The Napster Controversy

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The Arguments Contd...

Napster supporters also said that if RIIA wanted to sue the real people who were behind copyright violations, it would have to sue its own customer base of millions of music-lovers and not these websites. Another argument put forward by Napster was that it supported and promoted new artistes, who did not have recording contracts with the RIAA companies. Only about 2% of all artistes had recording contracts with the big companies. The rest thus had to compete with these big companies, without the resources to promote themselves. Services like Napster gave such artistes a way⁴ to distribute and promote their music directly to a huge community of fans worldwide.

The Future of Napster Towards the end of September 2001, Napster agreed to pay $ 26 million to music publishers to end the litigation. Napster also agreed to pay $10 million to the Harry Fox Agency, the licensing arm of the National Music Publishers Association for the future use of copyrighted material. In addition, Napster agreed to pay music publishers one-third of the revenues given to content owners. It was reported that Bertelsmann was providing Napster the money for these deals. Napster's much delayed relaunch was clouded by uncertainty regarding its services becoming fully or partly paid. Also, while earlier Napster had virtually any song imaginable on its service, the filters it now had to use made most songs hard to find. It was even reported that Napster was planning to drop the MP3 file format and launch its own format in the future.

All these factors led to doubts about the success of the service in the future. While the Napster brand name remained strong, there were doubts whether users would be willing to sign for a paid service, while many other free websites were still operating. In October 2001, RIAA filed suits against FastTrack, MusicCity, and Grokster and was formulating plans to file a suit against AudioGalaxy as well. These moves intensified the debate over the role of RIAA in policing the distribution of music worldwide.

In the future, improving bandwidth and faster Internet connectivity were expected to make electronic redistribution of video as easy as that of MP3 files. The media industry was worried over the prospect of customers utilizing the Internet to exchange movies and video files as well. Though the legal issues in the Napster case seemed to be heading towards a settlement, the ethical issues remained unanswered. Whatever be the outcome of the recording industry's battle against the new technology, it had undoubtedly left a great impact on the global music industry.

According to one analyst, Napster now had 'One shot to launch a new service that looks nothing like the old one. If they don't get it right, Napster will be dead in the water."

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4] During April-May 2000, Napster was reported to have signed contracts with more than five thousand artistes for distribution of their music.