billion, or 15 percent of overall music sales. 

Napster, now funded primarily by German media giant Bertelsmann AG, offered to pay record labels $200 million a year for five years, and work together to deliver music online. 

But the major labels – all of which are now developing their own online music distribution businesses – rejected Napster CEO Hank Barry’s offer even before he made it public. 

But that won’t solve the problems, since other ways of getting free music are sprouting up. These difficult-to-trace peer-to-peer applications have funny names such as Gnutella, LimeWire, ToadNode and BearShare, but they’re becoming easier to use with every hacker’s tweak. 





The BearShare program – software that scours a constantly expanding number of hard-drives for text, music and movie clips – has been downloaded more than 500,000 times since it was made available Dec. 4, according to its designer, Vincent Falco. 

Interest in non-Napster file-sharing programs has exploded with every headline in the RIAA’s case against Napster. PC Data Online reported that such programs had more than 90,000 visitors per day in February. 

Hilary Rosen, president of the RIAA, told other content providers at a conference in New York Thursday that the recording industry started seriously investing in online music delivery 18 months too late. 

“Don’t make the same mistake we made,” she said before flying to San Francisco, where she said she would implore the judge to deny Napster any more delays. 

“If there is a vacuum in the marketplace, it will be filled by pirates,” she warned. “Then no one makes any money, but a level of consumer expectation is developed that is hard to recapture.” 


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